VISION

• Effective and Efficient Cooperative Organization
• Viable and Sustainable Electricity Distribution Business
• Owned and Patronized by Member-Consumer
• Managed and Operated by Competent & Professional Staff

Thereby contributing to the progress and development of Aklan.

EC Commandment

Absolute Honesty, Maximum Efficiency and Total Solidarity

 

THE 7 CORPORATE CULTURE…

• Honesty
• Discipline
• Thrift
• Teamwork
• Hardwork
• Cleanliness
• Word of Honor

AKELCO BRIEF HISTORY AND PROGRAM IMPLEMENTATION

             The Aklan Electric Cooperative, Inc. (AKELCO) was incorporated by virtue of Republic Act No. 6038 otherwise known as the National Electrification Act, Amended by Presidential Decree No. 269 on August 6, 1973. It was registered under the Registration Certificate No. 23 of the National Electrification Administration (NEA) on April 25, 1972.

             The original coverage area is composed of 10 municipalities, namely: Kalibo, Banga, Makato, Ibajay, Numancia, Lezo, Malinao, New Washington, Balete, and Tangalan.

             The ten towns were organized into ten (10) districts, each having each own district Electrification Committee headed by a chairman. On April 25, 1972, the chairman of each of the District Electrification Committee became members of the interim Board of Directors of the Cooperative.

             Pursuant to the NEA Board Resolution No. 47, adopted on May 5, 1972, AKELCO has an approved loan of P16, 755, 000.00, payable in 35 years with two (2) percent annual interest.

             The loan agreement was however, signed on May 31, 1972, at the Aklan Provincial Capitol, Kalibo, Aklan. Signatories to the loan agreement were Gen. Ceferino S. Carreon, member of the Board of Administrators, representing the National Electrification Administration and Mr. Celestino R. Abello, President of the Board and representing the Aklan Electric Cooperative, Inc.

 

COOP INCORPORATORS

            The incorporators of the Cooperative are: Ramon F. Cortes, Balete; Agustin Santos, Banga; Vicente A. Solidum, Ibajay; Celestino R. Abello, Kalibo; Job Y. Besana, Lezo; Bienvenido T. Antoja, Makato; Cesar R. Imperial, Malinao; Bartolome Venus, New Washington; Pedro M. Cordova, Numancia; and Antonio T. Tabang, Tangalan.

             The Cooperative incorporators became the interim Board of Directors. Atty. Bartolome L. Venus, who died later, was replaced by Atty. Rustico I. Icamina. Mr. Alejandro R. Torrea replaced Engr. Job Y. Besana, when he resigned to be appointed as General Manager.

 

A & E CONSULTANT HIRED

            In February 12, 1973, the Cooperative entered into a contract with DCCD Engineering Corporation as its Architectural and Engineering (A&E) consultant in the preparation of the necessary drawings, specifications, cost estimates and other engineering works and supervisions during construction.

 

SITE FOR HEADQUARTERS FACILITIES

            On September 13, 1973, the Cooperative acquired by purchase its four (4) hectares of land for its headquarters facilities at Lezo, Aklan. Immediately thereafter, the Cooperative management started the construction by leveling the site and at the same time the construction of the Multi-Purpose building. Construction was made through forced account.

            On January 13, 1975, construction of the rest of the headquarters was started by V.M. Garcia Construction under contract, to include deep well, sewerage system. Lighting system, road nets office (administration) building, the warehouse, the General Manager’s residence and the perimeter fencing.

            Formal Blessing of the Headquarters facilities was made on January 16, 1975, with USAID Directors to the Phil., Hon. Thomas Unblock as guest speaker. Other Guests at the ceremonies were the ambassadors of Japan, West Germany, India and some members of the diplomatic corps, Exec. Sec. Mr. Alejandro Melchor, Jr., NEA Administrator Pedro D. Dumol, National, Provincial and Local officials attending.

           

DISTRIBUTION LINES CONSTRUCTION

            In the implementation of the AKELCO’S rural electrification program, the first major construction under contract was the Backbone System of the original ten-town coverage area. The backbone system of the distribution line linking the towns of Balete, Banga, Kalibo, Ibajay, Lezo, Makato, Malinao, New Washington, Numancia, and Tangalan.

            Construction of the ten-town backbone system started July 29, 1975 and was completed in July 1, 1977 by Citation Engineering & Marketing Corporation with a total labor cost of P581, 545.00 for the 117 kilometers overhead band 300 meters underground distribution lines.

            The first pole erection was made on August 15, 1975 in a simultaneous ceremony held at AKELCO Headquarters’ facilities and at Ibajay, at the same time with the organization and oath taking of the Aklan Fisherman’s Association. The ceremonies was attended by then Executive Secretary Alejandro Melchor, Jr., NEA Administrator Col. Pedro G. Dumol, USAID officials, NRECA and Stanley Consultants, Provincial Governor Roberto Q. Garcia, other National, Provincial and Local Officials.

 

ACQUISITION/TAKE-OVER OF EXISTING

PRIVATE & MUNICIPAL OWNED & OPERATED ELECTRIC SYSTEM

            On April 16, 1974, upon petition of the Kalibo Municipal Council and residents and as directed by NEA, the AKELCO took over the operations of the Kalibo Electric Light and Power Co., a privately owned and operated electric system. On October 1975, the Cooperative took over the operations of the municipal-owned Makato Power Plant and its system and on December 22 of the same year, started operating the Ibajay Electric Light, also a privately owned electric system.

 

LATERAL CONSTRUCTION

            While the ten-town coverage area were under construction through a contract, the Cooperative having substantially trained lenemen and Barangay Electricians through the auspices of the National Power Corporation (NPC), The National Electrification Adminstration (NEA) and the National Manpower Youth Council (NMYC) also constructed lateral lines, as follows:

PRIMARY - 1-0 = 18.989 kms; v-0=9.116 kms; 3-0=3.667 kms

SECONDARY – U B (30.002) kms; Open = 5.783 kms

TOTAL = 38.191 kms

 

69 KV AKLAN-CAPIZ TRANSMISSION LINE

            In an effort to give adequate and sufficient electric energy supply with the clamoring and increasing number of consumers/members, the next construction undertaken by the cooperative through force account was the 69 KV Aklan-Capiz Transmission (AKELCO Side) line covering 32.41 kilometers or a total of 64.82 Kilometers (including CAPELCO side). Construction started October 16, 1976 during the first pole erection ceremonies.

            The project was supposed to be completed within four (4) months only but was hampered due to unavoidable circumstances. The project, which links AKELCO and CAPELCO, was completed only on October 219, 1977.

 

5 MVA SUBSTATION

            In the course of the construction of the 69 KV transmission line, the 5 MVA substation at Andagao Power Plant of the cooperative started and was completed and energized November 27, 1977.

 

DISTRIBUTION LINE EXPANDED

            Just after the completion of the 69 KV transmission line, another backbone system was extended from Poblacion Ibajay to Poblacion Nabas. The 11.606-kilometer distribution line was constructed through force account.

            Another part of the backbone system from the town of Altavas to Batan was constructed with a total of 11.1 kilometers. Power will come from the 1.5 MVA substation at Altavas, which was also partly constructed by contract.

            To further hasten the implementation of the rural electrification program \, the town of Malay, utilizing its municipal set has also energized pending completion and construction as well as funding of the distribution lines from Nabas to Pandan, Libertad, Buruanga and Malay route in the west.

 

EXPANSION OF THE COOP COVERAGE AREA

            In September 1976, by petition of the residents and municipal councils of Libertad and Pandan of the province of Antique and the remaining towns of Aklan not included in the original town coverage, the area coverage of the Aklan Electric Cooperative, Inc. was expanded. From the original ten (10), the area coverage was increased to nineteen (19) towns. However, the number of districts was reduced from ten (10) to nine (9).

            Now the districts are: I- Malay & Buruanga; II – Pandan & Libertad; III – Nabas & Ibajay; IV – Makato & Tangalan; V – Numancia & Kalibo; VI- Lezo & Malinao; VII – New Washington & Batan; VIII – Altavas & Balete; and IX – Banga, Libacao & madalag.

 

SPECIAL MEMBERSHIP MEETINGS

            The first special membership meeting of the cooperative was held on July 9, 1977 at the Coop’s Multi-Purpose building at Lezo, Aklan. The members ratified the amendments made by the Board of Directors to the redistricting of the coverage area.

 

ELECTION OF THE NEW BOARD OF DIRECTORS

            In accord with the Coop’s By-Laws and to give other members a chance to serve the policy-making body of the Cooperative, the election of the new set of directors to represent the nine (9) districts was held from October 15-23, 1977. The newly elected Board of Directors assumed office on December 18, 1977 during the First Annual Membership Meeting of the cooperative held at the Multi-purpose building at Lezo, Aklan.

 

INSTITUTIONAL DEVELOPMENT

            It is said that good management requires continuous preparation and development for all the persons engaged in managing. To meet this objective, the Cooperative sees to it that qualified persons are employed for efficient management.

            As a policy for economic development and stability as an enlightened management, the Coop sends key men and women to institutes, conventions, conferences and seminar workshops conducted by the NEA to acquire effective leadership and motivation to provide the staff with visible opportunities for self-actuation. This, also include the members of the Board of Directors who are sent to seminar/workshops on Cooperative Development and Management.

            To further attain the goal of good management, member/consumers relationships, members are acquired to attend the District Election Committee Seminar workshops; and to maximize informational and educational membership drive; meetings are held in every town, barangay, and sitio before construction is started to acquaint the prospective member/consumers of their rights, obligations and privileges. For a well-rounded development communication system, the Coop’s key men and women participate in seminar-workshops meetings, lectures and forums in coordination with government offices and agencies as lecturer or resource speakers. This is also aside from the newsletter sent to member/consumers and the regular weekly radio program consumption of the general public.

 

AKELCO: THROUGH THE YEARS…

(The Aklan Turmoil)

On March 18, 2002, member-consumers of the Aklan Electric Cooperative (AKELCO) were shocked upon learning that the National Power Corporation (NPC) had disconnected its power supply to the power cooperative because of its unpaid debt reaching P153 million pesos.

The member consumers staged simultaneous protests against the AKELCO management because of the unclear explanation on the status of the power cooperative. Member-consumers were also restive asking the management when will the NPC restore the electricity in their homes.

During the chaos, resort owners in Boracay Island joined the protests. They received complaints from their guests both foreign and local tourists about the power outages, their business were affected.

This prompted the stakeholders through the Boracay Foundations Incorporated (BFI) to write to President Gloria Macapagal-Arroyo and Department of Secretary Vince Perez complaining about the problem.

Because of this development, the National Electrification Administration led by Administrator Fr. Francisco Silva, and acting on the presidential directive to take over AKELCO. Fr. Silva then issued an Office No. 2002-061, series of 2002 designating Mr. Erico O. Bucoy as Executive Officer effective immediately.

 

HISTORY

In April 25, 1972 the NEA organized 36 electric cooperatives and AKELCO is one of them.

Initially, it included only ten towns in the province as its coverage area. But was later expanded into 19 towns including Pandan and Libertad in Antique, by virtue of the amended Article of Incorporation and By-Laws enacted by the members last July 9, 1977.

It then took over the operation from the defunct Kalibo Electric Light and Power Company in April 16, 1974 as well as, the Electric Systems in the Municipalities of Makato and Ibajay in October and December 1975, respectively. But because power was only self-generated, there was scarcity then which made AKELCO unable to serve the member-consumers.

Construction by a contractor of the 69-KV transmission and distribution lines to cover the ten towns coverage area started only in July 29, 1975 and was completed two years after or in July 29, 1977. The AKELCO, together with CAPELCO, jointly implemented the construction of the 69-KV transmission lines, which actually brought power from NPC to the ten-service coverage area only in September 1978.

The backbone system for the nine other town service area was constructed by forced account maximizing the AKELCO trained personnel. In 1979, at least 17 of the 19 towns service coverage area were served with electricity, while the municipalities of Libacao and Madalag were not served. The construction was hampered due to the lack of construction materials. Without such predicament, construction could have been finished despite the rugged terrain and mountainous conditions of its coverage area.

In 1981 to1984, AKELCO has proven itself correct and pay off its obligations with NEA. However, in November of 1984, a super typhoon devastated the AKELCO, which incurred costs of repair and consequently unable to pay its loan with NEA.

In 1985, Akelco was able to overcome the challenges and in fact yielded a net margin of more than P1 million, which further increased to a high of P4.2 millions in 1986.

In 1989, because of Akelco’s growth and success, it was categorized as a Class A Cooperative. However, in December of the same year, because of the implementation of R.A. 6727 and the increase in NPC rate, which continued in 1990, AKELCO again was unable to pay its obligations with NEA.

The cooperative was not able to pay on time the NPC power bills and did not enjoy the prompt payment discount (PPD). Likewise, it unable to pay on time its other obligations, including the salaries and wages. At that time, AKELCO had a workforce of 278 personnel serving some 29, 304 member-consumers.

In March 1990, the late General Manager Job Y. Besana went on leave due to a severe illness. By the authority of the Board of Directors, Mr. Herminio B. Yatar Sr., the MSD Manager then, took over as OIC. He however resigned in the same post in July 31, 1990. These led to the assignment of the Project Supervisors from NEA, namely: Deputy Administrator Engr. Manuel Sta. Maria, Roberto G. Aterrado, who served very shortly until July 1991.

 

THE TURNING POINT

After which, Atty. Leovigildo T. Mationg, then NEA’s Corporate Lawyer, was designated Project Supervisor of AKELCO, who was later designated Acting General Manager in November 1991, immediately after the preventive suspension was served against GM Besana.

In December 1991, Besana re-assumed his post when his suspension was restrained by the Court of Appeals. Atty. Mationg, acted immediately and secured a Clarificatory Order from the same court, which actually sustained the suspension order. He (Besana) then tried to assume the management of AKELCO but prevented from doing so and was not able to enter the AKELCO compound in Lezo due to the protest rally staged by the AKELEA (AKELCO Employees Association) in January 2, 1992.

Four days after the attempted take-over, an alleged AKELEA President in front of the AKELCO gate shot a police officer. Because of this, the Board passed a resolution on January 9, 1992 directing the transfer of AKELCO office to formerly Amon Theatre Building in Kalibo. Another Board resolution followed dismissing from service GM Besana, who for the second time was issued a suspension order by the NEA.

GM Besana and his supporters refused to give up and continued running the operation of the cooperative. This led to confusion among the member-consumers as to who was then the legitimate AKELCO management. The power cooperative suffered of low collection efficiency at only 67 percent, the AKELCO in Kalibo paid the NPC power bills partially and applied for the restructuring of the balance.

Due to the abnormal condition and operation of the cooperative, it was declared as Category D in 1993. It bounced back into Category B in 1995, but was again re-categorized into a Class C in 1997.

With a relative increase in collection efficiency at 94 percent and decrease in systems loss at 18 percent in 1999, compared to the 1984-1988 levels, upgrading of its facilities were undertaken. In June of 2000, AKELCO started amortizing its NEA loans.

In 2001, the cooperative again suffered tremendous losses because of the high cost of operations having employed over 340 workforce and other unexplained causes. The consequence was, the cooperative again was not able to pay its obligations with NPC and NEA including employees benefits (i.e. PAG-IBIG, SSS etc.) as well as to the suppliers.

Because AKELCO is now incurring heavy net losses and failed to meet its obligation, the power supply was disconnected by the NPC.

 

PAINFUL DECISION

In Macalañang, President Arroyo said that the decision to cut-off its power supply in the province of Aklan was described as a painful decision “It was a painful decision for me because my political allies were at the shorter end and that we have to have a management take-over of Akelco and now they have an award,” President Arroyo said.

Atty. Mationg ran for the Congressional Seat in Aklan in the year 2001 under the same political party of Mrs. Arroyo but eventually lost to rival Congresswoman Billie Calizo.

They also knew that the tourism industry not only of the province but also of the country as well would be affected by the power cut off. Boracay Island (which is under the juridical coverage of Aklan) is considered a premier tourism destination in the entire country which is being visited by an average of 200, 000 foreign tourists every year.

Department of Energy Vince Perez who agree with President Arroyo’s sentiments that the decision is painful and that then Department of Tourism Secretary Richard Gordon and the late Senator Rene Cayetano asked him intensively study the possible impact of the power cut-off in Aklan particularly in Boracay.

“After 33 months, I know my decision to cut-off the power electricity in the Aklan province is right because we have seen the result. The AKELCO is now in the right track,” Perez said in Boracay Island recently.

 

THE TURN-AROUND COOPERATIVE

As soon as the NEA Administrator Fr. Silva ordered the take-over, Mr. Bucoy after reaching a decision in less than 24 hours accepted the job and immediately flew to Iloilo from Cebu. He then proceeded to Kalibo, Aklan with the assistance of GM Fred Billena of ILECO I and confidential friends from all fronts.

Without any-untoward incident, but tension filled situation starting in the evening of April 20, 2002, Mr. Bucoy, with the support from all sectors and/or stakeholders, carried out with swiftness the take-over in the dawn of April 21, 2002. Before the end of the day, the take-over, including the transfer of almost all properties from its Kalibo office back to Lezo Office, was practically finished.

On April 22, 2002, the AKELCO personnel, acting on NEA orders, started working back at its central office in Lezo, Aklan. After attending meeting with the Executive Officer, everybody started setting up the offices of every department and continued doing their respective jobs.

On April 25, 2002, a General Staff Assembly was conducted with Fr. Silva, as the Speaker-Lecturer. Other Present during the assembly included Edicio dela Torre, Alexander Benedicto, Atty. Rex JMA Fernandez, Edgar R. Masongsong and Wilfredo Ortiz.

The assembly then set the tone for AKELCO, Fr. Silva, entered into an agreement with the Change Management Team CMT) by declaring that everybody will be in amnesia that is, forgetting everything that happened in the past. Should the employees ncontinue to resist the reforms, everything will also be remembered and will become the basis for future decisions.

There were some who resisted change. There were at least 57 or more AKELCO personnel, who opted to be loyal to personalities, rather than to the organization. They were summarily dismissed.

Atty. Mationg, who was eventually ousted from the power cooperative, had filed a case asking for his return as general manager of AKELCO. He was favored by the Court of Appeals but the AKELCO management filed a motion for reconsideration to the Supreme Court. The case is still now pending in the SC.

The others who cooperated in the rehabilitation are now conscious and are working towards making the power cooperative an organization of ‘absolute honesty, maximum efficiency and total solidarity.’

NEA Administrator Edith Bueno, then Governor (now Congressman) Florencio Miraflores, the BFI and the League of Municipal Mayors in the province also played major roles in the quick turn of events of AKELCO.

Because of the successful turn-around of the power cooperative, it received numerous awards and recognitions from the NEA. In 2003, the AKELCO received the Best Turn-Around Cooperative Award, Model Headquarters Facilities Award and the Power Cooperative with Reflection, Question, Information and Messages (RQIM) Awards.

In 2004, the AKELCO again received four awards such as the Most Improved Electric Cooperative, Leadership Award, Extra-Ordinary Performance Award and a Special Citation for the Change Management Team.

This year 2005, the AKELCO had received the highest award given by the NEA to the power cooperative namely the President Gloria Macapagal-Arroyo Award for Exemplary Performance.

The continued success of AKELCO had inspired other low-managed power cooperative in the entire country to follow its footsteps.

As threats on possible forceful take-over continues to be aired over the radio by the renegade supporters of Atty. Mationg, the AKELCO employees recently took their own initiative to launched a signature campaign among themselves opposing the take-over threats and coming back of Mationg.

“They (AKELCO employees and management) should take this challenge of threats of take-over as compared to the trials in life. These trials should make them strong and able to sustain its Class A + Status,” Perez said in an interview.

Last February 18, 2005 Perez officially declared the AKELCO as one of the multi-awarded Class A+ Power Cooperative in the country today.

 

The Inheritance

• Php 153.5 Million of Unpaid NPC Bills
• Php 35 Million of Payables to Material Suppliers
• 424 employees, over a hundred with no specific job description

 Before Take-over (April 2002)

• A large Category E coop
• 22%+ System Loss
• 70% Collection Inefficiency
• High System Unreliability (SAIDI of 500)
• Glowing voltage delivery (160V)

TODAY (2004)

• Category  “A+”

 

AWARDS

       2003

• Turn-Around Electric Cooperative
• Model Headquarter Facilities
• Coop with RQIM System

          2004

• Most Improved Electric Cooperative
• Extra Ordinary Performance Award (Erico O. Bucoy)
• Sec. Fransisco G. Silva Leadership Award (Erico O. Bucoy)
• Special Citation for the AKELCO Management Team

          2005

• Unprecedented Excellent Performance Award

ØSystem Loss for the Month of Oct ‘04  - 16.00%
      (Jan-Oct, 10 Mos. Ave. – 13.74%)

> Collection Efficiency
      Month of Oct – 101.08%

> Reliability within National Standards
   (System Ave. Interruption Duration Index, SAIDI = 48 mins.
     per customer. /  Standard = 90 mins./customer)

>Improved Voltage Quality (200-220V)
            - Installed an additional 10MVA S/S at Andagao
            - Transferred 10MVA Nabas S/S at Caticlan
            - Upgraded Altavas S/S to 5MVA
            - Rehab of Distribution lines

>High Customer/employee ratio (1:232)

>Settled all obligation to NAPOCOR on August 2004

>Balance to suppliers – 14 M (Questionable transactions)

 

The Challenge

• Power Generation shortage
• EPIRA: Privatization, WESM, Expensive Grid and Distribution Code Compliance
• Magna Carta for Residential Consumers.
• NPC Rate increase
•    - Impending oil price increase (P2.00/liter)
• Taxation per recent SC ruling

 

The Strategies

Addressing the Panay Power Situation

• Negotiated with IPP’s to locate in Aklan

On going construction of 7.5 & 5 MW Power Plant in Nabas & New Washington respectively.

• Included in the negotiation the requirement for financial assistance simultaneously addressing the other challenges
• Institutional development of the EC
• Empowering member-consumer base thru: MCEC, Pulong-pulong, Linkages with LGUs, NGOs, POs
• Massive information Dissemination

•Coop conversion (Stock-Profit Cooperative)

•5-Year Global Competitiveness Plan

Government Position

• Push for privatization of generation, while relocating the Pinamucan plant to Dingle
• Require electric coops to be highly efficient without a substantial Return on Rate Base
• Implementation of the EPIRA LAW