POWER WOES: ALECO rehab continues amid privatization debate

By MANUEL T. UGALDE

LEGAZPI CITY --- The power situation in Albay has once again come under public scrutiny as the province’s electric cooperative grapples with recurring power interruptions and growing financial obligations, reviving discussions on whether it should again be privatized.

The Albay Electric Cooperative (ALECO), which serves about 250,000 consumers, has been experiencing frequent brownouts, prompting renewed calls from some sectors to seek private-sector participation in its operations.

ALECO was placed under a 25-year concession agreement with San Miguel Corporation beginning in 2014 through its subsidiary, Albay Power and Energy Corporation (APEC). However, the concession was terminated in 2022 following an ALECO members’ assembly initiated by then newly elected Albay Governor Noel Rosal, citing the concessionaire’s alleged failure to improve the cooperative’s services.

The privatization was originally pursued by then Governor Joey Sarte Salceda and then Legazpi City Mayor Noel Rosal, with the support of the National Electrification Administration (NEA), in an effort to rehabilitate ALECO, which was then burdened by financial problems and allegations of mismanagement.

Following the 2025 elections, newly elected Albay Second District Representative Carlos Loria reportedly initiated discussions with Manila Electric Company regarding the possible re-privatization of ALECO. The proposal, however, was met with opposition from several local government officials, consumers, and fellow lawmakers from Albay.

Records show that before the 2014 privatization, ALECO had twice experienced disconnection from power suppliers after failing to settle debts that had reached about P3 billion.

After the concession agreement was terminated in 2022, the NEA appointed Wilfredo Bucsit as general manager of ALECO. Bucsit recently disclosed that the cooperative’s liabilities have grown to more than P6 billion. He said ALECO has already paid P214 million to power suppliers to avert possible disconnection.

According to Professor Virgilio Perdigon, the NEA has long pursued the privatization of electric cooperatives across the country, with ALECO becoming the first to undergo the arrangement. Perdigon also recalled that APEC officials had promised significant improvements in power service under the concession agreement. However, he said consumers, including members of the Diocese of Legazpi, later protested what they described as poor service.

Perdigon said ALECO’s problems date back to 1994, when the cooperative experienced recurring brownouts and power disconnections. He noted that the ALECO Employees Union had earlier proposed a cooperative-to-cooperative management arrangement with the Benguet Electric Cooperative, but the proposal was not adopted.

Instead, the NEA organized an Interim Board of Directors headed by then Diocese of Legazpi Bishop Joseph Baylon. The board, together with Salceda, Rosal, and local government officials, supported ALECO's privatization. In the subsequent public bidding participated in by five major firms, SMC won the initial 25-year concession contract, renewable for another 25 years.

Following the termination of the concession, ALECO is now undergoing rehabilitation through a P1.2-billion allocation under the General Appropriations Act, secured by then Appropriations Committee chairman Zaldy Co.

According to AKO Bicol Party-list Representative Alfredo Garbin Jr., around P400 million of the rehabilitation fund has already been released for the upgrading and expansion of substations in Albay's Third District. He said the remaining P800 million will finance similar improvements in the First and Second Districts.

Garbin expressed confidence that the rehabilitation program would significantly improve the province's power distribution system once completed. He also proposed dividing ALECO into three district-based electric cooperatives, a structure that had been implemented but was later discontinued. He maintained that completing the rehabilitation program should take precedence over any renewed privatization efforts.

Meanwhile, the Albay Mayors League reportedly met with ALECO General Manager Bucsit and a representative of Meralco to discuss the possibility of another privatization initiative.

The reported discussions drew criticism from some consumers. Governor Rosal, for his part, said he plans to convene an ALECO members' assembly to discuss with the cooperative's board possible measures to address the province's continuing power service concerns.