“I'd rather regret the things that I have done than the things that I have not.”
― Lucille Ball

Friday, November 1, 2013

Electric Energy Cost

In my November 2010 post I reported about our electric connection. At that time we were still building the fence and a month later started building our house.

Of course electricity usage was still minimal, but when we started living in our house, mid 2011, the usage increased.

I collected all " Statement of Account" details and put the details in a spreadsheet, to be able to make trend graphs and analysis, which I want to share in this post.

So the actual data I used for the graphs below are from my own energy bills from Decorp (Dagupan Electric Corporation), the electricity distribution company in Dagupan area, Pangasinan province. It's not the only distribution company in this province, but you cannot choose like in the Netherlands.

First one to show is the Usage/Cost graph.

Data from DECORP bills from Dec 2010 until Sep 2013

What you see is that usage and net price ratio is quite stable, which means that the price per kWh is quite stable, details on the actual price will follow. Another conclusion is that after the initial 100 kWh/month in 2010, when we started building the fence and house, the usage (consumption) slowly increased to today's average volume of about 1000 kWh a month.

The highs/lows of the usage from February to June 2012 have probably to do with tuning the pump of our swimming pool since beginning of 2012. The usage increase from December 2012 up to mid 2013 is probably caused by the increase of persons living in our house and the installation of an air-con in January 2013.

The trend down again until Sep 2013 is caused by further tuning of the pool pump and finally switching off the pump, as we didn't use the pool during the rainy season.

Next graph depicts the monthly net cost of a kWh at the end of each period (month) shown.

Calculated Data from DECORP bills from Dec 2010 until Sep 2013

Apart from the dip in the first months of this graph, the cost price of a kWh is quite stable until April 2012. Bigger fluctuations occur from mid 2012 until now, with a trend down, but overall on average around 9 peso, with a high of 11+ and a low of 8- peso per kWh.

Back ground

Trying to explain this trend, I looked at the price of crude oil, you see the same trend i.e. low end of 2010 until Feb 2011, then quite stable with an average of 110 US$, but the trend down at the end of the period is missing.

See the graphs below from Infomine.
Courtesy www.infomine.com 
Courtesy www.infomine.com 

Next graph shows the same for coal on the world market.

This doesn't explain however the trend I found in the consumer net price. In an interesting overview of power plants in the Philippines on WikiPedia you can see that the following installed power generation types and volumes are operational.

  • Hydro-electric ... 36.864 MW
  • Coal ..................  4.166 MW
  • Geothermal ........  2.186 MW
  • Diesel (oil) .........       85 MW
  • Wind .................       25 MW
  • Solar .................         1 MW
  • Nuclear ............          0 MW (1 plant, never made operational)

In our area (Pangasinan) we have a large Hydro-electric plant at the San Roque Dam, where I guess our electricity is coming from, but of course there is a national/island grid used to distribute electricity over all regions and to act as a backup backbone in case a power plant fails.

So most generated power comes not from coal or oil, but from hydro-electric plants, and thus the costs are largely independent from raw energy prices on the world market. Furthermore the government has many instruments (implemented) to make sure that consumer prices do not fluctuate too much per period and per region/area and to make sure the government has a good income from power production.

In an interesting article in Interaksyon it is even stated that the Philippines electricity rates are among the 10 highest in survey of 44 countries. The report is based on Meralco prices, which operates in the Manila area.

It is contradicting the above overview, as they state that the dependency of power production is largely on gas and oil.

Consumer Price

Next I tried to understand how Decorp is calculating its consumer price. First source for info is the monthly bill. However it's not very clear, especially how they calculate the taxes.

The monthly kWh usage is multiplied by the calculated Average Generation Cost (AVG), which can be find in a spreadsheet that is available on the Website of Decorp here. It's in the last column of the spreadsheet, but not always updated in time to compare with your own bill. The AVG value is basically the gross cost Decorp has to pay to the generation and transmission companies, according to government rules.

Then they calculate additional costs for Transmission, Distribution and Energy Loss (e.g. as a result of bad infrastructure and stealing electricity), subsidies for developing distribution in low dense populated areas (called missionary projects), and discounts for senior citizens and some other additional costs.

Next are the taxes (VAT) for Generation, Transmission, Distribution and Energy Loss, plus an extra energy tax, which I believe is income for the municipalities and cities.

It's too complicated to discuss all the details - if clear anyway - but roughly the percentage of generation cost in the end user price is 55%, so additional costs for losses, special projects, transmission and distribution, maintenance and taxes is 45%.

It would be helpful if readers of this post, who have more experience/knowledge of the rules and policies, comment here to correct my statements and guesses as well as to give a better inside view in the market in the Philippines.


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