PALECO Franchise Renewal in Question
- September 30, 2025
Palawan Second District Rep. Jose Alvarez vowed to block the renewal of the Palawan Electric Cooperative’s (PALECO) franchise when it reaches Congress, dismissing the utility’s efforts to gain support from barangays in Puerto Princesa City, Aborlan, and Narra ahead of its 2029 expiry.
“Hindi na makakalusot ‘yan. Pwede ko namang upuan ‘yung franchise.” (That won’t get through. I can block the franchise.), he said, adding that PALECO is currently overseen by the National Electrification Administration (NEA), which dissolved its board and installed its temporary administrators.
Another lawmaker, Third District Representative Gil Acosta Jr., said he would not support PALECO’s franchise renewal unless the cooperative can demonstrate its ability to deliver electricity to all barangays in Puerto Princesa City.
(Also read: Marcos Outlines Spending Plan for Diverted Flood Control Funds)
PALECO’s persistent problems
PALECO supplies electricity across much of mainland Palawan and several island towns. Its franchise spans Puerto Princesa City, southern municipalities such as Aborlan, Narra, Brooke’s Point, and Balabac, as well as northern areas like Roxas, San Vicente, El Nido, and Taytay. It also powers the island communities of Cuyo, Magsaysay, Agutaya, and Cagayancillo.
However, power supply in Palawan has long been fraught with challenges, with PALECO often at the center of complaints over service reliability and efficiency.
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Frequent outages
PALECO has faced persistent criticism over its failure to deliver a stable and reliable power supply. “Frequent power outages and voltage fluctuations are a constant source of frustration for both urban and rural residents,” according to an opinion piece on a Palawan travel website.
Additionally, various areas in Palawan still endure unannounced power outages, with PALECO members, consumers, and owners (MCOs) reporting blackouts lasting about an hour up to three times a day. This is compounded by scheduled interruptions that stretch for several hours.
El Nido, one of Palawan’s top tourist destinations, set a new record with over 500,000 visitors in 2023. Yet Board Member Juan Antonio Alvarez lamented that power woes persist, saying, “Ang bayan ng El Nido, hindi lang weekend ang rotational load shedding … kungdi araw-araw na” (In El Nido, rotational load shedding happens not just on weekends but every day). He added it was disheartening that a place hailed as one of the world’s best destinations continues to grapple with unreliable electricity.
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Mounting public frustration
In 2017, some consumers called for the cooperative’s dissolution, accusing it of failing to fulfill its responsibilities. They reported that each summer, Puerto Princesa and southern Palawan are plagued by consecutive blackouts.
Two years later, Puerto Princesa’s local government sued PALECO, citing persistent power outages. Former Mayor Lucilo Bayron filed the case with a petition signed by over 500 residents, naming the cooperative, its board, and acting general manager as respondents. He highlighted that the city’s “electricity crisis” has lingered since 2009.
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Governance issues
In December 2018, NEA took over the troubled cooperative to address persistent power supply problems. The move followed President Rodrigo Duterte’s warning that the national government would intervene if PALECO failed to stabilize electricity service.
But the search for a new general manager faced delays. It wasn’t until September 2022 that NEA officially appointed PALECO’s new general manager, concluding a nearly five-year search for leadership.
Despite this development, PALECO’s service issues persisted. By 2024, a Palawan consumer group renewed calls for NEA to assume full control, citing ongoing failures to provide reliable and affordable electricity. Antonio Cabrestante, convenor of the Palawan Electric Member-Consumer-Owners (PEMCO), noted that NEA’s management could allow for a distribution bidding process, a buyout, or even termination of PALECO’s remaining five-year franchise.
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Questionable rate increases
In 2024, House Deputy Majority Leader Erwin Tulfo urged a review of the PALECO. Speaking at a congressional hearing, Tulfo said the province has endured persistent electricity problems since PALECO’s establishment in 1974 and argued that it may be time to “get rid of this company.”
The lawmaker’s remarks came after PALECO General Manager Rez Contrivida confirmed a rate hike from ₱13.67 to ₱14.71 per kilowatt-hour (kWh) in late 2023, despite ongoing power interruptions of four to five hours or more daily.
Tulfo criticized the increase, asking, “Lagi kayong brownout tapos mag-i-increase pa kayo? (You keep having blackouts, and yet you raise the rates?) How can you do that?”
In response, Contrivida said PALECO cannot control the brownouts and stressed that, under the Electric Power Industry Reform Act (EPIRA), the off-grid cooperative is entitled to a government subsidy. He warned that without it, electricity costs remain high, placing a heavy burden on member-consumers.
However, there is a growing debate about the long-term sustainability of such subsidies. Philippine taxpayers fund billions in subsidies for rural electric cooperatives, with ₱3.6 billion released in 2025 alone. Audit reports cite nearly ₱1 billion in unliquidated funds, raising accountability concerns.
Columnist Komfie Manalo pointed out that cooperatives still face frequent outages despite government aid, warning, “the subsidies must be halted to cut the undue burden on taxpayers.”
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NEA’s deactivation of the PALECO board
In January 2024, NEA deactivated PALECO’s Board of Directors after they refused to hold district elections in three areas. NEA Administrator Antonio Mariano Almeda delivered the order personally and appointed interim directors from other electric cooperatives to manage potential fallout.
Following NEA’s action, some MCOs launched campaigns to reinstate the elected board; the situation became polarized between those calling for reform and those claiming NEA overreach. PALECO itself issued statements defending some of its actions, stating that NEA’s move to deactivate PALECO was based on a minor clerical error.
According to Former District 1 Rep. Maylene Ballares, the PALECO Board of Directors (BOD) had already passed a resolution setting elections for the remaining districts, but these were delayed by a Temporary Restraining Order and Writ of Injunction. Although the TRO expired after 20 days, the districts hesitated to proceed, fearing legal complications. She stressed that the BOD explained the delay to the NEA, but a clerical mistake in their reply became the basis for the agency’s action.
“Ang ginawa namin nagsagot kami, kaso nagkamali yung date na nakalagay doon. Imbes na December 13, December 6 ang nailagay (We submitted our response, but the date was written incorrectly. Instead of December 13, it was written as December 6),” she explained, underscoring that the error was hardly grounds to dissolve the board.
(Also read: Calls for Accountability Over Palawan’s Power Issues)
Addressing Palawan’s power problems
Resolving Palawan’s energy issues requires a comprehensive approach combining governance reform, infrastructure upgrades, and sustainable energy initiatives. Experts stress the need for greater transparency and accountability in leadership, including improved management practices to restore public trust and ensure decisions prioritize community needs.
Upgrading PALECO’s aging distribution infrastructure is also crucial; in 2024, the cooperative secured a 15-year power supply agreement with Delta P, Inc. to improve reliability for local industries and households. In parallel, PALECO has invested in renewable energy projects, such as a 7-megawatt biomass plant in Brooke’s Point using agricultural waste.
But for Alvarez, the long-term solution lies in opening PALECO to private sector participation. He stated that even without a renewed franchise, the cooperative cannot simply halt operations, as doing so would put consumers at risk.
Citing the Busuanga Island Electric Cooperative Inc. (BISELCO), which serves Coron, as an example, Alvarez pointed out that private partnerships have helped ensure a nearly uninterrupted power supply there. He also dismissed concerns that involving private players would automatically lead to higher electricity rates, arguing that such collaborations can improve reliability without overburdening consumers.
Sources:
https://paleco.net/paleco/coverage/
https://www.abs-cbn.com/business/05/17/17/kooperatiba-ng-kuryente-sa-palawan-isinusulong-na-buwagin
https://www.pna.gov.ph/articles/1057314
https://www.facebook.com/photo.php?fbid=583622483507744&id=107048331165164&set=a.116227000247297
https://www.pna.gov.ph/articles/1217792
https://www.pna.gov.ph/articles/1218349
https://tribune.net.ph/2023/12/23/electricity-subsidies-to-electric-coops-a-never-ending-burden
https://palawan-news.com/mcos-push-to-reinstate-paleco-board/
https://vivant.com.ph/vivant-bags-15-year-power-supply-deal-for-palawan
https://www.bioenergy-news.com/news/paleco-agreement-to-bring-second-renewable-energy-plant-to-philippines-province
