Line men are seen working on electric posts in Tondo, Manila in this file photo. Customers of Manila Electric Co. can expect slightly lower bills this month. — PHILIPPINE STAR/ RUSSELL PALMA

HOUSEHOLDS in Metro Manila can expect lower electricity bills this month, with typical households set to see a P15 reduction, the Philippine capital’s largest power distribution utility said on Monday.

In a statement, Manila Electric Co. (Meralco) said the overall electricity rate dropped by P0.0737 per kilowatt-hour (kWh) to P9.8628 in October from P9.9365 per kWh in September due to the reduction in the feed-in-tariff allowance (FIT-All).

“For a residential customer consuming 200 kWh, the reduction is equivalent to a decrease of almost P15 in their total electricity bill,” Meralco said.

Those using 300 kWh, 400 kWh and 500 kWh can expect their monthly bills to go down by P22, P29 and P36, respectively.

Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga said the October rate was lower due to the P0.0619 per kWh cut in the FIT-All and the drop in generation charge.

The Energy Regulatory Commission (ERC) had approved the collection of a FIT-All of P0.0364 per kWh starting this October billing period. This is lower than the previous rate of P0.0983 per kWh.

Generation charge also slipped by P0.0201 to P6.9192 per kWh in October, from P6.9393 per kWh last month “on the back of lower costs from Meralco’s supply contracts.”

Mr. Zaldarriaga said charges from independent power producers (IPPs) and power supply agreements (PSAs) slipped by P0.5073 and P0.0702 per kWh, respectively.

“The reduced use of more expensive alternative fuel by the First Gas-Sta. Rita and San Lorenzo plants and increased plant utilization of IPPs and PSAs more than offset the impact of the steep depreciation of the peso in September,” Meralco said, noting that dollar-denominated costs made up 98% of IPP and 38% of PSA charges.

The peso closed at P58.625 per dollar on Sept. 30, weakening by P2.48 or 4.4% from its Aug. 31 close of P56.145.

Meralco said the lower IPP and PSA charges offset the higher rates from the Wholesale Electricity Spot Market (WESM), which went up P4.8128 to P11.9990 per kWh amid tighter supply in the Luzon grid.

“Both demand and capacity on outage increased, and the grid was placed on Red Alert on Sept. 12,” Meralco said, adding that it sourced 4% of its power requirement from WESM compared with 10% in September.

Transmission, taxes, and other charges for residential customers increased by P0.0083 per kWh.

Meanwhile, Meralco said South Premiere Power Corp. (SPPC) and San Miguel Energy Corp. (SMEC), the administrators of the Ilijan and Sual power plants, continued to supply power at ERC-approved rates “under protest.”

Last week, the ERC denied the joint petition of Meralco and San Miguel Corp. (SMC) for a rate increase to cover the losses of SMC’s two power plants.

Jose Ronald V. Valles, Meralco first vice-president of Regulatory Management Office, said the companies will “exhaust all remedies” to prevent the termination of the PSAs with SPPC and SMEC.

“Should SPPC and SMEC decide to pursue the contract termination, we will ensure continuity of stable, reliable and adequate supply for our customers by getting supply from other sources like the WESM and other generation companies,” Mr. Valles said in a statement.

Lawrence S. Fernandez, Meralco’s vice-president and head of utility economics, said that SPPC and SMEC supply around 1,000 megawatts under baseload PSAs which  translated to 19% of Meralco’s power supply last month.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose