GENERAL SANTOS CITY(January 7) — A decade-long failure to modernize power distribution facilities at South Cotabato II Electric Cooperative (Socoteco II) has been traced to deep-rooted management and governance lapses, raising serious questions about regulatory oversight and accountability in the local power sector, according to an audit by the National Electrification Administration (NEA).
The NEA audit found that Socoteco II has failed for nearly ten years to implement critical system upgrades, despite mounting technical red flags—high system losses, aging equipment, weak collection efficiency, and declining service reliability—that steadily eroded the cooperative’s operational and financial position.
Auditors noted that these deficiencies were neither sudden nor unforeseeable, but accumulated over years of delayed decisions and ineffective management, ultimately undermining the cooperative’s ability to meet growing electricity demand in its franchise area.
As a consequence, Socoteco II has been downgraded and is now losing an average of ₱25 million a month, driven largely by persistent system losses and poor revenue collection—conditions that regulators flagged as long-standing.
The audit also showed that the cooperative’s deteriorating finances have directly affected day-to-day operations, slowing service response, worsening outages, and further depressing collection performance—creating a feedback loop that regulators failed to arrest early.
Rene “Migs” Dominguez, president of the General Santos City Chamber of Commerce Foundation Inc., said the crisis underscores not only management failure but also the cost of delayed regulatory intervention.
Citing an industry study, Dominguez said Socoteco II requires ₱2 billion annually for five years, or ₱10 billion, to rehabilitate and modernize its distribution system. To compensate for the decade-long delay, the cooperative would now need to raise ₱2 billion in a single year—a scenario he warned carries serious financial and consumer risks.
“Loan approval at this scale would be risky, and amortization could reach ₱50 million monthly, potentially doubling current losses,” Dominguez said. “Without fundamental governance reform, this approach simply transfers the burden of institutional failure to consumers.”
He cautioned that unless regulators impose strict conditions—ranging from leadership accountability and technical competency standards to transparent recovery planning—the cost of correcting years of neglect will likely be passed on to households and businesses through higher electricity rates across the Soccsksargen region.
Dominguez stressed that the crisis is no longer a question of funding availability but of credibility and responsibility.
“This is about who allowed ten years of delayed upgrades to happen, why corrective action came so late, and how regulators will ensure consumers are protected going forward,” he said.
As the consequences of prolonged infrastructure neglect become increasingly visible, the situation has sharpened calls for stronger regulatory enforcement—one that addresses not only Socoteco II’s recovery, but also the systemic oversight gaps that allowed the crisis to deepen unchecked.
