Aleco: Power rate hike sought by private concessioner from ERC

LEGAZPI CITY -- The new management of the Albay Electric Cooperative (Aleco) has withdrawn the application for power rate increase recently filed behind the back of its member-consumers by Albay Power and Energy Corp. (APEC), the private firm now manning the operations of the controversy-laden electric cooperative.

Under the signature of its newly elected president, Jaime Chua, Aleco filed a manifestation asking the Energy Regulatory Commission (ERC) either to deny the application for rate-increase filed by APEC or to consider it as withdrawn.

“Aleco belies APEC’s claim that it has a concession agreement entered into with the cooperative on Oct. 29, 2013 because the corporation was registered with the Securities and Exchange Commission (SEC) only on Nov. 4, 2013. There is a clear case of misrepresentation in this issue,” lawyer Oliver Olaybal, the legal counsel for the group, over the weekend said.

APEC is a subsidiary of SMC Global Power Holdings Corp. created for the purpose of running the businesses of Aleco following its privatization worked out by the National Electrification Administration, Department of Energy (DOE) under Sec. Jericho Petilla and Albay Bishop Joel Baylon, and supported by Albay Gov. Joey Salceda.

The privatization was said to be intended to bail out the cooperative from its financial troubles amounting to around Php 4 billion, incurred over years of mismanagement, corruption and deep political meddling.

Olaybal said the rate hike application was filed for APEC by the Aleco interim board created by the NEA and placed under the headship of Baylon as chair sometime before the signing of the concession agreement.

The bishop-headed interim board was dissolved after it turned over the control of the cooperative to SMC Global.

APEC formally started running Aleco last March amid protests from several groups opposed to the privatization.

“We also informed ERC that the NEA charter prohibits the lease or sale of Aleco assets, so that APEC is without authority to represent the cooperative in seeking rate adjustment, being not its legitimate owner but its member-consumers who have invested Php 6.57 billion for the acquisition of its assets, which is too substantial to be ignored by government regulators,” he stressed.

Aleco, he said, emphasizes the distinction between ordinary utilities like Manila Electric Co. (Meralco) and non-profit cooperatives whose members are the ones to determine whether or not to make their membership more burdensome through rate-increase.

The Aleco management under Chua is also processing the filing of a case in court in a bid to win back the cooperative from SMC-APEC.

“Considering the absence of consent on the part of the member-consumers for the lease of the franchise and the assets of Aleco, the cooperative under its new Board of Directors, shall be filing a court petition for quo warranto, assailing the right of SMC Global/APEC to exercise the cooperative’s corporate powers, operate its franchise and utilize its assets,” Olaybal said.

Last Aug. 25, Aleco served APEC with a letter repudiating its hostile management takeover of the business, franchise and other assets of the cooperative.

The repudiation letter, according to Olaybal, is required for the judicial recovery of the facilities from APEC.

Under the law, when a stranger takes over the business without the consent of the owner, there arises a juridical relation between the parties known as "negotiorum gestio", or officious management.

“It becomes obligatory on the part of the officious manager to yield management and control of the business, following repudiation made by the real owner of the business,” Olaybal said, adding that Aleco is reserving the right to prosecute the culprits behind the hostile management takeover, under the law on syndicated estafa, which imposes a penalty of life imprisonment.

The investigations also cover the missing Php 500-million fund allocated for the cooperative out of the Php10-billion Bicol Calamity Assistance and Rehabilitation Effort (BCARE) fund provided by Malacañang under then Pres. Gloria Macapagal-Arroyo following super typhoon "Reming" that ravaged the region in September 2006.

The general assembly recognizes that the root of today’s problems in Aleco is the missing fund intended for the rehabilitation of the distribution system of the power cooperative, Chua told NBI in an earlier letter requesting an investigation.

Despite the huge fund, the system was not rehabilitated following its misappropriation that left the cooperative suffering from 24-percent systems loss, which is equivalent to Php 48 million in monthly deficits or Php 576-million deficit per year, Chua said.

The amount, he said, was disbursed by then Barangay Captain Jose Zamora of Ubaliw, Polangui, Albay, who was appointed as NEA’s project manager for Aleco during that time.

Had the amount been spent as intended, Aleco would not be having its Php 4-billion deficits that had drawn the cooperative into bankruptcy, Chua said.

Baylon and Zamora were among those summoned by NBI to appear at its office in Manila last Sept. 8 as part of the ongoing investigations.(PNA)

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