Expanding private electric distributors to rural areas ‘not viable’ – ILECO exec

By Mariela Angella Oladive

The Iloilo Electric Cooperative III (ILECO III) continues to pursue its mandate of delivering total rural electrification, particularly in far-flung island communities in northern Iloilo, amid growing discussions on the entry and expansion of private electric utilities in the province.

ILECO III General Manager Atty. James Balsomo said powering remote and undeveloped areas remains financially challenging and is a responsibility that private electric distributors may not be willing to undertake due to low economic returns.

“Private providers survive through profit… but in rural areas where development is scattered and there is no big return on investment, it may not be viable to operate,” Balsomo said on Nov. 27 in an interview with a local radio station.

He cited Iloilo City as a developed service area handled by a private distributor, compared to the 13 municipalities served by ILECO III where consumers are dispersed across a much larger land area.

According to Balsomo, the cooperative model was established precisely to address the lack of private sector interest in rural electrification—drawing on historical lessons from the United States during the Great Depression.

“The U.S. organized rural electric cooperatives when no private companies were willing to energize rural areas. The same happened in the Philippines during the 1970s. Areas that were economically unviable were left out,” he said.

“For example, in some barangays in the town of Sara, we invested PHP 36 million for electrification, but we only collect around PHP 16,000 a month. How do you recover from that?”

Balsomo added that ILECO III is a non-profit, service-oriented cooperative and does not operate using the same business model as private distributors.

He emphasized that the cooperative remains committed to serving isolated communities, including island barangays.

“We want to reach the last frontier. Last week, we already issued the notice to proceed for the electrification of some remote areas of Concepcion, and we hope to complete the project by March 2026. Our role is to provide solutions for island communities by connecting them to the mainland grid,” he added.

Balsomo also noted that in terms of land coverage and distribution complexity, rural cooperatives are working with significantly broader and more difficult terrains.

“Iloilo City serves roughly 7,000 hectares under the private utility, but Sara alone has over 16,000 hectares. Consumers in our areas are spread out—roughly 50 times or more larger. If profit is the goal, you will not survive. It must be service-focused.”

His statement comes amid legislative efforts to expand MORE Electric and Power Corp. to more areas in Iloilo province. A bill filed by Iloilo 1st District Rep. Janette Garin seeks to amend the company’s existing franchise to allow entry into seven municipalities under her district.

Garin said MORE Power has been able to reduce electricity rates in Iloilo City and improve facilities since taking over the franchise.

But Balsomo said discussions on rates should be based on data and technical factors.

“There is science in it. The power industry is highly regulated. We have to look at how the rates are composed. There are months when ILECO III is cheaper than the city’s private distributor, even for commercial and industrial users. So there is no guarantee that a private takeover will lead to lower prices,” he said.

Talks on the expansion of private power distributors have been gaining traction among local groups and consumers in the province.

Balsomo maintained that the cooperative’s duty is to deliver electricity to areas where development has yet to reach.