Albay co-op officials OK bid of SMC subsidiary | Inquirer News

Albay co-op officials OK bid of SMC subsidiary

By: - Correspondent / @msarguellesINQ
/ 08:02 PM August 26, 2013

LEGAZPI CITY—Interim officials of the debt-ridden Albay Electric Cooperative (Aleco), the sole distributor of electricity in the province, have approved a concession bid by a San Miguel Corp. (SMC) subsidiary to operate and manage the debt-ridden entity.

SMC Global Power Holdings Corp. (SMCGPHC) is the lone bidder under a private sector participation (PSP) scheme being proposed as one of two options to rehabilitate the cooperative, which has accumulated P4 billion in debts to various power suppliers. Under the PSP, a private firm will manage and operate Aleco for a period of 25 years.


The other option, dubbed “Co-op to Co-op,” is letting another electric cooperative with an excellent track record run Aleco. It is being pushed by a multisectoral group opposed to the quasiprivatization of the cooperative.

Consumers’ choice


Thousands of consumers, numbering around 170,000, will choose between the two options in a Sept. 14 referendum as announced by Energy Secretary Carlos Jericho Petilla during a dialogue here last month. Petilla had urged stakeholders to launch an aggressive information drive to heighten public awareness about the options.

The outcome of the referendum would serve as the basis for the Aleco interim board of directors (IBOD) to put the winning option in place.

On Monday, the cooperative’s spokesperson, Alvie Boral, said the IBOD reached the decision on Friday to approve SMCGPHC’s bid for concession. Its bid and awards committee found the firm’s proposal to have strictly conformed to the “terms of reference” made by the interim board, Boral said in a text message.

Boral, however, said the IBOD withheld the processing and issuance of the notice of award pending the outcome of the referendum on Sept. 14.

Based on its bid presentation, the SMCGPHC will assume Aleco’s debts to power suppliers and initially infuse P250 million for the rehabilitation of the cooperative through the installation of new transformers and equipment over a period of three years.

It will make available P260 million for the separation pay benefits of Aleco employees who opt to retire, P2.1 million in quarterly fund for the election of the cooperative’s board, consumers’ annual general assembly meeting and salaries of board members, and another P2 million fund in security fee, Boral said.

Aleco distributes electricity to the three cities and 15 towns in Albay, with a combined population of one million.


Consumers have complained about its high power rates, poor service, uncontrolled system loss due to pilferage and antiquated transformers and equipment, and an inefficient collection system.

They have also accused the cooperative of mismanagement of funds and resources, prompting the National Electrification Administration to take over its operation in 2011 and replace its top officials with the IBOD, led by Legazpi Bishop Joel Baylon.

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TAGS: Albay Electric Cooperative, Energy, News, power industry, Regions, San Miguel Corp.
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