THE Northern Davao Electric Cooperative, Inc. (Nodeco) penned an open letter to President Ferdinand R. Marcos Jr., dated January 30, 2025, opposing Senate Bill No. 2888/ House Bill No. 11072 to protect constitutional integrity, public interest, and rural electrification.
Nordeco stated that it wrote a letter to the president to draw his attention to a matter of "significant legal and constitutional importance -- the pending Senate Bill No. 2888/House Bill No. 11072 -- and to earnestly seek your support in preventing its passage."
The bill stated by Nordeco seeks to extend the Davao Light and Power Company, Inc. (DLPC) franchise into some areas in Davao del Norte and the entire Davao de Oro, which are at present served by Nordeco.
The electric cooperative cited that despite Marcos' earlier veto of HB 10554, which is similar to the pending bill, due to constitutional and legal infirmities, SB 2888/HB 11072 "proposes essentially the same contentious provisions, posing substantial risks to the rule of law, public policy objectives, and the welfare of vulnerable communities."
Constitutional violations and legal infirmities
Nordeco cited that among the bill's violations and legal concerns is the non-impairment of contracts, as Nordeco holds valid, subsisting franchises until 2028 (for the Mainland) and 2033 (for the Island Garden City of Samal).
"The proposed bill violates Section 10, Article III of the 1987 Constitution, which explicitly prohibits the impairment of contractual obligations. By enabling DLPC to effectively supplant Nordeco prior to the expiration of its franchises, Senate Bill No. 2888/House Bill No. 11072 amounts to an unlawful encroachment on a vested property right and contractually guaranteed franchise term," the letter stated.
The electric coop also cited that the proposed bill violates the Epira Law's Section 27 provision, which protects electric cooperatives by guaranteeing their franchises to full term.
"The proposed expansion of DLPC’s franchise flagrantly disregards this statutory provision. Allowing DLPC’s takeover of Nordeco’s territories would set a dangerous precedent of overriding laws that were enacted precisely to safeguard cooperative-led rural electrification efforts," it said.
Nordeco also claims the pending bill is a "collateral attack on a franchise," stating that established jurisprudence prohibits the collateral attack of an existing franchise.
"Franchises must be challenged only through direct legal action. By approving Senate Bill No. 2888/House Bill No. 11072, the legislature would authorize a prohibited collateral attack, undermining the fundamental legal principles governing public utilities and their franchises."
Economic and social consequences
Nordeco also cited the economic and social repercussions once the bill is passed into law. It stated that the proposed bill is a threat to rural electrification and the sitio electrification program (SEP).
"Nordeco has been an indispensable partner in the government’s total sitio electrification program, which aims to energize every household and barangay by 2028. To date, more than 80,000 households in 631 remote, financially unviable sitios under Nordeco’s jurisdiction remain to be electrified. Given DLPC’s historical performance — leaving 19% of its existing franchise area in Davao City unenergized even after decades of operation — there is little assurance that DLPC will prioritize these challenging rural areas," the letter stated.
It added that the expansion would thus leave thousands of families without electricity, which is a basic necessity, directly contradicting the President’s vision for comprehensive rural development.
Nordeco also claims that the proposed bill is an increased burden on consumers, stating that the acquisition of Nordeco's assets, the majority of which are funded by government subsidies and consumer equity, would drive up costs that DLPC would “inevitably pass on to its consumers.”
"This would result in higher electricity rates not only in the affected territories but also in DLPC’s original service areas," the letter stated.
It added that the loss of a community-focused cooperative structure in favor of a profit-oriented investor-owned utility would shift the emphasis away from public welfare toward corporate returns.
The electric coop also claims that the proposed law would result in the loss of jobs and community stability.
"Nordeco's displacement would lead to the termination of around 800 employees," it said, adding that for decades, these employees have supported their communities by ensuring consistent and affordable electric service.
It also said that the removal of their employees would destabilize countless families and erode local economic resilience, particularly in areas that are already struggling financially.
Lastly, Nordeco said the pending bill would result in the erosion of public trust in governance.
"The President’s veto of HB 10554 was a strong statement of his administration’s commitment to legal integrity, rural electrification, and equitable public service. By passing Senate Bill No. 2888/House Bill No. 11072, the legislature would appear to undermine that decision," the letter stated.
Nordeco added that this inconsistency could diminish public confidence in government decision-making and send the wrong signal regarding the administration’s policy direction.
National policy implications
Nordeco also claims that SB 2888/HB 11072 is inconsistent with the government’s overarching policy goals as it disregards the ongoing need for sitio electrification, undermines cooperative-based rural development, and disrupts the socioeconomic stability of underserved regions.
"While DLPC is a long-established entity, its business model has historically focused on financially viable areas. It is unlikely that the company would be willing or able to assume the same level of commitment to rural electrification that Nordeco has steadfastly maintained," the letter stated.
It added that the potential dissolution of Nordeco threatens to unravel decades of progress under the National Electrification Administration (NEA), which has long supported electric cooperatives as a means to bring affordable power to underserved areas.
"The disruption of this cooperative-based model would not only hinder the achievement of electrification targets but also jeopardize the livelihoods and development opportunities of rural Filipinos," it further stated.
Call for support
The letter ended with the electric cooperative stating that the stakes of this issue extend beyond a single franchise.
"At its core, this is about upholding constitutional protections, preserving public trust, and safeguarding the welfare of vulnerable communities. We, therefore, appeal to your esteemed office to lend its voice to the growing chorus of opposition against Senate Bill No. 2888/House Bill No. 11072. By doing so, you will reinforce the administration’s commitment to constitutional integrity, social equity, and sustainable rural development," it ended.
Signatories
The open letter was signed by the Task Force Northern Davao Power Board of Directors, led by Engr. Emmanuel B. Galarse, Chairperson, TFNDP/NEA Project supervisor to Nordeco; Dir. Alejandro C. Rodriguez, MD, vice chair; Dir. Ernido J. Malone, board secretary; Dir. Juliet M. Senario, board treasurer; Dir. Augusto S. Blanco, Jr., member; Dir. Napoleon Roberto C. Villarica, member; Dir. Nieljun C. Esdrelon, member; Dir. Alfonso A. Alvarez, member; Dir. Felix U. Sayon, Jr., member; the management of the cooperative headed by Elvera S. Alngog, MMPA, acting general manager; Josephine N. Armidilla, finance services manager; Marilou R. Impuesto, institutional services manager; Engr. Benedicto D. Ongking, technical services manager; Michelle A. Catoc, internal audit manager; Jolly Ann C. Kuan, manager, Corporate Planning & ICT; Engr. Hermilo C. Sunio, Jr., Area Services I manager (Davao de Oro); Engr. Nielo A. Japay, Manager, Area Services II (Tagum City); Demetrio L. Jagunos, manager, Area Services III (Davao del Norte); Engr. Jenifer B. Caspillo, Head, Task Force Igacos (Area Services IV); Dionisia R. Abaquita, Corporate Affairs & Communications manager;
and EC Allied Groups led by Rev. Angelico F. Cofreros, Jr., chairman, Coalition Against Privatization of Electric Cooperatives (CAPECs); FR. Freddie R. Barte, co-chairman of CAPECs; Rene Boy S. Abrea, National Center of Electric Cooperative Consumers, Inc. (NCECCO)-Northern Davao Chapter president; Leonardo B. Largo,
United Daneco Employees Welfare Association (Udewa) president; Christian Rex G. Almedral, Public Information Officer, CAPECs chairperson, Akbayan-Davao del Norte Chapter; Restituto Baliguat, spokesperson of Nordedo for People Ownership of Electricity Rights (N-Power); Lhorlyn Hiso-Estrada, MDMG, Friends of CAPECs; and Alvin Marquez, CAPECs member and president of Freedom from Debt Coalition-Southern Mindanao. CEA