July 22, 2024

■  Rimaliza A. Opiña 

A group of members and consumers of Benguet Electric Cooperative has opposed the utility firm’s decision to pay P684 million to the Power Sector Assets and Liabilities Management Corporation (PSALM) for incremental currency exchange rate adjustment (Icera) and the Generation Rate Adjustment Mechanism (GRAM).

In a press release, the group of member-consumers which also includes recent board of directors who have been removed from post by the National Electrification Administration said since this payment will be collected from consumers, Beneco should have consulted member-consumers first before deciding to negotiate with Team Energy and PSALM.

The group said member-consumers should not be made to pay double – Icera and GRAM to the PSALM and another to the utility’s current supplier – Team Energy.

The group said Beneco should have waited for the decision of the Energy Regulatory Commission regarding the utility firm’s protest about them being billed the Icera and the GRAM when this was supposed to have been paid to Team Energy and Team Energy should have remitted this to the PSALM.

It added payment of the P684M was not the decision of the recent board of directors.

“The removal of the 11 board of directors and the appointment of five interim directors by the NEA last Jan. 11 somehow railroaded the past agreements without considering the upcoming decision of the ERC,” the group said.

GRAM represents the recoveries for the actual incremental costs of fuel and power sourced from independent power producers, while Icera is for fluctuations in the international currency exchange rates.

Beneco Acting General Manager Delmar Cariño said the decision was the most reasonable and favorable to consumers of Beneco.

He said waiting until the ERC decides on the utility firm’s protest resulted in the ballooning of Beneco’s obligations to PSALM.

He said Team Energy continues to bill Beneco a rate above the P5.73 per kilowatt hour they agreed earlier on, while PSALM continue to bill them Icera and GRAM with interests.

Cariño said the Icera and the GRAM paid to Team Energy cannot be considered as payment to PSALM. 

“After a review of Beneco’s legal positions on the Icera and GRAM issue, the consensus was the Icera and GRAM being asked by PSALM is different from the Icera and GRAM Beneco paid to Team Energy,” he said.

Cariño said the Icera and GRAM that Beneco owed to PSALM was by virtue of an ERC order, while the Icera and GRAM paid to Team Energy was part of the rate formula.

Cariño added PSALM also refused to issue Beneco a “certificate of non obligation,” which is one of the requirements that the utility had to submit to Congress for its franchise to be renewed.

With Beneco’s agreeing to pay, through an instrument called “letter of agreement,” both PSALM and Team Energy issued certifications that Beneco has no outstanding liability.

“The previous position of Beneco that it will fight it out until the Supreme Court was not railroaded when the 11 directors were removed. The change in track was arrived at after a careful review of the legal and factual bases of the disputes. The decision to enter into an agreement with Team Energy and PSALM was the most practical and most feasible option for the electric cooperative and its member consumers,” Cariño said.