December 2, 2022

The surging price of coal in the world market has not spared the Benguet Electric Cooperative, as its current generation cost of P4.95 per kilowatt hour (kWh) is expected to increase in April.
Beneco fears a P9 per kWh increase in generation cost but its officials are talking with its power supplier Team Energy for measures to mitigate any increase and cushion its adverse impact to member consumer owners.
The projected increase was based on the price of coal this month which reached a high of $420.65 per metric ton on March 9.
“These are abnormal times and we advise our member consumers of the possibility of rate increase due to market forces that are beyond our control,” said Beneco General Manager Melchor Licoben.
Beneco buys an average of 40 million kWhs of electricity a month from Team Energy that supplies the power from its coal-based plant in Sual, Pangasinan.    
Beneco and Team Energy’s power supply agreement originally pegged the generation cost at P3.85/kWh for January to June and P3.80/kWh. 
The agreed rate allowed the Beneco to charge one of the lowest generation cost for consumers among the country’s electric cooperatives since 2014. 
The price gave Beneco comfort as the estimated bandwith for coal price then was $60 to $130 per metric ton. 
But the range was breached starting the first quarter of 2021 when coal price exceeded $130 per metric ton. Due to this development, Team Energy was forced to collect a higher generation cost which, however, was tempered when Beneco and Team Energy entered into an interim agreement for the cost of generation. 
“The rapid increase in the demand for coal as the world transcends to pre-pandemic levels and the Russia-Ukraine war have seriously affected the trading price of coal. The coal price naturally has to go up,” he said.
Licoben said Team Sual, whose power plants are dependent on coal, will naturally pass the increase in generation cost to its customers, the distribution utilities. 
“Being a pass on cost, the electric cooperatives have no option but to collect the increase from the consumers,” Licoben said. 
Team Sual has informed Beneco the agreed generation cost could no longer hold or absorb the increase brought about by the increase in cola prices. 
Licoben said he has asked his team to review the past arrangements with Team Energy in order to arrive at a mutually acceptable generation cost to avoid a high increase in the rates. – Delmar O. Cariño