DOE Statement on ALECO Disconnection

July 30, 2013

The Department of Energy (DOE) is continuously assisting ailing electric cooperatives (ECs) such as the Albay Electric Cooperative, Inc. (ALECO) to ensure the continued power service to their consumers and resolve their accumulated arrearages due the power generators and transmission service provider.

The DOE has been in constant talks with the Philippine Electricity Market Corporation, National Grid Corporation of the Philippines, and the National Electrification Administration on finding ways to avoid disconnection as a result of ALECO's and other ECs' non-payment of power sourced from the generators through the Wholesale Electricity Spot Market (WESM).  The WESM is the trading venue for buyers and sellers of electricity.  Specifically, there has been continued discussion on the appropriate restructuring/rehabilitation program for ALECO including ways and means to mitigate the impact to its consumers.

However, private power generation entities inevitably avail of the remedy of disconnection of some distribution utilities in order to minimize losses in the event of non-payment and to stop the further accumulation of debts.  Power generators have likewise obligations to their creditors, while the financial viability of the WESM must be ensured.

The DOE appeals for the cooperation from the public, ailing ECs and power generators to place the welfare of the consumers in their decisions affecting the power supply.