THE El Niño phenomenon is proving to be worse than expected as the Benguet Electric Cooperative (Beneco) said the phenomenon is likely to cause high price of wholesale electricity.
Beneco Wholesale Electricity Price Market (WESM) specialist Mario Gayaw said the lack of water, which is usually converted to hydroelectric energy, will cause power producers to source energy from coal or gas burning companies.
“The generation of electricity in hydro plants is slowly decreasing, which will result to high prices in the stock market,” Gayaw said.
He said due to El Nino, there will be problems in purchasing and the generation rate will soar high.
Beneco General Manager Gerardo Versoza said it’s a good thing that the cooperative has an existing contract with the Tokyo Electric-Marubani Team Energy (Team), which now supplies low cost energy to the cooperative.
Versoza said based on the contract, Beneco should buy at least 6.789 megawatts of electricity from Team.
The everyday consumption of the area covered by Beneco is 55 MW.
Versoza said the deal with Team is better than those with the National Power Corporation (Napocor) because Beneco saves at least P13,991,846 a month.
“The contract is beneficial to the cooperative and to the consumers because it is cheaper,” Versoza said.
He said the contract with Team allows more leeway and freedom to the cooperative.
He said Beneco also has the right to terminate the contract if there will be a power producer that can offer cheaper prices than Team.
The contract with Team will last for 10 more years.
On the other hand, the Energy Regulatory Commission (ERC) approved Beneco’s application for a rate adjustment of P.2745 per kilowatt-hour.
Before the approval, Beneco was classified as Group F electric cooperative, together with 14 other cooperatives.
Based on the ERC decisions, the ERC chair Zenaida Cruz-Ducut and four other commissioners said the adjustment in distribution, supply, metering rate is very minimal considering that the base year of the unbundling is year 2000 and there were no adjustments in the past eight years.
The rate adjustment will be divided into the following: P.2178 for the reinvestment and P.0567 for operation and maintenance.
The adjustment will be implemented in two years’ time with 50 percent to be implemented this year and full adjustment for the next year.
Beneco assured the rate adjustment will not have great financial effects on the members who are consuming 45 kilowatt-hours or less a month. (Visha Calventas)