Davaoeños will enjoy cheaper electricity rates - ERC

Electricity consumers of Davao Light and Power Company (DLPC) will enjoy lower electricity rates with the ERC’s (Energy Regulatory Commission) approval of DLPC’s MOA (Memorandum of Agreement) with the TRANSCO (National Transmission Corporation) for Reactive Power supply using the Bajada Power Plant. On 15 January 2007, the ERC approved the said MOA and, at the same time, issued its final decision on DLPC’s unbundling of rates application.

Under the MOA, the Bajada Power Plant of DLPC will provide reactive power support on a non-firm basis or as the need arises to the Mindanao Grid, subject to the dispatch instructions of TRANSCO’s Mindanao System Operator. “The Davaoeños served by DLPC will enjoy lower rates when its Bajada Power Plant is operated whenever Reactive Power Support is required and NPC is not able to fully provide such ancillary service. In such instances, TRANSCO will pay DLPC for the availment of such service which will be flowed back to DLPC’s customers by way of reduced rates. DLPC customers can enjoy a possible rate reduction of PhP0.1599/kWh based on TRANSCO’s 2004 actual availment of Reactive Power Support,” ERC Chairman and CEO Rodolfo B. Albano, Jr. stated.

Reactive Power Support is a type of ancillary service being dispatched to the Grid in the event of power shortages and/or low voltage situations. Reactive Power Support to be sourced from the Bajada Power Plant of DLPC can help maintain the proper voltage level or power quality in the system.

“With the MOA between DLPC and TRANSCO in place, the consumers of DLPC will benefit in terms of lower rates and all the consumers in the Mindanao Grid will be assured of a more stable and reliable power supply,” Chairman Albano concluded.

February 12, 2007