The Continuing Saga of Resisting the Privatization

of the Albay Electric Cooperative (ALECO)
--- Part II ---

 

 January 8, 2014

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Photo by Rico De Mesa Manallo
   
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Photos by Rico De Mesa Manallo unless otherwise indicaed
           
     
  Photo by Ephraim de Vera  
     

 


News Release

January 8, 2014

Reference: Vince Casilihan

Cellphone number: 09481390488

 

Sufficient, Affordable, and Stable Electricity are the People’s Right


“A government feeding its people to the sharks” is how Vince Casilihan of Karapatan-Bicol describes the object of the people’s fury that effected the repossession of Albay Electric Cooperative (ALECO) by member-consumers last January 6.  “It was therefore just for Albayanos to retake the electric cooperative from the voracious San Miguel Energy Corporation and fight the anti-poor case of ALECO’s privatization,” he said.

 

The human rights alliance condemns in particular the incursion by the Albay PNP, reinforced by security forces of San Miguel Energy Corporation, on the demarcation between strikers and state forces. Hurt were negotiators Fr. Alex Bercasio of the Redemptorist Congregation and Atty. Donna Escio of the National Union of People’s Lawyers, when the two were shoved by police and security forces and pinned to the gate during the foray.

The Albay PNP and SMEC security forces encroached upon the prohibited area, prompting a struggle between the two parties, when member-consumers under the banner of ALECO Multi-Sectoral Stakeholders’ Organization (AMSSO) demanded the pull-out of SMEC personnel from the ALECO office as this violates an agreement between the two sides. Also required by AMSSO is the furnishing of a copy of the Concession Agreement between ALECO and SMEC, believed to be anomalous.

 

Even so, Casilihan expresses Karapatan-Bicol’s disdain on the government’s wanton sale of the people’s interests into the hands of profit-driven capitalists. “An industry so vital to national industrialization as energy should be operated by the state and not be left in the hands of big capitalists who only have income-generation as their primary motive,” Casilihan explicates. “The ALECO problem only exposes further that Noynoy Aquino’s government is not at all taking into account the people’s welfare. Instead, he immorally serves up ALECO as a bonanza to his uncle Danding,” furthers Casilihan.

 

Casilihan underscores such government neglect in the rejection by local leaders of the widely-supported and feasible Cooperative-to-Cooperative scheme.  Karapatan-Bicol forthrightly demands Albay’s governor, congressmen and mayors, as well as Legazpi City’s bishop, to recoup from their abandonment and betrayal of the people of Albay.  

 

Proponents of privatization have long advanced the purported benefit of lower prices as to be brought about by competition. To this, Casilihan quickly retorts: “Case upon case of government sale of public assets have repeatedly slapped the shame of deceit onto the mouths of privatization’s fanatics. As in the case of Aleco, foreboding privatization already spells high and unjust electricity prices.” Casilihan likewise chastises the 14-hour rotating brownout currently afflicting Albay as a devious ploy by SMEC to hold hostage the lifestyle and commerce of Albayanos in order to impose on the people what he calls “the plagues of privatization.”

 

In ending, Casilihan reiterates, “The people duly demand a stable, sufficient, and affordable source of electricity. As long as these are wanting, it is our right to defend ourselves against the wringing of SMEC of the people’s earnings. We will do so through battling in all forms the exploitation of big capitalists, as well as the government’s anti-people policies.”###

 

 

     

▲AMSSO, ALEO, Member Consumers and members of media, with the minion of SMC the Mayor of Legazpi City.

Photos and caption by Vince Casilihan of Karapatan - Bikol ▼

           
     


Isa pang Redemptorista ang nasaktan ngayong araw, Enero 7, 2014, sa patuloy na pakikipaglaban ng mga Albayano sa karapatan sa ALECO
--  Photos and caption by Rico De Mesa Manallo 
 

     
     

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ALECO Member-Consumers Uphold Ownership Right of Albay Electric Cooperative(ALECO)

 and Frustrate San Miguel Global Power Holdings’ Scheduled

 Formal Take Over

 

 Press Statement

Reference: Dan Balucio

 

            Bagong Alyansang Makabayan(BAYAN-BICOL) stands with the member-consumers of Albay Electric Cooperative(ALECO), Inc in the united opposition to the privatization of ALECO. Enlightened member-consumers led by ALECO Multi-Sectoral Stakeholders Organization (AMSSO)to which BAYAN-BICOL  is a member, together with ALECO employees’ union which is now on strike for over three months now, thwarted the full  take over of ALECO by  private concessionaire, San Miguel Global Power Holdings(SMGPH), one of the group of companies of San Miguel Corporation.

 

            Exercising their collective right as partly-owners of ALECO, the enlightened member-consumers made the decisive action to defend and protect the cooperative against privatization and to frustrate the corporate greed  of San Miguel Corporation for super profit at the expense of the people of Albay. 

 

Two weeks ago, in  December 21, 2013, member-consumers held a people’s assembly right inside the compound of ALECO  main office.  In that assembly the member-consumers passed  resolutions dissolving the ALECO Interim Board of Directors  whose members were representatives of politicians in Albay including the bogus party list, Ako Bicol(AKB), and the big business; elected a new set of Interim Board of Directors  which is multi-sectoral in representation; and rejected the concession agreement entered into between ALECO and San Miguel  Global Power Holdings.

 

            In January 6, 2014, the enlightened member-consumers stormed ALECO main office to uphold their ownership right of ALECO, and keep a barricade in front of the electric cooperative office to prevent the concessionaire’s personnel and its hired agencies’ personnel from entering the office.  It frustrated the January 7th scheduled formal turn over of ALECO to San Miguel Corporation.

 

            The privatization of ALECO  in the guise of concession agreement is within he framework of the Electric Power Industry Reform Act of 2001 (RA 9136) which the Aquino Government is hell-bent in implementing.  The Aquino government roughshods the rights of ALECO member-consumers and plunges the people of Albay into further misery as they will  have to pay higher electric bills.  ALECO member-consumers are  complaining  the spike of electric power rate in their recent bills of about P2.00 per kilowatt hour and the   massive discrepancies in their monthly electric  bills compared to previous bills before the concessionaire’s hired agency took over the meter reading while the ALECO workers were on strike. The Energy  Regulatory Commission (ERC) conducted public hearing on ALECO’s application for a P4.10 per kilowatt-hour rate increase even in the absence of public notice.    The Haciendero President  joins his big capitalist uncle  Danding Cojuango in exploiting the people of Albay.

 

            Acting on orders of the Department of Energy (DOE), the National Electrification Administration (NEA) facilitated the  privatization of ALECO by  broking for private companies and in railroading the legal processes.  NEA did not do its task on helping ALECO in its rehabilitation which it is suppose to do under EPIRA law. Together with Albay politicians’ handpicked Interim Board of Directors, NEA succeeded  in pushing for the private sector participation (PSP), another term for public-private partnership(PPP). NEA supervised every stage of the privatization process from bidding through the signing of the concession agreement to ensure completion of ALECO privatization.

 

            The concession agreement between ALECO and San Miguel Global Power Holdings which will last for 25 years and may be extended to another 25 years  is not ratified by ALECO member-consumers.  Thus, the concessionaire’s taking over of the operation and management of ALECO is not legal. ALECO management, the Interim Board of Directors, NEA and  the concessionaire refuse to provide the member-consumers copy of the concession agreement despite repeated demand. It only strengthen the suspicion that the agreement is very disadvantageous to the member-consumers in particular  and the people of Albay in general.

 

            The privatization of ALECO  is a template for the privatization of all electric cooperatives in our country.  Big capitalist in the electric power industry are subdividing our country into their respective sphere of influence. There is truth to the report that Bicol Region is assigned to San Miguel Energy Corporation (SMEC). 

 

            Moreover, the  privatization of ALECO will serve other purpose. It will help   those responsible for the P4 Billion debt of ALECO    due to mismanagement and corruption escape prosecution. The concessionaire will not be interested in pursuing the case against them.

 

            We call on all ALECO member-consumers to unite and stand against privatization of our electric cooperative,  uphold our collective ownership of ALECO, reject the concession agreement, campaign for the repeal of EPIRA law, and persevere to bring to justice those responsible for the bankruptcy of ALECO.

 

            BAYAN-Bicol joins the multi-sectoral call for the boycott of all products of San Miguel Corporation and  calls  on all Bicolanos to do the same. BOYCOTT ALL SAN MIGUEL PRODUCTS!

 

 

 

 

BAGONG ALYANSANG MAKABAYAN(BAYAN-BICOL)

January 7, 2014

           

 

 

     
     
     
     
           
     
     
     
           

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ALECO then and now
By Vince Casilihan

Albay Electric Cooperative (Aleco) is the first electric cooperative organized in the Bicol region in 1972 for the primary purpose of undertaking power generation, utilizing renewable energy sources, acquisition and operation of sub-transmission or distribution of electricity services to its household members.

Aleco has thrice been under the direct management of National Electrification Administration (NEA) for more than a decade that ended in 2006. In 2008, Aleco forged another “operation and maintenance” (O & M) contract with the National Power Corp (NAPOCOR) for one year upon recommendation of Albay Gov. Joey Salceda to then President Gloria Macapagal-Arroyo in his bid to save the ailing cooperative, then on February 22, 2010 – Albay Electric Cooperative, Inc. (ALECO) is under the Operation and Management Contract of the National Power Corporation (2009) but it was arbitrarily terminated by the Board of Director, despite of the recorded positive changes of operation.

April 23, 2010 – The Diocese of Legazpi Chancery issued a PASTORAL BULLETIN No. 02, Series of 2010, calling for the ALECO Board of Directors and the Politicians to decide for the welfare of the Albayanos, the transparency and accountability and ensure the cooperative status of ALECO.

July 14, 2010 – formation of the ALECO Multi-Sectoral Stakeholders Organization (AMSSO).

February 10, 2011 – NEA PS/AGM Paulino T. Lopez take over the ALECO operation and management. The ALECO debts to PEMC already ballooned to 974 Million Pesos in less than a year due to WESM spike, rampant corruptions and mismanagement that was captured in the NEA Audit report. His accomplishment is the 22% system loss became 25% in his one year term and accumulated an additional debt from the current power purchases.

February 11, 2011 – Due to intensified media campaign and mass rallies by the consumer group like the AMSSO, the ALECO Board of Director was forced to resign.

September 3, 2011 – Introduction of the Coop to Coop Partnership Proposal (C2C), a turn-around program for ALECO which was written by Prof Rowaldo de Mundo of the University of the Philippines, National Engineering Centre, to the Stakeholders Forum. The Albay Congressmen are present, the business sector and media.

November 30, 2011 – The ALECO SGMA rejected the Private Sector Participation Parameters.

January 2012 – The Diocese of Legazpi Chancery issued a PASTORAL BULLETIN No. 01, Series of 2012. Titled Renewal, Reform and Rehabilitation – A Pastoral Letter on the Albay Electric Cooperative (ALECO) which called for; 1. The welfare of Albayanos is the first priority. 2. The preservation of our cooperative nature is our preferred position. 3. Obligations should be acknowledged and settled. 4. Transparency and accountability need to be ensured in the service of truth and justice, and; 5. Real rehabilitation will be realized only through meaningful reforms.


July 16, 2012 – PS Lopez was recalled to NEA Head Office and was replaced by PS Veronica Briones with a concurrent capacity of General Manager of Camarines Sur Electric Cooperative 4, Inc.
 

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February 1, 2013 – During the Interim Board meeting NEA railroaded the Private Sector Participation and under pressure of PEMC disconnection NEA threatened to pull out of ALECO if the Board pursue with the C2C. PS Briones said that NEA’s stand is for PSP. NEA methodically scrapped the C2C Proposal even if it was already completed. NEA should put it in black and white if they want to remove the C2C program, Dir. Villalon said, but PS Veronica Briones answered that the Board should decide that matter.

Before this Man Made Disaster happen Aleco was categorized as an effective electricity distribution facility in the 1972-1994 period. The cooperative’s debts started ballooning in 1994 when under NEA management, Aleco I, II and III were merged into one operation.

The public should know that the Electric Power Industry Reform Act (EPIRA) of 2001 completed the privatization of electric power industry in the country from power generation, transmission, and to the large extent, distribution. About fifty two percent (52%) of the power industry is controlled by three(3) big private corporations – San Miguel Corporation(SMC), the Aboitiz, and the Lopezes.

In the past, the electric power industry was a public monopoly through the National Power Corporation (NAPOCOR). The EPIRA Law caused the privatization of the industry. Proponents of EPIRA Law argued then that privatization will help NAPOCOR pay its huge debts and electric power rates will become cheaper because of competition. Amidst the people’s strong opposition while this laws was still pending in Congress, the US-Arroyo regime railroaded its passage.

After ten (10) years of implementation of EPIRA Law, this stature is a dismal failure. NAPOCOR’s debt in 2001 amounting to $16.4 B remains big at $15.8 B in 2010 despite NAPOCOR’s debt service payment of $18 B. The electric power rate in the Philippines is the highest in Asia.

The outstanding debt of ALECO amounting to P3.7 B is not the fault of the members-consumers; rather, it is the result of corruption and mismanagement. ALECO is the sole power distribution utility in Albay so there is no reason for it to become heavily ridden in debted except for the reasons above cited. The indebtedness and near bankruptcy of ALECO is systematically designed to render all other option untenable expect privatization.

The US-Aquino regime ins exerting all-out efforts to place ALECO under the control of private corporations as intended by EPIRA Law. This, NEA ‘s intervention in the affairs of the electric cooperative is purposive. To fast track the process, NEA appointed Atty. Briones as ALECO’s project supervisor. ALECO Interim Board of Director yielded to the pressure of NEA, dismissed the Coop-to-Coop option and adopted the PSP parameters.

The PSP parameters will pave the way for the wholesale of ALECO. Members-consumers will loss control over ALECO and will cause the electric power rate to soar high. Badly affected will be the low-end consumers. PSP as an option for ALECO regressiove and anti-poor. Let us join our efforts to oppose ALECO privatization and frustrate the private sector participation option. let us fight for cheapest electric power rates for all Albayanos.

[BicolToday.com/03Aug2013]

- See more at: http://bicoltoday.com/2013/08/03/aleco-then-and-now/#sthash.ShBKHyUJ.PPQa4AVG.dpuf

           
     
 
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Background and Status of ALECO

 

Background

 

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.

 

1950’s – 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

 

2000’s: 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, ALEO, 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, 2013; during 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.

 

     Status

 

ALECO is still on strike.

 

San Miguel Corporation is taking over ALECO Management. The seal of the cooperative was removed from the façade. The advocates of ALECO privatization are proceeding with their scheme roughshod and without any semblance of delicadeza. Member-consumers are being asked to pay for consumption already paid for in previous months and year unless they show old receipts. They are told to fill up data forms to reconstruct the records of the cooperative. This, however, is a mere attempt to seek legitimacy because SMC did not seek General Membership ratification of the contract. A 14-hour brownout is being rotated among the feeders of ALECO. Refrigerator contents have been spoiled, business has slowed down, ICU patients have to be manually assisted. Platelet stocks are damaged.

 

It is very urgent to stop the privatization of ALECO and assert the implementation of C2C as the pro-people, pro-Albayano solution to ALECO’s problems. The member-consumers will decide what is best for their cooperative.

 

 ALECO Multi-Sectoral Stakeholders Organization

January 6, 2014 

 

     
     
     
     
     
     
     
     
     
     
     
           
           
           

 

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