AS my regular readers certainly know, I do not see eye-to-eye with that subset of energy stakeholders known as “consumer advocates.” However, when an argument based on factual reality is offered, it is right, no matter who is saying it. And, iconoclast that I am, I do make a conscious effort to reject the accepted fashion here in the Philippines of assuming credibility of a source based on the source’s personality or position.
In that context, I would like to share a statement sent to me earlier this week by Nic Satur Jr., whom I’ve known for some time, and who is the chief advocacy officer of a group called Partners for Affordable and Reliable Energy. As the statement is not very long, I’ll include it in its entirety, and then add some of my own insights after:
On co-ops seeking franchise renewal
“Partners for Affordable and Reliable Energy (PARE) is calling on Congress to exercise stricter oversight and deny franchise renewals to electric cooperatives that fail to meet basic technical and regulatory standards.
“The recent case of Isabela I Electric Cooperative Inc. (Iselco I) illustrates the urgency of this call.
“An Energy Regulatory Commission (ERC) report in late 2025 showed Iselco I compliant with only [six] of 46 Philippine Distribution Code (PDC) standards. The cooperative exceeded the feeder loss cap at 10.84 percent against the 10.25-percent ceiling, was only “partially compliant” with PDC requirements, and failed to submit its Philippine Grid Code (PGC) compliance report for 2024.
“These lapses, alongside gaps in net metering, customer choice, and metering tests, highlight how consumers ultimately bear the costs of inefficiency and poor reliability.
“This case is not about singling out Iselco I, but about exposing systemic flaws in how franchise renewals are reviewed and granted. If this can happen to Iselco I, then other cooperatives may be facing similar problems. With around 30 electric cooperatives seeking franchise renewals, the current evaluation system must be reviewed and overhauled to ensure accountability.
“The evaluation process must go beyond paperwork and technical submissions. It must take into account the sentiments and lived experiences of consumers, who are directly affected by service inefficiencies and reliability issues. Franchise renewals should not be granted unless cooperatives can demonstrate clear compliance, transparency, and a roadmap for improvement.
“Hindi dapat aprubahan ng Kongreso ang franchise renewal ng mga electric cooperative na hindi tumutupad sa itinakdang pamantayan. Kailangang baguhin ang sistema ng pagsusuri upang isentro sa kapakanan ng mga konsumer ang bawat desisyon (Congress should not approve the franchise renewal of electric cooperatives that do not meet the established standards. The review system must be changed to center every decision on the welfare of consumers).”
I agree with this point of view completely, and I am very pleased that someone other than myself has raised this issue. While the majority of electric cooperatives (EC) in the country are performing adequately, at least according to the performance standards set by the National Electrification Administration (NEA) — standards that are generally in accordance with the PDC — there are an unacceptable number that are not. And although this is a bit anecdotal, it is the ECs who are performing the most poorly who fight the hardest to hold onto their franchises, even resorting to extralegal means to do so in some cases. A good recent example of this is the Northern Davao Electric Cooperative (Nordeco), which, despite having its franchise taken away and given to the Davao Light and Power Corp. (DLPC), still insists its franchise (and privilege to provide absolutely awful service to its captive customers) is some kind of divine right. And obviously, the case of Iselco I highlighted by the PARE statement is another example, and there have been several more in addition to those.
I also strongly agree with PARE’s observation that the PDC standards do not adequately capture the “service experience” of co-op customers. It is an argument that I have made myself, with regard to the NEA’s key performance indicators, which are detailed in the quarterly compliance reports it publishes. An EC can be performing adequately, according to PDC and NEA benchmarks, and still be providing inadequate service to its customers. A case in point here is the ongoing dispute in Batangas involving one of the two cooperatives that provide most of the electricity service in the province. Even though it is not doing that badly according to the NEA matrix, its customers are furious at its unreliability, and are fighting to have the Manila Electric Co., or Meralco, establish itself as their service provider. As this is a situation I am about to become more involved in over the coming weeks, I am not going to get into more details about it now, but suffice to say it is an exact example of what PARE was talking about in its statement.
Congressional franchises are arcane, counterproductive, and unnecessarily politicize public services. They should be abolished. However, since the clown school that comprises the lawmakers of this country is likely to fight tooth and nail to hang onto that bit of unnecessary authority, the process can at least be improved to make the franchises granted fairer and more consumer welfare-oriented.
The standards for new franchises should be reviewed, and that is something that can probably be workshopped with regulators, prospective service providers, and organizations like PARE. For franchise renewals, however, since performance records are available to guide the process, there should be clear guidelines. Meeting all 46 of the PDC standards should be a minimum requirement, and in addition, a sound and credible “consumer sentiment” survey of the customers of the EC applying for renewal — the survey should include all of them, or as many as can be tapped for it to provide a statistically reliable result — should be a requirement. If a determinant majority (say, at least 60 or 70 percent) of the affected consumers are satisfied with the level of service they receive and the rates they have to pay for it, then that favors franchise renewal. If they are not, then that requires an automatic rejection of the renewal.
ben.kritz@manilatimes.net
Bluesky: @benkritz.bsky.social
Website: www.badmannersgunclub.com