BENECO warns hike on generation charges
Benguet Electric Cooperative consumers will pay higher for their electric consumption next year with the anticipated adjustment in generation charges as Beneco’s contract with its power supplier is expiring in March 2024.
Invited to the city council for an update as Beneco is currently looking for a new power supplier, Assistant General Manager Melchor Licoben said the current P5.73 per kilowatt hour that supplier Team Energy collects from consumers of the utility might increase to about P7 to P8 next year.
Licoben said the P5.73 rate is temporary as Team Energy has submitted to the Department of Energy a petition for rate adjustment.
He declined to divulge the supplier’s proposed rates, citing it is premature.
Beneco has submitted its opposition to Team Energy’s petition for rate adjustment.
Reopening of the economy, lower value of the peso against the dollar, hike in the prices of coal in the world market, and the Ukraine-Russia war are some of the factors that contributed in the rate increase, Licoben said.
Generation charge is the cost of power that consumers buy from independent power producers.
Licoben said as early as four years ago, Beneco started preparing for the eventual expiration of its contract with Team Energy by aggregating with other electric cooperatives in Pangasinan, La Union, Ilocos Sur, and Cordillera in a bid to negotiate for competitive rates but there were several circumstances that led to a delay in negotiations.
A bids and awards committee (BAC) composed of representatives from the different cooperatives has been formed but while in the process of crafting a terms of reference, was overtaken by the declaration of the Covid-19 pandemic.
In June 2022, with the easing of restrictions due to Covid-19 pandemic, a bidding has finally pushed through but there were no bids submitted at the time, which made the BAC declare a failure in bidding.
A second bidding happened in December 2022 where three generation companies participated but this too failed when one company was disqualified, and the technical working group declared that the other pre-qualified company’s offer was not competitive.
After two failed biddings, the DOE has allowed a negotiated bidding where the BAC awarded the contract to Therma Luzon, Inc. – an Aboitiz-owned power plant based in Pagbilao, Quezon.
When the result of the bid was submitted to the National Electrification Administration, it said the BAC did not eva-luate the bid, hence the need for another bidding.
Licoben said early this year, the interim board of directors of Beneco permitted the utility to open for bidding the power supply contract but this time excluding the other coops.
Licoben said Beneco also registered with the Wholesale Electricity Spot Market (WESM), where it intends to purchase power in the event no contract with a new power supplier is signed.
However, Licoben is hopeful that by December, a contract would have been signed.
Meanwhile, as a third bidding is in the pipeline, a representative of SMC Power Global, the “power arm” of San Miguel Corporation, has informed the city council that they are interested to bid for Beneco.
SMC said it would have submitted its bid in the previous biddings but failed to meet the deadline set by the BAC.
Beneco BOD interim president Steve Cating said the board will select members of a BAC before the uti-lity’s annual general assembly in June. – Rimaliza A. Opiña