ALECO Privatization Should be Last Resort, Not First Option

By Partners for Affordable and Reliable Energy (PARE)

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.

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.

• Nic Satur: Jr09271448048nsaturjr.pare@gmail.com

About Partners for Affordable & Reliable Energy

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.