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BAGUIO CITY – Member-consumer-owners of the Benguet Electric Cooperative (BENECO member-consumer-owners during the staging of its 37th Annual General Membership Assembly (AGMA) held in Atok, Sablan and Baguio City this month.
The resolution reiterated the decision of BENECO members in 2011 that the loan balance plus interest and penalties of its P100 million from NEA in 2006 amounting to P78.4 million be included in the 2018 NEA budget for reasons pursuant to Section 32-A of Republic Act 10531 or the revised NEA law and Section 5 of Energy Department circular No. DC2013-07-0015.
The resolution argued BENECO)’s loan from NEA which was contracted ahead of the government’s SEP had the same purpose with that of the rural electrification program which was to energize the sitios that have remained unilluminated for so many years and that the SEP fund was a subsidy and BENECO’s fund was a loan.
Further, it added the other electric cooperatives directly benefitted from the subsidy and compared to BENECO, the other ECs implemented the SEP much later and enjoyed being spared from the burden and agony of paying for any loan or interest while BENECO was the first and only EC to take the risk of securing a loan from NEA in such gargantuan amount to energize unviable areas or sitios.
As a consequence, the resolution stated BENECO took the cudgels to secure a condonation of its loan via congressional initiative that resulted to the filing of two bills with the House of Representatives for the condensation of such loan.
BENECO had been religiously paying its loan until September 2012 and not that the EC was financially in distress that it decided to stop paying considering that the option was taken since the loan it took had the same purpose as the SEP.
Under BENECO’s proposal, the mechanics are that BENECO will be provided a subsidy in the proposed 2018 NEA budget which the EC will automatically reimburse to NEA to cover its existing loan balance and the inclusions in NEA’s general or administrative fund will be used to provide financial assistance to the other ECs and at the same time relieve BENECO from the burden of paying the loan considering that the move is to seek appropriation from the national government through the general appropriations act.
When the SEP was launched in 2011, BENECO was able to pay the amount of P25.8 million in interest and P22.2 million of the principal amount of the loan and the loan payment was sourced from BENECO’s internally generated fund, savings from the distribution, supply and metering (DSM) revenue which was derived due to the efficiency of the electric cooperative in operation, load growth and reduced number of manpower which is far lower than the NEA standards, thus, it is worthy to note that the pass-on rate of BENECO does not include a provision for NEA debt service while the SEP project is not likewise included in its capital expenditure plan.
The NEA legal services submitted a legal opinion providing legal basis for the inclusion of BENECO’s loan for SEP in the 2018 NEA budget which were Section 32-A of the new NEA charter which empowers NEA to provide institutional, financial and technical assistance to electric cooperatives upon request.