Napocor blames Aleco board for Albay’s power shortage

Manila Times.net
State-owned National Power Corp. (Napocor) denied allegations by Gov. Jose Sarte Salceda of Albay that it is responsible for the power shortage in the province because it allegedly failed to secure bilateral agreements for the cash-strapped Albay Electric Cooperative (Aleco).

In a statement, Napocor said that its mandate when it took over the operations of Aleco in 2008 was to ensure the improvement of its financial viability and restructure its P1.5-billion obligation to the power company through a one-year Operations & Management (O&M) contract, approved by the utility’s board. 
The agreement was implemented from July 17, 2008 to July 16, 2009 but was extended on a month-to-month basis by mutual agreement by both Aleco and Napocor until February 23.
Then President Gloria Arroyo directed Napocor to take over the operation and management of Aleco to help it improve its financial viability.

“But still, even as we were already scoring some successes in improving Aleco’s financial viability, we were never remiss in the efforts to negotiate and enter into a bilateral contract for the supply of electricity on behalf of Aleco. We actually exercised utmost diligence in trying to secure these contracts,” Napocor said.

It said that as early as May 27, 2009, Napocor already requested authority from the Aleco board to negotiate with power suppliers. 

The authorization was requested, as this was not included in the program duly approved by the Aleco board when it took over the electric cooperative’s operations.

“However, the Aleco board did not act on this request until August 14, 2009 when it issued Resolution No. 09-026 authorizing [Napocor] to enter into bilateral contracts with other suppliers of electricity for and in behalf of Aleco,” the statement said.

Unfortunately, the electricity suppliers approached by Napocor did not deem it feasible to enter into supply agreements with Aleco, by the time the requested authority was granted.

“Also, the original term of the O&M contract had already expired and was merely being renewed on a monthly basis by Aleco. Consequently, our authority to negotiate and enter into bilateral contracts on behalf of Aleco was also being renewed on a month to month basis,” Napocor said.

As a result, Napocor was constrained by the authority given to it by Aleco to negotiate for short-term monthly supply contracts, which the electricity suppliers are not amenable to accept.

The statement further said that the negotiations at that time with Aboitiz Power Renewables Inc. (APRI) to supply electricity to Aleco did not prosper since the former required Aleco to provide a security deposit of nearly P100 million in cash or standby letter of credit.

APRI is the new owner of Napocor’s privatized Tiwi-Makban geothermal power plant, which provides bulk of the Bicol region’s power supply.
“We tried to convince APRI to waive the security deposit but to no avail. Aleco was not able to secure funding for this purpose hence no agreement was reached,” Napocor said.

Euan Paulo C. Añonuevo