Albay electric co-op agrees to restructure P982-million debt

LEGAZPI CITY, Philippines  – The Albay Electric Cooperative is in deep financial crisis and the Philippine Electricity Market Corp. (PEMC) had warned to cut off power supply tomorrow to force the coop to pay its P982 million debt.

PEMC’s warning forced a debt restructuring charge of P1.66/kwh for three years starting this month to ensure that the power distributor will be able to pay its obligations.

The additional charge raises the cost of electricity from P8.56/kwh to P10.22 kwh for the 160,000 consumers in the province’s 15 towns and three cities.

“There is no more disconnection on Monday but ALECO has to pay its debt to WESM,” said Albay Gov. Joey Salceda, who brokered the negotiation between ALECO and its creditors.

“There is no takeover of the coop but the Department of Energy (DOE) and National Electrification Administration (NEA) can conduct inspections as well as exercise visitorial powers,” Salceda said.

The coop is hobbled by its inability to raise its rates since February this year and high system loss due to the failure of public sector clients, mostly in far-flung areas, to pay their bills.

Salceda, who saw the power cut off as a threat to the province’s competitiveness, called an emergency meeting with the province’s elected officials recently to support the new rates.

 “The coop is creating a lot of trouble already,” said Salceda, who learned that foreign investors had called the attention of the DOE about the coop’s inability to settle its financial obligation to WESM.

ALECO collects P150 million in monthly sales revenues.

The electric cooperative gets 60 percent of its electricity supply from WESM while the remaining 40 percent comes from Aboitiz Power Renewables, Inc. (APRI) which now operates a geothermal plant in Tiwi, Albay.

The coop is losing about 25 percent of its monthly revenues due to system loss.

Aside from WESM, ALECO also owes the Power Sector Assets and Liabilities Management Corp. (PSALM) P2.6 billion.