BENECO POWER RATE UP BY JULY DUE TO GENERATION COST ADJUSTMENTS

June 24, 2023 Headlines

Interim Board Chairman Cating says NO to BENECO privatization

BAGUIO CITY Customers in areas served by Benguet Electric Cooperative (BENECO) will see higher power rate within their billing cycle caused by the adjustment of generation system
charge estimated at additional P1.50 to P1.70 per kilowatt-hour (kWh). In Wednesday’s meet the
Press, Engineer Melchor Licoben, assistant manager of BENECO said the generation cost adjustment is expected to reflect in July electric billing as negotiations between BENECO and Power Sector Assets and Liabilities Management Corporation (PSALM) are on its final stage.

PSALM adjustment mechanisms are mandated under the so-called Generation Rate Adjustment Mechanism (GRAM) and Incremental Currency Exchange Rate Adjustment (ICERA). In the case of Team Energy’s cost is affected by the price of fuel and coal in the world market, the BENECO official said. Actually, BENECO’s power supply contract with Team Energy expires on March 12, 2024.

For 15 years, BENECO has not made any adjustment (generation system charge) ,said Licoben , pointing there’s a need for a longer power supply deal to ensure the continuous supply and delivery
of affordable , efficient electric power. FINANCIAL STATUS Earlier, Interim Board Chairman Steve
Cating emphatically declared that BENECO’s financial status is strong. Cating added that all of
BENECO’s “freezed” bank accounts have already been opened and its operations are back to normal.

He made sure that all rules and policies set by the National Electrification Administration (NEA) are followed to avoid a repeat of the recent ”leadership crisis” especially in the selection of a general manager. He echoed the position of the interim board that they are against the privatization of
BENECO. Reportedly, some sectors to include industry players are pushing for the privatization of
BENECO which franchise expires in 2028.

CHALLENGES Cating said BENECO is beset with the following challenges: renewal of BENECO’s franchise, which is pending in Congress; impending adjustment of its generation system charges; its bill liability (P300M) to PSALM; and its pending application with Cooperative Development
Authority (CDA). CDA APPLICATION Others include selection of a regular general manager; and
the election of regular board of directors.

On the matter of BENECO’s application to CDA to become a full pledge cooperative, Lawyer Delmar Cariño, who is also the head of BENECO’s Administrative Department reported only 41,000 member consumers-owner so far have paid their share capital , totaling to P31 million.
“This is quite a concern,” said Cariño as he encouraged member-consumer to pay said share of capital.

A member-consumer has to pay a total P2k as share capital. Initial down payment of P500 is allowed while the remaining balance can be paid by installment. To date, BENECO has a total of 142,000 member-consumers in Baguio City and the Province of Benguet. BENECO ’s authorized
capital stock set at P1 billion. Cariño further that BENECO it being a non- stock, non- profit service oriented entity, has to pay a certain amount to the internal revenue before the latter can issue tax exemption certificate.

FRANCHISE BENECO officials reported that NEA is ready to issue a Performance Assessment
Category AA, a major requirement by the Committee on Franchise in Congress in order to expedite its report for submission in the plenary for final deliberation. House Bill No. 6145 introduced by Representative Mark Go, extends BENECO’s franchise. It was gathered after series of general assembly meetings, member-consumers supported Go’s measure together with government units of Baguio City and Benguet.

For the record, before the general managership fiasco, BENECO has been a consistent recipient of awards. In the latest Overall Performance Assessment conducted by NEA in 2019, BENECO belongs to the 85 electric cooperatives (EC) that obtained the AAA rating, the highest score given to ECS’.

Primo Agatep/ ABN