San Miguel group yet to take over Aleco

MANILA, Philippines – The Albay Electric Cooperative (Aleco) may be disconnected again from the national electric grid, as it struggles to settle unpaid power fees and deal with issues regarding its own management.

Aleco needs to pay P240 million in power bills the cooperative has accrued in two months, or else it may lead to a repeat of its disconnection from the grid last year, said Energy Secretary Carlos Jericho Petilla.

Last week, the SMC Global Power Holdings Corporation of San Miguel Corporation (SMC) was supposed to take over management of Aleco, but a group of consumers prevented it from happening. Members of the gorup had occupied parts of Aleco’s headquarters.

The group was reportedly representing “sectors from the academe, lawyers, business, church, former board of directors and party-list groups such as Akbayan and Bayan.”

Petilla clarified, however, that SMC Global Power will not own Aleco. It will only “run and shoulder the debt and pay monthly concession fees” of the electric cooperative for 35 years.

He then reminded the concerned group that “Aleco is owned by the people of Albay.”

On Jul. 30, 2013, the entire supply of electricity to the province of Albay was cut off by the National Grid Corporation of the Philippines due to nearly P4 billion in debts that Aleco owed various creditors. Electricity was restored the next day.

In October, SMC Global Power won the bid to take over Aleco.

Aleco’s debt exposure to SMC Global Power amounts to P600 million.

SMC Global Power will be shouldering P350 million in separation payments to affected cooperative workers. An additional P250 million was set for capital expenditures.

SMC Global Power is among the largest independent power generation companies in the country, with an installed capacity of 2,545 megawatts.

As of 2012, the company had a 17% market share of the power supply of the national grid and 23% share of the Luzon grid. – Rappler.com