THE House of Representatives approved on second reading a bill expanding the franchise area of Davao Light and Power Company (DLPC) to other parts of the region covered by the Northern Davao Electric Cooperative (Nordeco).

The lower Congress passed on the second reading House Bill (HB) 10554 on Wednesday, December 1.

The proposed bill expands the franchise area of the AboitizPower subsidiary to include Tagum City, the Island Garden City of Samal (Igacos), Asuncion, Kapalong, New Corella, San Isidro, and Talaingod in Davao del Norte and Maco in Davao de Oro.

At present, the franchise area of Davao Light only covers Davao City and Panabo City, Carmen, Dujali, and Sto. Tomas in Davao del Norte.

HB 10554 was authored by Palawan Representative Franz Alvarez, Committee on Legislative Franchises chairperson, along with Mindanawon Representatives including Davao del Norte Representative Pantaleon Alvarez, PBA Partylist Representative Jericho Nograles, and Camiguin Representative Xavier Romualdo. Manila Fourth District Representative Edward Maceda also sponsored the bill.

The proposed law will be amending Republic Act No. 11515, which extends Davao Light's franchise to another 25 years.

The bill's purpose aims to provide continuous and uninterrupted supply of electricity in the franchise area.

Section 2 of the bill states, "To ensure the uninterrupted supply of electricity, the Nordeco, in the interim is authorized to operate the existing distribution system within its former franchise area, and implement its existing power supply agreements with generation companies that are provisionally or finally approved by the ERC [Energy Regulatory Commission] until the grantee establishes or acquires its own distribution system and fully takes over the operation in the franchise area."

"The Nordeco may operate not longer than the two (2) years from the approval of the expanded territory of this legislative franchise," Section 2 adds.

Alvarez, in an interview, has assailed Nordeco officials for its alleged continued inability to improve its poor service that has exacerbated the miseries faced by his constituents during the Covid-19 pandemic crisis.

He said the recall of Nordeco appeared to be the only solution that would put an end to the burden being faced by his constituents as a result of the “lousy service” of the cooperative.

Alvarez said he has filed a legislative measure proposing the cancellation of the legislative franchise granted by Congress to Nordeco.

Davao del Norte Governor Edwin Jubahib and Igacos Mayor Al David Uy also criticized Nordeco's inefficiency in providing a stable electric supply in the province.

Uy posted on his social media accounts about his frustrations with regards to the delayed construction of the submarine cable and substation projects. These projects are seen to improve the power situation on the island.

Nordeco, lawmakers opposes

Nordeco, in an issued statement, opposed HB 9978, the filed bill before it was converted into HB 10554.

Nordeco said that it was "hasty carried and approved even in the absence of the position papers from the Department of Energy, National Electrification Administration (NEA), and ERC," which are yet to be submitted by their respective representatives.

Lawyer Daniel Campoamor, the cooperative's representative and one of the legal counsels, cited reasons for its opposition to the bill.

Campoamor said the grant of franchise to DLPC is "blatantly" violating Article III, Section 10 of the 1987 Constitution; Republic Act (RA) 6038 or the National Electrification Administration Act; Section 27 of RA 9136 or the Energy Power Industry Reform Act (Epira); and Section 2 of RA 10531 or National Electrification Administration Reform Act of 2013.

He also said it does not adhere to the National Policy of the State specifically Section 2 of Presidential Decree No. 269, as amended that government officials should give tenable support to electric cooperatives like Nordeco.

In addition, the remaining 635 unenergized sitios in the mentioned municipalities "would be deprived of the government's mandate towards rural electrification as DLPC is ineligible of any subsidy from the government as provided for by law."

Campoamor also said that DLPC is after profit.

He also said Tagum City was once operated by private company Tagum Electric Company (Tagelco) but was assumed by Davao del Norte Electric Cooperative (Daneco), the former name of Nordeco, for failure to sustain its operation.

Nordeco's legal counsel also said power rate is inevitable, citing that the power rate and distribution charges should be compared and not the total bill, as the other charges are only passed through cost paid or remitted to the generation suppliers, transmission provider, and the Government.

The power Coop said they are "compliant" with the performance indicators set by NEA, ERC, and other regulatory bodies.

Contrary to allegations, Nordeco said they have "sufficient power supply for its franchise areas."

"Nordeco has a total contracted power supply of 112.50 megawatts (MW), which is more than enough to meet its 104-MW peak demand requirement," it said.

The cooperative said that while some political leaders in Davao del Norte attended the hearing, "the 230,000 member-consumer-owners of Nordeco were not given the opportunity to be heard."

"In this country where all businesses are owned by a few, the Electric Cooperative is the last piece of power that belongs to Juan de la Cruz. Nordeco belongs to its member-consumer owners! OPPOSE House Bill 9978!" Nordeco said.

In a letter addressed to the House Majority Leader, the Power Bloc questioned the “unusual haste” in the scheduling of HB 10554, considering that the initial deliberation was only held on November 29, a mere two days before its approval on Second Reading in the Plenary on December 1.

Philippine Rural Electric Cooperatives Association, Inc. Representative Presley De Jesus opposed the bill, stating that it would "constitute an unwarranted monopoly of distribution services, not just in the largest city in the Philippines in terms of land area (Davao City) but including the two provinces of this huge region.”

Association of Philippine Electric Cooperatives Representative Sergio Dagooc said granting DLPC a franchise in those areas covered by Nordeco’s franchise would diminish the invaluable efforts of the electric cooperative that served Northern Davao for decades.

He said it would be more sustainable to strengthen the services of Nordeco by refining its policies and power contract agreements rather than simply allowing another distribution utility to take over.

Recoboda Representative Godofredo Guya shared the same and added that it will be "violative to the constitutionally guaranteed right to equal protection of laws to the emaciated franchise area of Nordeco.”

Aside from expanding the franchise area of DLPC, the measure also aims to revoke the franchise of Nordeco, which will expire in 2033.

The Power Bloc stressed that the said measure is in violation of Section 27 of RA 9136 or Epira, which provides that “all existing franchises shall be allowed to their full term.”