The Benguet Electric Cooperative has signed an emergency supply power agreement (EPSA) with a subsidiary of San Miguel Global Power, assuring Beneco’s service areas a continuous supply of electricity for the next 12 months.
The EPSA was signed on March 12 with Lima Power, Inc. or on the day the National Grid Corporation of the Philippines was set to disconnect Beneco’s substations from the grid after the distribution utility’s 20-year power supply contract with its immediate former supplier Team Philippines Energy, Inc. ended midnight of March 12.
Beneco General Manager Melchor Licoben said NGCP gave Beneco a notice on March 7 that it will no longer receive power supply effective 12:01 p.m. of March 13 after Team Energy notified NGCP that its contract with Beneco was ending on March 12.
“The EPSA saved us from the brink of disconnection. Honestly, we got worried a lot. Word was spreading fast that Beneco will be disconnected from the grid at 12:01 on March 13. What could salvage the electric cooperative would be a new power supply contract or a proof that Beneco is a direct player in the Wholesale Electricity Spot Market. As of 8 a.m. before that day, we did not have both. But our prayers were answered. Around 10 a.m. on March 12, Beneco sat with San Miguel Global Power officials to put signatures on the dotted line,” Licoben told reporters on March 14.
He said the EPSA was sent right after its signing to NGCP, which recalled the notice of disconnection afternoon of the same day.
Licoben said the EPSA was a result of a series of negotiations with San Miguel and it only happened that its completion came close to the disconnection notice.
As per rules of the Energy Regulatory Commission, EPSA is an agreement that is brief in nature and is resorted to by distribution utilities as a stop gap measure while trying to secure a new power supplier that could offer a long-term contract.
This means Beneco must complete a competitive selection process for a new power supplier within the next 12 months.
Licoben said Beneco opted for an EPSA as efforts to secure a new power supplier in anticipation of the termination of its contract with Team Energy was affected by unavoidable circumstances, foremost was the Covid-19 pandemic.
He said moves to find a new supplier started in 2019, but the pandemic and subsequent intervening events beyond the control of Beneco took place which left it with no other option but to go for an EPSA.
“We hope that we can secure this year a new long term contract. We will do it with force and determination to dispel fear of disconnection among our member consumers,” he said.
Licoben said under the EPSA, Beneco might not be able to maintain the existing rate passed on to consumers, so consumers may expect a minimal rate adjustment.
He said the exact rate will depend on variables and this will be known from the new supplier’s billing and computation on March 25. Among the variables is that Lima Power Inc. is indexed on coal, and the rate will depend on the price of coal.
“But we assure our consumers that the rate adjustment will not be higher than most of the generation cost of other electric cooperatives,” he said. – Hanna C. Lacsamana
