DAVAO Light and Power Co., Inc. customers can expect higher electric bills this summer, according to the electric distribution company's EVP and COO Rodger Velasco.
There are three main reasons for this upward trend. Two are due to the increase in the generation charge. The other is the normal behavior of consumers to use more energy during the hotter months.
First is the shift from National Power Corporation's (NPC's) wet to dry rates, which affects the electric distribution bills from March to July. “The NPC is still our biggest energy supplier and this shift translates to an increase of about 0.20 centavos per kWh. This increase is a pass-through charge that Davao Light collects in behalf of the generation utility. Rates will reduce accordingly during the generation company's imposition of the wet rates. This is cyclical in nature and it happens year on year”, said Velasco.
Second, Davao Light contracted 60 Megawatts (MW) with the San Miguel Consolidated Power Corporation (SMCPC). This replaces the reduction in the contract with the NPC by 20 percent or average of 167 MW for 2017 to an average of 133 MW for 2018. Consequently, this alters the generation supply mix such that from NPC contributing 68 percent to the total to now only 48 percent.
The 60 MW capacity is also intended to cover the Davao Light franchise increasing demand due to the robust economy.
“We already anticipated this scenario and thus, we had to be forward looking. Had we not signed up with the SMCPC we have already been experiencing rotating outages of two hours. This would have debilitating effect on the economies within our franchise area,” said Velasco.
The SMCPC contracting's impact on the generation cost starting mid April billing is an increase of 0.34 centavos per kWh. This is also a pass-through charge which the distribution utility merely collects.
The third reason is the increase due to actual energy usage. The peak demand for the entire franchise rose from 386 MW to 414 MW or 8% between January and March.
Velasco advises its customers to be prudent in the use of energy by promoting Energy Conservation and Efficiency. Tips that are available in its official website, social media accounts and weekly radio program, Thursdays, 9 a.m. to 10 a.m. in one of Davao's top AM radio stations.