Debts of Electric Coops reach P4.88 billion

The total debts of electric cooperatives (ECs) with the private power generators alone already reached P4.884 billion to-date, and among the claimants are the country's major power industry players.

The swelling liabilities of the ECs could imperil the financial viability of power generators, hence, they are reportedly raising such alarming concern to Energy Secretary Carlos Jericho Petilla.

The arrears with the generation companies (Gencos) are still separate from the obligations of ECs with state-run Power Sector Assets and Liabilities Management Corporation (PSALM), which as of last year, already hovered at P14 billion including taxes and interest payments.

When he was barely sworn in at the Department of Energy, Petilla was able to work out an acceptable payment arrangement for the debts of Abra Electric Cooperative (ABRECO) with the Aboitiz group.

Hence, the power generators are hoping that he can do the same for the outstanding obligations of all other ECs with various power suppliers.

One of the power utilities logging hefty financial delinquency had been Albay Electric Cooperative (ALECO). Its estimated total debt already hit P962.956 million.

For that particular EC, there are about 45 claimants but the major ones are Therma Luzon Inc. of the Aboitiz Group; SN Aboitiz Power Inc.; Masinloc Power Partners Co. Ltd.; PanAsia Energy Holdings Inc.; San Miguel Energy Corporation; Strategic Power Development Corp; Trans-Asia Oil and Energy Development Corporation; and Trans-Asia Power Generation Corporation.

The proposed restructuring program for the ALECO debts is the subject of the proposed third amendment in the payment agreement that the EC will have to seal with the power generators.

This will also involve the Philippine Electricity Market Corporation (PEMC) being the market operator, as the capacities of the power generators are all offered in the gross pool-designed Wholesale Electricity Spot Market.

Industry watchers have noted that some electric cooperatives cannot thrive financially because their managements are either "politically-maneuvered" or other external factors weigh down their operations.

The worsening financial dilemmas of a number of electric cooperatives prompted energy officials to pursue amendments into the Charter of the National Electrification Administration (NEA) so it can be given "step-in rights" or "supervisory functions" over all electric cooperatives including those which are registered with the Cooperative Development Authority.

However, there are electric cooperatives that NEA cannot easily touch or takeover due to reasons such as a restraining order from the court or other circumstances.

Earlier, Albay Electric Cooperative (ALECO) was warned anew on supply disconnection if it cannot settle its dues for supply sourced from the Wholesale Electricity Spot Market.

In a letter to ALECO acting general manager Veronica T. Briones dated June 18, 2013, Philippine Electricity Market Corporation (PEMC) president Melinda L. Ocampo noted that based on WESM records -- up to that date, the electric cooperative has an outstanding arrears of P19.942 million, exclusive of value added tax.

The electricity spot market operator also pressed ALECO to settle other billed amounts for its supply purchases, totaling P99.629 million (VAT-exclusive), which is due this June 25.

The electric cooperative was fiercely required to comply with its imposed due date, otherwise, it could face supply disconnection and this will be to the detriment of its customers who may suffer power outages.

As of press time, the PEMC chief executive disclosed that ALECO already made "partial payment", but "we are still assessing the amount paid versus outstanding obligation."