THE RECLOSER By Delmar O. Carino

On free electricity

Free electricity? Technically, there is no such thing.

Free in so far as our member consumer owners who benefitted from the Pantawid Liwanag are concerned but not on the part of electric cooperatives that were compelled to realign portions of their annual budget to be able to provide a subsidy for the program.

BENECO will spend P19 million for the initiative. That no peanuts. But the electric cooperative, realizing that it has its own moral responsibility to help alleviate the adverse impact of the ECQ on its customers, decided to still throw in some amount for the subsidy.

What this Recloser wants to convey is that the electric cooperative will just the same shoulder the cost of the free electricity or the discounted portion of its Pantawid Liwanag lest our MCOs entertain the idea that the EC, after all, can pull all the stops to provide free power should it wish to. The idea that the subsidy can be made permanent is also nil.

It’s not that easy. But BENECO had to do its part because of the extraordinary situation that befell us all, a force majeure that we can’t control and worse, an enemy that we can’t see.

Take note. For April, our consumers need not pay their bills if they used 30 kilowatt hours (kwh) and below. Those who used 31 kwh to 100 kwh will enjoy a P100 discount also for April. For May, it’s the turn of those who used P101 kwh to 200 kwh to enjoy the P100 discount.

Let us pray that the ECQ will not be extended beyond May 15. We can no longer afford another round of subsidy. My boss, GM Melchor Licoben, will surely agree with me that another wave of subsidy will already be bareknuckle.

Your Recloser almost fell from his chair when the news headline quoted a consumer group saying the electric consumption of consumers up to 100 kwh must be given free for three months due to the ECQ. Good the body of the news said the consumer’s group is actually asking the government to shoulder the subsidy. Asking the ECs to do so would be a nightmare.

Let’s not forget some basics though. One, ECs buy the electricity they distribute to consumers from their power supplier. Since the power is bought, the ECs have to pay. Two, the ECs are saddled with expenses for capital and operational expenditures (CAPEX/OPEX) that are necessary to ensure the continuity of the EC’s daily operations. And three, the cash flow methodology used by the ECs provide no margin for profit compared to private investor owned utilities whose rate formula embraces an ROI.

That’s why the plea of one of our commercial consumers that BENECO should waive the distribution demand charges and the distribution charges as a matter of CSR will be flatly but humbly denied. I reiterate what this corner has emphasized in previous engagements – ECs keep the DSM charges (pass on charges) but they have to remit to the national authorities the universal charges and VAT, and the generation and transmission charges to the power suppler and NGCP, respectively. In this equation, the ECs are left with no option but just to run its business based on its available cash.

Buried, however, in this story of subsidy is the fact that our consumers, particularly the so-called lifeline raters, already enjoy a subsidized discount pursuant to RA 9136 or the EPIRA during Covid or no Covid -- 20 kwh and below (50%); 21-25 kwh (40%); 26 – 30 kwh (30%); 31-35 kwh (20%); 36-40 kwh (10%); and 41-45 kwh (5%).

The cost of these discounts, however, will be subsidized by the non-lifeline consumers. So it’s not that free in the truest sense of the word.