Will PALECO Earn Its Franchise Renewal?
- October 16, 2026
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The Palawan Electric Cooperative (PALECO) faces renewed scrutiny over its power service as it seeks a 25-year franchise renewal. The Puerto Princesa City government challenged the electric cooperative (EC) in court over recurring power interruptions, accusing it and its board officials of negligence and failing to provide residents with adequate, reliable electricity.
But in a decision dated November 28, 2025, the Court of Appeals (CA) upheld the dismissal of the city government’s complaint, ruling that allegations of negligence and unreliable service fall under the administrative jurisdiction of the National Electrification Administration (NEA), which exercises supervisory and control powers over ECs.
The case stemmed from a 2019 complaint filed by Mayor Lucilo R. Bayron, which sought an injunction and P1 million in damages over outages that the city said disrupted public services, hurt tourism, and damaged household appliances.
The ruling, however, did not establish that PALECO had provided satisfactory service or resolve the allegations against it on their merits. With the EC seeking to continue serving Palawan, the central question remains: does its track record justify a franchise renewal, and can it deliver the reliable, affordable electricity that residents and businesses need?
(Also read: Pumped Hydro: Turning Stored Water Into Energy Security)
Persistent Concerns over PALECO’s Service
Tourism remains a major economic driver for Palawan, with the province recording 2.1 million tourist arrivals in 2025, up 7.76% from the previous year. Puerto Princesa City led in visitor numbers, followed by El Nido, Coron, and San Vicente. Linapacan and Narra also figured among the destinations drawing visitors.
The industry generated an estimated P65.51 billion in revenue for the province in 2025. Foreign tourists accounted for 48% of visitors.
However, Palawan’s continued tourism growth also depends on a stable power supply, making reliable and affordable electricity essential to the province’s economic future. This places PALECO’s service performance at the center of concerns.
Frequent power interruptions
Palawan risks falling behind as a tourist destination amid persistent power interruptions, a coalition of members, consumers, and owners (MCOs) of the Palawan Electric Cooperative (PALECO) warned.
“Kilala ang Palawan bilang isa sa mga paboritong tourist destination sa bansa pero nangangamba kami na baka tayo’y mapag-iwanan dahil sa patuloy na brownout sa ating lalawigan,” (Palawan is known as one of the country’s favorite tourist destinations, but we fear it may be left behind because of the continuing brownouts in our province.) said Dr. Tony Cabrestante, a PALECO MCOs leader.
The coalition stressed that various parts of Palawan continue to experience unannounced power interruptions lasting about an hour, reportedly occurring three times a day. These disruptions add to scheduled outages that can last several hours.
Board Member Nieves Rosento, former mayor of El Nido, noted that recurring brownouts are placing a heavy burden on local businesses.
“Persistent occurrence na ang brownout sa El Nido at hindi na ito katanggap-tanggap bilang isang tourism destination na madi-discourage po ‘yung mga turista na dumarating,” (Brownouts have become a persistent occurrence in El Nido, and this is no longer acceptable for a tourism destination, as it could discourage tourists from visiting), she said.
Soaring electricity rates
In September 2026, PALECO ranked among the five off-grid ECs with the highest residential electricity rates, charging P11.09 per kilowatt-hour (kWh).
The high cost of electricity is putting pressure on Palawan’s tourism sector, with hotels and resorts struggling to manage operating expenses without increasing rates. Department of Tourism (DOT)-Mimaropa Regional Director Roberto Alabado said power costs remain a key concern for businesses as they affect both expenses and prices charged to guests.
“Siyempre ang cost ng electricity ay tumataas so ang operating cost ay tumataas din,” (Of course, as electricity costs rise, operating costs also increase) he explained.
Alabado added that raising hotel and resort rates to offset electricity costs could make Palawan less competitive as a tourist destination. The DOT-Mimaropa continues to monitor the issue.
Concerns over PALECO’s service and electricity costs have also drawn attention at the national level. In 2024, House Deputy Majority Leader Erwin Tulfo called for a review of the EC during a congressional hearing, citing power problems that have persisted since its establishment in 1974 and questioning whether it should continue operating.
The call came after PALECO General Manager Rez Contrivida confirmed that electricity rates had increased from ₱13.67 to ₱14.71 per kilowatt-hour in late 2023, despite daily outages lasting four to five hours or longer.
Tulfo questioned, 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?”
Continued Taxpayer Support
NEA has extended approximately P700 million in assistance to PALECO since 2022 to improve distribution and troubleshooting operations. NEA Administrator Antonio Mariano Almeda said the agency is working to expand distribution lines across the province, improve barangay-level connections, and extend electricity services to sitios.
He cited Palawan’s roughly 600-kilometer sub-transmission network as a major challenge, explaining that a fault in one section can affect a wider area. However, the scale of the network’s challenges raises questions about whether the assistance extended to PALECO has translated into more reliable service for consumers.
The published report did not detail how the P700 million was allocated, which projects had been completed, or when communities could expect improvements. These gaps leave the public with limited information on the results of the substantial government assistance.
For Nic Satur Jr., chief advocacy officer of Partners for Affordable and Reliable Electricity (PARE), the question is whether government assistance has improved PALECO’s service reliability.
“Where did the funding go, what improvements were achieved, and how have consumers benefited?” he wrote. “Public funds must translate into measurable improvements in service, reliability, and affordability.
Meanwhile, Department of Energy (DOE) Secretary Sharon Garin has directed PALECO to submit its distribution development plan for September to October 2026. She also stressed the need to weigh infrastructure expansion costs against their potential impact on electricity rates, as consumers already face high power costs.
Lagging electrification efforts
PALECO has pledged to electrify four barangays within two months—Apurawan and Culandanum in Aborlan, and New Panggangan and Marufinas in Puerto Princesa City—as the House Committee on Legislative Franchises provisionally approved its proposed 25-year franchise renewal to continue serving 18 municipalities in the province.
Palawan Third District Representative Gil Acosta Jr. warned that he would withdraw his support for the franchise renewal if PALECO failed to meet its commitment. During a recent hearing, a congressman also questioned the EC’s performance, particularly in Puerto Princesa and Aborlan, where two barangays and several sitios reportedly remain without electricity service.
(Also read: ACEN Boosts Renewables Drive With New €50-Million Loan)
Reliable Power Can No Longer Wait
As of September 2026, Palawan had 103 megawatts (MW) of contracted power capacity against a forecast peak demand of 69.1 MW. But having enough contracted supply does not automatically guarantee reliable electricity delivery, highlighting the need to strengthen PALECO’s distribution system and ensure power reaches consumers consistently.
Electrification also remains incomplete across PALECO’s franchise areas, with only about 78% of potential households connected to the grid. Several municipalities, including Araceli, Quezon, Taytay, Bataraza, and Balabac, have electrification rates below 75%.
To help address these concerns, the DOE aims to complete the three-loop, 69-kilovolt transmission line under Palawan’s energy master plan by December 2027.
Garin acknowledged that Palawan’s unstable electricity supply and recurring interruptions have long been overdue concerns. She also noted that high electricity rates affect the level of subsidies needed.
“Considering the economic contribution and potential of Palawan, I think it’s about time talaga (really about time). This is long overdue,” stressed Garin. “Dapat years ago pa ginawa na ayusin para kumpleto na ang electrification, mas maraming bahay ma-energize, and more businesses to come.”
Garin’s remarks underscore what is at stake: reliable electricity is essential not only to connecting underserved communities but also to supporting businesses, livelihoods, and Palawan’s continued economic growth. With the province’s tourism industry and local communities depending on a stable power supply, further delays in addressing persistent service gaps carry real costs.
The DOE must keep infrastructure improvements on schedule, while PALECO must show measurable progress in expanding access and delivering reliable service. Palawan cannot afford another cycle of delays and unfulfilled commitments; planned investments and public assistance must translate into dependable, affordable electricity for the people and businesses that need it.
Sources:
https://palawan-news.com/palawan-welcomes-over-2-1-million-tourists-in-2025
https://www.facebook.com/photo/?fbid=1050656094641252&set=a.161462543560616
https://palawan-news.com/power-costs-put-pressure-on-palawan-hotel-rates-says-dot-mimaropa
https://politico.ph/congress-urged-to-review-palawan-electric-coops-franchise/
https://www.facebook.com/photo/?fbid=1055533280820200&set=a.161462543560616
https://www.facebook.com/watch/?v=1469232858442185
https://pia.gov.ph/news/luzon/mimaropa/doe-works-on-palawans-3-loop-system-to-improve-power-by-2027
