BAGUIO CITY – The Benguet Electric Cooperative (BENECO) stated that the reported slight adjustment in the residential and commercial power rates in June was inevitable as the electric cooperative’s hands are tied since the reflected increase has regulatory approval, particularly by the Energy Regulatory Commission (ERC).
BENECO General Manager Engr. Melchor S. Licoben stated that even the electric cooperative hates increase, not at this time when people are facing difficult times supposed to be.
However, he pointed out that there are matters that the electric cooperative cannot control, like ancillary charges, global coal and fuel index, and the peso to dollar rate which are factored in the computation of the generation and transmission charges, both pass through rates as reflected in the power bills of consumers.
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The Beneco official asserted that the same explains the emphasis of the need to fully grasp what pass through and pass on charges are where the pass through charges were responsible why the June residential and commercial power rates slightly went up but not the pass on charges such as the distribution, supply and metering (DSM) charges which are BENECO’s own set of charges.
The pass through charges are charges which the electric cooperatives collect from consumers and remit them to the appropriate body or government agency that include the generation charge for the power supplier, the transmission charge for the transmission company, the universal charges for the Power Sector Asset Liability and Management Corporation (PSALM) and value added tax for the Bureau of Internal Revenue (BIR).
On the other hand, pass on charges refer to the charges which the electric cooperatives impose on their own customers to finance their operations, fund their capital expenditures and pay the salaries of their employees where the same include the DSM charges and the reinvestment fund for sustainable capital expenditure (RFSC).
Licoben underscored that BENECO did not deliberately act to increase the residential and commercial power rates in June and that it has no plans to increase its own charges and that what caused the increase in the June power rates are the pass through charges such as the transmission charge and feed in tariff allowance which the electric cooperative had to impose on its customers by operation of law.
According to him, BENECO cannot unilaterally increase its DSM charges without the approval of the ERC, even for a single centavo.
“If the increase in June was due to a surge in the DSM charges, then by all means BENECO must be held liable. Distribution utilities are required to submit their monthly rate schedule to the ERC for review. The REC would call the attention of the electric cooperatives should there be any discrepancy in its DSM charges. The ERC would be the first to know and would issue a show cause order to BENECO if indeed it increased its rates without approval,” Licoben stressed.
He asserted that BENECO is just a mere collector of the pass-through charges just like the other similar charges.
By Hent
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