Left in the Dark: How Amianan’s Electric Cooperatives Failed Communities for Decades

Electric cooperatives (ECs) were created to bring affordable, reliable electricity to rural and provincial areas of the Philippines. In the Amianan region of Luzon, including Ilocos Norte, Ilocos Sur, La Union, Pangasinan, Cagayan Valley, and the Cordillera Administrative Region (CAR), these cooperatives have helped power homes and businesses for decades.

However, many have faced chronic challenges that have impacted service delivery and consumer confidence. From high system losses and frequent outages to questions about governance and financial management, this article explores historical and recurring issues that have made some Amianan ECs problematic for the communities they serve.

(Also read: Philippine Energy Outlook 2026: Reliability & Resilience in Focus)

System Losses and Enforcement Challenges

The Ilocos Norte Electric Cooperative (INEC), which serves roughly 185,000 to 190,000 member-consumer-owners, has renewed scrutiny over long-standing issues tied to power losses and billing inefficiencies after uncovering hundreds of unregistered connections within its system.

In 2025, INEC officials disclosed that around 600 consumers had not been properly registered, a lapse the cooperative identified as a major contributor to persistently high system losses. The EC said these unaccounted-for users significantly inflate losses that are ultimately absorbed by paying members through higher charges.

The discovery emerged from a house-to-house verification survey conducted across INEC’s service areas. The exercise was prompted by a directive from the Bureau of Internal Revenue (BIR) requiring the cooperative to update its records, including the registration of electric meters, to accurately determine taxable income. What began as a compliance measure soon revealed deeper structural gaps in consumer monitoring and enforcement.

System losses, which include electricity lost through pilferage, illegal connections, and technical inefficiencies in transmission and distribution, currently cost INEC consumers an estimated ₱10 million each month. These losses account for about 10% of the average electricity bill. Roughly 6% stems from technical causes, while the remaining 4% is attributed to non-technical factors such as theft and unregistered usage.

Currently, ECs are allowed a systems loss cap of up to 12%, a regulatory threshold largely due to the logistical challenges of serving rural and geographically dispersed areas.

However, Cebu Electricity Rights Advocates (CERA) convenor Nathaniel Chua said system losses have become a key driver of escalating power bills. Private distribution utilities operate under a tighter cap of about 5.5%.

CERA argued that the disparity weakens incentives for operational discipline. “When electricity rates exceed actual consumption levels, it not only becomes unfair for consumers but also discourages quality control measures and fosters complacency among providers,” Chua asserted.

Power Supply and Service Issues

The Ilocos Sur Electric Cooperative’s (ISECO) service areas often experienced multiple scheduled and unscheduled power interruptions, with notices of rotational and maintenance-related outages affecting several towns.

In May 2024, government operations in Narvacan were brought to a halt after an extensive, pre-announced power interruption shut down electricity across the town. The eight-hour outage, which prompted the suspension of work at the municipal hall, was linked to annual preventive maintenance at the Narvacan substation. The maintenance activity disrupted power supply across five municipalities in southern Ilocos Sur, highlighting the far-reaching impact of power interruptions on local governance and essential public services, particularly in areas heavily reliant on ECs.

A year later, in November 2025, trial courts across 16 towns in Ilocos Sur temporarily halted operations due to a scheduled power outage. The interruption forced the suspension of routine court activities, including the filing of time-sensitive pleadings and the issuance of resolutions, though cases requiring urgent judicial action continued to be addressed.

This January 2026, concerned ISECO consumers raised an alarm over frequent power interruptions disrupting daily life, work, businesses, and student activities. Many reported damaged appliances from sudden outages and voltage fluctuations, adding financial strain. While repairs are ongoing, outages persist, leaving households frustrated over the lack of long-term solutions, equipment upgrades, and clear communication. Consumers urged ISECO to provide timely advisories, invest in sustainable improvements, and demonstrate accountability beyond temporary fixes to ensure reliable service.

Mismanagement and Criminal Complaints

In May 2025, the National Electrification Administration (NEA) moved decisively against alleged mismanagement and irregularities in several ECs, filing cases with the Department of Justice (DOJ).

Among the cooperatives implicated is INEC, where both current and former officials face charges of syndicated estafa. They are accused of embezzling approximately ₱118 million from the cooperative’s Employees Retirement Fund, raising serious concerns over governance and financial accountability within the organization.

Earlier still, INEC faced a major financial management controversy involving over‑billing and customer refunds. The dispute centered on alleged over‑recoveries in electricity billings from 2004 to 2010.

Initially, INEC applied to the Energy Regulatory Commission (ERC) to approve a modest refund of around ₱8 million. After reviewing the cooperative’s records, the ERC determined that over‑collections had actually amounted to approximately ₱480 million and ordered INEC to refund the full amount to affected consumers. INEC’s motion for reconsideration was denied, pushing the cooperative to elevate the case to the Court of Appeals, which upheld the ERC’s ruling.

Undeterred, INEC brought the matter before the Supreme Court. In a 21‑page decision released on February 3, 2022, the SC affirmed both the ERC and CA rulings. The case highlighted systemic issues in billing practices, financial oversight, and regulatory compliance, marking one of the most significant instances of financial mismanagement in the cooperative’s history.

Weather Vulnerability and Repeated Outages

Northern Luzon’s ECs are especially vulnerable to storms and typhoons that routinely traverse the region.

In September 2025, the aftermath of Super Typhoon Nando left several ECs struggling to restore power, according to NEA. Among the hardest hit were INEC, Abra Electric Cooperative (ABRECO), and Batanes Electric Cooperative (BATANELCO), all of which remained without electricity days after the storm. The prolonged interruptions underscored challenges in disaster preparedness, infrastructure resilience, and rapid restoration efforts across provincial electric utilities.

Earlier in July 2025, Typhoon Emong triggered widespread power outages across La Union and Pangasinan, leaving communities without electricity as floods and toppled power lines delayed repair efforts. NEA reported that Pangasinan I Electric Cooperative (PANELCO 1) and La Union Electric Cooperative (LUELCO) were facing total power failure, while 13 other ECs across Luzon experienced partial interruptions.

The outages affected more than 500,000 households across the region, with damages to distribution infrastructure estimated at over ₱4 million, including losses from previous tropical cyclones.

The vulnerability of ECs to natural disasters continues to draw criticism, highlighting the challenges of ensuring reliable power in the provinces. Manila Standard columnist Ray Eñano wrote that many ECs are undercapitalized and lack the technical expertise and robust infrastructure of larger distribution utilities, leaving them ill-prepared to meet consumer demands or respond effectively during natural disasters.

“The poor response from a public service provider like ECs after a disaster is inexcusable—they should be at the forefront of recovery efforts,” he added. “Providing reliable and sustained power supply is the mandate of the ECs. This includes restoring electricity immediately to ease the sufferings of typhoon victims.”

The issue has driven lawmakers to push for stronger regulatory compliance. After Severe Tropical Storm Kristine struck in 2024, Senator Sherwin Gatchalian urged NEA to ensure that all ECs adhere to the provisions of the Electric Cooperative Emergency Rehabilitation Fund (ECERF) law.

“The goal of ECERF is not just to provide funds that ECs can tap for the restoration and rehabilitation of ECs’ damaged infrastructures following a fortuitous event such as typhoons but to ensure that the distribution utilities are resilient to withstand calamities,” he said.

Gatchalian stressed that ECs must submit annual vulnerability assessments, emergency and mitigation plans, and resiliency compliance reports to the NEA, as well as document progress on mitigation projects. Given the Philippines’ frequent exposure to typhoons and other natural disasters, he emphasized that ECs must bolster their infrastructure and planning to prevent or limit power interruptions, ensuring communities are not left in the dark when calamities strike.

(Also read: ACEN Brings 60-MW Solar Capacity Online in Pangasinan)

Irregular Financial and Procurement Processes

At the start of 2023, NEA ordered the removal of the entire board of directors of the Benguet Electric Cooperative (BENECO) following an audit that uncovered long-standing governance, financial, and procurement irregularities. NEA found that board members improperly received benefits and allowances, mismanaged substantial loans, altered payment terms with suppliers without regulatory approval, and engaged in questionable investments and procurements, including a ₱160-million placement and multimillion-peso equipment purchases.

As a result, the removed directors were disqualified from reinstatement, reemployment, or running for board positions in any EC, and were ordered to refund disallowed benefits. NEA also suspended BENECO’s assistant general manager for administrative negligence and flagged continued violations of agency guidelines, including improper handling of corporate funds and abuses in signing and cash-advance privileges.

In February 2023, NEA issued show-cause orders to a group of ECs for apparent lapses in transparency and compliance during a joint competitive selection process for short-term power procurement. Most of the ECs involved were in the Amianan area, including INEC, ISECO, LUELCO, PANELCO I, BENECO, Kalinga-Apayao Electric Cooperative (KAELCO), and the Mountain Province Electric Cooperative (MOPRECO).

NEA flagged that the ECs’ third-party bids and awards committee declared two rounds of bidding as failed, in June and December 2022, because participating suppliers did not meet the project requirements. Despite this, the ECs reportedly pursued direct negotiations with the same bidders and even issued a notice of award without notifying NEA. Administrator Antonio Almeda stressed that such actions potentially violated rules on fairness and transparency, ordering the officers of ECs to show cause why they should not be held administratively liable.

Long-Standing Debt Problems

ABRECO has been called out on significant unpaid energy settlement obligations in the WESM. According to official market data published by the Independent Electricity Market Operator of the Philippines (IEMOP), ABRECO consistently showed one of the largest outstanding settlement amounts among WESM participants throughout 2025, totaling roughly ₱289 million in unpaid obligations as of late September 2025.

In the context of WESM operations, participants are expected to settle energy trading obligations at regular intervals based on energy consumed or traded during market sessions. When a member fails to settle these obligations, the unpaid amounts become part of the market’s receivables and may trigger enforcement actions under WESM Rules, such as suspension of market participation or default penalties aimed at protecting overall market integrity.

ABRECO’s financial struggles go back even earlier. Reports from the mid-2010s noted that the cooperative had accumulated hundreds of millions in debt, largely owed to the Power Sector Assets and Liabilities Management Corporation (PSALM) under the EPIRA restructuring and unpaid taxes. NEA reported that ABRECO faced repeated power shutdowns in 2012, 2013, and 2014, a consequence of the cooperative’s mounting unpaid obligations for electricity consumed.

Furthermore, a NEA audit covering 2013 to 2016 found deep operational and financial deterioration at ABRECO, including large restructured loans, unpaid obligations to major market entities such as the National Grid Corporation of the Philippines (NGCP), Philippine Electricity Market Corporation (PEMC), WESM, and Aboitiz Power Renewables Inc. (APRI). The audit also showed delayed remittances to government agencies (SSS, PhilHealth, Pag-IBIG) and serious issues with billing and cash handling. These findings prompted NEA to intervene, suspend management, and establish a task force to run the cooperative’s operations.

Following NEA’s takeover in 2018, reforms were initiated to address billing errors, update financial remittances, improve collection efficiency, and lower system losses, demonstrating the EC’s longstanding need for structural improvements.

These patterns of chronic debt, audit-flagged financial and procurement lapses, unpaid market settlements, and service reliability challenges illustrate that ABRECO’s inefficiencies were persistent and multifaceted, involving both governance and operational weaknesses over many years.

Unfair costs burdening consumers

In July 2024, ERC imposed a ₱2 million penalty on the Isabela II Electric Cooperative (ISELCO II) after the EC repeatedly failed to substantiate the generation charges it passed through to its customers. ERC found that ISELCO II did not provide the necessary fuel cost invoices and supporting documents tied to its power supply arrangement with Anda Power Corporation, in violation of mandated fuel audit and reporting procedures.

The commission noted that it had directed the cooperative to produce the required documentation as far back as December 13, 2022, but despite “ample time” and multiple reminders, ISELCO II did not respond. ERC characterized this inaction as a “serious dereliction of duty” under EPIRA. Because the missing data prevented ERC from evaluating whether the fuel costs charged to consumers were accurate and justified, the agency deemed the coop’s non‑compliance “unjustifiable.”

According to the regulator, a utility must ensure that all costs passed on to consumers are transparent, reasonable, fairly computed, and free from inflation, and that it independently verifies all underlying invoices and contracts before including such charges in its rate structure. ERC also reminded ISELCO II that it must carry out the conditions tied to its approved power supply contract — not merely rely on the supplier’s assertions — to guarantee that only legitimate, verifiable costs are recovered from consumers.

Power as a Pillar for Amianan’s Economic Future

Northern and northern‑adjacent regions of Luzon play a significant role in the Philippines’ broader growth trajectory. In 2024, the Cordillera Administrative Region posted a Gross Regional Domestic Product (GRDP) of about ₱378.3 billion, expanding by 4.8 % from the previous year, with a per capita output higher than the national average, underscoring its economic relevance beyond rural expectations.

Meanwhile, the Ilocos Region’s economy grew by 4.9 % in 2024, pushing its gross regional output above ₱735 billion and contributing meaningfully to the nation’s production base.

These figures reflect vibrant economic activity in Amianan provinces that span agricultural hubs, growing services sectors, expanding industries, and increasingly diversified local commerce. Across this landscape, access to stable and affordable electricity is foundational — powering everything from small enterprises and agro‑processing facilities to healthcare, education, and digital services.

Yet, as this article has shown, the current state of many ECs in the region reveals enduring weaknesses that risk undermining these economic gains. Systemic gaps in infrastructure, administrative capacity, financial discipline, and regulatory compliance have persisted for years. These weaknesses increase operational costs, contribute to inefficiencies, and reduce the confidence of both consumers and potential investors who depend on power reliability as a basic service. In economies where services and industry increasingly drive growth, weak electrical foundations can become bottlenecks to further progress.

For Amianan’s economies to continue their positive rise — not just in aggregate output but in quality of life, job creation, and sustained competitiveness — electricity delivery must be dependable, transparent, and aligned with modern standards. This means not only repairing and upgrading grids but also strengthening governance and regulatory compliance so that cooperatives can manage resources effectively and respond to evolving challenges.

As the region’s contribution to national GDP becomes more pronounced, ensuring that power supply is robust and future‑ready must be a priority for cooperatives, regulators, and policymakers alike. Long‑term investments in infrastructure, strict enforcement of transparency standards, and strategic planning are essential to match the region’s economic promise with reliable service on the ground.

Sources:

https://www.pna.gov.ph/articles/125537

https://www.pna.gov.ph/articles/1245517

https://www.philstar.com/the-freeman/cebu-business/2025/02/05/2419322/cera-seeks-review-system-loss-policy

https://www.pna.gov.ph/articles/1224346

https://www.philstar.com/nation/2025/11/22/2488967/power-outage-disrupts-work-ilocos-sur-courts

https://www.facebook.com/groups/905933742789983/posts/26104590269164316

https://tribune.net.ph/2025/05/27/nea-files-cases-vs-ec-officials-over-alleged-fund-mismanagement

https://businessmirror.com.ph/2022/02/21/sc-upholds-erc-decisionto-refund-inec-customers

https://tribune.net.ph/2025/09/23/three-cooperatives-remain-without-power-after-nando

https://manilastandard.net/news/top-stories/314620589/outages-in-la-union-pangasinan-as-emong-destroys-powerlines.html

https://manilastandard.net/business/314528973/electric-co-ops-still-slow-in-restoring-power-to-the-provinces.html