Take-or-pay.

It is indeed a welcome news that, amid a reported tight power supply situation that has caused blackouts last month in Metro Manila, the Manila Electric Co. (Meralco) will implement a 27 centavo per kilowatt hour (kwh) reduction in their billing charges this month.

Per official announcement from Meralco, they will pass on to us their customers the reduced electricity bills as a result of the lower charges they got from independent power producers (IPPs) and power supply agreements (PSAs). The lower charges that would be reflected in our Meralco bills this month should finally lay to rest earlier fears the previous month's power outages may lead to possible increase in rates when the supply gap was sourced by the IPPs and the PSAs from the Wholesale Electricity Spot Market (WESM).

To date, there have been seven incidents of yellow alerts and equal number of times the National Grid Corp. of the Philippines (NGCP) placed the Luzon grid under red alerts at the height of the power supply deficit last month.

During this period, the WESM provided 12 percent of Meralco's supply needs. The reduction in our Meralco bill was largely due to the strengthening of peso-dollar exchange rate and lower fuel prices for coal and Malampaya natural gas.

According to Meralco, about 98 percent of IPP charges and 72 percent of PSA charges are dollar-denominated under the foreign exchange charges (forex) component of our monthly electric bills. As explained by Meralco, WESM charges have actually increased by P3.5355 per kwh because of tight supply conditions in Luzon.

But these were more than offset by the bigger cuts in forex charges. From computations of Meralco, the cost of power from IPPs and PSAs decreased by P0.7544 per kwh and P0.5143 per kwh, respectively, as a result of much bigger reduction in forex charges.

But more than the reduced billing charges, the government's primary interest at present is a firm guarantee that there won't be any power outages during the period starting on election day Monday, May 13. This is because our country's automated election system requires more than sufficient power supply to lessen, if not totally prevent, glitches. Any glitch, man-made or by electric power failure, could otherwise stir suspicions and doubts on the credible outcome of our automated election machines.

Officials from the Department of Energy (DOE) headed by Secretary Alfonso Cusi have repeatedly given assurances of an ample power supply situation...