(DP 2025-04) Competition Considerations in Change Ownership Reforms for Electric Cooperatives

Carlos L. Vega, Jestoni A. Olivo, Antonio Miguel S. Ventura, Eirene Gillian M. Reyes

Abstract


Change ownership reforms for electric cooperatives (ECs) have once again attracted policymakers’ interest due to current efforts in expediting their privatization. This note serves as input to this ongoing conversation using the lens of competition. We argue that unchecked consolidation - especially vertical integration along the power supply chain from generation to distribution - may cause more pernicious effects on the industry and welfare than existing inefficiencies of ECs. Consistent with Canlas & Jandoc (2025), we support a franchise competition regime where the threat of displacement may foster an overall competitive behavior among existing and potential players. The necessary conditions for and the challenges to implementing an effective competition for the market framework are determined.

JEL Codes: D43, L43, L94


Keywords


market imperfections; legal monopolies; regulation or deregulation; electric utilities

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