BENECO increases power rates despite unbundling
Written by Lyn V. Ramo for the Northern Dispatch
BAGUIO CITY — Bayan Muna party list representative Satur Ocampo’s technical consultant, an electrical engineer, noted that Benguet Electric Cooperative (BENECO) increased its power rate by 6.8% after the unbundling of its power rates. This is contrary to the provision of Electric Power Industry Reform Act (EPIRA) that the unbundling should not increase the rates.
This, Engr. Ramon Ramirez, convenor of Samahan ng Nagtataguyod ng Agham at Teknolohiya Pasa sa Sambayanan (Agham) divulged in a forum on the plight of the Philippine electric service at the University of the Philippines-Baguio Multipurpose Hall on March 11.
Ramirez and Edwin Castillo, also of Agham, discussed issues surrounding the power industry, among others and explained the unbundled rates electric utilities all over the country are now implementing.
The Agham study revealed that BENECO’s rate in December 2003 was P4.20/kwh before the unbundling was implemented. At the start of unbundling in January 2004, the rates rose to P4.46/kwh. Current rate is at P6.58/kwh.
BENECO filed for the unbundled rate on June 3, 2002. It was approved by the Energy Regulatory Commission (ERC) on December 3, 2003 and was implemented on January 3, 2004.
Unbundling, says Ramirez, is like removing the strings that binds a stick broom (tingting). “So consumers will know what items compose the electric power bill.” Specifically for BENECO, there used to be five items in the bill before unbundling. After unbundling there are 11 items. “Pero lahat tumaas,” (But everything rose) Ramirez told Baguio consumers.
Ramirez also disclosed that the contested Purchased Power Adjustment (PPA) now includes the NPC PPA, BENECO’s use of electricity, BENECO’s systems loss and franchise. In the bill, these are in transmission, generation costs and General Rate Adjustment Mechanism (GRAM), and later the Incremental Currency Exchange Rate Adjustment (ICERA) resulting from fluctuations in peso-dollar exchange.
Electric consumers protested against the PPA in 2001 and 2002. Before the State of the Nation Address (SONA) of Pres. Gloria Macapagal-Arroyo, she ordered the PPA reduced from P1.25 to P0.40 per kilowatt-hour. Later, the PPA was no longer indicated in the electric bill. This caused the National Power Corporation a lot of losses because it had to absorb the P0.85/kwh GMA removed from the consumer’s bill.
Ramirez revealed that according to the Energy Regulatory Commission, “Discontinue charging the PPA upon effectivity of the unbundled rates. Any change in the cost of power purchased, with the exemption on power purchased from LUELCO which shall be limited to that of NPC rates, shall be reflected as deferred charges or credits which shall be recovered through the GRAM and ICERA for implementation effective February 2003.”
To remedy the P29 billion annual losses, Ramirez revealed that NPC had to loan $100 million.
“Tayo ang magbabayad sa utang na ito,” Ramirez warned, “sa pamamagitan ng universal charges. In the end, there was nothing that PGMA removed from our bills.”
Ramirez also noted that BENECO’s systems’ loss is too high at 23% or 9% more than the 14% allowed by law.
While BENECO General Manager Gerardo Versoza put much of the blame on the EPIRA and the pass-on charges from Transco and NPC, Ramirez believes that the local distribution utility also has its share in the power rate hikes.
He advises consumers to look into the bill closely and examine the financial reports of BENECO. He said that the use of electricity by the distribution utility should not exceed 1% of its purchased power for a given period.