Full takeover of ailing power co-op cleared

LEGAZPI CITY—A collection efficiency rate of just 50 percent. A military detachment that has not paid its power bills for 20 years. System loss of double the allowable.

A private power company on Tuesday said it was ready to deal with these challenges as it takes over full operation of the Albay Electric Cooperative (Aleco) early next month.

Alan Marchan, newly installed general manager of Albay Power Electricity Corp. (Apec), said Apec, the new name of Aleco under SMC Global Power Holdings Corp. (SMC Global Power), would start to fully operate Aleco next week.

Marchan said Apec had finished an audit of Aleco last month, paving the way for Apec’s complete takeover of the cooperative.

SMC Global Power is committed to transforming the cooperative into an efficient power distribution utility, he said in a press conference here.

He said the audit found several problems that have kept the cooperative bleeding financially. Among these are dilapidated equipment and power lines, pilferage and inefficient collection.

According to Marchan, the audit team found that at least 90 percent of Aleco’s equipment and power lines are barely usable.

Aleco, he said, had bleeding up to P32.5 million in system loss that is equivalent to 26 percent, double the allowable rate of only 13 percent.

Aleco is able to realize only half of its monthly collectibles of P200 million, Marchan said.

At least P18 million in collectibles from the Barangay Power Association in the province’s third district remain uncollected while a military detachment has not paid its bills for more than 20 years.

Figures from the Department of Energy showed Aleco had suffered losses of up to P2.4 billion since 1995. In 2012 alone, the cooperative lost P478 million due to poor collection.

To improve collection efficiency, Apec has installed 3,500 new meters and would install 15,000 more until next month,  Marchan said.

In October, SMC Global Power, the power generation arm of diversified conglomerate San Miguel Corp., signed a concession agreement with Aleco for the operations and maintenance of Aleco’s facilities for a period of 25 years.