FOLLOWING increased electricity rates for the past months in the city of Baguio, the Benguet Electric Cooperative (BENECO) has committed to searching for and implementing a measure to lower the costs for consumers and prevent increasing production costs from being passed on to Baguio residents.
BENECO General Manager Engr. Melchor Licoben said that the cooperative is currently negotiating a fixed generation charge with TeaM Energy, which produces and supplies power to the cooperative. The measure would prevent consumer rates from rising in times of increasing power production costs.
However, the negotiations are still underway and a fixed rate has yet to be set.
The bills for BENECO consumers have increased by an average of P0.2232 per kWh per month since February of this year.
The price hike is said to be caused by an increase in the cost paid to Team Energy, the power generation company that runs the coal-fired power plant in Sual, Pangasinan where Beneco’s power supply comes from.
The price of electricity in the past year was lower due to global coal costs dropping due to the COVID-19 pandemic. According to Licoben, the gradual revival of businesses and industries as the world reopened economies also increased demand, and subsequently prices, of coal globally. The increased demand for power pushed coal prices high this year, thus breaching the coal bandwidth between BENECO and Team.
The Beneco and Team contract provides that the generation cost from Jan. to June will be P3.85 per kWh and from July to Dec., P3.80 per kWh. The generation cost, according to Licoben, is responsible for 50 percent of the power bills.
BENECO consumers will also have to pay P0.0696 per kWh for incremental currency exchange rate adjustment (ICERA) and P0.1948 for generation rate adjustment mechanism (GRAM), both inclusive of value-added tax.
At the same time, P0.1138 per kWh of the cost increase in August is due to an increase in the cost of ancillary services charges, remitted to the National Grid Corporation of the Philippines.
Licoben said the uptick in the generation charge on a monthly basis is legally allowed even without approval by the Energy Regulatory Commission (ERC) compared to the other components of the electric bill.
BENECO, just like other electric cooperatives, will have to pass such cost and its adjustments to the consumers as the cost is deemed a “pass-through” charge, or one that BENECO as a distribution utility, will have to collect as a collecting agent for the power supplier.
The Reinvestment Fund for Sustainable Capex (RFSC) and the Distribution Supply Metering (DSM) items are BENECO’s “pass on” charges to the consumers or the charges that it collects and retains for its operations and capital outlays.
Licoben said that compared to the generation charge, the RFSC and DMS charges cannot be changed at the will of the electric cooperative since the distribution sector is a regulated sector of the power industry where any change to such bill components must be approved by the ERC.