BAGUIO CITY — Power consumers of Baguio City and Benguet Province should anticipate an approximate increase of Php1.50/kWh in generation cost, scheduled to take effect in July.

This increase is a direct consequence of a billing dispute and liability between the Benguet Electric Cooperative (BENECO) and its power supplier, TeaM (Philippines) Energy Corporation (TPEC), as well as with the Power Sector Assets and Liabilities Management Corporation (PSALM).

BENECO assistant general manager Melchor S. Licoben on Wednesday, June 21, 2023 said the dispute with TPEC revolves around a substantial difference in the generation costs billed by the power supplier and what BENECO has charged its customers.

While TPEC had been billing BENECO at a higher rate of around Php7/kWh, consumers were only being charged between Php3.95 to Php4.95/kWh, with a recent increase to Php5.73/kWh.

This difference has amounted to approximately Php2.3 billion in unpaid bills and outstanding generation costs payable to the power supplier.

BENECO has taken action by filing a petition with the Energy Regulatory Commission (ERC), while negotiations with TPEC are still underway.

“We did not collect the amount actually being billed by our power supplier because we are waiting for the action of the Energy Regulatory Commission,” Licoben said.

While the negotiations with the power supplier are still ongoing and not yet finalized, significant progress has been made, resulting in a substantial reduction in accountability of approximately Php684M.

In addition to the TPEC matter, BENECO faces an additional billing liability of approximately Php300 million owed to the PSALM, formerly known as the National Power Corporation (NPC).

According to Licoben, PSALM has taken over all assets of NPC and incurred additional charges during its plant operations.

Consequently, PSALM has filed for supplementary power rate charges with the ERC.

Although these charges were initially approved in 2013, the final approval was granted in 2018, causing delays in the collection process.

In the meantime, TPEC has been collecting the adjustment from BENECO, a responsibility that should have belonged to PSALM, without the cooperative’s knowledge until they reconciled records with the power supplier.

Licoben said that BENECO has expressed its concerns regarding this matter to the ERC; nevertheless, a decision on the issue is still awaiting release.

According to Licoben, a resolution has been reached after BENECO’s contract and petition underwent thorough examination by both BENECO’s lawyers and the lawyers from the National Electrification Administration (NEA).

He further explained that fulfilling its obligations with PSALM is a legal requirement for BENECO, emphasizing the importance of doing so to prevent the penalties from escalating.

The resulting liabilities of BENECO with TPEC and PSALM led to unpaid power charges, which must be passed on to the consumers.

These charges represent outstanding billings to the cooperative that were not collected in previous consumer billing cycles.

As per Licoben’s statement, the projected power rate adjustment on Generation Cost is set to be implemented in the upcoming billing cycle.

PSALM’s contribution is anticipated to result in an increase of approximately 30 to 35 centavos per kWh, while TPEC’s minimum increase is expected to be around Php1.20/kWh, which may vary depending on the recovery period.

“We are trying to stretch the recovery period so that the increase in the monthly bill will be less,” Licoben said.

Licoben clarified that the impending adjustment will only be passed on to those affected during the negotiation period with TPEC, and assured consumers that the rate will either be equal to or lower than the generation costs charged by other distribution utilities.

He said the power rate adjustment does not apply to new member-consumer-owners (MCOs) who have recently begun receiving their power bills.

As consumers brace themselves for the impending increase in generation costs, BENECO continues to work towards a resolution with both TPEC and PSALM, aiming to strike a balance between meeting their financial obligations and safeguarding the interests of power consumers in Baguio City and Benguet Province.