Sidebar | Aleco and power service in Albay

January 8, 2014

From the Backgrounder provided by Aleco Multisectoral Stakeholders Organization (Jan. 4, 2013)



Albay has had electricity since the turn of the 20th Century. Evidence of this are photographs taken during the early days of the American Period.

1950s – 1975: LEALDA (Legazpi Albay Daraga) Electric Company served Legazpi Port District, Albay District, and Daraga; it was owned by the Benito family; electricity was expensive for the ordinary household could afford only a fluorescent lamp; after a typhoon it took months before service was totally restored

1972 – Albay Electric Cooperative was established in the Third District

1975 – President Marcos visited Albay; the people shouted, “We want electricity!” LEALDA was abolished; ALECO was established as the sole provider in the entire province

1972 – 94: ALECO was well-managed and had no serious problem

1994: Influential entities and persons started to interfere in ALECO affairs; ALECO’s woes began; corruption became rampant

2000s: ALECO problems worsened; debts mounted; Legazpi Diocese was asked to get engaged; NEA and NPC alternately managed ALECO; corruption and crisis continued to hound ALECO

July 17, 2008: Operation and Management Contract with NPC was approved by ALECO Board of Directors; losses for 2008 declined to P261 M from P401 M in 2007

July 2009: the OM Contract was renewed by the DOE*; ALECO posted a positive P153 M net income

November 13, 2009: the DOE, NEA and the Office of the Solicitor-General endorsed to NPC the re-extension of the contract through Resolution No. 65; NPC, in turn, approved the re-extension for two years through Resolution 2009-68

February 22, 2010: OM Contract was suddenly terminated by ALECO BOD, citing that it had expired and NPC assets had passed to PSALM

April 23, 2010: Bishop Joel Z. Baylon issued Pastoral Letter against privatization

July 28, 2010: public forum on ALECO crisis organized by Social Action Center, ALECO, and other stakeholders; inspired by the Bishop’s Pastoral Letter, civil society groups led by SAC organized the Multi-Sectoral Stakeholders Committee which later evolved into the Multi-Sectoral Stakeholders Coalition and ALECO Multi-Sectoral Stakeholders Organization (AMSSO); on January 23, 2013 AMSSO was registered with SEC on the advice of Bishop Baylon

September 2010: MSSC convened a General Assembly of member-consumers; resolution calling for resignation of OIC Realoza and BOD was passed, among others

October 2010: Crisis Committee was formed by political leaders; Bishop Baylon was invited to be Chairman

October 2010 to January 2011: campaign to oust ALECO Management Team and BOD intensified; march and picket staged by MSSC

February 2011:  Realoza and BOD resigned; NEA sent its Management Team under PS Paulino Lopez

March 2011: MSSC proposed restoration of OM Contract with NPC; DOE declined

May 14, 2011: NEA proposed the Special Payment Arrangement; Special General Membership Assembly approved

June 2011: NEA added 3 conditions to SPA (voluntary payment, P7M monthly prudential guarantee, default provision)

October 2011: NEA Management Team cited inability to solve ALECO problems; MSSC accidentally met Prof. Rowaldo del Mundo and Prof. Editha Espos of UP-NEC and Engr. Gerardo Versoza, GM of BENECO; Cooperative-to-Cooperative Partnership was designed

November 2011: Crisis Committee, NEA and DOE proposed Private Sector Participation and formation of Interim Board

November 30, 2011 – in a Special General Membership Assembly NEA and Crisis Committee allowed PSP to be presented; when it was the turn of MSSC to present C2C, the Crisis Committee requested the emcee to let Congressmen Fernando Gonzalez and Edcel Lagman talk in favor of PSP; after their speeches, C2C was brushed aside and a vote on PSP and formation of an Interim Board was rushed; the assembly rejected PSP and Interim Board by a vote of 315 vs 155

December 10, 2011 – the MSSC met with Bishop Baylon; public presentation of C2C was agreed upon

December 22, 2011 – public presentation of C2C was held in De Guzman Hall of Aquinas University; present were Bishop Baylon, Prof. Wally del Mundo of UP-NEC, Engr. Gerry Versoza and Engr. Lito Villarey of BENECO

March 24, 2012 – a Special General Membership Assembly approved the conversion of the Crisis Committee into the Interim Board of Directors (IBOD); the participants were separated among Tabaco, Legazpi and Ligao; in Legazpi the IBOD was given the mandate to look for “solutions” to ALECO’s problems; in Ligao and Tabaco, only the conversion of the Crisis Committee into an Interim Board was approved; IBOD began to claim it is authorized to implement PSP

December 2012 to January 2013: with no private company coming forward to propose, the IBOD agreed to implement Cooperative-to-Cooperative Partnership; DBP offered to lend P 1 billion at 8% interest; PEMC counter-offered with 2.5%; the IBOD turned down DBP; when the IBOD tried to formalize an agreement with PEMC, the latter backed out; the IBOD returned to DBP but the bank refused

February 1, 2013: in a meeting, PS Veronica Briones announced that if the IBOD would choose C2C, NEA would leave ALECO because the agency wants PSP; the IBOD voted unanimously to adopt PSP (evidence: minutes of the IBOD meeting)

April 4, 2013:  in a press conference, the IBOD announced its decision to adopt PSP

May 2013: the AMSSO, formerly the MSSC, filed a petition for TRO against the implementation of PSP; it was granted; the AMSSO filed a Motion for Prohibition to Bid; decision on the case was so delayed it was overtaken by events

July 16, 2013: AMSSO, IBOD and other parties held a meeting with DOE Sec. Jericho Petilla; a referendum was agreed upon to settle which between C2C and PSP to adopt; referendum is not a mechanism for decision-making under the ALECO By-Laws

August 7, 2013 – the IBOD and NEA scheduled a Submission and Opening of Bids; only one bidder submitted, San Miguel Energy Corporation; the bid of San Miguel did not comply with the Terms of Reference which the pro-PSP themselves drafted. There was failure of bidding because only one presented a bid and that lone bidder has conflict of interest with ALECO since SMEC is a sister company of the Bank of Commerce which is a depository of the electric cooperative

August 15, 2013: Sec Petilla visited Albay ; a roadshow of the two option was scheduled from September 2 to 7, 2013during the roadshow for the referendum, the content of the contract with the lone bidder, San Miguel Global Power Holdings, was never revealed to the member-consumers; on Day One of the roadshow for the referendum PSP had scanty details. As the activity progressed, PSP was increasingly copied from the Cooperative-to-Cooperative Partnership plan until on the last day, the former option looked almost like C2C, with BENECO removed and put in its place was San Miguel Corporation. The irremovable fact is that BENECO would give all earnings to ALECO while SMC would have to get its cut. Furthermore, under PSP copied from C2C, San Miguel has all the power to declare just what it wants as ALECO earnings even zero or negative

September 14, 2013: only 4.8% of the member-consumers turned out to vote on while the legal requirement for any corporation is 5%; there was massive vote-buying amounting to P20, P50 and P150 perpetrated by pro-PSP politicians especially among the members of barangay power associations (BAPA). Pro-PSP voters were hauled. Voting centers were relocated to necessitate travel by member-consumers. ALECO funds, barangay vehicles and other government resources were used in favor of PSP; a Redemptory’s priest, among others, saw and testifies to these evil acts; NEA obliges any complainant to pay P750,000 as a fee and the pro-C2C do not have such money.

September 23, 2013: ALECO Employees Organization (ALEO) pushed through with the long-suspended strike

October 29, 2013: the IBOD, NEA, DOE, politicians and San Miguel proceeded to sign a contract in Makati without submitting the same for prior ratification by the General Assembly, claiming that the referendum result sufficed; the contract has the blessing of the Bishop of Legazpi even though it is a fruit of dishonesty

November 28, 2013: The ERC held a public hearing on the petition of ALECO Management for a rate increase effective January 2014. Thus, we have another evidence of deception. As we heard during the presentation, the plan to apply for the increase was in place as of June 2013. Yet, the PSP presenters had the gall to tell the public that there would be no rate increase! The member-consumers were not effectively informed about the “public hearing” as only 7 were able to attend.

December 21, 2013: About 100 member-consumers rushed into the compound of ALECO, conducted a General Assembly and elected a new Interim Board of Directors

December 23, 2013: ALECO old management closed ALECO and prevented member-consumers from paying their bills. Payment resumed on the 24th.

December 26, 2013: AMSSO padlocked the gate. Security guards attempted to remove the chain but were driven off by member-consumers.

December 28, 2013: The new IBOD and PS Veronic Briones agreed to prevent San Miguel personnel from entering the ALECO compound and to provide AMSSO with a copy of the Concession Agreement. AMSSO will allow opening of the gate. PS Briones admitted that the agreement is different from the claims made during the roadshow prior to the referendum. The agreement was never honored by the old management.

January  6, 2014: member-consumers stormed the compound of ALECO a second time. They demanded that San Miguel personnel be prevented from entering the premises of the cooperative and a copy of the Concession Agreement be provided to member-consumers.