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Aleco fate rests on people of Albay

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11:34 PM August 16th, 2013

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By: Mar S. Arguelles, August 16th, 2013 11:34 PM

LEGAZPI CITY—The people of Albay will decide the fate of the cooperative that supplies electricity to the province but which is saddled with at least P4 billion in debts, according to a top energy official.

Energy Secretary Carlos Jericho Petilla, at a forum here, said the people of Albay will be asked in a referendum, to be supervised by the Department of Energy (DOE) on Sept. 14, to choose how to keep electricity running in the province—allow a private firm to run the Albay Electric Cooperative (Aleco) or another cooperative to run Aleco.

The entire province of Albay was disconnected from its power source for several hours recently over Aleco’s failure to pay its debts.

“Let the people decide,” Petilla said at the DOE-sponsored forum.

He said an aggressive information drive should precede the referendum to inform the people about the choices they have.

Under the first option, Aleco would tap a private concessionaire to run the cooperative for at least 25 years. The second option would have Aleco run by another cooperative with an excellent management record.

Aleco’s bids and awards committee is currently evaluating a bid made by San Miguel Corp.-Global Holding Corp. (SMC-GHC), which became the lone bidder after two other firms—Manila Electric Co. and Aboitiz Power Corp.—withdrew.

SMC-GHC proposed to infuse P250 million to rehabilitate the cooperative and install new transformer and equipment in three years. The firm would also set aside P260 million for the separation pay of Aleco workers who would be laid off in a downsizing plan.

SMC-GHC would also assume Aleco’s more than P4 billion in debts.

Complaints against Aleco range from high rates to mismanagement. In 2011, the National Electrification Administration (NEA) decided to take over Aleco and appointed a new board of directors, headed by Legazpi Bishop Joel Baylon.

Efforts by the NEA-appointed board to revive Aleco, however, have run into opposition by groups in the province.

The province was disconnected from its power source for at least 29 hours from July 31 to Aug. 1 after Aleco continued to fail to pay its debts.

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