Business Mirror
13 Jul 2014 Written by Lenie Lectura
RAMON S. ANG, president of San Miguel Corp. (SMC), said his company remains on the lookout to help other ailing electric cooperatives despite the still-unresolved financial woes of Albay Electric Cooperative (Aleco).
“If there is something viable, we will evaluate,” Ang said.
SMC, through SMC Global Power Holdings Corp. (SMC Global), in January won the bid to take over the management of Aleco for 35 years. It will not own Aleco but merely “run and shoulder the debt and pay monthly concession fees.”
Since SMC Global’s takeover, Aleco’s financial troubles have continued.
“We are still fixing Aleco’s many problems. It will take years to make money. It’s public service, though. We are not sad about it,” Ang said.
SMC Global had said it was shelling out P350 million in separation payment to affected Aleco workers. Also, some P250 million was earmarked for capital expenditure. Meanwhile, Aleco’s debt exposure to SMC Global is now P600 million.
SMC Global has become one of the largest independent power-generation companies in the country with an installed capacity of 2,545 megawatts (MW) to date. It plans to install a total of 3,000 MW of new capacity over the long term with new power plants that will be based on clean-coal technology.
Meanwhile, Energy Secretary Carlos Jerico L. Petilla urged power firms to supply power to Aleco. “We are asking for other suppliers to please have pity on Aleco. The other suppliers want SMC as guarantor, because others do not want to go directly to Aleco because of its outstanding debts.”
He said SMC Global used to supply 100 percent of Aleco’s power requirements but after the former took over Aleco, it could only supply up to 50 percent, citing cross-ownership rules stated under the Electric Power Industry Reform Act.
“Prices went up last summer, and everyone complained. Before, SMC could supply 100 percent of Aleco’s power requirements at P4 per kilowatt-hour, but not anymore because of the cross-ownership rule. Now, no one wants to supply Aleco because of its debt issues. That’s why I am appealing to the power generators to help Aleco because it’s the people there who are suffering,” Petilla said.
Meanwhile, a senior official of a local human-rights group scored the government and San Miguel Energy Corp. (SMEC) “for the unresolved power outages that continue to paralyze commerce and perpetuate inconvenience among residents in Bicol,” after SMC took over of the electric cooperative in January.
SMEC, which took over management of Aleco through the public-private partnership of the government with the power industry, continue to fail to meet its promise of ending blackouts in the province, said Vince Casilihan, Karapatan-Bikol spokesman.
Albay, which covers three component cities and 18 municipalities, still experience daylong rotating brownouts about half a year after the SMEC takeover, he said. Power fluctuates five times a day nom the average.
The rotation of blackouts, which are felt in different segments of the province, stem from the poor outline of the power firm to revive electricity in Albay, Casilihan said.
Proponents of Aleco’s privatization vowed to resolve the power problem in the province, he said. However, Albay is still gripped by a dim prospect about six months after SMEC’s takeover of the cooperative in January.
Casilihan said the province experienced intentional long power outages months prior to the takeover to justify Aleco’s privatization.
The handover of the cooperative was unlawful, he said. Only 4.8 percent of the total number of Aleco’s member-consumers voted in favor.
Rule requires the 5-percent vote by the entire membership of the cooperative, Casilihan said. In addition, member-consumers were persuaded to vote for the takeover of Aleco by a private-power distributor.
Casilihan said his group keeps data of politicians in favor of the privatization of power distribution, bribing member-consumers to vote for the selling of their ownership of the cooperative.
Power distribution in Albay should be restored in the hands of member-consumers, he said. The power problem in the province was prompted by mismanagement and corruption.
About P265 million under the Special Payment Agreement (SPA) collected from member-consumers were supposed to pay for Aleco’s accountabilities, which was initially sufficient to prevent disconnection by the national grid, he said.
Mismanagement and corruption inside Aleco was made worse by meddling politicians, who brokered for the takeover by SMEC, and profited, Casilihan said.
Government should have saved power distribution in Albay in the hands of public by subsidizing the cooperative instead of facilitating a power company to control its management, Casilihan said.
The Electric Power Industry Reform Act of 2001, which failed to keep its promise of resolving power problems nationwide, should be abolished, he said.
Otherwise, all public-owned and ran power distribution utilities in the country would get into the private ownership of power companies, Casilihan said.
The Epira law backs, among other things, the introduction of more private capital and expansion of the breadth of ownership in power generation, transmission, and distribution.
On the contrary, the law states protection of public interest affected by rates and services of electric utilities and other power providers.
With Oliver Samson and Manly Ugalde source
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