Abreco to undergo rehab

BANGUED, Abra  -  Financially troubled Abra Electric Cooperative (Abreco), which has incurred heavy debts from its power supplier and other obligations, will undergo a three-month rehabilitation plan to avoid the power cut off problems that the cooperative faces.

The plan includes the deferment of payment to the Power Sector Assets and Liabilities Management (PSALM) for the first year then pay PSALM P2 million per month for 13 years.

The rehabilitation plan is the best and most legal way of resolving the  cooperative's problems, Abreco general manager Loreto Seares Jr. said.

Abreco is set to reduce its current monthly P5.4-million administrative costs to P3.5 million and also trim down its operating expenses from the present P5 million per month to P2.5 million.

The step is seen to result in a  P1.2-million monthly surplus for the cooperative.

The rehabilitation plan, said Seares, has the blessings of the Energy department as the agency presided over a meeting last February 4 to determine the cooperative’s problem.

Following the meeting of Secretary Carlos Jericho Petilla of the Department of Energy with top-level inter-agency officials  and Abreco, new arrangements with  various stakeholders including power supplier Aboitiz Power Renewables Inc. (APRI) have been sought.

These arrangements, among others, direct Abreco to pay APRI the entire P16 million in four equal installments of P4 million each on the 18th, 22nd, 26th and 30th or end of the month.

Abreco has also agreed to pay the National Grid Corp. of the Philippines (NGCP) its monthly fees estimated at P6 million in three installments of P1.5 million due on the 20th; P1.5 million due on the 23rd; and P3 million due on the 25th of each month.

The fiscal solutions however necessitate trimming down Abreco’s personnel from over 400 to 190 or 140 to attain a cash surplus of P2.5 million.

Abreco incurs a monthly deficit of P3.4 milion.

With the rehabilitation plan however, separation pays of “to be retired” employees
is pegged at P10 million.

With the deficit and the P189 million capital expenditures of the cooperative, the Energy Regulations Commission (ERC) has suggested a power rate increase for Abreco’s 47,000 member-consumers,  Seares bared.
 
“But I struck it down because such  an option is anti-people,” he said.

The DOE has designated an observer to ensure the proper implementation of the rehabilitation plan.

In case a disconnection notice is issued either by the APRI or NGCP within the three-month period, the DOE will intervene to avert the disconnection.

In case DOE steps in, an Abreco insider who is competent and familiar with the operation shall be designated as rehabilitation manager, while the  DOE and the National Electrification Administration (NEA) will act as consultants. The Cooperative Development Authority (CDA) will monitor the takeover. - Artemio A. Dumlao