City Council sets committee hearing on power rate hike

Sunstar Davao 

THE Davao City Council is set to conduct hearings on the power rate increase implemented by the Davao Lights and Power Company (DLPC).

Councilor Pilar Braga - chair of the City Council committee on energy, transportation, and communication – said on Tuesday that the hearings are in response to a petition filed by progressive groups before her office.

A committee hearing is set November 24, Braga said.

Protesters, spearheaded by Power Dabaw -- a group composed of barangay officials, consumer activists, nongovernment organizations and entrepreneurs -- lauded the move during Tuesday’s City Council session.

“We are glad that after more than a month of waiting, the committee hearing is finally set. It was long overdue and we fear that our petition would end up unattended. We further hope to see resolute actions from the City Council through its Committee on Energy,” Power Dabaw chair Nonato Bolos said in a statement.

Power Dabaw said that while DLPC declared a P0.08 increase, the actual average increase is much higher at P0.33.

“Precedents are clear in revealing the dubious scheme of the Aboitiz Company. Their attempt to own a monopoly of power generation in Mindanao, especially in the region, is to further siphon profits at the expense of the people,” Bolos said.

Power Dabaw vowed to intensify its efforts to encourage consumers’ active participation in movements against power rate increase, and eventually against the Epira law, Bolos said.

DLPC has implemented since August the performance-based rate system (PBR) of power rates in compliance with the Electric Power Industry Reform Act (Epira) of 2001.

According to DLPC, the Epira law sought to restructure the power industry into four different sectors - generation, transmission, distribution, and supply. This way, it promotes efficiency as the PBR imposes strict service standards through a performance incentive scheme (PIS) in the distribution utility, which will be penalized for performing below the standards.

Per case 2010-036 dated July 15, the Energy Regulatory Commission (ERC) approved DLPC’s application for its Annual Revenue Requirement (ARR) and the PIS, which is in compliance with the PBR application.

DLPC’s officials, in past interviews, said their utility company has not applied for a rate increase for years, thus an increase of P0.08 should be justified. The increase adds to the average distribution rate to come to a total of P1.16 per kilowatt hour (kWhr).

The generation and transmission rates of February 2010 yielded the following rate hikes:

Monthly Consumption New Rate Old Rate Increase
175 kWh P1,219.31 P1,164.16 P55.15
200 kWh P1,392.69 P1,329.66 P63.03
250 kWh P1,739.45 P1,660.66 P78.79
300 kWh P2,086.21 P1,991.67 P94.55

DLPC officials, however, said the PBR rate does not necessarily mean having higher expenses as DLPC has adjusted its existing lifeline subsidy discount rates, which were first implemented in 2004.

With the adjustment, customers consuming 100 kWh or less per month will now enjoy higher discount percentages on their electric bills.

DLPC also stressed that the new average distribution rate of P1.16 per kWh is small compared to those of other distribution utilities even as DLPC is considered the third largest in the country. (Jade C. Zaldivar)

Published in the Sun.Star Davao newspaper on November 11, 2010.