DLPC lowers power rate by 38-centavos in Davao

NGCP power lines (File photo from the Philippine Daily Inquirer)

DAVAO CITY — The Aboitiz-owned Davao Light and Power Company (DLPC) has brought down electricity rates by 38-centavo per kilowatt hour within its franchise area this month, propped up by an abundance of power supply in Mindanao, which also brought down the buying price of retailed electricity at the Wholesale Electricity Spot Market (WESM), a company official said.

Roger Velasco, DLPC chief operations officer, said some 1,000 MW excess power in Mindanao had caused electricity buying price to go down in the retail market, allowing the distribution company to buy cheap from WESM, bringing down its current electricity rate to P11.14 per kwh.

DLPC, which started buying from WESM on January 26, has been sourcing some 30 per cent of its power needs from the retail market, or roughly an average of 100 MW per day, Velasco said.

He said the company always worked to find the cheapest power available in the market, so they could sell their electricity to consumers at the most reasonable price.

“Whenever WESM prices are low, we buy from WESM, but if prices from our contracted suppliers are low, we buy from them (suppliers),” Velasco said.

Although the prices at WESM vary and change every minute, he said the company was able to buy electricity at the retail market at for as low as P6.50 per kwh, much lower than the P7 and P7.50 per kwh the company was buying from imported suppliers.

He warned though that the retail electricity market is volatile, as it is subject to the law of supply and demand and could change at a moment’s notice.

The 38-centavo decrease, to be reflected in next month’s billing, could easily translate to P76 savings for households consuming 200 kwh of electricity.

DLPC, which serves Davao City and some parts of Davao del Norte, like Panabo City and the towns of Carmen, Sto. Tomas and Braulio Dujali, has one of the lowest power rates in Mindanao, but largely because it is one of the largest contractors of cheap hydropower from Agus and Pulangi hydroelectric power plants, one of the reasons it had kept its electricity rate low, an energy source said.

Fermin Edillon, community relations manager, said as much as 50 per cent of the company’s power mix comes from renewable energy sources, including hydro power.

Velasco also said he was not worried about the upcoming El Nino, as Mindanao has other alternative power sources to hydro power, which might be affected by the long dry spell.

He said the company also expected the price of crude oil to go down, though not entirely to its 2019 level but much lower from the spike it experienced last year.

Fuel prices rose last year to as much as $400 per metric ton from $60 to $80.

Velasco said the prices had gone down to $200 to $250 at present.

“Our expectation is for it to slowly go down (although) the volatility of the market is still there because the Russia and Ukraine war is still there,” he said.

“Two things will happen (in case of El Niño): there will be less (reliance) on hydro and more fossil-based fuel; and imported at that. But we expect fuel prices to go down, not necessarily back to the 2019 level, but definitely way below, from its level last year,” he added.

“That will be our price expectation, and we are 70 percent confident that prices will stabilize.”

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