Baguio: The Benguet Electric Cooperative (Beneco) is forecasting a decrease in electricity rates for more than 250,000 consumers in Baguio and Benguet, following the activation of its long-term power supply agreement with Masinloc Power Partners Co. Ltd. (MPCL).

According to Philippines News Agency, Beneco General Manager Melchor Licoben announced that the cooperative expects its generation charge to drop below PHP6 per kilowatt-hour, down from the current rate of PHP7.40, once the agreement's impact is reflected in consumer bills. Licoben indicated that the reduced generation cost should appear in the August-September billing period, potentially leading to a corresponding decrease in value-added tax (VAT) charges, which are calculated based on the generation component of the electricity bill.

Before the MPCL agreement, which became effective on July 15, Beneco sourced 36.5 percent of its power from Therma Luzon Inc. and the remaining 63.5 percent from the Wholesale Electricity Spot Market (WESM). Licoben explained that while Beneco had submitted its contracts with both Therma Luzon and MPCL to the Energy Regulatory Commission (ERC), the approval for MPCL came later, necessitating a heavier reliance on the spot market.

The MPCL agreement allows Beneco to reduce its dependence on the spot market, thereby minimizing exposure to sudden price fluctuations. Licoben noted that while the MPCL rate is lower, the cooperative may not benefit immediately from any potential decrease in WESM prices due to the fixed nature of the MPCL contract. Nonetheless, the agreement is expected to provide greater rate stability for consumers.

Additionally, Beneco is keeping a close watch on transmission charges, which are directly passed on to consumers. The cooperative currently experiences an average daily demand of 110 megawatts, with demand projected to increase by at least 10 percent annually due to ongoing development in Baguio and Benguet.