3-centavo increase per kWh with Train

WITH the implementation of the Tax Reform for Acceleration and Inclusion (Train) law, a Davao Light and Power Company (DLPC) executive said consumers shall expect about three centavos price increase for every kilowatt hour (kWh) for the first year of the law's implementation.

The amount will increase to six centavos per kWh for the second year and nine centavos per kWh for the third year.

These amounts will depend on whether the coal prices will remain constant as well.

The 3, 6, 9-centavo increase per year will only be the excise tax resulting from the Train law.

If the price of coal decreases, the electricity will also have a corresponding amount of decrease as well.

"This is very minimal if you think of it, and should not be a cause of alarm... If you look at the impact, it's very negligible. The average household electricity consumption in Davao City is 200 kWh per month, so you multiply that by three centavos, that's basically P60 for every household per month," Aboitiz Equity Ventures Advisor for Mindanao Arturo Milan said Wednesday, January 17 at Habi at Kape, Abreeza Ayala Malls press conference.

Effectivity of the price increase will depend on the current coal inventory being used.

"For the incoming coal deliveries, that should impact already but with the current inventory, it should not change since it is still based on the old pricing of P10 per metric ton," he said.

As Milan pointed out that consumers should not be alarmed of this small increase, what DLPC is concerned about is the fact that the Philippines had already been tagged as the country with one of the most expensive electricity and yet it will still increase resulting from the excise tax.

For his part, Mindanao Development Authority (Minda) executive director assistant secretary Romeo Montenegro said they are closely monitoring the electricity price impact of the Train law in Mindanao, especially that 70 percent of power consumption in the island is derived from coal.

"We always look at, over the long-term, achieving an ideal energy mix in Mindanao which is not relying heavily on fossil technology but also making sure that we are able to integrate renewable energy in terms of our fuel and electricity sources so that we are not subject to market volatility, foreign exchange fluctuations, and excise tax plus a possible levy of export of coal from sources such as Indonesia, in East Kalimantan where Mindanao today sources 100 percent of its coal requirements," said Montenegro.


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