Saving the losing electric cooperatives

By Herbert Vego

IS the Northern Negros Electric Cooperative (NONECO) losing?

If that is so, more than 200,000 electricity users would suffer.  Its coverage areas include the cities of Victorias, Cadiz, Sagay, Escalante, and San Carlos, as well as the municipalities of E.B. Magalona, Manapla, Toboso, and Calatrava in Negros Occidental.

This corner agrees with the observation of a consumer group, the Alliance of Concerned Consumers in Electricity and Social Services (ACCESS), which reported that NONECO’s facilities have aged and therefore need replacements that it may not cope with.

Indeed, why wait until it’s too late?

As reported by the Daily Guardian’s Dolly Yasa, ACCESS President Wennie Sancho had warned that NONECO could go the way of the Central Negros Electric Cooperative (CENECO), which had gone to the point of burying itself in loans it could not afford to pay until it inked a joint venture agreement with a rivate corporation, Primeletric. This partnership gave birth to Negros Power and Electric Corp. or Negros Power for short.

With money problems solved, the distribution utility has rapidly expanded its clientele from 177,737 customers in August 2024 to 242,000-plus today.

The good news is that Negros Power may consider the same partnership with NONECO. There had already been times when the former helped the latter restore its power outages.

NONECO Acting General Manager Engr. Wilbe Bilbao has confirmed having received a joint venture proposal from Negros Power.

One recalls that until it partnered with Primelectric, the former Central Negros Electric Cooperative (CENECO) had incurred more than ₱600 million in loans which it could no longer afford to pay.

At the moment, according to Sancho, NONECO does not have the needed capital, technology, and efficiency to meet the growing demands of consumers. But there’s no reason why it could not generate enough money to modernize.

For example, in the act of saving CENECO, Primelectric – mainly owned by billionaire Enrique Razonspent – had sunk ₱1.2 billion on upgrades within a year of their partnership.

He said, “CENECO’s experience showed that cooperation, not resistance, drives progress. This is not only about privatization or conversion but about bringing in expertise and investment to make electricity service more reliable, efficient, affordable, and inclusive.”

Cadiz City Mayor Salvador Escalante Jr. shares that view, no doubt because of Primelectric’s track record with CENECO and Bohol Light in Tagbilaran City, which has also partnered with Primelectric.

Like MORE Power in Iloilo, all of them have Roel Z. Castro as president and chief executive officer.

Incidentally, MORE Power took over the Iloilo franchise from Panay Electric company in 2020 by virtue of Republic Act No. 11212. Its customer base has leapfrogged from 62,000 to 105,000 customers.

Under Republic Act, it is in the process of expanding its coverage to Passi City and the 15 municipalities of Alimodian, Leganes,Leon, New Lucena, Pavia, San Miguel, Santa Barbara, Zarraga, Anilao, Banate, Barotac Nuevo,Dingle, Duehas, Dumangas and San Enrique.

As to why some electric cooperatives are losing, it’s because decades of wear and tear have turned the electric cooperatives’ viability into liability.  Being non-stock and non-profit public utilities, they now suffer from a shortage of funds to replace and upgrade worn-out poles, power lines and other obsolete facilities. Thus, they need fresh capitalization to remain viable.

It is no secret that electric cooperatives in the Philippines are old.  They trace their roots from the year 1969 with the passage of Republic Act 6038, which created the National Electrification Administration (NEA) to initiate rural electrification with an initial capital stock of ₱1 billion.