New Baguio storm: Beneco vs outsider

PRESS reports from Baguio talk ominously of a coming power play, which the community supposedly opposes. It concerns the appointment of a general manager for the Benguet Electricity Cooperative (Beneco) from outside, i.e., not from Baguio, not from Beneco. The person alluded to is a certain Anna Maria Banaag Rafael, a lawyer. It seems the National Electrification Administration (NEA) that oversees Beneco as an electricity cooperative in the Baguio-Benguet area has been told by the current political power to appoint her and is working for the consummation of this appointment. The hue and cry are that the would-be appointee is an outsider who does not have the technical qualifications while the next-in-line in Beneco, a certain Melchor Licoben, (the general manager Gerardo Versoza died last September after 32 years in the position) has the technical qualifications from long-standing work in the cooperative. Supposedly, the Beneco board appoints the general manager, but there are the orders from above to the regulatory agency in charge to appoint Banaag Rafael. Can they ignore these? Regulatory agencies are supposed to be independent and act for the good of the majority of their constituents. In this case, it should be for the Beneco consumers, not just the Beneco board. Will they?

Banaag Rafael has served as the mayor of Paracelis in the Mountain Province (though her political family comes from Natonin, another town). So, we are talking politics. She was also sometime ago an investigator in the Ombudsman’s Office and more recently also worked for the Presidential Communications Office. It does look like she has a godfather somewhere that gets her in and out of government offices where she does not stay long. On this record she has been under attack in social media and the Baguio media.

So, should Beneco be saved from an outsider who has no technical knowledge about electricity? The last general manager of Beneco was a commerce graduate. So, why are the goal posts being moved now? After due inquiries and even personal experience it has become obvious that Beneco itself needs better and more honest management. More to the point, it needs overall reform as it has been a Kingdom of Darkness for some time, not what an electricity cooperative should be.

Let us begin with their board of directors, supposedly elected by districts and yet no one in the districts, including myself from Itogon, has ever been asked to vote for a director from our district nor seen a ballot for it. No one hears when they are holding elections; no one knows who is supposedly elected. None of the names ring a bell nor have some known record of previous public service that is appreciated, which means these are a bunch of lucky people. This is the darkness I allude to. Those “elected” hit the lottery when given the cushy job of director that the record shows amounts to access to a public trough. Do not expect them to be independent but rather, subservient to whoever got them there. Moreover, the terms for directors are for two years and yet looking at the directors’ names on the website, most are on a term up to 2017 and a few others until 2019 and still there. It is 2021, is the pandemic the excuse for no elections? Probably, even if those elections are virtually ghost exercises.

Can of worms

Asking around about Beneco yielded a can of worms. It is supposed to be a cooperative but from its actions, it looks like it has been privatized by its officers at the cost of the consumers who are the rightful owners. It acts like a private business owned by whoever is running it, rather than a cooperative that is answerable to its consumers/members. It is known to throw money to elect politicians or to co-opt the Baguio media, and it attempts to build an empire by trying to head off other power servers from the Cordillera even if they do not have the capacity or the capital (unless they borrow). Meanwhile, it has incurred an astonishing amount of debt — its newly built office on South Drive is one instance of the mania for acquiring enormous debt which will have to be paid by consumers as they are the ones paying for Beneco’s operations. The South Drive Beneco headquarters cost unconscionable millions. It is prime Baguio real estate. Why does a cooperative have to buy prime real estate outside the commercial center and throw that kind of money away as a sunken cost? The lot alone was bought for P184 million and the building cost P89 million. Yet it is said that the price was under-declared. In other words, one can guess an arrangement between buyer and seller that has a lot more to it than meets the eye. The Energy Regulatory Commission disapproved the purchase because Beneco had about seven other properties and buildings in the area, but it went ahead anyway and did what it wanted. They certainly did not exhibit goodwill or discretion in the matter. Besides the scuttlebutt that the property was overpriced and under-declared is the fact that it violated the zoning regulations on South Drive, which is supposed to be a prime residential area. Now it looks like a motor pool attached to a luxury building.

In a tayo-tayo move, Beneco also paid P100 million in cash for a property on Camp 7, supposedly for housing for employees. The employees come before the consumers who are the owners? Why not retire debt first? The general manager’s salary is P224,000 a month and presumably the compensation rate for directors and other managers is not far behind. They all have new vehicles and who knows what other perks paid for by Beneco at the consumers/ members’ expense, of course. There is a party going on there paid for by the Beneco consumers. Yet there was a recent announcement that Beneco needs to raise rates to pay off debts. Another debt is P77 million to the NEA borrowed for its electrification projects which Beneco is now asking to be condoned via Baguio representatives in Congress (why are these congressmen doing this?)

Beneco officers live rich. Who pays for that? It can only be the consumers/members. And if you look at their slick website, note the schedule of numerous interruptions regularly due to “repairs,” which I think are due to inefficiency. I can almost be guaranteed of at least one brownout for a weekend in Itogon when I go there. So, what technical knowledge assets are they talking about? And why can they not retire debt?

Officers are said to have formed private corporations using relatives and friends that sell everything that Beneco needs from office supplies like paper clips, computers and bond paper to electric meters, and whatever high-priced hardware a project needs. Presumably, no public bidding is held because it is not a government agency but a cooperative, which means sky-is-the- limit profits for suppliers. One family has gone into Napoles-style high living with multiple houses in the US, frequent travel, a palatial residence in the Manila area, luxury vehicles, intensive jewelry acquisition and an incipient wholly owned housing project that exhibits enormous capital needs. Their Beneco relative has struck a gold mine working there.

It has also been discovered that while Beneco has been parading as a cooperative since the 1970s, it was only last November 2020 that it officially registered as such with the Cooperative Development Administration. All the time, before November 2020, it was a nonstock, nonprofit corporation registered with the Securities and Exchange Commission and did not disclose it. Is this honesty? Did the NEA know this? Or are they part of the party going on at Beneco? For example, the last general manager was supposed to have retired at 60 but the NEA tweaked its rules to accommodate him and allow him to stay on. It was only when he had a heart attack at 66 after 32 years as the general manager that he left. That is the behavior of an owner of an enterprise, not an employee of a cooperative.

This can of worms at Beneco almost balances off the outsider would-be appointee with the rolling-stone record of government positions. In truth, only an outsider can reform Beneco as everyone there has been compromised enough for too long to be able to tackle such an