MANILA, Philippines—Customers of the Manila Electric Co. will see the system loss component of their electricity bills go down by 10 centavos per kilowatt-hour (kWh) once the Energy Regulatory Commission approves the reduction of existing system loss caps.

The ERC has drafted a new resolution that will bring down system loss caps to eight percent from 9.5 percent for distribution utilities such as Meralco and to 11 percent from 14 percent for electric cooperatives.

This draft resolution is still subject to public consultations.

System losses refer to the cost of electricity lost due to non-technical causes such as pilferage, or technical causes such as heat loss when electricity travels through power distribution lines.

Anything beyond the law-mandated system loss caps is absorbed by distribution utilities and electric cooperatives.

“We’re still waiting for the final resolution, but based on our June billings, the impact on customer bills will be a 10-centavos-per-kWh reduction. The impact to us, we still have to compute,” Meralco vice president and utility economics head Ivanna Dela Peña said in a telephone interview on Wednesday.

This reduction, however, would only be felt when the ERC issues the final order on the new system loss caps.

Meralco customers, however, may have to bear a two-centavos-per-kWh increase in their August bills due to a slight hike in the distribution utility’s purchased power costs.

Dela Peña said figures from the wholesale electricity spot market (Wesm) were still preliminary, so the actual impact on customer bills of the slight increase in prices would still have to be computed.

“We don’t use the Wesm preliminary figures. We’d rather wait for the final Wesm billing. But the slight increase that we see now is the result of an interplay of suppliers. The price of electricity from our (independent power producers) slightly increased,” she said.

“It’s just a usual price fluctuation. Last month our generation charge went down by four centavos per kWh. This month, it will increase by around two centavos per kWh. The generation charge changes each month,” she added.