Ignite Power is lining up a five-year modernization of South Cotabato II Electric Cooperative’s (SOCOTECO II) power distribution network as part of a proposed joint venture that would give the company control of the cooperative’s distribution assets and a foothold in a service area covering about 200,000 member-consumer-owners.

The company said Sunday the planned investment will focus on rehabilitating aging facilities, upgrading equipment, reducing power interruptions, and lowering system losses at SOCOTECO II.

Ignite Power Information Officer Jonathan Cabrera said the company would initially put up its own capital for the planned improvements.

“We will first spend our own money to improve services before seeking approval from the ERC for cost recovery,” Cabrera said, stressing that any future adjustment in distribution charges would still require regulatory approval.

Ignite is also targeting a reduction in system losses passed on to consumers to 5.5 percent, down from SOCOTECO II’s current 8.25-percent recoverable level.

The company plans to seek competitively priced power supply as part of efforts to keep generation costs in check.

The deal, however, must first clear a September plebiscite among the cooperative’s MCOs before it can proceed.

Under the Conditional Joint Venture Agreement, Ignite will acquire SOCOTECO II’s distribution assets, with 70 percent of the consideration to be paid in cash and the remaining 30 percent converted into SOCOTECO II equity in the proposed new distribution company.

The proposed overhaul comes as SOCOTECO II struggles with mounting financial and operational pressures.

SOCOTECO II Board Treasurer Jessie Alaban said the cooperative is losing more than P40 million a month, while its actual system loss has climbed to nearly 14 percent.

The Energy Regulatory Commission allows electric cooperatives to recover system losses of between 8.25 percent and 12 percent, depending on their classification.

Support for the joint venture has been building ahead of the September vote, with thousands of MCOs attending information and education sessions since Aug. 6 across General Santos City, Sarangani and parts of South Cotabato.

Around 200,000 MCOs are expected to decide on the proposed joint venture next month.

The vote follows the endorsement of roughly 32,000 members during SOCOTECO II’s annual general membership assembly on 25 July.