Nordeco challenges Davao Light franchise expansion at Supreme Court

THE Northern Davao Electric Cooperative, Inc. (Nordeco) has elevated its legal battle to the highest court in the country in an effort to stop the implementation of Republic Act No. 12144, a law that transfers its franchise in Davao de Oro and Davao del Norte to the Davao Light and Power Company (Davao Light). 

On May 24, 2025, Nordeco filed a Petition for Certiorari and Prohibition with Prayer for a Writ of Preliminary Injunction and Temporary Restraining Order before the Supreme Court, asserting that RA 12144 is unconstitutional.

RA 12144, which lapsed into law without the President’s signature on April 6, expands the coverage area of Davao Light to include the cities of Tagum and the Island Garden City of Samal, as well as the municipalities of Asuncion, Kapalong, New Corella, San Isidro, and Talaingod in Davao del Norte, and Maco in Davao de Oro. These areas are currently under the cooperative’s franchise, which remains valid until 2028 and 2033, respectively.

Nordeco’s petition hinges on constitutional and legal arguments, particularly the claim that the passage of RA 12144 violated due process. 

The cooperative argues that it was not properly consulted nor given an opportunity to be heard before Congress passed a law that essentially reassigns its operational territory to a private company.

“Recourse to our Supreme Court, that has the power to review the acts of the legislative and the executive department, is the most appropriate action in the light of the inaction of the executive department, the President of the Philippines and the veto he exercised over similar measures as this R.A. No. 12144,” the cooperative said in its official statement.

The cooperative is also invoking the constitutional protection of franchise holders from impairment without due process. In its petition, Nordeco emphasized that its legislative franchise, granted under Republic Act 3843 and extended by subsequent laws, is still in force and effect. 

The cooperative also noted that the executive branch, through the Department of Energy (DOE), has not recommended the revocation or reassignment of its service areas, which contradicts the legislative move to carve out portions of its jurisdiction.

According to the electricity provider’s Acting General Manager Elvera S. Alngog, the cooperative was left with no choice but to resort to legal remedies to defend its mandate and contribute to the government’s total electrification program, which targets 100 percent nationwide electrification by 2028. 

She stressed that the cooperative remains steadfast in its service delivery and will continue to operate normally while awaiting the court's ruling.

The controversy surrounding the franchise expansion has drawn widespread public attention. On February 26, an estimated 8,000 individuals participated in simultaneous peace rallies in Tagum City and Davao City to protest the impending bill that has now become law. 

Organized by the Tagumpay ng Nordeco movement and various member-consumer-owner (MCO) groups, the rallies condemned what they labeled as an "unjust" and "corporate-driven" attempt to displace a long-standing electric cooperative that has been serving the region for over four decades.

Protesters expressed fears that the takeover could lead to job losses among Nordeco employees, delays in rural electrification projects, and potentially higher power rates in far-flung communities. They also raised concerns over Davao Light’s alleged lack of readiness to serve geographically isolated and disadvantaged areas (GIDAs), which comprises a significant portion of Nordeco’s service territory.

However, consumer advocacy groups such as Ilaw and the Davao Consumer Movement (DCM) welcomed the franchise expansion, citing persistent complaints about Nordeco’s service inefficiencies. These include frequent power outages, voltage fluctuations, and billing disputes. 

Davao Light, a subsidiary of Aboitiz Power, has been recognized for its relatively more stable service delivery in Davao City and nearby areas, fueling arguments for franchise realignment.

In a public hearing held in March 2025, the Energy Regulatory Commission (ERC) acknowledged that both Nordeco and Davao Light had submitted documents showing their respective investments in infrastructure and service improvements. 

The DOE, meanwhile, has maintained a neutral position, saying it will respect the outcome of the judicial review.

While the legal case proceeds, the implementation of RA 12144 hangs in the balance. DEF