Albay candidates urged to reject energy privatization

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By Reynard Magtoto, VERA Files

LEGAZPI City —Despite the recent uproar over the energy privatization in Albay, candidates have refused to join the fray and remain mum on the issue.

On April 15, the National Electrification Administration (NEA) decided to finally privatize the bankrupt Albay Electric Cooperative (Aleco), the country’s second biggest electric cooperative.

Stakeholders in Albay have been protesting against such a move, claiming that privatizing the cooperative would further jack up electricity prices.

During Monday’s protests, the Aleco Multi-Sectoral Stakeholders Organization (Amsso) sought the politicians’ support to not allow corporations to take control of the province’s energy sector.

Two giant firms, Aboitiz and San Miguel Energy Corp., were invited to the pre-bid conference last Monday. The winner will be announced on May 27.

Politicians must speak up, make a stand against energy privatization in Albay, a group …“Privatizing Aleco is not the solution; it will make the situation worse. Our electricity bill is already expensive and it will be more expensive if private corporations will operate it,” Amsso president Atty Bart Rayco said.

Amsso said a profit-oriented venture is against Aleco’s very nature: nonstock, nonprofit, nonpolitical. NEA has refused to accept alternative solutions.

“We’re willing to present the issue to them (candidates) so they can have a dialogue with their constituents in towns and provinces so they’ll know the sentiment of the people,” Rayco said, adding that the candidates seem to be busy with the campaigning. Even the Mayors League of Albayhas not issued a stand on the matter.

Staving off crisis

The energy crisis has dogged the province for years. The idea of privatizing Aleco was raised by Gov. Joey Salceda in 2010, after he rated the performance of NEA and the National Power Corp., the agencies tasked to rehabilitate the cooperative, to be poor.

In 2011, a Church-led crisis management committee was created and then abolished to make way for an interim board of directors headed by Bishop Joel Baylon. NEA was brought to co-manage the cooperative. NEA management created a Special Payment Agreement of 10 percent in consumers’ monthly billings to raise funds for pay off debts, which is close to P4 billion, to the Wholesale Electric Spot Market.

The SPA, which is to end in 2014, was reportedly rejected by the Energy Regulatory Commission, but the cost continued to be included in the monthly billings.

NEA insists that private sector participation or PSP is the most sustainable way to continue providing electricity to some 250,000 consumers.

Amsso, however, sees Cooperative-to-Cooperative (C2C) Partnership Proposal as more viable. The C2C was presented to NEA personnel and Aleco employees on Dec. 22, 2011.

Baylon sought experts’ proposals in favor of C2C, including the recommendations of University of the Philippines National Engineering Center and General Manager Gerardo P. Verzoza. Only lawyer Veronica Briones, NEA’s designated project supervisor for Aleco, pushed for PSP.

Minutes of the Feb. 1 board meeting stated that Briones threatened that NEA would pull out from the cooperative if the board chooses the coop-to-coop program. The board ended up unanimously voting for PSP.

Privatization vs coop

Aleco said privatizing its operations will improve its services. But the group of Rayco said private corporations’ only interest is to control the distribution and selling of electricity in Albay.

Electricity in Albay ranges from P9 to P10 per kWh, which is P4 to P5 per kWh higher than regular prices. Under a privatization scheme, Aleco estimates there will be a possible increase of P14 per kWh for every consumer.

Rayco reminded politicians that the issue is in the interest of constituents, adding that the candidates will be accused for failing to represent the poor if they remain silent on the issue.

(VERA Files is put out by veteran journalists taking a deeper look at current issues. Vera is Latin for “true.”)

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