CFE’s DAC Rate
People often move into their home in Mexico and begin living like they might at home in the US or Canada. One expectation few have is the impact of not paying attention to your electricity usage and CFE bill. Run your ACs, enjoy that waterfall into the pool or your courtyard fountain. Without some thought you can end up on the dreaded DAC (Doméstico Alto Consumo). It’s a surprise to almost everyone when it happens. Here’s what it is and how it kicks in to play.
What is the DAC?
The DAC is a rate that kicks in when you consume too much. There is a component of your regular bill which includes a subsidy from the government for home consumers. When you consume to much, you are placed on the DAC which has no subsidy. Your rate for electricity essentially doubles.
How do I get on the DAC?
In Los Cabos, the regular rate (or “Tarifa”) on the bill is called “1C”. On the 1C rate in Los Cabos, the DAC limit is 10,200 kWh over the past year (6 bills) including the latest bill. It is a rolling calculation that is recalculated each bill as a previous bill drops off and another one comes along. It is an evaluation of your usage over that past year. Use more than 10,200 kWh in a year and you will be billed on the DAC Rate instead of 1C starting with the bill where you first exceeded the limit.
In the chart below a two year period is illustrated. the DAC limit is the black dashed line and the DAC consumption being evaluated each bill in grey. Bi-monthly kWh consumption are blue bars. The blue dashed line is the recommended limit on the bill represented by the Green to Red Usage bar on the CFE bill shown below.
For a CFE bill in Los Cabos this is 1,700 kWh (10,200 ÷ 6 bills). Approaching 1,700 kWh for that bill will put the arrow marker in the red. Being over 1,700 kWh will put the marker past the end.
Looking at the DAC consumption (grey area) in the graph below you will see the that the home was operating well below the limit for over a year. The DAC consumption started to increase steadily in February 2019 and kicked in in August with a bill of 6,741 kWh.
How do I get off the DAC?
Once you are on the DAC, getting off of it involves getting the DAC consumption (grey line above) back below the DAC limit. This involves reducing your usage for each bill, bill after bill until the 12 month total is below 10,200 kWh.
There are 2 ways to get off the DAC rate once you have managed to get yourself on it:
- Change your electricity consumption – in the chart above this would mean changing the consumption considerably by doing much less of what caused it to run up in the first place. For many people it may involve some changes is habit, resetting pool pump run timers and installing LED lighting. In doing so, it will take up to a full year to unwind you off the DAC.
- Install Solar Panels to offset consumption – for anyone who finds they cannot alter their consumption, solar panels are your only answer. That said installing them doesn’t give you an instant change and once you have them it may still take a full year to unwind you off the DAC.
What else can I do? ……. New Home Owner
If you have just bought the property and inherited this situation – you are in luck. CFE allows for a reset of DAC consumption history when you are a new owner of an existing property. This is basically a fresh start with no previous bills included in the calculation. CFE will need your Fideicomiso or Escritura to verify you are the new owner and will reset the history based on your possession date.