Personally, the main factor that led to Albay Electric Cooperative’s

(ALECO’s) failure was due to mismanagement. Of course, there are other factors
that should also be considered. The cooperative’s failure to collect from the
consumers, failure to bill the consumers, systems losses mainly because the
equipment (transformers, meters, etc.) was obsolete.
Further, they also failed to comply with the submission of the Distribution
Development Plan which is required under Section 4(p) of the Implementing Rules
and Regulations of EPIRA Law. Under this provision, it requires the preparation and
submission of an annual five-year distribution plan to the department not later
than the 15h of March every year. Substations were also not in compliance to the
Grid Code. ALECO also received series of disconnection notices due to its failure
to settle obligation with the Philippine Electricity Market Corp. (PEMC). In toto,
ALECO faced a total debt of 5.6 Billion.
There is no doubt that the above-mentioned factors have resulted to poor
management of the said cooperative. The direct opposite of mismanagement is
sound management.
Effective and sound management helps an organization of fulfilling and
complying with all its obligations, whether it be an obligation to pay or an
obligation to submit reports on time. Based on research, majority of businesses
90% fail due to poor management. Therefore, good management is important in
every business and/or organization as it can make or break it.