Beneco hydropower plant to reduce power rates

By Michael Jerome de Guzman

BUGUIAS, Benguet -- The Benguet Electric Cooperative (Beneco) is investing in its own hydropower plant and buy its output to cut the cost of electricity that it sells to consumers, an official said on Thursday.

Engineer Ricardo Pallogan, manager for Beneco’s power generation division, said they expect to start the operation soon of the three-megawatt power plant located here in Barangay Sebang.

On the first year of the operation, the hydropower plant will sell the power at P5.44 per kilowatt hour, almost the same as the cost of power Beneco buys from the generation company that provides their electricity needs.

Proceeds from operation will also cover the loan for the construction and putting up of the hydropower plant.

After the 12th year, it will be able to sell to its consumers at PHP1.54 per kilowatt hour, not retaining anything as Beneco is a non-stock, non-profit electric cooperative owned by the electric consumers within the franchise area of Baguio City and Benguet.

“Beneco or any electric cooperative, should construct, commission and operate their own generation facilities para 'yun ang pagbaba ngrates (to lower the rates),” Pallogan said.

“Beneco will be able to do this as it is not allowed by law to retain profits, it being a non-stock, non-profit," he added.

Beneco passes on to consumers what is charged by the generation and the transmission sector.

Pallogan said Beneco had borrowed around PHP58 million to start building the three-megawatt hydro power plant. It will pay the loan in a span of 12 years. Once paid up, it will give its promised rate of PHP1.54 per kilowatt hour to consumers.

"Go for power generation, for run-off-river technology because it is allowed by law for you to engage in that to lower the cost of power that you sell to your consumers," said Professor Rowaldo del Mundo, an Associate Professor and Program Director of the National Engineering Sector of UP Diliman, specializing in Power System, Electricity markets and regulation. 

In one of the seminars he conducted for government information officers in the Cordillera, del Mundo said that Beneco sold power to the consumers at an average of PHP8.40 per kilowatt hour, around PHP1 cheaper compared to Meralco’s PHP10.20 per kilowatt hour.

The low rate is also a positive effect of the one-digit systems loss of Beneco at 7 to 8 percent, much lower than the ceiling allowed by the distribution sector.

The cheap cost of power provided by Beneco will further be reduced with the schemes being undertaken.

Randy Caralino, head of the billing and collection division of Beneco, said that Baguio City already has the cheapest rates in the whole country.

Aside from the Buguias power plant, Beneco had also entered into an agreement with the indigenous peoples organization in Kabayan, Benguet for a new and bigger power plant, which in the future will add on to the three-megawatt production in Buguias, and further cut the power rates for Baguio and Benguet consumers. -- PNA