An official of the Davao Light and Power Company (DLPC) disclosed on Wednesday that customers will enjoy reduced power rates middle of the month.
“It started sometime middle of the month. We bill our customers in 22 batches, some batch numbers will start lowering at 38 centavos or close to 40 centavos and will enjoy that sometime middle of the month until next month,” said Rodger S. Velasco, president, and chief operating officer of DLPC, during Wednesdays at Habi at Kape.
After lowering the power rate to P11.52 per kilowatt-hour in February this year, DLPC announced earlier this month that it is reducing its power rate once again.
DLPC again reduced the price by 38 centavos per kWh, to P11.14 for the residential.
Velasco cited DLPC’s participation in the Mindanao-based Philippine Wholesale Electricity Spot Market (WESM) because of its cheap price.
‘Naa nata’y WESM and during intervals where prices are low we dispatch WESM, we buy from WESM and when prices are high versus our existing contract we buy from our existing contracts. Something to that effect on how we dispatch,” Velasco said.
DLPC started buying from WESM in January this year and Velasco said DLPC buys 30 percent from WESM.
Velasco said during dispatch time, DLPC buys at WESM at an average price of P6.50 per kilowatt hour versus some of its imported suppliers which is P7 to P7.50 per kilowatt hour.
“We buy every five minutes and we are buying 30 percent from WESM because of the price. It created a behavior na kung barato siya, mupalit. we have software that will help us whether to buy or not to buy. In terms of megawatts I would say as high as 100 MW, which is 1/4 of our demand or less than 20 percent of our demand,” Velasco said.
Velasco also said that Mindanao has an oversupply of 1,000 MW from the total power supply of 3,000 MW while the current demand in Mindanao is 2,000 MW.
“This also dictates the price of WESM. WESM prices are lower than some of our suppliers. So we optimize the dispatch of our supply contract plus using WESM as one of our sources. I think our mix now is about 30 percent WESM because of the lower prices of WESM,” he said.
Apart from buying from WESM, the reduction of rates was also due to the lowering of prices of coal and crude oil and the optimization of DLPC dispatch.
“Means this cause our dispatch, which is the outcome of our generation, the big chunk of our suppliers will contribute to the lowering of the rates. So, we optimize the dispatch of our supply contract plus using WESM as one of our sources. Hopefully, the supply of fuel will still be low maybe lower or flatten at least ma-maintain nato ni nga supply,” Velasco said.
