Local distributor Benguet Electric Cooperative, Inc. (BENECO) is calling on the Department of Energy (DOE) to review its policy in issuing Hydropower Service Contracts (HSC) to electric cooperatives.
In a letter shared to Power Philippines, BENECO said that local electric cooperatives are interested in constructing their own renewable energy facilities as part of their efforts to reduce power rates. However, they said the current HSC hinders the ECs’ efforts to become power generators themselves.
“Our position is that ECs should be given priority in the tapping of renewable resources within their franchise areas and that they should be given opportunity to challenge any existing HSCs the DOE may have granted to some other entities in the same area,” the letter stated.
The electric cooperative is hoping that the HSCs won’t obstruct the chances of ECs to pursue a similar endeavor as other private developers.
“The DOE’s issuance of HSCs to private capital in many areas for the utilization of renewable energy sources has clipped the chances of ECs to become generation players, not thanks to the DOE’s HSC policy that grants exclusive rights to the HSC holder to explore and use renewable energy in the area,” the cooperative said.
BENECO is echoing the concern of other ECs over the huge number of private developers being given “water rights” and service contracts.
Cordillera Region Electric Cooperatives Association (Creca) financial studies show that electric cooperatives can provide much better benefits to the community compared to private developers.
In a Creca’s resolution that was quoted in a Sun star report, “financial studies revealed only electric cooperative developers, being non-stock, non-profit entities, have the power to lower the generation cost in their respective franchise area to as low as P1.50/kWh once the loans are fully paid within 10-12 years of operation of which cheap cost of power will ultimately benefit the member-consumers and spur development in the local community because of the residual disposable income as a result of paying less electricity bill.”
BENECO is waiting for the DOE’s response to their letter.
BENECO is an electric cooperative providing lines and services to the areas to Baguio City and Benguet Province.