Senate okays new 25-year franchise for Benguet co-op

SKILL CONTEST Trained linemen from different electric cooperatives in Luzon display their skills at a competitive “rodeo” hosted by Benguet Electric Cooperative at Burnham Park in Baguio City on May 22. These utilities are campaigning for public support for a measure that will eliminate the value-added tax from their monthly bills. —Neil Clark Ongchangco

BAGUIO CITY, Philippines — The Senate has renewed the franchise of the power utility that services Baguio City and Benguet province—one of the upper chamber’s last acts before the 19th Congress winds down.

On Monday, 21 senators voted to pass on the third reading House Bill (HB) No. 10483, which extends the 50-year franchise of Benguet Electric Cooperative (Beneco) by another 25 years. HB 10483, sponsored by eight lawmakers led by Baguio Rep. Marquez Go, passed the House with 202 votes, said Laarni Ilagan of the Beneco public information office

The Senate is transmitting the bill to President Marcos, whose late father and namesake, Ferdinand Sr., had organized the first sets of electric cooperatives in the 1970s.

Beneco drew the spotlight when a leadership standoff with its regulator, the National Electrification Administration (NEA), led to an Oct. 18, 2021, police raid.

Before the rift, Benguet’s P4.5-billion electric cooperative was one of the country’s top-performing power distributors.

READ: Power consumers in Benguet to pay lower bills this January

Leadership feud

But its employees and over 100,000 cooperative members rejected what they called a unilateral NEA decision to appoint a former official of the Duterte administration as its general manager, triggering a legal and fiscal standoff that was resolved only at the start of 2023.

Beneco’s franchise, which was granted on March 20, 1978, would have lapsed in 2028.

Despite the progress regarding its extended lifespan, Beneco has recently launched a public signature drive to help speed up the passage of another piece of legislation affecting the power industry, which is pending with the outgoing Congress.

Beneco is supporting HB 02151 that would “eliminate” a 12-percent value-added tax (VAT) that is levied on every stage of the country’s power industry, from electricity generation to grid distribution and even over electric cooperative subsidies, according to a petition circulating Baguio’s 128 barangays.

HB 2151 would “exempt the sale of electricity by generation, transmission, and distribution companies and electric cooperatives from the imposition of the VAT” as prescribed by the National Internal Revenue Code.

‘Power bloc’

Sponsored by the so-called “power bloc” composed of the party list groups Philreca (Philippine Rural Electric Cooperatives Association) and Apec (Association of Philippine Electric Cooperatives), the measure was refiled in 2022 but had not moved from the House committee on ways and means, Ilagan said.

The petition says the Philippine electricity ranks third among countries in Southeast Asia, with the highest power costs in 2024, and blames government taxes as one of the key reasons.

“Currently, the 12-percent VAT is imposed on generation, transmission, distribution, and other charges such as system loss and even subsidies passed on to member-consumers,” among them, the lifeline and the senior citizen subsidies, the petition stated

“Recognizing the need and rights to access essential utilities at affordable costs, removing the multi-layered VAT collection will be an effective solution … as part of a propeople energy policy that prioritizes affordability, accessibility, and social equity,” it said.

Ilagan said she collected 50 signatures when she circulated the petition in Barangay West Quirino Hill on Monday. The petition is also available at Beneco’s collection centers in Baguio and Benguet. —Vincent Cabreza