INTRODUCTION

This study is aimed to uncover factors that affect Albay Power and Energy
Corporation (APEC) in their organization, factors such as Transactional factors such as
External Environment, Leadership, Mission or Strategy and Organizational Culture.
Transformational factors, on the other hand are system and policies, organizational
structure, individual needs, motivation, work climate and task requirement. These factors
are what caused organizational change and performance.

Albay Power and Electric Corporation (APEC) is private owned corporation under
San Miguel Corporation (SMC), it took over the local electricity firm in Albay after the
ALECO or Albay Electric Cooperative on was put to privatization after it has been
bankrupt, February 26, 2014 APEC formally took over. The taking over objective is to
rehabilitate the electricity firm in Albay and to further improve the service provided. Local
government units and five Albay lawmakers were unanimous in supporting the National
Electrification Administration and Malacaang in their move to privatize Aleco as the only
option to save it from total collapse.
STATEMENT OF THE PROBLEM:

According to our research we found out that Albay Power and Electric
Corporation has been facing organizational problems internally and externally. We will
subdivide the problems into two factors, namely Transactional Factors and
Transformational Factors.

Transaction Factors

Orgnizations Debt

The P4-billion outstanding loan inherited by San Miguel Corp.(SMC)-owned

Albay Power and Energy Corp. (Apec) has ballooned to P5.6 billion more than two years
after its acquisition of the ailing Albay Electric Cooperative (Aleco). Apec has a standing
debt of P1.6 billion to San Miguel Energy Corp. (SMEC) involving power supply, while
Apec collectibles stand at P1.2 billion. He said the outstanding Aleco loan of P4 billion
inherited by Apec remains unsettled. According to APEC General Manager, when the
Aleco turned over documents and data base to Apec, the names of some 180,000 of the
225,000 Aleco consumers were missing in the data base. Thus, Apec could not collect
payment as it could not send bills except to some 40,000 consumers in the data base.
As a result Albay Power Energy Corp. (APEC) is on the verge of being disconnected
from the National Grid Corporation of the Philippines (NGCP).

Failure to implement efficient bills collection

APEC information officer Patricia Gutierrez said the company has only 30
percent collection efficiency. Only 3 out of 10 or 30 percent of the total number of
consumers are paying religiously which is around 55,597 of the 185,324 consumers in
Albay. Since APEC took over operation of the Albay Electric Cooperative (ALECO) on
February 26, 2014, the San Miguel Global Energy Power Holdings Corp., APECs parent
company, has been subsidizing APECs monthly billing from the NGCP. SMC has been
subsidizing APECs average monthly billing of PHP215 million from NGCP. As a result,
San Migel had warned APEC to increase its collection efficiency by at least 50 percent
until December this year or they will stop its subsidy for the monthly bills that would
cause NGCP to cut-off their power supply to APEC and the rest of Albay.

Innacurate amount of electricity bill

During the first year of Apecs operation, consumers complained of their

erroneous and impossibly high billings that one consumer who usually got billed less
than P200 a month having only three bulbs at home was billed P30,000. Apec officials
apologized to the consumers, saying the problems are being acted on.

Transformational Factors

Deliquent Consumers and Illegal Connections

Of the 225,000 Albay consumers, however, 185,000 connection lines were not
found in the database. Collections during the first year of operation involved only 40,000
consumers. They could not send monthly billings to the others. As a result of this, Apecs
unbilled consumers were given the opportunity to settle their account one by one on a
monthly basis.The companys consumers are urge to pay their bills on time avoid the
inconvenience of disconnection. Recently, they were able to slowly uncover the missing
power connections in the database. Many of them do not even have meters; Apec is
preparing legal options against the thousands of delinquent consumers who had refused
to report to Apec their connection lines.
Poor Services and Action

A lot of the consumers are complaining about the services of APEC like
inconsistent electricity supply, slow response and delay in sending of disconnection
notice and bills. As a result, consumers are refusing to pay their bills because they are
unsatisfied for the services they acquire. Another is the slow process of payment of bills
to their assigned billing stations; it took hours of waiting in line just to pay for the bills.
Also, the slow response of the company to the complaints of the consumer regarding
their service which take a couple of days. And lastly, the consistent rotating brownout
and fluctuating flow of electricity that cause appliances to malfunction.

High Price of Electricity

The consumers are complaining about the high price of electricity bills after
APEC took over. They say that before APEC took over, they are paying less than what
they are paying now with the same appliances used. According to Scientist group
AGHAM-Advocates of Science and Technology for the People this is the result of
ALECO falling into further bankruptcy which led to termination of its Transition Supply
Contract with NAPOCOR in 2009 following the sale of the Tiwi Geothermal Power Plant
to Aboitiz Power, forcing the cooperative to source power from the Wholesale Electricity
Spot Market (WESM) at a relatively higher cost.
CONCLUSION

APEC is in on its great responsibility to provide their entire consumer in Albay

better service for what they subscribed. We believe that in order to attain such change in
performance in an organization like APEC it should start to the organization itself or
internally. In accordance with Burke and Litwin Change Model, change in the
performance of a team or an organization by establishing links between performance
and the internal and external factors which affect performance. This change model is
based on assessing the organizational as well as environmental factors which can be
tweaked so as to ensure a successful change, or in this study we used Transformational
Factors and Transactional Factors in determining what APEC as an organization needs
to developed in order for it to attain organizational change in performance.
RECOMMENDATIONS:

Orgnizations Debt & Failure to implement efficient bills collection

A way to resolve this problem is to implement a strict policy which regards to

collecting payment of bills. We suggest implementing a one receipt policy wherein
consumers are strictly urge to pay their bills every month in order to raise the collection
efficiency percentage and be able to pay for the companys debt. It may take a while but
it would suppress the ballooning of debt of APEC.

Innacurate amount of electricity bill

We suggest to that APEC should implement a more sophisticated manner of

reading the electric meter. One way is by replacing old electric meter with a more
advance and calibrated meter. Also, to attach an automated price meter in each electric
meter so that the consumer would monitor their consumption whenever they want. And
lastly is to provide a more detailed copy of receipt in order for the consumer to know
what they are paying for.

Deliquent Consumers and Illegal Connections

We would recommend implementing massive changing and clustering of meters

and line clearings, especially in areas full of vegetation, to reduce losses. Clearing of the
lines from vegetations reduce the risk of damaging the electric lines and electric poles as
well and a result would lessen the cost of maintenance for the organization. We would
also like to recommend implementing legal actions against the thousands of delinquent
consumers who had refused to report to Apec their connection lines and ask the help of
the local officials could encourage their constituents to pay their monthly bills on time
and help APEC combat illegal connections and other pilferages to solve the system
losses.
Poor Services and Action

This issue can be resolved by creating a central hotline where consumers can
call to state their complaints. Also, to update the equipments and subject the employees
to training in order to improve their efficiency at work. APEC could also expand their
manpower in order to fully monitor their consumers.

High Price of Electricity

This issue can only be resolved with the help of the government, because to
think Albay could supply its own electricity because we have our own Geothermal Power
Plant in Tiwi, Albay but the electricity generated from it is transmitted to NCR before it
return back to Albay which doubles the price. If the government with DOLE would appeal
to the Power providers to directly buy electricity to Tiwi Geothermal Power Plant in order
to lessen the Price of Electricity in Albay, it would be a great help.

price comparison
References:

https://www.doe.gov.ph/energist/index.php/2-uncategorised/10533-albay-power-
debt-balloons-to-p5-6b-in-2-years
http://newsinfo.inquirer.net/tag/albay-power-and-energy-corp
http://www.agham.org/press-releases/scientist-group-reiterates-call-stop-smc-
takeover-aleco-corporate-control-over-bicol
 Southern Luzon Technological College Foundation Inc.
College of Business Administration & Tourism Management

PROJECT
in
ORGANIZATIONAL
DEVELOPMENT

Submitted to:

Dr. Rodrigo H. Romero

Dean, College of Business Administration
And Tourism Management

Submitted by:

Jessa Mae B. Mangosta

Jhosell A. Romero
Angie A. Moscoso
Jyan Conda
Mary Jane Dinglasan
Jacques Andre Bea
 ALBAY POWER
AND
ENERGY CORPORATION