ALECO to manage power distribution in Albay after terminating concession deal with San Miguel’s energy arm

Member-consumers (MCOs) of Albay Electric Cooperative Inc. (ALECO) voted to terminate their concession agreement with SMC Global Power Holdings, owner of Albay Power and Energy Corp. (APEC).

SMC Global Power, through its subsidiary APEC, entered into a concession agreement to operate and maintain ALECO IN 2013. It is the power arm of conglomerate San Miguel Corp.

ALECO is the franchise holder for electricity distribution in the province of Albay in Luzon.

APEC started to operate and manage ALECO’s franchise area in 2014.

According to the National Electrification Administration (NEA), ALECO will again operate the power distribution services in Albay by the first quarter of 2023.

ALECO board resolution No. 58 invoked the default provision under Section 21.1.1 of the concession agreement with APEC.

“ALECO shall not take over the usual operations until the exhaustion of the period as required by the said clause, which should not be later than February 25, 2023, being the timeline set in view of the preparations and groundworks that shall be arranged by ALECO,” the resolution read.

Pending takeover, APEC shall continue to perform the terms of the concession agreement in order not to disrupt the services that APEC and ALECO should give to the member-consumers.

ALECO invoked the supervisory power of NEA under Presidential Decree No. 269, as amended by Republic Act No. 10531, which lays the groundwork for the transition until the electric cooperative becomes financially and technically viable to manage its operations.