BENECO ordered to stop collection of universal charge

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BAGUIO CITY – The Private Sector Assets and Liabilities Management (PSALM) Corporation advised the Benguet Electric Cooperative (BENECO) to cease from collecting the P0.0543 per kilowatt-hour universal charge for stranded contract cost (UC-SCC) effective February billing to its member-consumer-owners within its franchise area.

Earlier, the Energy Regulatory Commission (ERC) directed the scrapping of the aforesaid charge being collected from consumers considering that the National Power Corporation (NPC) fully recovered its P5,117,060,647.80 from the universal charge for its stranded contract cost effective February billing period.

Based on PSALM’s order, for purposes of monitoring compliance to the ERC directive, BENECO was required to provide PSALM with 3 electricity bills containing no UC-SCC as soon as the same is reflected in the consumer’s power billings for the February billing period.



The UC-SCC had been charged by electric cooperatives as pass-on rate to their consumers representing the stranded cost for the power plants that have been operational.

The cessation of the collection of the UC-SCC is pursuant to the provisions of Republic Act (RA) 11371 or the Murang Koryente Act which is one of the priority measures being advanced by the present administration.

BENECO is one of the rural electric cooperatives in the country that is charging its consumers one of the lowest power rates, much lower compared to the power rates being charged by private distribution utilities like the Manila Electric Company with a far more feasible area of coverage and much wider compared to the electric cooperative’s franchise area.

Further, the electric cooperative is also one of the top performing rural electric cooperatives in the country with a rating of Class AAA having been consistent in sustaining its single digit systems loss, 100 percent collection efficiency and aggressive in the implementation of the government’s rural electrification program.

Presidential Decree (PD) No. 269 created the National electrification Administration (NEA) to implement the government’s rural electrification geared towards bringing quality power to the countryside with the assistance of the established rural electric cooperatives which were created through the grant of their respective franchises covering certain areas of jurisdiction in the different parts of the country.

The PSALM is a government-owned and controlled corporation that took over the assets of the State-owned National Power Corporation (NPC) after the implementation of Republic Act (RA) 9136 or the Electric Power Industry Reform Act (EPIRA) that divided the same into the National Grid Corporation of the Philippines (NGCP) and the National Transmission Corporation while the power distribution remained with the electric cooperatives and the power distribution utilities which have selected areas of coverage, especially those in urban centers in the different parts of the country.

One of the benefits of the EPIRA is the unbundling of the power rates to show to the consumers the real cost of power being charged to them by both the electric cooperatives and the power distribution utilities and the income of the private distribution utilities using the return-on-rate base formula in the preparation of rates as electric cooperatives rely on the cash flow basis.

By Hent


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