DAVAO Light Power Corporation (DLPC), a subsidiary of Aboitiz Power, is considering dropping their short-term diesel supply contracts as they are looking into the possibility of sourcing their short-term supply from the Wholesale Electricity Spot Market (WESM).
During DLPC’s Kuryentalks at their Ponciano Office, Executive Vice President and Chief Operating Officer Rodger Velasco said this year’s electric supply of Mindanao is at 2,500 megawatts (MW) while the demand is only at 1,700 MW resulting to an excess of about 700 MW. Velasco said this is a huge difference from the last year’s electric shortage experienced by Mindanao due to drought.
“Our strategy is to revisit our short term supply. We have short term supply contracts with diesel. We’re deciding right now whether or not to renew or just depend on WESM because we think we can buy cheaper power in WESM. That’s what we think. We’re just running it out. The price of WESM is dictated by the availability of supply. If there’s oversupply, price would tend to go down,” Velasco said adding they might source more of WESM for the next two years if it will be available by next year.
With this strategy, he says they look forward that the electricity prices would go down.
“The strategy there is to decide what balance of mix between WESM and diesel,” Velasco added.
Velasco also said they are still planning to maintain their base load as its service is reliable and available for 24 hours.
During his talk, Velasco mentioned that the National Power Corporation’s (NPC) electricity source contribution had been reduced from 73 percent on February 2017 to only 60 percent July of this year. Coal electricity source increased from 11 percent to 27 percent. Hydro-electricity decreased from 14 percent to 12 percent while oil electricity source from two percent to only one percent.
“In supply, we’re not much affected because we have additional contracts already. It’s just that because of that reduction, it affected our rates. We have the lowering down of NPC, which is cheaper, and then mix it up with the new power plants, it ended up with 38 centavos of difference in generation charge. The positive side of it is because we're not dependent of NPC, we will have more stable supply,” Velasco answered when asked how this change in NPC’s electricity source contribution had affected DLPC in general.
Velasco also said they are not sure of the exact reason of the reduction for NPC’s electric source contribution.