ECs threatened by takeover of private distribution firms

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BAGUIO CITY – The Benguet Electric Cooperative (BENECO) disclosed that ailing and performing electric cooperatives (ECs) with expiring franchises in the country are being eyed for possible takeover by private distribution companies and this will have a serious negative impact on the implementation of the government’s rural electrification program due to income-based nature of the business.

BENECO General Manager Gerardo P. Verzosa said most of the 11 ECs in the country have expiring franchises in the coming years, thus, enterprising private distribution companies are inclined to challenge the renewal of their franchises with the promise of better services, cheaper power rates because of the availability of their power generation plants, among others, that could eventually result to the possible takeover of the operation of the distribution systems of their franchise areas by private companies.

He revealed the takeover of the private distribution firms over electric cooperatives already started in the case of Pampanga Electric Cooperative (PeLCO) 2 which was taken over by Meralco, Albay electric Cooperative (ALECO) which was taken over by San Miguel, Zamboanga City Electric Cooperative and the latest is Camarines Sur electric Cooperative 3, thus, the need for electric cooperatives like BENECO to embrace the needs strategies to prevent such takeover within the next eight years and mitigate its possible impact to the cooperative’s cheap power rate and the welfare of its consumers.



One of the available options for BENECO to do is venture on the put up of power generation plants,  part of its long-term program to help thwart takeover plans by a private distribution firm, but Verzosa pointed out the need for the electric cooperative to find short and medium-term options to sustain its cheap power cost and efficient delivery of services to prevent the takeover of BENECO by private energy distribution businesses.

The BENECO official claimed among the private power distribution companies  interested to takeover the operation of electric cooperatives in the different parts of the country are those with numerous established power generation plants that guarantees the said companies the stability of the power supply aside from assuring prospective customers of cheap power rates considering that their sources are renewable energy resources of the State.

“We should be ready to confront the challenge posed on us by the private power distribution companies interested to takeover the electric cooperative which we nurtured and improved over the past two decades until it reached its status now. We need to keep our rates the lowest possible that we can offer and continue reducing on our operational costs,” Verzosa stressed.

Earlier, two private distribution companies already started assessing the status of BENECO for possible takeover but the said companies backed out when they found out that the expected  return of investment on the capital they need to infuse will not be too soon because of the very low power rates being charged by the cooperative to its consumers aside from its effective and efficient distribution system that ensures the delivery of quality power to the consumers within its franchise which include  non-viable areas that are yet for energization.

By HENT


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