BACKGROUND OF ILOCOS SUR
Sur is located along the Western Coast
of Northern Luzon bounded by Ilocos
Norte in the North, Abra in the Northeast,
Mountain Province in the East and Benguet
in the Southeast, La Union in the south
and China Sea in the west. The province
falls within latitudes of 16°40'
to 17° 54' north and longitudes
120°56' east. Vigan City is the
provincial capital approximately 395
kilometers by road from Manila.
province has an area of 2, 487.30 square
kilometers. It has 32 municipalities
and 2 cities with a total of 768 barangays.
THE ILOCOS SUR ELECTRIC COOPERATIVE,
INC. (ISECO) IN RETROSPECT
The birth of Ilocos Sur Electric Cooperative,
in. (ISECO) ushered the beginning of
a new Ilocos Sur and unlike other RECs,
ISECO has a unique beginning.
In December 1971, a group of concerned
citizens of San Esteban met to discuss
and plan for the energization of the
municipality through the formal organization
of the San Esteban Electric Service
Cooperative with the proposed initial
capital of P100, 000.00. The initiators
of this move were Atty. Godofredo Corrales
Sr., Dr. Leonoardo Vergara, Mrs. Nieves
Vergara-Aragones, Atty. Samuel A. Abellera,
Mr. Peter P. Javier and other concerned
citizens of San Esteban.
morning in early June 1973, an audience
was made with Col. Pedro Dumol, then
Acting Administrator of the National
Electrification Administration (NEA),
to discuss the organization of the proposed
San Esteban was a very small town for
a Rural Electric Cooperative and with
the endorsement of Assistant Executive
Secretary Roberto V. Reyes and Col.
Pedro G. Dumol, it was decided that
a rural electric cooperative will be
organized which initially would cover
the 2nd District of Ilocos Sur consisting
of 23 municipalities under the special
program of Rural Electrification under
the New Society. The municipalities
referred to are: Tagudin, Sta. Cruz,
Sta. Lucia, Candon, Santiago, San Esteban,
Sta. Maria, Narvacan, Santa, Nagbukel,
Burgos, Lidlidda, San Emilio, Banayoyo,
Galimuyod, Salcedo, Suyo, Sigay, Cervantes,
Quirino, del Pilar, Sugpon and Alilem.
the later part of June 1973, a meeting
with all municipal mayors of Ilocos
Sur and representatives from the NEA
was conducted at the Provincial Capitol
on Vigan to discuss about the proposed
organization of a rural electric cooperative.
The mayors from the first district raised
their objections with regards to the
initial area coverage of the REC thinking
that the rural electrification program
might not reach their municipalities
but assurances were made by the representatives
that within two years, the program would
the meeting, a team of engineers from
the NEA came to conduct the survey and
feasibility study of the 23 municipalities
which most of the people then were unaware
of their presence and mission. They
never expected that their undertakings
will bring progress to them.
September 1973, a team from the NEA
headed by Mr. Efren Bautista conducted
meetings in the 23 municipalities covered
where they organized the Municipal Electrification
the completion of the survey and feasibility
study, the team recommended a funding
of P9.364 million, which was subsequently
approved by the Board of Administrators
of the NEA in October 1973.
the end of November 1973, a team from
the NEA headed by Mr. Manuel O. Viloria
arrived to conduct a physical inventory
of assets of the electric systems to
be taken over.
by Atty. Godofredo Corrales, Sr., Dr.
Leonardo Vergara, Mrs. Nieves Vergara-Aragones,
Atty Samuel Abellera, Mr. Peter Javier
and other concerned citizens of San
Esteban, Ilocos Sur, they met in December
1971 to discuss and plan the organization
of an electric cooperative for their
June 1973, they met with Col. Pedro
Dumol, at that time the Acting NEA Administrator
to discuss the proposed organization
of an electric cooperative for San Esteban.
San Esteban was a very small town for
a rural electric cooperative, it was
decided that a rural electric cooperative
be put up to cater the whole 2nd district
of Ilocos Sur with twenty-three municipalities.
the proposed plan for a rural electric
coop in the 2nd district was discussed
in a meeting with all the municipal
mayors in the province, 1st district
mayors objected the initial coverage
area of the proposed REC but assurances
were given that the electrification
program would reach them in two years.
the completion of the survey and feasibility
study, the team of engineers from NEA
recommended a funding of P9.364 million
which was approved in October 1973.
The capital to put up ISECO was loaned
from the NEA.
the area was divided into 10 districts.
January 24, 1974, ISECO was registered
with the National Electrification Administration
at the Provincial Capitol of Vigan and
began its formal operation on April
16, 1974 in a rented office at Candon,
Ilocos Sur. Engr. Evelito Elento from
the NEA was sent as the Acting General
the operation of ISECO, there were already
eleven private electric systems operating
in the province of Ilocos Sur. On April
to June of 1974, seven out of these
eleven private electric systems were
bought and taken over by ISECO.
4, 1974 marks the first energization
and San Esteban was the first town to
be energized. On December of the same
year, His Excellency then President
Ferdinand Marcos, the First Lady Imelda
Romualdez-Marcos and their children
inaugurated and energized the upland
towns of Banayoyo and
had a good start because the first of
operation showed a net income of P64,
241 with a system loss of 23%.
the National Electrification Administration,
ISECO was able to acquire land from
Philippine Government, land property
of the former Bureau of Public Highways
Headquarters at Bigbiga, Santiago which
became the Main Office of the cooperative
up to the present.
the NEA approved the P5million loan
of ISECO, the cooperative started in
the early months of 1975 the expansion
of lines, which extended to the first
district, fulfilling the promise during
the conception of ISECO to energize
the towns of first district within two
March 3, 1976 the tenth private electric
system was acquired by ISECO. In April
1977, Engr. Evelito Elento was recalled
by NEA and Mr. Antonio Ablog, still
from NEA took his post as the Acting
response to the clamor for proper representation
in the Board of Directors by the residents
of the first district, in May 1977,
the Board passed a resolution redistricting
the coverage area of ISECO from ten
to thirteen districts.
eleventh and last private electric system
was again acquired by ISECO on September
10, 1977. VELCO which was one of the
private electric systems acquired by
ISECO had many lines needed to be rehabilitated.
ISECO along with other RECs undertook
the rehabilitation program of VELCO
line which was called "Operation
Silaw Task Force 20-20" at Fuerte,
Caoayan (It was coded 20-20 because
it started in September 20 and ends
on October 20, 1977).
first annual general membership assembly
was held on October 1, 1977.
was again change in managerial position
of ISECO when Atty. Felipe Pacquing
took the position as the General Manager
when Acting General Manager Ablog was
recalled by NEA.
the cooperative was only allowed to
operate through a temporary franchise,
ISECO applied for a permanent franchise
and was granted a permanent franchise
to operate for fifty years on November
27, 1978 which will be until year 2028.
crucial year started in 1979 because
it started to pay its loan amortizations
to NEA. Although it was a difficult
year, the cooperative was able to cope
up with these difficulties.
the lead agency in implementing bliss
project of then Ministry on Human Settlements,
ISECO organized the BALICAT (Bagong
Lipunan Community Association of Turod)
of Turod, Cabugao on March 28, 1979.
This undertook the providing of houses
for the residents in the area. ISECO
also supported NEA projects such as
TANGLAW which was tasked to provide
lights and water systems to schools.
six years of operation (1980), ISECO
already connected 40, 700 houses/establishments.
augment collections and to be nearer
to electric consumers, collection offices
in Candon and Narvacan were put up in
the same year.
was a time when the cost of oil was
getting costly, NEA looked for alternative
sources of power so they came up with
the idea of putting up dendro-thermal
projects. ISECO put up its dendro-thermal
plant in Balugang, Burgos, Ilocos Sur.
Likewise, ISECO was also able to put
up a mini-hydro plant built in Poblacion,
Suyo, Ilocos Sur called Dawara Mini-Hydro.
was also tagged as a Show Window of
Rural Electrification in the Philippines
by then NEA Deputy Administrator David
Aguila because of the good services
it provides to its electric consumers
and because of its good operation.
1981, for the first time in seven years,
ISECO was categorized "A"
and was able to hit the one million
mark in collections. It was also the
year when the 1st unit of the Dawara
mini-hydro project was tested. ISECO
also took part in the pursuance of the
agro-forest scheme which was basically
the planting of ipil-ipil trees in every
municipality in the province.
events befell ISECO when the Dawara
Mini-Hydro Power Plant submerged after
the landslide brought about by a super
typhoon "Nitang" on August
1, 1983. It was a big loss for ISECO
and due to insufficient fund, it was
not rehabilitated since then.
the death of Sen. Benigno Aquino, Sr.
on August 1983, inflation rate gone
up. Collection of ISECO was greatly
affected, electric pilferage also became
rampant, and as a result, the coop could
not finance its expansion projects and
could not pay its dues to the supplier
on time. To solve the problems on rampant
stealing of electricity, a task force
financial condition of ISECO deteriorated
further in 1984 and 1985 which resorted
to borrowing of funds to private individuals
and on August 15, 1986, ISECO's line
was disconnected by NPC due to inability
to pay its dues. ISECO suffered a two-day
there was power interruption, ISECO
took advantage of it to collect accounts.
The cooperative was classified category
D at the end of the year. The problem
got worse when GM Felipe Pacquing resigned
from his post to pursuit his appointment
as RTC Judge of Laoag City.
with P11.038 million liabilities to
the National Power Corporation and over
P17 million to NEA, Engr. Genaro Cada
who took as the Acting General Manager
in replacement to GM Pacquing started
the recovery program of ISECO. Strengthening
the collection efficiency, lowering
the system loss and avoiding unnecessary
expenses were his main concerns. Indeed,
his ideas worked out and through proper
motivation, all employees did their
part to save ISECO. For these, AGM Cada
was branded the "trouble shooter"
of troubled RECs.
AGM Cada was recalled by NEA, Mr. Efren
Bautista took over on May 23, 1988.
One of his programs was restructuring
arrears of consumers which several took
advantage of. With the assistance of
Engr. Ferdinand Villaroel of NEA, the
installation of 5MVA substation transformer
was completed and became operational
in 1988 which reduced the system loss
by about 5%. Transformer rewinding shop
was also put up. Restructuring of accounts
with National Power Corporation was
also undertaken. These resulted to complete
turn-around from losses to gains and
the coop was reclassified as category
C. There was also decentralization of
operations in December 1988 and January
1989 through the establishments of two
the acquisition of more computers, the
computerized billing system was revised.
This made the billing system faster
and more organized. And, at long last,
ISECO was able to fully pay its dues
to the National Power Corporation and
on August 15, 1989 ISECO was again able
to avail the 3% prompt payment discount
from the NPC. Another 10 MVA substation
transformer was also acquired to augment
the power supply of the 1st district
of Ilocos Sur. ISECO was reclassified
category B from C.
June 30, 1990, ISECO was able to fully
pay all loan amortization to NEA including
the P3.5 million short-term loan. ISECO
paid a total of P4.97 million in just
a month which was a record for ISECO
at that time. The cooperative was also
able to give an advance payment for
the amortization. At the end of the
year, the financial condition of the
coop improved a lot.
July 7, 1990, the 10 MVA Substation
at Sto. Domingo was established to cater
power demands in Magsingal, San Juan,
Cabugao and Sinait and some parts of
Gulf War in January 1991 affected ISECO
but after the war in April, the cooperative's
operation went back to normal. Upland
municipalities were also energized in
the same year.
all the improvement in the operation,
ISECO was reclassified Category A, an
achievement employees have long been
of the priority programs in 1992 was
to make sure that ISECO would have good
financial standing. To achieve this,
ISECO launched "Operation: Disconnect
Arrears" in implementing Policy
4-1G re: Policy on Disconnection. The
Coop also made an amnesty program to
all disconnected consumers from 1989
and prior years. Under this program,
the disconnected consumers shall pay
only the outstanding arrears on their
electric bills, all interests, penalties
and other fees were waived.
in the 1st quarter of this year, 10
MVA substation was acquired and was
put up at Ayudante, Candon to cater
the power demands of consumers in the
municipalities of Candon, Galimuyod,
Salcedo, Sta. Lucia, Sta. Cruz, Tagudin
February 11, 1992, the upland municipality
of Alilem was energized.
the third quarter of 1992, another 5
MVA substation was purchased and put
up in the Sto. Domingo site to complement
the existing 10 MVA that supplies the
5 municipalities in the first district
of Ilocos Sur.
part of the Coop program to intensify
collection, a raffle draw was conducted
wherein all prompt payers were automatically
included in the draw. Prizes were pails
full of grocery items.
1994, GM Bautista initiated the purchase
of rewinding machineries and construction
of the transformer rewinding shop at
the Coop Main Office. This gave savings
1996, another tough man and a true leader
took the post as ISECO General Manager
in the person of Cesar G. Gironella.
He started the wood pole production
program-employees and BAPAs were given
mahogany seedlings to plant. There were
also many seedlings planted within the
Coop compound. Later if these trees
would be ready for harvest, they would
be bought by the Coop in a lesser price.
1997, the priority program was the campaign
against electric pilferers. To create
awareness against stealing of electricity,
Coop Management sought the help of the
media. In March 6, media practitioners
were invited to attend a seminar on
RA 7832 or the Anti-Pilferage Act of
Gironella also emphasized in his management
to exercise frugal spending and cost-cutting
measures to lessen the administrative
expenses which worked because at the
year-end, the Coop saved a considerable
1998, many of the electric pilferers
were apprehended which was a good indication
that the anti-pilferage campaign was
working. To further encourage member-consumers
to be more vigilant, incentive given
to informants was increased. The Technical
Services Department also conducted the
system upgrading and rehabilitation
of lines. These programs resulted to
the reduction of the system loss.
2000, the Silaw Mo, Sagut Ko program
was launched. In this program, ISECO
gave house-wiring materials, service
drops, kWh meters, hired electricians
to install wirings inside the house
and shoulders the costs of tapping and
pre-requites to be paid before tapping
such as membership fee, IDs, etc. Beneficiaries
were indigent families. For that year,
33 families were benefited. (This program
continued until 2008. In 2009 ISECO
implemented giving free kWh meters to
all new connections).
2001, the upland municipality of Del
Pilar was energized. ISECO Vigan Sub-office
permanent building was at last constructed.
In July 3 and 4, tragedy hit Ilocos
Sur when Super Typhoon Feria (the typhoon
that caused the fall of Banaoang Bridge
in the municipality of Bantay) traversed
in Northern Luzon leaving Ilocos Sur
in total darkness. More than 300 poles
were downed and uprooted, kilometers
of lines and service drops snapped,
several transformers were busted and
about thousand of kWh meters were broken
and were penetrated with water. On the
5th of July, all crew began the restoration
work and on that day, as soon as the
power from NPC was restored, ISECO gradually
energized the backbone lines and some
town proper. Spirit of cooperation engulfed
as all employees and coop member-consumers
worked together to restore power. The
cost of damage was about P8M and about
P9M lost in revenue.
Through the collaborative effort of
all employees and member-consumers,
the coop immediately recovered from
the losses of year 2001, in fact in
2002, ISECO was awarded as One of the
Top Performing Electric Cooperatives
in the Philippines (for 2001 operation).
2003, the Coop implemented rate reduction
of P0.08752/kWh pursuant to ERC directive
due to the loan condoned by PSALM (Power
Sector Assets and Liabilities Management).
In November billing, read and bill system
was also implemented. The read and bill
system phased out the conventional way
of reading and billing of kWh meters.
In the read and bill system, meter readers
use Psion computers. Breakdown and computation
of rate for the current month is already
programmed in the Psion computer. Upon
reading the kWh meter, the meter reader
could immediately print the bill. The
unbundled rate, account name and address,
the total bill to be paid and the name
of the meter reader are stated in the
billing statement. Consumers could immediately
pay their bills in the nearest ISECO
offices in their area. The nine-day
grace period was also implemented, which
means that after the reading, the consumer
is given nine days before the due date
to pay their bills. Beyond the nine
days, a corresponding penalty for late
payment is already instigated. The penalty
was basically to discipline consumers
to do their responsibility by promptly
paying their bills.
2004, the effect of the implementation
of read and bill system was felt. Since
most consumers became aware of the penalty
for late payment, they now started to
paying their bills on time to avoid
being penalized. On the part of the
Coop, it was no longer difficult to
collect fund to be paid to the power
supplier (formerly National Power Corporation
now San Miguel Electric Corporation)
and for the transmission company (formerly
Transmission Company now National Grid
Corporation). The Coop lessened its
administrative expenses because there
was no longer a need to hire for collectors.
Meter Readers are now utilized for other
duties after the reading period.
2005, the rate reduction of P0.08752/kWh
implemented in 2003 was raised to P0.1408/kWh
for residential consumers, which was
refunded through deducting the amount
on the electric bill. Other types of
consumers such as commercial type, public
buildings, irrigation, etc. were also
given a corresponding rate to be refunded.
was also the year when the TOU rate
system of NPC was implemented. The TOU
(Time of Use) is real-time rate charging
of electricity. There are corresponding
rate per hour, taking for example, electricity
is cheaper during off peak hours (during
those hours when only few are using
electricity, like midnight or dawn)
and electricity is more expensive during
peak hours(during those hours when many
are expected to use electricity, like
in noon time and from 7:00 P.M. to 9:00
P.M.). Somehow, ISECO was able to save
because of that rate system.
this year, unfortunately, ISECO was
included in the implementation of the
EVAT (Expanded Value Added Tax). Since
then, all transactions made to the Coop
like paying bills, sales of service
drops, sales of meter seals and other
gadgets, penalties, service fees and
others are added with 12% EVAT. Of the
total power purchased from the supplier,
its tax (EVAT) are to be paid in full
to the government whether the Coop could
collect it or not from the consumers
which makes it more difficult to cope;
as for a fact, many consumers do not
pay their bills on time. Therefore,
the taxes supposed to be collected from
them will be paid by the Coop in advance
to the BIR.
December 9 of the same year, ISECO applied
for renewal of franchise through a public
hearing conducted at ISECO Main Office
Board room, Bigbiga, Santiago, Ilocos
Sur. The Coop applied for another twenty
(20) years of franchise.
2007, on January 12, ISECO signed with
the TRANSCO (Transmission Company, state-owned
company) re-divestment of the Sub-transmission
assets which involves the sale of San
Esteban to Narvacan junction old 115
KV line, the San Esteban to Narvacan
Tower 21, take off to ISECO Sub-station,
and the Bantay to Sto. Domingo 69 KV
line TL with a total number of 420 structures
and span of 42.03 circuit kilometers,
with a total sale value of P48.7 M.
permanent building was also constructed
for Sta. Cruz Sub-office.
this year, there was again rampant stealing
of electricity so the Coop pushed through
in continuing the meter clustering program.
was a successful year for the Cooperative
because it was able to maintain its
A+ category: excellent collection efficiency
and lower system loss. A permanent building
was also put up for Cabugao Sub-office.
The San Juan Sub-office which was being
rented was then transferred to the Cabugao
this year, the issue of whether the
Coop should register with CDA or remain
under the roof of NEA was a hot discussion
amongst the member-consumers. Management
benchmarked with other cooperatives;
they conducted extensive study and research.
After weighing all the facts, Management
decided to stay with NEA because the
NEA had taken good care of the ECs under
its roof and so far, the Coop is so
much satisfied with how the NEA manages
the ECs. Management sent employees to
educate member-consumers of the pros
and cons in registering with the CDA/staying
with the NEA.
Coop also launched the book outreach
program titled, "Quenching the
thirst for knowledge." This program
was in collaboration with Kauai Island
Utility Cooperative, Inc. (Kauai, Hawaii).
Aside from reference books, other learning
kits such as coloring books and activity
books were distributed. ISECO also gave
colored TVs and DVD players as additional
learning tools for pupils. Six public
elementary schools were initial beneficiaries.
2009, the Cooperative celebrated its
35th Founding Anniversary.
January 26 a Prompt Payer Raffle Promo
was conducted wherein all consumers
who promptly paid their bills from January
2008-December 2008 were automatically
included in the draw. 600 winners were
picked and were given original Compact
May of this year, the Energy Regulatory
Commission conducted an RSEC-W (Wheeling
Rates) hearing in ISECO Main Office
regarding its current rate. It was assessed
that the current rate of ISECO had not
been changed for 10 years and unfortunately
in 2003, its rate was reduced. The Commission
found out that the current rate is no
longer sufficient to effectively run
its operation. ERC decision has not
yet been released.
April, General Manager Cesar G. Gironella
reached his 60th birthday, however,
due to exemplary performance, Management
initiated a petition to the Board to
extend his services (beyond 60 years
old, exemplary performing general managers
could still be extended in their service).
The Board, through a resolution, extended
his service as General Manager; this
resolution was approved by the NEA.
40th Anniversary, entitled "Greenlight@40",
aims to create environmental awareness
and to relive the colorful evolution
of rural electrification program in
the Philippines, ISECO conducted four
programs which were: tree-planting activities,
massive tapping to new connection applicants
(in contribution to the 40,000, 000
house connection program of NEA), Brigada
Electric Check (checking of wiring connections
of schools to ensure safety) and story-telling
of the conceptualization and evolution
of the rural electrification program.
Coop again continued the book outreach
program, "Quenching the Thirst
for Knowledge" wherein more than
twenty public elementary and high schools
were given books and learning kits.
that year, the NEA also released a directive
to all ECs regarding the new qualification
for those who would be running for Board
Directorship, which is to attend at
least two Annual General Membership
Assembly within five years prior to
the filing of certificate of candidacy.
The implementation date of this directive
would be January 1, 2012, so the Coop
immediately conducted massive information
regarding this through the Coop newsletter,
radio stations and meetings with the
in 2009, the Coop implemented giving
free kWh meters to all types of new
28, 2009 marks another milestone for
the Cooperative because this was the
day when Dinwede West, Cervantes, the
last barangay unreached by electricity
was energized. Ilocos Sur has now energized
is an electric distribution utility
with franchise area covering the whole
province of Ilocos Sur with 32 municipalities
and 2 cities namely: Alilem, Banayoyo,
Cabugao, Caoayan, G. Del Pilar, Lidlidda,
Magsingal, Nagbukel, Narvacan, Quirino,
San Emilio, San Esteban, San Ildefonso,
San Juan, San Vicente, Santa, Santiago,
Sinait, Sta. Catalina, Sta. Maria, Sto.
Domingo, Tagudin, Vigan City and Candon