Manila Electric Co. (Meralco) is seeking to partner with electric cooperatives (ECs) nationwide by providing capital, technology, and operational expertise, as it pushes to modernize power distribution systems to meet rising electricity demand and support economic growth in underserved areas.

In an interview on Straight Talk, Daily Tribune’s online show on Wednesday, Atty. Arnel Casanova, head of Strategic DU Partnerships and Acquisitions at Meralco, said many ECs were established decades ago as non-stock, non-profit organizations focused on bringing electricity to rural households.

Today, however, they face mounting challenges as urbanization, industrialization and digitalization drive higher power demand.

Meeting challenges

“The demand for electricity has increased exponentially. And the challenge now is actually how to meet the challenges of the times of the businesses and even the quality of life,” Casanova said.

According to Casanova, many cooperatives lack the financial capacity to undertake major infrastructure projects needed to improve reliability and accommodate new industrial and commercial loads.

“A substation will be worth hundreds of millions, which the cooperatives do not have,” he said.

Partnership models address these constraints, Meralco is proposing a partnership model under which participating cooperatives may convert into stock corporations, enabling them to raise private capital while allowing member-consumers to become shareholders.

“Our model is really to help and empower the cooperatives by infusing capital through that stock corporation structure,” Casanova said.

Aside from financing, Meralco said it intends to contribute more than a century of operational experience by helping modernize distribution systems through smart-grid technologies, digital monitoring, technical training and management support.

The company also plans to upskill employees of partner cooperatives through its training programs.

Casanova said the proposal is intended to strengthen electric cooperatives rather than replace them, to enable them to meet the growing requirements of businesses and industries located outside Meralco’s franchise area.

Meralco currently serves about 3 percent of the country’s land area, but the utility noted that these areas account for a significant share of national electricity demand because they host many of the country’s economic centers.

Expanding the model nationwide

The company is looking to expand the partnership model nationwide, particularly in Mindanao, the Visayas and other areas with strong economic potential. It plans to pursue projects incrementally, prioritizing cooperatives where investments can be implemented immediately and where local stakeholders are receptive to partnerships.

Among its initial targets is the South Cotabato II Electric Cooperative, where Meralco has submitted a partnership proposal.

Casanova said the company believes the selection of private partners for electric cooperatives should be conducted through a competitive and transparent process to ensure member-consumers receive the best possible option.

He said Meralco’s long-term strategy is to strengthen distribution networks to improve power reliability, reduce brownouts, and create conditions for industries and businesses to expand beyond major urban centers.

“The idea really is to eradicate brownouts across the country so that the industries could function and continue to grow,” he said.