Will ALECO reprivatization worsen Albay power woes?

Public frustration over power outages in Albay has led to renewed discussions about the potential reprivatization of the Albay Electric Cooperative (ALECO). Lawmakers have shown interest in a private takeover, particularly from Meralco, due to ongoing issues like high power rates and significant debts. Advocacy groups argue against privatization, citing past failures and advocating for the rehabilitation of ALECO's infrastructure and the use of renewable energy sources to improve reliability and reduce costs for consumers. This is AI-generated. Read the article for full context. Report any errors. ALBAY, Philippines — Mounting public frustration over unresolved power outages has reignited debates over reprivatizing the Albay Electric Cooperative (ALECO), barely four years after control of the province’s energy distribution operations was reinstated to the cooperative. Debates over ALECO’s management escalated following Albay Governor Noel Rosal’s 2026 “Ulat ng Bayan (Report to the People),” where he called out the cooperative’s P5.7-billion debt. Clarifying his stance in August, Rosal insisted he is not advocating for privatization, but demanding immediate structural reforms from its management. “The provincial government of Albay assures everyone that its position on the matter has not changed: the decision on how to rehabilitate and strengthen ALECO’s management and operation shall be left to its member-consumers who stand to be directly benefited or injured ultimately,” Rosal said in a statement. Rosal has also urged the ALECO board to present all pertinent data at an upcoming Special Annual General Membership Assembly (AGMA) to directly address affected consumers. “It is important that they prepare a report that is believable, because we need a report from the board for the consumers to be able to decide on the direction that we have to take,” he said. In 2025, discussions intensified after lawmakers floated proposals for a private takeover — including expressed interest from the Manila Electric Company (Meralco) — prompted by persistent issues such as high system losses, increasing power rates, and ballooning liabilities. “We already had our first round of talks with a Manila electric company, which is Meralco. That is why we are studying what will be the result of our third and fourth rounds of talks, because the number one priority here is to resolve the debts of ALECO,” said Albay 2nd District Representative Caloy Loria. Loria initially claimed that he was acting with the support of Rosal, along with Albay 1st District Representative Krisel Lagman and Albay 3rd District Representative Adrian Salceda in discussing Meralco’s possible takeover. “There will be a round of talks first, and Meralco will study it well. But they are very interested in operating the entire province of Albay,” Loria told DZGB News Online, a local radio station in Legazpi. The district representative had also filed House Resolution No. 108 in 2025, directing the committee on energy to conduct a legislative inquiry into ALECO regarding its “operational failures” and “frequent power outages.” However, in August 2026, Rosal clarified that his administration was not in talks with Meralco, nor had it sought the company’s help in strengthening ALECO. “At this time, however, it must be clarified that the PGA (Provincial Government of Albay) has not made any official request to Meralco. While we continue to explore all viable options, no formal discussions or negotiations with the said electric company have commenced,” Rosal stated in a statement released on July 28. “We therefore implore Meralco to be more cautious and prudent in releasing statements that might otherwise mislead the public,” he added. APEC lookback Amid discussions on reprivatizing ALECO, the Philippine Movement for Climate Justice (PMCJ), Albay Renewable Energy Alliance (AREA), and the ALECO Member Consumer Owners Alliance (AMCO) warned that privatization could exacerbate the power woes affecting over 1.3 million household consumers. “When ALECO was privatized, we saw that it changed nothing and the debt even ballooned. The service they are promising will turn into a nightmare for consumers. It will only become worse if privatization is pushed through,” PMCJ senior energy program officer Larry Pascua said. AMCO member Virgilio Perdigon also alleged that ALECO’s operations under the Albay Power and Energy Corp. (APEC) — a subsidiary of San Miguel Energy Corp. (SMEC) — resulted in an even more unreliable energy supply distribution and higher electricity costs. “Under APEC, we experienced higher energy costs. Returning to privatization will only gravely affect residents,” Perdigon said. “It is not true that privatization will solve the issues consumers are experiencing now under ALECO.” In 2014, ALECO entered into a 25-year Concession Agreement (CA) transferring its operations to APEC to manage the debt-ridden utility, which owed nearly P4 billion to creditors at the time. However, APEC subsequently accumulated massive debts to power suppliers, including P4.2 billion owed to SMEC. The utility attributed these losses to high system losses and inefficient collection efforts. In November 2022, ALECO and APEC terminated the CA, citing persistent operational failures, mounting supplier debt, and service deficiencies. Distribution operations were formally returned to ALECO by the end of 2022 under the supervisory management of the National Electrification Administration. According to Pascua, privatization has also prevented locals from feeling the cost efficiency of renewable energy sources in Albay, such as the geothermal power plants in Tiwi and Manito (along with Bacon in Sorsogon). He argued that these renewable energy sources could have served as a lifeline for residents reeling from unreliable service and high costs. “The geothermal power plants in Albay could have provided sustainability and reliability, but unfortunately, because of privatization, power generation does not see public service as its foundation, but rather profit generation,” Pascua added. Rehabilitation push Instead of privatization, advocacy groups are pushing for genuine rehabilitation of ALECO’s infrastructure, including its power lines, substations, and other major facilities. “There’s a great and urgent need to rehabilitate ALECO’s dilapidated facilities, which are causing these issues. The rehabilitation should also be followed by new and cleaner sources of energy that can increase the efficiency and reliability of energy services in Albay,” Pascua explained. The Albay power and energy committee held a hearing on Wednesday, October 7, seeking updates on ALECO’s financial statements, as well as its modernization and rehabilitation projects with a combined P1.2 billion budget allocation. ALECO head of operations Mark Lucilo said that Phase 1 construction of substation rehabilitations in Daraga town and Ligao City worth P367 million is nearing completion and is set to be finished by the end of 2026. – Rappler.com