The Real Power Crisis May Be Poor Governance in Electric Cooperatives
- July 10, 2026
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Recently, the Partners for Affordable and Reliable Energy (PARE) pointed out that the Oriental Mindoro Electric Cooperative (ORMECO) posted the highest residential electricity rate (₱18.29 per kilowatt hour) among main-grid electric cooperatives (ECs) in June 2026. According to the consumer advocacy group, the increase was driven by the utility’s reliance on “more expensive generation sources,” with power purchases from emergency power providers rising by 56.09%.
A power purchase agreement (PPA) is a contract that defines the terms under which electricity is bought from a generator, including supply commitments, pricing, and duration.
Defective power supply agreements quietly lock EC consumers into paying higher rates,” stated PARE Chief Advocate Officer Nic Satur Jr. “If PSAs truly protect member-owners, then publish them and prove that the lowest- or least-cost and most reliable suppliers were chosen.”
(Also read: Rooftop Solar Installations Surge As Filipinos Seek Relief From Soaring Power Costs)
PSA Failures in Focus
Over the years, some ECs have faced challenges in managing PPAs, with contract disputes, compliance failures, and unfavorable terms ultimately affecting consumers.
Siquijor’s Power Crisis
In June 2025, the Energy Regulatory Commission (ERC) launched an investigation into Siquijor’s frequent and prolonged outages, reviewing the power supply agreement (PSA) between the Province of Siquijor Electric Cooperative (PROSIELCO) and the S.I. Power Corporation (SIPCOR). The regulator said the contracted capacity under the agreements was supposed to be enough to meet Siquijor’s peak demand, but residents continued to suffer 568 power interruptions and daily rotating brownouts averaging 11 hours.
Later, the ERC revoked SIPCOR’s permit to operate as the island’s power supplier after the Department of Energy (DOE) uncovered multiple compliance failures, including operating without a valid Certificate of Compliance, deploying unauthorized rental generator sets, and failing to deliver sufficient power under its agreement with PROSIELCO.
Malapascua Island’s Growth Stalled by Unreliable Power
The Cebu II Electric Cooperative (CEBECO II) played a role in Malapascua’s power situation after it terminated its 2009 waiver to provide electricity service to the island in favor of Power Source Philippines Inc. (PSPI), citing the island’s remote location.
Since 2019, Malapascua has faced recurring power reliability issues, with voltage fluctuations and frequent outages affecting residents and businesses. In 2024, the Malapascua Business Association (MBA) called for the termination of PSPI’s service engagement, prompting then Cebu Governor Gwendolyn Garcia to intervene. A month later, CEBECO II reversed its waiver and moved to resume responsibility for power service on the island.
Ultimately, Malapascua’s experience underscores how decisions made by electric cooperatives can shape long-term power outcomes for communities. CEBECO II’s withdrawal and later return highlighted the need for ECs to remain proactive in ensuring reliable service, especially in areas where private providers may struggle to meet consumer needs.
Isabela EC Fined ₱2M over Unjustified Charges
In the case of the Isabela II Electric Cooperative (ISELCO II), the issue stemmed from the EC’s failure to submit fuel cost invoices and supporting documents related to its power supply agreement with Anda Power Corporation.
As a result, the ERC fined ISELCO II ₱2 million after finding the cooperative administratively liable for failing to justify the reasonableness of generation charges passed on to consumers.
The regulator said ISELCO II did not submit required fuel audit documents, including supporting invoices, despite being given sufficient time to comply. The ERC noted that the missing documents prevented it from verifying the accuracy of fuel charges, particularly amid a period of rising generation costs.
When Politics Enters EC Governance
While legislation has sought to insulate ECs from political influence by restricting the involvement of politically connected individuals in leadership roles, governance tensions continue to persist.
From 2021 to 2024, the Benguet Electric Cooperative (BENECO) became embroiled in a leadership dispute after the NEA removed its board and moved to install an external general manager. The move triggered protests and a police-assisted takeover of the cooperative’s headquarters.
Beyond leadership disputes, PARE also raised concerns over what it described as politically charged activities involving some ECs ahead of the 2025 midterm elections. The group cited instances where EC consumer assemblies featured campaign materials for political candidates, arguing that such platforms could have instead been used to discuss measures to improve power affordability and service delivery.
Financial Misconduct
Another dimension of governance challenges among some ECs is financial management, where issues involving transparency, accountability, and the use of consumer funds have drawn scrutiny.
In 2024, NEA removed 12 officials of the Negros Occidental Electric Cooperative (NOCECO) following findings of improper spending amounting to over ₱87 million. The NEA said some board members granted themselves unauthorized allowances and benefits, while former executives allegedly received improper salary increases, per diems, and other financial benefits.
In 2025, the Department of Justice (DOJ) formally received criminal complaints filed by the NEA, in coordination with several ECs, against their current and former officials and employees.
Among the cases, the Isabela I Electric Cooperative (INEC) submitted a complaint for syndicated estafa against current and former executives over the alleged diversion of about ₱118 million from the cooperative’s Employees Retirement Fund.
Meanwhile, the First Bukidnon Electric Cooperative (FIBECO) lodged qualified theft complaints against its former general manager, alleging that he used his position to facilitate questionable transactions, including the purported unauthorized purchase of a ₱11.550-million property that was never completed and the alleged transfer of ₱6 million to his personal account.
The allegations intensified calls to strengthen governance standards, improve financial transparency, and reinforce NEA’s oversight of ECs. Senator Win Gatchalian emphasized that “issues of corruption hounding certain ECs cause consumers to lose their confidence in the ECs concerned. Such a situation negatively impacts operations to the detriment of consumer welfare.”
(Also read: Can Pumped Hydropower Rescue the Renewable Revolution?)
A National Push for Better EC Performance
As organizations responsible for a critical public service, ECs need leaders with expertise in energy, finance, and long-term planning. When board decisions are shaped by political interests rather than competence and accountability, the consequences can include weak contracts, inefficient spending, and operational problems that ultimately affect consumers.
Improving EC performance requires stronger governance standards, including higher qualifications for directors and more independent voices in leadership. A more professionalized board structure would help ensure that decisions are driven by consumer needs for reliable and affordable electricity rather than short-term political interests.
When it comes to PSAs, the size and negotiating power of electric cooperatives can significantly influence the terms they secure. Smaller ECs often struggle to match the bargaining strength of large generation companies, limiting their ability to negotiate more favorable supply contracts. As a result, some may end up with higher-cost power sources or greater exposure to the volatile Wholesale Electricity Spot Market (WESM).
A more coordinated approach to power procurement could help address this imbalance. By allowing ECs to pool their demand and negotiate as a group, cooperatives can gain stronger leverage when dealing with generators. This collective purchasing strategy could lead to more competitive supply terms and help ease the cost burden ultimately carried by consumers.
However, improving power procurement is only one part of the larger challenge. The way ECs are governed and managed also plays a crucial role in determining the reliability, affordability, and quality of electricity service delivered to communities.
“Rural electricity cooperatives are notorious for their higher power costs, the poor quality of electricity delivered, long brownouts and questionable charges,” stressed Alex Magno of the PhilStar. “It is not coincidental that areas covered by inefficient electricity cooperatives have the lowest rates of progress.”
For PARE, providing consumers with clear and truthful answers is essential. “For problematic and inefficient ECs, our question is direct. Why are we paying high bills on time and still suffering from brownouts, slow response, and vague explanations?” the group posted. “We are students, farmers, fishers, teachers, tricycle drivers, and small business owners…We deserve clarity, accountability, and real solutions, not more excuses.”
Sources:
https://sunstar.com.ph/cebu/cebeco-ii-soon-to-power-malapascua
https://bworldonline.com/the-nation/2025/03/13/659296/power-co-ops-urged-to-shun-politics/
https://lawphil.net/judjuris/juri2024/nov2024/gr_232581_2024.html
https://www.pna.gov.ph/articles/1192454
https://newsinfo.inquirer.net/1858735/nea-ends-leadership-row-at-benguet-power-co-op
https://www.pna.gov.ph/articles/1223279
https://www.doj.gov.ph/news_article.html?newsid=8DICG9kROAEP56KzVfptXSogQuIYa7-FNopnYHKUcJM
https://legacy.senate.gov.ph/press_release/2024/0213_gatchalian1.asp
https://www.philstar.com/opinion/2023/09/02/2293158/indentured
