The National Electrification Administration (NEA) has installed Nollie B. Alamillo as Executive Officer (EO) of South Cotabato II Electric Cooperative (SOCOTECO II) following audit findings that found financial and operational issues, including around PHP 59 million in revenues that were not returned to consumers.

The appointment, made on March 30, 2026, comes as the agency moves to address concerns over the cooperative’s performance and ensure the protection of its member-consumer-owners (MCOs).

NEA said Alamillo was granted supervisory powers to improve operational efficiency and safeguard consumer interests after reports and a Special Audit pointed to issues in SOCOTECO II’s handling of its Power Supply Agreements (PSAs).

Amongst the findings was the cooperative’s treatment of remarketing revenues from unused power supply. Under certain PSAs, excess capacity was sold in the Wholesale Electricity Spot Market (WESM), generating approximately PHP 59 million over three years.

These revenues, which form part of pass-through generation costs paid by consumers, are expected to be returned to reduce electricity rates. However, the audit found that SOCOTECO II management transferred the amount to its General Fund instead of passing the benefit on to its MCOs.

The agency also flagged the disbursement of PHP 126.08 million in mortuary benefits from 2016 to 2024. It noted that the spending warrants further review given the cooperative’s financial condition and potential need for long-term technical improvements

On top of that, NEA cited reports of extensive outsourcing of operations and maintenance functions, with around 600 contracted personnel, which is significantly higher than the cooperative’s plantilla, raising concerns over cost efficiency.

The findings come as SOCOTECO II’s performance rating declined from AAA to B in 2024 based on NEA’s Key Performance Indicators, prompting earlier interventions including the installation of a project supervisor.

The cooperative’s own board had also previously sought NEA’s intervention, citing internal challenges in governance. In a resolution dated March 24, 2026, the board requested assistance to address issues “including those arising from or aggravated by deficiencies in coordination, transparency and accountability” between management and the board.

In response, NEA designated Alamillo to support the cooperative’s recovery efforts. Alamillo is currently a member of the NEA Board of Administrators and has previously served as a project supervisor in several electric cooperatives.

The agency has also ordered a further audit by its Management and Consultancy Services Office, with a team composed of certified public accountants and engineers to examine both financial and technical aspects of operations.

“NEA assures the public, most especially the MCOs of SOCOTECO II, that the agency shall continue to take action in order to restore operational normalcy within the cooperative and improve its services,” the administration said in a statement. 

The intervention is expected to help stabilize SOCOTECO II’s operations and address governance issues as the agency works to improve service delivery to consumers.

What changes do you think consumers should expect as NEA steps in to address these issues?

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