The Benguet Electric Cooperative (BENECO) board of directors recently decided that BENECO will bill member consumer owners a generation cost of P4.95 per kilowatt hour (kwh) amid the continuing surge of coal price in the global market.
The board of directors said the rate is temporary since it can still soar. “But we wish to negotiate such interim price with our power supplier while the terms of our power supply agreement are being reviewed and renegotiated,” said lawyer Esteban Somngi, the board’s chairperson.
The generation cost is a pass through charge which BENECO officials explained is dependent on adjustments in the global coal prices as captured in the power supply agreement inked between the electric cooperative and Team Energy.
The generation cost is the highest among the components of the unbundled electricity bills issued to member consumers every month.
BENECO has billed its consumers an increase in generation cost the past few months but management has convinced Team Energy to the interim rate of P4.95 per kwh.
Team Energy supplies BENECO’S power requirement from its coal powered plant in Sual, Pangasinan. Its power supply agreement with BENECO will end in 2024.
Team Energy earlier wrote BENECO that it could no longer hold on to the P4.95/kwh rate since the company said it could no longer sustain the cost of generating the power it supplies to BENECO due to the surging price of coal.
The management, led by Melchor Licoben, general manager, asked Team Energy to stick to the interim rate P4.95/kwh as any increase in generation could will surely be burdensome to the member consumers.
Licoben will forward to Team Energy the resolution passed by the board directors in a bid to convince the power producer to be more considerate and to allow a review of the power supply agreement.
Licoben said the agreement became grossly disadvantageous to BENECO when coal prices surged following the pandemic.
The global demand for coal pushed coal prices to a high of U$359 per ton early this year, threatening to increase BENECO’s generation cost up to more than P8/kwh but management batted for a lower cost.
The board’s decision to stand pat at P4.95/kwh is meant to protect the welfare of the consumers, Somngi said.
“This is the least that the board can do at this point in time as the rest of the world is grappling with the skyrocketing price of coal,” Somngi said.