Electricity restored in Albay

MANILA, Philippines (4th UPDATE) – Electricity is back in the province of Albay as of 5 pm Wednesday, July 31, more than 24 hours after the entire province was disconnected from the grid.

“I have ordered reconnection of Albay to the grid by 5 pm today after [the Albay Electric Cooperative (Aleco] disconnected top 100 nonpaying customers,” Energy Sec Jericho Petilla said in a text message to Albay Gov Joey Salceda, who posted it on his official page on Facebook.

“There is still a balance of P19M for [the] current billing but we will reconnect just the same [with] the assumption that [the] 19M will be settled in the next few days,” another message from Petilla read, which was also posted by Salceda.

The province was cut off from the grid Tuesday noon, July 30, due to millions of pesos in debts that the Aleco owed various creditors.

The Department of Energy (DOE) said the disconnection notice to Aleco was served by the National Grid Corporation of the Philippines (NGCP), as ordered by the Philippine Electricity Market Corporation (PEMC).

PEMC, which handles the Wholesale Electricity Spot Market (WESM), made the order after Aleco failed to pay its P56-million bill for the month of June.

The disconnection notice to the top 100 delinquent customers was one of two conditions the DOE imposed on the electric cooperative before electric service could be restored. The second condition was for the electric cooperative to flesh out a rehabilitation plan to address its debt, now totaling more than P4 billion.

Hospitals, hotels and the Legazpi Airport were forced to run on emergency generators after power was severed on Tuesday afternoon, while businesses closed and residents struggled amid steamy, tropical weather.

“We could not sleep last night, it was very hot. I opened the windows and a screen door to get some wind inside, but that allowed the big mosquitoes in,” Jun Marana, a coach driver in Legazpi City, told Agence France-Presse by telephone.

Marana said all the food in his refrigerator had spoiled, while it was difficult to buy more for his four children because many shops had closed.

Only solution

Presidential Spokesperson Edwin Lacierda said disconnecting the province from the grid was the way to start addressing the cooperative’s growing problems.

“Si Secretary Petilla nakipag-ugnayan siya sa mga congressman ng Bicol Region… pinaliwanag niya kung bakit gagawin ito,” Lacierda said in a press briefing in Malacañang.

(Sec Petilla contacted the representatives from the Bicol Region and explained why they needed to cut power to the province.)

“Hindi na… [puwedeng] lumaki pa itong problema dahil, kung hindi naayos iyan, lalaki at lalaki ang problema diyan. So ayusin natin, kaya dinisconnect,” Lacierda said.

(The problem should stop growing, that’s why the disconnection had to happen.)

“This is a problem of Bicol and we ask the people from Bicol to also help in resolving the problem… This cannot bleed forever. It has to stop, and that’s the reason why Secretary Petilla… is going to meet with them,” he added.

Another blackout possible

NEA is currently supervising Aleco after it incurred big losses back in 2011, caused by mismanagement, a high systems loss rate, and dilapidated infrastructure.

Out of the cooperative’s total debt, around P1 billion is owed to PEMC, while around P3 billion is owed to the NGCP, TransCo, Power Sector Assets and Liabilities Management Corp (PSALM), and the National Electrification Administration (NEA).

“How can we encourage investors if the distribution utilities like (Albay Electric) are consuming electricity without paying?” PEMC president Melinda Ocampo told AFP. “There is no free electricity.”

Ocampo said power to the whole province would be turned off again in 7 days unless Aleco began repaying its debt.

“If they cannot pay then we will cut them off,” Ocampo said.

Ocampo rejected suggestions the company’s actions could have put people’s lives in danger, saying the electric cooperative was at fault because it had agreed to have its debts restructured in 2010, then reneged.

Saturnino Velasco, president of the Albay Chamber of Commerce and Industry, said in an interview with ANC that businessmen are disappointed by the outage in the province.

Velasco said their group wants the cooperative to be privatized to address the mismanagement problem.

Salceda, meanwhile, said Tuesday that the Albay government has “no expertise” and is “not interested” in running the debt-ridden cooperative.

Lost income

Legazpi City mayor Noel Rosal said his city had lost more than P15 million because of the blackout, largely due to businesses being forced to close.

“This is a disaster,” Rosal said on ANC, as he blamed Aleco. “This is completely a (case of) mismanagement by the board.”

ABS-CBN News reported Legazpi City will declare a state of calamity to be able to release part of their calamity fund, which will be used to pay the P19 M balance.

In Daraga municipality, Angel Medalla said he had lost vital business at his Internet cafe.

“Without power, we could not function. I did not put in a generator because it would have been too expensive,” he told AFP.

“I must have lost P1,000 a day. That is a big deal to me. I have to pay for my Internet connection and the rent for my shop even without electricity.”

Petilla said the complexity of how Albay Electric wracked up the debts was staggering.

“One needs one semester and six units (of economic classes) to comprehend what happened,” he said.

“The Department of Energy (DOE) is continuously assisting ailing electric cooperatives (ECs) such as the Albay Electric Cooperative, Inc. (ALECO) to ensure the continued power service to their consumers and resolve their accumulated arrearages due the power generators and transmission service provider,” the DOE also said in a statement Tuesday. – With reports from Agence France-Presse/Rappler.com