LEGAZPI CITY –- The Albay Electric Cooperative Inc. (Aleco) with P1.4 billion in unpaid debts is “technically insolvent,” according to lawyer Rodolfo Bonafe Jr., Aleco president and chairman of the board of directors.

        Provincial board member Raul Borejon, chairman, Sangguniang Panlalawigan committee on energy, made this committee report during the last regular session held last Tuesday afternoon.

        Borejon said his report was based on what transpired during the committee hearing participated in by Aleco officials and some board members.

        Quoting Bonafe, Borejon said Aleco owes the National Power Corp. (NPC) to the tune of P1.4 billion in unpaid bills.

        According to the Aleco president, the board and the management are making several options to revive the ailing cooperative. This includes overhauling the staffing pattern of the coop.

        “Despite all these problems, Aleco is still able and capable of delivering service to its consumers, Bonafe told the Borejon committee.”

        To unburden Aleco from its huge debts, Bonafe had proposed the following options:

        First, Aleco will seek for a debt restructuring of its financial obligations with NPC. In this connection, the Aleco board is asking the SPA to pass a resolution in support of debt restructuring.

        Second, Aleco directors are still waiting for the NPC memorandum allowing them to participate in the management (but not takeover) of Aleco.

        Third, is for Aleco to invite investors under the Investment Management Contract (IMC) concept.

        At the same time, Bonafe said the coop is grateful to the national government through the efforts of Gov. Joey Sarte Salceda for commiting P150 million as subsidy to Aleco for technical upgrading. An initial P36 million had already been released.

        Some of the problems confronting Aleco which were discussed during the committee included the high systems loss of 23% which is way beyond the 14% allowed by the Electric Power Industry Reform Act (EPIRA).

        The coop is also losing income because malls and big corporations directly tap at NPC.

        Meanwhile, the present surcharge on delayed payments has been suspended pending the legal opinion of the Energy Regulatory Commission (ERC) on the matter.

        The Aleco president is questioning the legality of the injunction issued by RTC Judge Pedro Soriao on the 2% surcharge as it was directed against the National Electrification Administration (NEA) not Aleco.