A portion of the electricity bill that is used to finance the amortization of loans acquired by electric cooperatives to expand or upgrade their systems cannot be converted as a share capital of member-consumers.
The Benguet Electric Cooperative clarified the Reinvestment Fund for Sustainable Capital Expenditure (RFSC), which is one of the components of the bill paid monthly by member-consumers, cannot be treated as a share capital.
Beneco issued the clarification in light of claims that member-consumers need not pay their capital shares as these are already settled through the RFSC they are paying monthly.
In an advisory, Beneco General Manager Melchor Licoben said the Energy Regulatory Commission already ruled that the RFSC cannot be used for purposes other than for capital expenditure projects, which are also subject to ERC approval.
The RFSC is intended to fund the amortization of loans by electric cooperatives, which they acquired to expand, rehabilitate, or upgrade their distribution system. These programs or projects are detailed in the Capital Expenditure (Capex) plans of electric cooperatives, which they submit to the ERC for approval before implementation.
When Beneco registered with the Cooperative Development Authority, it initially considered treating the RFSC payments as share capital of member-consumers, but the ERC, which regulates power rates, ruled this cannot be used for purposes other than Capex projects.
“The ERC said that it is contrary to its issuance if the RFSC of a CDA-registered cooperative will be applied or converted to a member’s share capital upon registration with the CDA,” the advisory stated.
“The ERC based its ruling on ERC Resolution 14, s. 2011, which says that the RFSC shall be used solely for Capex or any other projects approved by the ERC and not for any other purpose, even on a temporary basis.”
The ERC ruling prompted Beneco to collect a minimum of P500 from member-consumers as their share capital, the collection of which was declared valid by the CDA as part of the requirements to be complied by Beneco to make it a full-fledged cooperative.
Member-consumers approved the collection of the P500 minimum share capital, during the annual general membership assembly in October 2021.
Member-consumers are advised to pay their capital share contribution at the Beneco accredited collections agents and at the collection centers at South Drive, Maharlika Livelihood Complex, at Bonuan Condominium in Baguio City and at the Beneco buildings at Km.4, La Trinidad and at Bekes, Buyacoan, Buguias in Benguet.
Earlier, Licoben said the payment of monthly bills should only be at the accredited collection agents, which are also found in the barangays, as payments with the banks have been suspended.
He said member-consumers who paid with the banks will not be spared from disconnection, especially if they were already informed to no longer settle their bills with the banks. – Jane B. Cadalig
April 20, 2024
