Aleco to take over Albay power distribution

MANILA, Philippines — Power distribution in the province of Albay is set to be managed again by the Albay Electric Cooperative Inc. (Aleco) by the first quarter of next year, according to the National Electrification Administration.

NEA said Aleco’s member-consumer-owners voted to terminate the concession agreement between the electric cooperative and SMC Global Power Holdings Inc., the owner of Albay Power and Energy Corp. (APEC).

NEA said a board resolution of Aleco unanimously invoked the default provision under Section 21.1.1 of the concession agreement.

“Aleco shall not takeover the usual operations until the exhaustion of the period as required by the said clause, which should not be later than Feb. 25, 2023, being the timeline set in view of the preparations and groundworks that shall be arranged by Aleco,” the resolution stated.

Pending takeover, NEA said APEC should continue to perform the terms of the concession agreement in order not to disrupt the services to be given both by APEC and Aleco.

Audit findings of NEA conducted on March 2021 showed that there are deficiencies in the performance of APEC as a concessionaire of Aleco.

The audit showed that the system loss remained well above the system loss cap set by the Energy Regulatory Commission, which resulted in huge subsidized costs thereby negatively affecting its financial viability.

Further, NEA said the collection efficiency remained well below the standard it set.

NEA said the member-consumer-owners in the province unanimously voted to terminate the agreement, which was adopted by the Aleco board of directors.

SMC Global Power in 2013 entered into a concession agreement for the operation and maintenance of Aleco, which is the franchise holder for the distribution of electricity in the province of Albay.

All rights, interest and obligations of SMC Global Power under the concession agreement with Aleco were assumed by its wholly owned subsidiary, APEC.