Generation Rate Increase & Enercon Drive for the May 10 Elections

Dear Valued Customers:

The CAGAYAN ELECTRIC POWER & LIGHT CO., INC. [CEPALCO] is earnestly requesting its Valued Customers to exercise prudence in the use of electricity in order to conserve electric energy, not only because of the scarcity of supply from the generation companies because of the El Niño phenomenon, but also in order to reserve enough quantity of power for the May 10, 2010 automated national and local elections.

Conserving electricity will not only help ensure the stability of the generation and transmission systems in Mindanao, but will also cushion the effects of the use of more expensive power generators due to the extremely reduced power generation through the much cheaper hydro power.

Generally, consumption of electricity during summer months increases because of various reasons, among which are:

1. The hotter days necessitate more usage of air conditioners, electric fans and other cooling appliances.
2. Since the kids are on vacation from school, more people get to use electric appliances at home such as computers, stereo sets, television sets, electric fans, and other appliances.
3. Refrigerators and freezers work overtime to maintain the cooling. Again, because of the hotter temperature, people at home tend to open refrigerators and freezers more often.

And, the 5-hour rotating brownouts are not an assurance that electric bills will proportionately reduce, because aside from the normal increase in consumption during summer, the reduction in consumption because of the brownouts, and the expected reduction in your electric bills, may only be offset by:

1. The increased cost of electricity produced by the National Power Corporation and other IPP’s because of the use of more diesel and other non-hydro electric plants. We all know that the hydro power in Mindanao is very much cheaper compared to non-hydro power. Unfortunately, the El Niño phenomenon has dramatically reduced the output of the hydro power generators.
2. When the cost of power that is billed through the generation charge increases, there are items in the electric bill that also increase such as taxes [mostly VAT] and systems loss charge. And because the National Grid Corporation of the Philippines has to enter into agreements with electricity providers for ancillary services, the transmission charge has also increased.
3. Because of the scheduled 5-hour rotating brownouts, end-users tend to shift some activities to hours when power is available. For example, ironing clothes or cooking is done earlier or later when power is available. Besides, because of the 5-hour brownouts, freezers and refrigerators are expected to work overtime when power is restored in order to provide the cooling these appliances are set to provide.

Given the foregoing factors, our Valued Customers are encouraged to continuously observe the energy-saving tips that CEPALCO has regularly disseminated to the public in order to effectively manage your electric consumption and your electric bills.

Thank you.

CEPALCO Management

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