Business Group Backs Socoteco 2-Ignite Power Deal With Consumer Safeguards

MANILA, Philippines — The General Santos City Chamber of Commerce and Industry has backed the proposed partnership between Ignite Power and South Cotabato II Electric Cooperative (Socoteco 2), but with a strong emphasis on consumer protection. The business group believes the collaboration could help Socoteco 2 overcome operational difficulties and financial deficits, while also upgrading its aging infrastructure. Crucially, the chamber stressed that the agreement must guarantee the full protection of the rights and economic interests of the cooperative's member-consumer-owners (MCOs). "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 stated. Although the chamber had previously preferred Socoteco 2 to remain an independent distribution utility, it now recognizes that a combination of "internal and external factors" has complicated its standalone operations. To address potential issues arising from the proposed deal, the chamber advocates for binding commitments from the private partner to rehabilitate Socoteco 2's facilities, which could lead to reduced system losses. Ignite Power, a venture formed by Razon-led Primelectric Holdings and MP Holdings, owned by boxing icon Manny Pacquiao, has put forth a proposal to invest in the modernization of Socoteco 2's power distribution network. If approved, this partnership would support a five-year modernization initiative aimed at decreasing Socoteco 2's system losses from the current recoverable rate of 8.25 percent to a target of 5.5 percent. In addition to tackling system losses, the chamber highlighted the necessity of implementing safeguards to prevent abrupt increases in electricity rates. They asserted that any adjustments to tariffs must adhere to the regulations set by the Energy Regulatory Commission (ERC) and remain under public scrutiny. The chamber also called for the establishment of quantifiable performance benchmarks for the planned joint venture, focusing on aspects such as power reliability, service quality, and customer responsiveness. Concerning ownership, the chamber urged the safeguarding of Socoteco 2's reported 30 percent equity in the partnership. They further recommended that the agreement incorporate anti-dilution provisions to ensure the cooperative's continued board representation and voting rights are preserved.