Power rates in Davao City stabilizing

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DAVAO CITY (MindaNews / 2 Aug)—Consumers in Davao City may expect electricity rates to stabilize as the price of coal in the world market has gone down, an executive of the Aboitiz-owned Davao Light and Power Company (DLPC) said.

Davao Light and Power Company linemen perform maintenance work.. MINDANEWS PHOTO

Rodger S. Velasco, DLPC president and chief operating officer, told “Wednesdays Media Forum at Habi at Kape” that the world market price of coal saw a downturn beginning January this year from the time when the armed conflict between Ukraine and Russia escalated early last year.

He said the distribution utility imposed a lower rate of P8.75 a kilowatt hour this month from P10.24 a kWh in July.

He said at the onset of the Ukraine-Russia war, the price of coal skyrocketed to about US$400 per metric ton from US$60-US$80 per MT before tensions escalated between the two nations.

He said prices of coal range between US$125 and US$140 per MT.

“It’s not yet normal but it is cheaper than last year’s US$400. That drives down our rate,” he said.

But Velasco added that DLPC projected the rate of power to range between P9 and P11 a kWh for the remainder of the year, excluding such other factors that may drive the prices of fuel up.

He added that the price of fuel worldwide remains volatile.

DLPC being connected to the Wholesale Electricity Spot Market (WESM), Velasco pointed out, helps bring down the electricity rates because the DLPC could source their supply of power at cheaper rates.

He said the law of supply and demand drives the movement of the prices in the WESM, and with excess supply, generators sell power to the grid at lower cost to the utilities.

According to the National Grid Corporation of the Philippines, the current available power in Mindanao was at 3,322 megawatts while the system peak demand was 2,340 MW, leaving an excess supply of 982 MW.

Velasco said DLPC gets 30% to 40% of its power from WESM without any contract.

“WESM is more affordable now. What we do in our dispatch is that we have a software where it will forecast the cost of power of WESM, and when it’s cheaper to buy from WESM, we buy from WESM,” he said.

He added, however, that DLPC is not yet dispatching the more expensive diesel source but may be forced to in order to augment supply if the El Niño phenomenon would affect the hydropower plants. (Antonio L. Colina IV / MindaNews)

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