ALECO privatization should be last resort, not first option

By Partners for Affordable and Reliable Energy (PARE)

Albay has been here before.

A struggling electric cooperative. Mounting debts. Frustrated consumers enduring daily brownouts. Officials pointing to private sector participation as the only way out. And the public left wondering whether this time will be different.

PARE is cautioning that it may not be different now.

The Albay Electric Cooperative is once again at the center of a high-stakes debate about its future. Albay Governor Noel Rosal has raised the alarm over ALECO's reported debt burden, reportedly reaching P5.7 billion, and has opened the door to privatization as the definitive answer to the province's lingering energy crisis. The proposal deserves serious scrutiny. So does the history behind it.

"The question before the people of Albay is not simply who will run their electric cooperative. The deeper question is whether Albayanos will once again be asked to pay for a crisis they did not create," PARE said.

History Already Answered This Question

In 2014, ALECO entered into a concession agreement with the Albay Power and Energy Corporation, a subsidiary of San Miguel Corporation. The transition to private management was backed by Albay's top officials and sold to the public as the solution to the cooperative's chronic problems.

Eight years later, ALECO's Member-Consumer-Owners voted unanimously to terminate that agreement.

Under APEC, system losses reportedly ballooned to an all-time high of 40 percent. Collection efficiency collapsed to below 50 percent. Electricity rates reached P18 per kilowatt-hour. Debts continued to grow despite the promise that private management would resolve them. NEA audit findings confirmed that APEC had failed to satisfy the majority of its major requirements and deliverables under the concession agreement.

When NEA assumed management control in late 2022, consumers' bills reportedly dropped from P18 to P13 per kilowatt-hour almost immediately.

This is not ancient history. This is the last chapter.

"Privatization did not solve the problem the first time. Consumers were the ones who paid the price. Before anyone rushes to that conclusion again, every available reform measure must first be exhausted," PARE said.

P1.2 Billion in Public Money Is Already at Work

What makes the current privatization push particularly troubling is its timing.

The national government, through the initiative of Ako Bicol Party-list Representative Alfredo Garbin Jr., has committed over P1.2 billion to rebuild ALECO's infrastructure from the ground up. The Salvacion Substation was energized in May 2025, boosting demand capacity and stabilizing voltage for consumers in Sto. Domingo, Bacacay, and San Miguel Island. Two additional substations in Daraga and Ligao are targeted for completion by August 2026. An additional P800 million in line enhancements and new substations is rolling out across Legazpi City and the entire province this year.

Congressman Garbin has raised a critical point that consumers deserve to hear. Private entities are reportedly expressing interest in ALECO precisely because the national government has already absorbed the enormous upfront cost of building new infrastructure. Privatizing now would hand a taxpayer-funded asset to a corporation without any binding guarantee that old debts will be absorbed rather than quietly passed on to consumers through higher electricity rates.

"This is a shared accountability issue. The rehabilitation program is funded by the Filipino people. If privatization proceeds before this program is completed and independently assessed, consumers deserve to know who benefits and who pays," PARE said.

ALECO General Manager Engr. Wilfredo Bucsit has also reported that under current management, the cooperative has already paid down more than P129 million of its total obligations. The brownouts consumers experience today are reportedly tied to ongoing construction work that cannot safely be performed on live lines. These are facts that deserve honest public communication.

The Right Question Is Governance, Not Ownership

ALECO's crisis did not emerge overnight. It accumulated over many years through governance failures, management decisions, regulatory interventions, and inadequate oversight from NEA, DOE, and ERC. Accountability for the cooperative's condition does not rest with one institution alone. It extends to every body that exercised authority over its operations.

This is precisely why privatization is not a shortcut to accountability. It is often an escape from it.

"The more urgent question is not who will own ALECO but how it will be governed. Rehabilitation must strengthen cooperative governance, restore financial discipline, promote transparency, and ensure meaningful participation by Member-Consumer-Owners and stakeholders," PARE said.

Privatization does not automatically erase debt. It does not restore democratic governance. And as Albay's own experience has demonstrated, it does not guarantee better public service.

Exhaust Every Remedy First

Before privatization is placed on the table, PARE calls on DOE, NEA, ERC, and Congress to complete and independently assess the rehabilitation program, implement genuine governance reforms, strengthen consumer participation, and ensure full transparency at every stage.

If after all these measures are genuinely exhausted the cooperative still cannot deliver for Albayanos, then broader options may be considered. But consumers must be at the center of that decision. Not corporations. Not politicians. Consumers.

ALECO belongs to the people of Albay. Its future must serve them.

"Consumers pay for every inefficiency, every outage, and every pass-on charge in the system. They deserve accountability, transparency, and a meaningful voice in shaping the future of the institution that rightfully belongs to them," PARE said.

Rehabilitation with accountability and genuine consumer participation is the path forward. Privatization must be the last resort. Not the first instinct.

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Partners for Affordable and Reliable Energy (PARE) is a national, independent consumer coalition advocating for affordable electricity, reliable service, energy justice, and meaningful consumer participation in the Philippine energy sector.

Nic Satur Jr09271448048nsaturjr.pare@gmail.com

The Electric Cooperative Reform the Philippines Can No Longer Ignore By Partners for Affordable and Reliable Energy (PARE)

On July 6, 2026, the people of Palawan did not wait for a congressional hearing or a regulatory investigation. They went outside and made themselves heard.

Member-Consumer-Owners of the Palawan Electric Cooperative gathered in front of PALECO's offices to deliver a message that no performance scorecard had managed to capture. They were not asking for the impossible. They were asking for what every Filipino household deserves: electricity that is affordable, reliable, and built to last.

It was a peaceful rally. But behind it was years of accumulated frustration.

Triple-A on Paper. Brownouts at Home.

In May 2026, PALECO achieved the highest performance rating for electric cooperatives in the country. Based on NEA's 2025 Annual Overall Performance Assessment, the cooperative was awarded an AAA distinction, scoring 97 percent. The cooperative's management celebrated. The mood in El Nido, Puerto Princesa, and Narra was considerably different.

John, a small business owner in Puerto Princesa, put it plainly. "We are paying premium rates. What we are not getting is premium service. The lights go out in the morning, come back, then go out again by afternoon. That is not Triple-A. That is triple the frustration."

According to MCO Tony Cabrestante a phrase now quietly circulating among PALECO's Member-Consumer-Owners. AAA, some consumers now say with a tired laugh, no longer stands for excellent performance. It stands for "Araw-Araw, Ara Kuryente." Every day, no electricity.

The joke draws a knowing smile. The reality behind it deserves a serious response.

Lisa, a small transient house owner in El Nido who depends on steady electricity to serve the tourists visiting one of the country's most celebrated destinations, shared her frustration quietly. "Guests are patient. I try to be patient. But after years of the same thing, patience runs thin. The lights should not be going out this often in a place like this."

What the Rating System Is Not Measuring

Nic Satur Jr., chief advocate officer of PARE, said the gap between PALECO's AAA classification and the daily experience of its consumers points to a deeper flaw in how electric cooperative performance is currently evaluated.

"Consumers are not looking at scorecards. They are looking at their electric fans, their refrigerators, their children doing homework at night. The rating system must be reformed to reflect what consumers actually experience, not just what institutions report about themselves," Satur said.

He added that questions have been raised about the credibility of a rating system where the same agency overseeing an intervention also evaluates its results. Those questions deserve transparent, public answers from NEA.

PARE has formally urged NEA to incorporate direct consumer feedback into its evaluation framework, including customer satisfaction data, complaint resolution rates, and power restoration performance during calamities and emergency situations.

"The ultimate measure of performance is a simple question every member-consumer-owner asks every morning: will the lights stay on today? Until that question has a reliable answer, a Triple-A rating is not a milestone. It is a gap that needs to be explained," Satur said.

PALECO Is Not an Isolated Case

The frustration in Palawan is real. But it is not unique. Across the country, consumers in cooperative franchise areas are living versions of the same story.

In Catanduanes, the First Catanduanes Electric Cooperative, or FICELCO, has been managing a power supply crisis that pushed daily brownouts to as many as eight hours for its over 62,000 Member-Consumer-Owners earlier this year. A combination of generator failures, unsettled subsidy obligations involving its power supplier, and a stalled competitive selection process for a new supplier left consumers on an island with no reliable timeline for relief.

In Albay, the struggles of the Albay Electric Cooperative, or ALECO, have become a flashpoint for a national debate on whether struggling cooperatives should be reformed or privatized. A P1.2 billion government rehabilitation program is currently underway, yet the specter of premature privatization continues to hang over a cooperative still finding its footing.

In Batangas, consumers of the Batangas Electric Cooperative, or BATELEC, have been enduring recurring outages that prompted a provincial government intervention and a public debate about private sector participation. A recent survey found that an overwhelming majority of consumers in the area experienced multiple outages per month.

In Zamboanga, the Zamboanga City Electric Cooperative, or ZAMCELCO, has faced its own rotational brownout episodes driven by supply and infrastructure challenges. In the Visayas, BISELCO consumers have similarly raised concerns that the service they receive does not match what they pay for every month.

"PALECO is one face of a national problem. Consumers from Catanduanes to Zamboanga are asking the same questions, enduring the same disruptions, and paying rates that do not reflect the service they actually receive," Satur said. 

"This is not a cooperative-by-cooperative issue. This is a systemic failure in governance, oversight, regulation, and accountability that demands a national response."

What Consumers Are Asking For

The MCOs who gathered in front of PALECO on July 6 were not demanding the extraordinary. They were asking for the basic.

Affordable rates that reflect prudent and efficient management. Reliable service that does not interrupt livelihoods, education, and community life. Transparent governance that places Member-Consumer-Owners at the center of every major decision. And accountability from PALECO, FICELCO, ALECO, BATELEC, ZAMCELCO, BISELCO, and every cooperative in between, as well as from NEA, DOE, and ERC, for the state of the service consumers are paying for every single month.

"Consumers fund the entire system. They deserve a system that works for them, not one that works around them. That is the reform PARE is calling for. Not just in Palawan. Nationwide," Satur said.

The lights should not be going out this often. Not in Palawan. Not in Catanduanes. Not anywhere in this country.

That is not too much to ask.

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Partners for Affordable and Reliable Energy (PARE) is a national, independent consumer coalition advocating for affordable electricity, reliable service, energy justice, and meaningful consumer participation in the Philippine energy sector.

Nic Satur Jr09271448048nsaturjr.pare@gmail.com