July brings higher bills for BENECO consumers
GENERATION COST HIKE. Benguet Electric Cooperative (BENECO) assistant general manager Melchor S. Licoben assures consumers that the power rate adjustment will only be passed on to those affected during the negotiation period with Team Energy, and the rate will either be equal to or lower than the generation costs charged by other distribution utilities. (Photo by Mario Oclaman/FNS)
BAGUIO CITY – Baguio City and Benguet Province power consumers find themselves on edge as they prepare for an upcoming increase in generation costs, expected to take effect in July.
The Benguet Electric Cooperative (BENECO) has shed light on the reasons behind this sudden rate adjustment, revealing a contentious billing dispute with their power supplier, Team Energy, which has resulted in outstanding dues amounting to approximately Php680 million.
Additionally, BENECO faces another financial challenge, as it carries a billing liability of around Php300 million with the Power Sector Assets and Liabilities Management Corporation (PSALM).
These accumulated liabilities, which the cooperative is obligated to settle, are set to be passed on to the consumers through the impending rate adjustment.
The root cause of the billing dispute lies in the significant disparity between what Team Energy has billed BENECO and the generation costs passed on to consumers.
BENECO assistant general manager Melchor S. Licoben explained that Team Energy had been billing the cooperative at a much higher rate, approximately Php7/kWh, while consumers were only charged a range of Php3.95 to Php4.95/kWh, with a recent increase to Php5.73/kWh.
The substantial discrepancy between Team Energy’s billing and the generation costs billed to consumers has accumulated to an estimated Php2.3 billion, resulting in unpaid bills and outstanding generation costs payable to BENECO’s power supplier.
“We did not collect the amount actually being billed by our power supplier because we are waiting for the action of the Energy Regulatory Commission,” Licoben said.
Licoben said that BENECO has filed a petition with the Energy Regulatory Commission (ERC), and while the petition is under review, negotiations with Team Energy are ongoing.
Although a final agreement has not yet been reached, significant progress has been made, resulting in a reduced accountability of approximately Php684M with the power supplier.
To add to the complexity, PSALM, formerly National Power Corporation (NPC) has applied for additional power rate charges with ERC due to additional operational costs incurred by the plant.
Despite the approval of the additional charges by the ERC in 2013, the final approval was only released in 2018, leading to delays in their collection.
Meanwhile, it has come to light that Team Energy has been collecting the adjustment from BENECO, which, unbeknownst to the cooperative, should have been the responsibility of PSALM, until the reconciliation of records with Team Energy revealed the discrepancy.
Licoben said that the cooperative has contested this issue with the ERC, but a decision has yet to be released.
While a final decision from the ERC is still pending, progress has been made through the review of contracts and petitions involving BENECO’s lawyers and representatives from the National Electrification Administration (NEA).
Licoben explained that BENECO is bound by law to settle its obligations with PSALM in order to prevent further penalties.
The forthcoming rate adjustment is projected to come into effect in the next billing cycle, with PSALM accounting for a rate increase of 30 to 35 centavos per kWh and Team Energy contributing a minimum increase of Php1.20/kWh, depending on the recovery period.
“We are trying to stretch the recovery period so that the increase in the monthly bill will be less,” Licoben said.
Licoben highlighted that the adjustment will only be passed on to consumers affected during the negotiation period with Team Energy, and assured that the adjusted rates will remain competitive with those charged by other distribution utilities, as negotiations with Team Energy continue.
Despite the challenging circumstances, efforts are being made to strike a balance between the cooperative’s financial obligations and the interests of the consumers, as Baguio City and Benguet Province residents brace themselves for the unavoidable rise in their energy bills. # Merriam del Rosario // FNS
