Aleco finally disconnected

Business Mirror

Published on Tuesday, 30 July 2013 19:34

Written by Manly M. Ugalde / Correspondent

LEGAZPI CITY—After years of being unable to pay a P4-billion debt capped by seven days of failed negotiations, the National Electrification Administration (NEA) finally disconnected the Albay Electric Cooperative (Aleco) from the power grid at 12 p.m. on Tuesday.

Aside from the P4-billion debt accumulated over the years, Aleco owes P67 million more in current electric bills.

The disconnection will be in effect for at least two days, during which time it will be given the chance to pay at least the P67 million it currently owes in unpaid electric bills.

Aleco is servicing more than 200,000 consumers in Legazpi City.  It is known as the third-biggest cooperative in the country and among the 10 worst. It has the highest system loss at 24 percent among the country’s active cooperatives.

Albay Gov. Joey Sarte Salceda said the disconnection was devastating for the province’s economy and very disruptive if not reconnected soon. Albay, under Salceda, is in the middle of outstanding strides in tourism development and environmental leadership.

The NEA, which has managed Aleco since 2011, has been negotiating with the Department of Energy to forestall the disconnection threat scheduled on July 22, then July 28 and, finally, July 30.

Energy Secretary Jericho Petilla pleaded with NEA-Aleco to at least settle the current P67 million it owes in unpaid power bills to spare Albay from the current power cutoff, a threat which Aleco often encountered and avoided, thanks to interventions by powerful politicians, including Malacañang.

Legazpi City Mayor Noel Rosal said the mayors’ league had pleaded that the disconnection be extended for at least two more days. Rosal and other local politicians had hoped Aleco would meet the P67-million minimum payment required from collections, but the Department of Energy (DOE) declared there was nothing they can do anymore. Aside from the current P67-million bills with the Philippine Electricity Market Corp. (PEMC), Aleco has an unsettled P1.2-billion debt in accumulated PEMC electricity bills. 

This, despite the creation of the controversial Special Payment Agreement (SPA), a scheme started in September 2011 to raise payment exclusive for the PEMC bills until 2014. The SPA is from the consumers’ advanced payment inserted in the monthly billings equivalent to at least 10 percent of their consumption.

NEA-Aleco Project Supervisor Veronica Briones and Legazpi Diocese Bishop Joel Baylon, the designated chairman of the Nea-created Aleco interim board, said the SPA collection is directly collected from the SPA and is being remitted directly to PEMC, according to its scheme and as approved by the Energy Regulatory Board.

Aleco is currently locked in a court battle at the Regional Trial Court here after its scheduled bidding to privatize was blocked by a court order upon petition of the Aleco Multi-Sectoral Stakeholders Organization (AMSSO), led by its president, lawyer Bartolome Rayco.  AMSSO is pushing for a cooperative-to-cooperative operation to save Aleco from its present situation.

On June 16, however, AMSSO received a letter from the PEMC president, saying that Aleco had so far been paying PEMC on interest basis, which Amsso estimated to have reached more than P55 million only. Briones announced in April that the SPA collection reached only P126 million as of January because of the consumers’ rejection.

Amsso also asked Nea-Aleco as to the whereabouts of the P100-million recovery fund collected since 2011 as approved by ERC specifically for electric bills.

Ephraim de Vera of Aleco and member of AMSSO said collection from the SPA from September 2011 to January 2013 was computed at P165,634.20. With P67 million in current obligations, there is no reason for disconnection, he said, adding that Amsso is suspecting the disconnection  may have something to do with the privatization to kill other viable options.

Salceda assailed the DOE for disconnecting Albay, saying the DOE owes the province some P102 billion for geothermal power contributed to national development over 34 years sourced from Albay’s indigenous geothermal energy.   source