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Last July 2024, the Energy Regulatory Commission (ERC) fined Isabela II Electric Cooperative (ISELCO II) ₱2 million for failing to justify the higher generation charges it passed on to consumers. The cooperative did not submit the required fuel cost invoices and documents related to its power deal with Anda Power Corp., violating audit requirements.
ERC found ISELCO II guilty of severe neglect for ignoring a 2022 order to submit fuel cost data tied to its deal with Anda Power. The case was referred to the National Electrification Administration (NEA) for possible sanctions, including criminal charges.
The ERC reminded power distributors that their responsibility went beyond supplying electricity and billing, ensuring charges are “transparent and reasonable, correct, uninflated, fairly computed,” and aligned with the least-cost delivery of power.
There have been no public updates on the case, highlighting a broader issue of unreliable electric cooperatives (ECs) across the country. This article will focus on the impact of these challenges in the Amianan (Northern Luzon) region.
(Also read: Emergency Agreement Secure Uninterrupted Power for Baguio)
Controversies surrounding Amianan ECs
Through the years, ECs in the Amianan have faced controversies, including reliability issues and allegations of mismanagement.
Aside from failing to comply with fuel audit procedures in 2024, ISELCO II also faced backlash during the Enhanced Community Quarantine (ECQ) in 2020. Due to restricted access to meter readings, the cooperative applied average consumption charges, resulting in significantly higher bills for some consumers. While ISELCO II cited increased household usage, many felt the charges were excessive.
The Ilocos Norte Electric Cooperative (INEC) faced scrutiny in January 2023 when NEA appointed a new board member to oversee its management. This move came after concerns raised by the Ilocos Norte provincial government about the cooperative’s energy services and their impact on local consumers.
In February 2023, NEA issued show-cause orders to several Northern Luzon ECs, including INEC, Ilocos Sur Electric Cooperative (ISECO), La Union Electric Cooperative (LUELCO), Pangasinan I Electric Cooperative (PANELCO I), and Benguet Electric Cooperative (BENECO). According to NEA, these ECs bypassed failed biddings for a 130-megawatt (MW) power supply project and proceeded with direct negotiations without informing the agency.
Also in 2023, a congressional inquiry uncovered several issues within ISELCO I, including the collection of approximately ₱130 million in late payment service fees without ERC approval, payment of ₱2 million monthly for unrendered IT services, and the awarding of projects to a supplier with a history of delays.
Because the Amianan region is highly prone to typhoons, the need for a more resilient and reliable power infrastructure is urgent.
In 2024, Super Typhoon Julian displaced over 77,000 residents across Northern Luzon, leaving a trail of destruction that crippled infrastructure. Power outages struck 16 cities and municipalities, while communication lines went down in six municipalities.
That same year, Typhoon Marce struck the area, causing flooding, landslides, and widespread damage. Cagayan province, where it made landfall, saw toppled trees, downed power lines, and damaged homes. Over 40,000 residents were evacuated, and two airports were also affected, compounding damage from previous storms.
With weak infrastructure, ECs in these areas can be severely affected, as seen in 2023 when Typhoon Betty caused partial power interruptions. The Cagayan Electric Cooperative 2 (CAGELCO 2) experienced outages, particularly affecting the municipality of Pamplona. Similarly, Batanes Electric Cooperative (BATANELCO) reported power disruptions in multiple municipalities, including Mahatao, Itbayat, Ivana, Basco, Sabtang, and Uyugan.
(Also read: ERC Evaluates La Union’s Emergency Power Agreement)
Why Amianan needs reliable power
According to the Philippine Statistics Authority (PSA), Northern Luzon’s economy showed growth in 2023. Notably, Batanes recorded the fastest growth at 14.5%.
Meanwhile, the Ilocos Region’s economy grew by 7.1%, reaching ₱701.5 billion from ₱654.8 billion in 2022. This growth was primarily driven by the Services sector, followed by Industry and Agriculture, Forestry, and Fishing.
In the Cordillera Administrative Region (CAR) provinces like Mountain Province saw significant contributions from the Services sector, which accounted for 67.9% of the provincial Gross Domestic Product (GDP). Other provinces in CAR, including Abra, Apayao, Benguet, Ifugao, and Kalinga, also had substantial shares of their economies driven by Services.
To maintain the positive economic growth of Northern Luzon, a reliable electricity supply is crucial. The World Bank highlights that access to electricity is fundamental for driving modern economic activities and ensuring the delivery of essential public services.
ECs—a boon or bane?
ECs in the Philippines were established to bring electricity to rural and remote areas not served by private utilities. Their original role was to promote rural electrification, improve quality of life, and stimulate economic development in underserved communities.
NEA, formed in 1969, was tasked with implementing the rural electrification program and reinforcing the technical capability and financial viability of rural ECs.
However, critics are quick to point out the ECs’ persistent governance issues, aging infrastructure, and inefficiencies in service delivery. Minimal Government Thinkers President Bienvenido Oplas Jr. called NEA as “one of the more wasteful agencies in the government, one that needs an endless subsidy from Philippine taxpayers”.
According to his research, taxpayers gave P12.9 billion to NEA in 2020 alone, followed by P2 to P3 billion annually from 2021 to 2025—sums that surpassed the yearly budget of the Department of Energy and were at least triple that of the ERC.
The Philippine Institute for Development Studies (PIDS) said blackouts are more than just inconveniences—they damage local economies, disrupt businesses, and strain public services. It noted that ECs are “at the heart of these outages” and urged them to abandon outdated practices in favor of greater transparency, accountability, and flexible, modern management.
Oplas highlighted that NEA, as a political body, extends patronage to ECs, allowing them up to 12% in system losses—double the 6% cap for private utilities. This gap results in consumers in the provinces shouldering potentially hundreds of billions of pesos more each year.
“I have argued for the abolition of the NEA someday, and that all ECs should become corporations, monitored by the Securities and Exchange Commission (SEC) and not entitled to any taxpayer subsidy,” he wrote.
Meanwhile, energy expert Arnel Casanova supports the idea that collaborations between private distribution utilities and electric cooperatives can improve efficiency through economies of scale. He advocates for joint ventures, shared infrastructure, and bulk purchasing to enhance service quality. Casanova also calls for policies that incentivize shared infrastructure, streamline approvals, and ensure fair tariff structures to foster effective collaboration and improve power distribution.
Sources:
https://rmn.ph/iselco-ii-may-bawas-singil-sa-kuryente-sa-hunyo/
https://www.pna.gov.ph/articles/1192306
https://www.thenews.coop/filipino-electric-co-ops-asked-to-explain-apparent-lack-of-transparency/
https://apnews.com/article/philippines-typhoon-yinxing-51b689a712c6bb793cc7d08929eb3143
https://rsso02.psa.gov.ph/content/batanes-economy-accelerates-further-145-percent-2023
https://rsso01.psa.gov.ph/content/economic-performance-provinces-ilocos-region