SMC unit has yet to take over electric co-op

By Lenie Lectura, BusinessMirror

Posted at Jan 13 2014 08:29 AM | Updated as of Jan 13 2014 04:29 PM

MANILA - Diversified conglomerate San Miguel Corp. (SMC), through SMC Global Power Holdings Corp., has yet to formally take over the management of Albay Electric Cooperative (Aleco). The said electric co-op faces yet again the possibility of disconnection from the grid for unpaid power fees worth P240 million.

“[SMC Global has] not yet taken over because of possible strikers who might still be around. For now, it is SMC that is running but [there is] no formal takeover yet,” said Secretary Carlos Jerich L. Petilla of the Department of Energy (DOE) in a text message.

The formal turnover was supposed to take place last week but unidentified people, said Petilla, have occupied parts of the compound in a move to prevent the turnover.

SMC Global won the bid to take over the management of Aleco for 35 years.

“There are groups preventing this takeover and that prevention might actually lead to non-payment to power bills and that could lead to disconnection. We’re talking about two months. Already P120 million is due and there’s still another P120 million to be paid,” said Petilla.

A source said these groups are “member consumers represented by sectors from academe, lawyers, business, church, former board of directors and party-list groups such as Akbayan and Bayan.”

Petilla reminded these groups that are preventing SMC’s takeover that “Aleco is owned by the people of Albay.” The DOE chief also said SMC Global Power will not own Aleco. It will only “run and shoulder the debt and pay monthly concession fees.”

SMC Global Power had said it will be shelling out P350 million in separation payment to affected Aleco workers. Also, some P250 million will be earmarked for capital expenditure. The working capital has yet to be determined until such time SMC Global Power starts to operate Aleco.

Aleco’s debt exposure to SMC Global amounts to P600 million. SMC Global has become one of the largest independent power generation companies in the country with an installed capacity of 2,545 megawatts (MW) to date.

The company holds a 17-percent market share in power supply of the national grid and 23-percent share of the Luzon grid capacity as of end 2012.

The conglomerate plans to install a total of 3,000 MW of new capacity over the long term with new power plants running on clean coal technology.