The Court of Appeals (CA) has downgraded the administrative liability of the Negros Occidental Electric Cooperative (NOCECO) Board of Directors (BODs) almost two years after the National Electrification Administration (NEA) removed them from office over alleged grave misconduct.
In a decision dated January 15, 2026, the CA ruled that the board members failed to comply with NEA rules on the appointment of a general manager but committed only simple misconduct, not grave misconduct that would justify dismissal from service, in a ruling penned by Associate Justice Florencio M. Mamauag Jr.
NEA earlier removed the entire NOCECO BODs in a February 27, 2024 decision, following a motu proprio investigation that found them guilty of grave misconduct for appointing Engineer Ray V. Bustamante as general manager without complying with NEA Memorandum No. 2017-035.
The board members elevated the case to the CA, arguing that they acted in good faith and within the authority granted under NOCECO’s by-laws.
While the appellate court affirmed NEA’s supervisory and regulatory authority over electric cooperatives under Republic Act No. 10531, it found no evidence that the board members acted with willful intent to violate the law.
The CA pointed out that NEA itself had previously recognized Bustamante as NOCECO’s general manager through official communications, memoranda, and agreements—circumstances that could have reasonably led the board to believe they had authority to make the appointment.
“Grave misconduct that warrants dismissal from the service implies wrongful intention and not a mere error of judgment,” the CA said, adding that such misconduct must directly relate to the performance of official duties through maladministration or willful and intentional neglect.
The court added that the evidence failed to show that the petitioners acted with a willful intent to violate the law or deliberately disregarded established rules that would justify their dismissal from service.
The CA thus held the petitioners liable only for simple misconduct and imposed a 30-day suspension, modifying NEA’s earlier ruling.
The ruling reaffirmed NEA’s power of supervision over electric cooperatives but tempered the penalties imposed, drawing a clear distinction between grave misconduct and actions taken in good faith.
As of press time, the legal counsel for the NOCECO board members had yet to respond to the ruling.
Alleged fund mismanagement
In a separate case also pending before the CA, the NEA cited alleged unauthorized fund disbursements as additional grounds for the sacking of the NOCECO BODs, after an audit covering 2019 to 2023 found alleged violations of agency rules.
The audit found that board directors allegedly awarded themselves P65.53 million in allowances and benefits.
That NEA ruling also recommended the board members’ disqualification from reinstatement or reemployment in any electric cooperative, barred them from running as candidates for board director positions in any cooperative, and ordered the forfeiture of their monetary benefits.*
Reymund Titong is a Filipino journalist steadily building his voice in the field of news reporting, driven by a commitment to tell meaningful and relevant stories.
He serves as a correspondent for Rappler, maintains a personal blog on Medium, and is the communications officer of Hope Builders Organization Negros Island.