Business group backs Socoteco 2-Ignite Power deal

MANILA, Philippines — The proposed partnership between Ignite Power and South Cotabato II Electric Cooperative (Socoteco 2) should push through but with strong safeguards in place to protect consumers, according to a business group.

The General Santos City Chamber of Commerce and Industry said the proposed deal could help address Socoteco 2’s operational challenges and financial losses while improving its aging infrastructure.

At the same time, the cooperative must ensure that the rights and economic interests of its member-consumer-owners (MCOs) are fully protected.

“Reliable power supply, affordable electricity rates, good governance, accountability, operational integrity, equity protection and ownership rights of the cooperative, and full transparency and informed consent of the MCOs are the bedrock and non-negotiable principles upon which we stand in connection with the proposed conditional joint agreement,” the chamber said in a statement.

Although it had previously preferred Socoteco2 to remain a distribution utility, the chamber acknowledged that the “confluence of internal and external factors” had made it challenging for the cooperative to continue operating as one.

To address concerns over the proposed deal, the group said the agreement must include binding commitments requiring the private partner to rehabilitate Socoteco 2’s facilities, which could help lower system losses.

Ignite Power, a joint venture between Razon-led Primelectric Holdings and boxing legend Manny Pacquiao’s MP Holdings, has proposed investing in the modernization of Socoteco 2’s power distribution network.

If approved, the deal would support a five-year modernization program aimed at reducing Socoteco 2’s system losses to 5.5 percent from the current recoverable level of 8.25 percent.

Beyond addressing system losses, the chamber said safeguards must also be put in place to prevent sudden increases in power rates.

Any tariff adjustments, it stressed, should comply with the rules set by the Energy Regulatory Commission and remain subject to public oversight.

The chamber also called for measurable performance standards for the proposed joint venture, including targets for power reliability, service quality and customer responsiveness.

On ownership, the chamber urged the protection of Socoteco 2’s reported 30-percent stake in the partnership.

The agreement, it added, should include anti-dilution provisions to preserve the cooperative’s board representation and voting rights.