Weaker peso, higher fuel costs may increase electric bills

Contributed photo
Contributed photo

HIGHER fuel costs and a weaker peso could further raise power generation charges on the electric bills, an official from the Davao Light and Power Company (Davao Light) said.

Davao Light Reputation Enhancement Department manager Fermin Edillon told SunStar Davao in a phone interview on Friday, September 30 that its consumers had been experiencing an increase in their recent electric bills as the price of fuel in the world market pushed the generation rate up.

Fermin said generation charge or the cost of power that distribution utilities like Visayan Electric Company and Davao Light purchase from independent power producers and producers it has power supply agreements with, contribute a major share on the bills.

The utility official said the generation rate has increased because of the global increase in fuel prices as the power distributor sources 50 percent of its power from non-renewable sources, like diesel and coal.

Various factors had made gas and coal more expensive, including Russia’s invasion of Ukraine which has disrupted its value chain.

"Kung musaka ang generation rate, muapekto gyud na sa atong total rate (if the generation rate increases, the entire total rate would be affected)," Edillon said.

He also said a weaker Philippine Peso could also jack up the generation rate as generation companies import equipment and raw materials.

"It really has an impact especially sa pagpalit sa (in the purchasing of) coal and crude oil, ay dollar baya ang ginapalit. Ginaangkat man nato ning coal and gasolina using dollar. Kung musaka ang exchange rate (since dollar is the purchasing currency. We import coal and crude oil using dollars. When the exchange rate increases), definitely it will have an impact sa pagpalit (in the purchasing)," Edillon said.

With the uncertainty of the value of the peso, the official is not discounting the possibility of a possible spike in power bills.

"Depende man gud na sa presyo sa world market. (It depends on the price of the world market). I guess it will have an impact depending on the dollar exchange rate," he said.

The peso closed at P58.97 Thursday, Sept. 29 from P58.98 on Wednesday against the US dollar, after hitting an intra-day low of P59.

The peso began the year at around P51 to the US dollar.

Edillon, meanwhile, clarified that its distribution charge remains at an average of P1.43/kWH as approved by the Energy Regulatory Commission (ERC). Davao Light’s distribution charge has not increased since 2013.

The generation and transmission charges are pass-through charges that Davao Light only collects but does not earn from. Being a power distribution utility, Davao Light earns from the distribution charge only.

Davao Light is trying to cushion the spike in generation rates by getting their sources in renewable resources, he said.

The power distributor sources around 50 percent of its supply from hydropower plants. This allows the power distributor to keep its current rates lower compared to other areas in the country.

"Importante na ma-maintain nato ang power mix nato para mahimo siyang reliable, but as well as reasonable ang cost sa atong tanang consumers," Edillon said.

Edillon said they are hoping for the understanding of their consumers, but he said they are taking measures to cushion the possible increase.

Meanwhile, Davao Light encourages its customers to be prudent and efficient in the use of electricity, by checking their daily routines and activities and seeing where they can efficiently use electricity.

Based on the summary of rates for the billing month of August 2022, the charges of residential consumers are P13.29/kWh.

Notably, there has been an increase in rates for residential consumers since May this year.

The rate for May is at P10.55/kWh, which then increased to P11.11/kWh in June and P11.64/kWh in July.

The increase in power rates could have been due to an increase in the generation charges and system loss charges.

Generation charge for May was at P6.57/kWh, while charges for June were at P6.57/kWh, P6.98/kWh in July, and P8.27/kWh (August).

System loss charge for May is at P0.59/kWh, while the rate for June is at P0.66/kWh, P0.69/kWh in July, and P0.80/kWh in August. RGL


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