SMC wins bid for Albay Electric Coop.


LEGAZPI CITY: San Miguel Corp. (SMC) is set to takeover the debt-ridden Albay Electric Cooperative (Aleco) after three other interested buyers withdrew during the August 7 bidding for the said power distributor, Gov. Joey Salceda of Albay said over the weekend.

The governor noted that SMC would shoulder Aleco’s P4-billion debt.

He added that the Aleco bids and awards committee would announce its decision during the cooperative’s general assembly on August 21

On September 14, the National Electrification Administration (NEA) will conduct a referendum among consumers to decide whether to privatize the beleaguered electric cooperative, as pushed by the NEA, or settle for a cooperative-to-cooperative operation, as proposed by the Aleco Multi-Sectoral Stakeholders’ Organization (Amsso).

Salceda, for his part, expressed confidence that majority of the consumers would choose to privatize Aleco.

The three firms who withdrew from the bidding process for Aleco are Meralco, the Aboitiz Group of Companies (Aboitiz), and the Lopez Group of Companies (LGC).

Aboitiz owns the Tiwi Geothermal Power Plant in Tiwi, Albay while the LGC owns the Bac-man Geothermal Power Plant in Manito, Albay.

Salceda has broken a three-year silence on the issues hounding Aleco by confirming that he had strongly supported the privatization of the beleaguered electric cooperative.

In 2011, the NEA took over management control of Aleco and pushed for its privatization.

Amsso, however, questioned the legality of the moves to privatize Aleco before the Legazpi City Regional Trial Court in May.

Amsso’s president, lawyer Bartolome Rayco, said that the Aleco Employees Union (AEU) and his group is currently waiting for a court resolution against the privatization after the 20-day Temporary Restraining Order issued by the court had expired on June 10.

Rayco said Amsso and the AEU fears that the NEA, Salceda, and other entities pushing for Aleco’s privatization will use their resources to buy the votes of consumers for the September referendum.

Amsso officials also criticized the NEA-Aleco move to award the concession to SMC as the winning bidder on Wednesday.

“Could this mean that the referendum results have already been ante-counted in favor of privatization?” Rayco asked.

Bidding terms
In a forum held here late last week presided by Energy secretary Carlos Jericho Petilla, NEA called for the special general assembly to announce that SMC won the bid for Aleco after emerging as the lone bidder.

Petilla said Meralco withdrew from the bidding, refusing to shoulder the P4-billion loan obligation of Aleco.

Aboitiz, meanwhile, rejected the Terms of Reference (TOR) of the bidding, which obliges the winning bidder to shoulder 11 percent of the 24 percent system losses of Aleco for the first three years of operation.

Salceda, meanwhile, said, “As a governor, I am strongly supporting the ongoing NEA-managed process of privatization of Aleco management to achieve our second goal after power restoration last July 31 to ensure continuous supply of power.”

The governor also allayed consumers’ fears of steep power rate hikes, saying that Albay consumers might not experience any rate increase for the first three years of operation under the SMC.

According to SMC bids representatives, lawyer Avelino Cedo and Jose Valte, SMC would initially infuse a total of P510 million for the rehabilitation of Aleco.

The cited amount is set for benefits to be given to employees who will be laid-off or asked to retire. Cedo and Valte confirmed that the present number of Aleco employees would be drastically reduced.

Reeling from blackout
Aleco’s power supply was cut for 28 hours after the after the National Grid Corp. of the Philippines cut its supply on July 30 for nonpayment of electricity bills to the Philippine Electric Market Corp. (PEMC).

PEMC asked Aleco to pay its electric bill for June amounting to P68 million. Aleco had a delinquent account with PEMC amounting to almost P1.2 billion.

With the partial payment of P47 million, however, the Department of Energy (DOE) ordered the reconnection of Aleco to the grid. The DOE also set compelled Aleco to cut electric supply to the top 100 delinquent consumers of the cooperative, which owed it some P15 million.


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  1. Excellent update. Can you pl.s provide me with your reports on Bicol concerns. Do you have an update of Apec preparations in Albay. Thank you so much. I met you thru Mr Tuanqui. Best regards