The House Bill (HB) was earlier known as HB 9977 in its initial deliberation, but was later on amended and merged to the mother bill of DLPC franchise renewal HB10544.
HB10544 aims to expand the franchise area of Davao Light and Power Company, Inc. (DLPC) to “Construct, Operate and Maintain an Electric Light, Heat and Power System” in areas already serviced by Northern Davao Electric Cooperative (NORDECO).
It targets to widen the franchise area of DLPC by including the Cities of Tagum and 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.
The Power Bloc in its earlier statement expressed its opposition to the measure and emphasized its possible repercussions during the committee hearing.
Philippine Rural Electric Cooperatives Association (PHILRECA) party list representative Presley De Jesus manifested his disagreement, saying 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 Davao Region.
Association of Philippine Electric Cooperatives (APEC) Representative Sergio Dagooc maintained that 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 the NORDECO by refining its policies and power contract agreements rather than simply allowing another distribution utility to take over.
Likewise, Rural Electric Consumer and Beneficiaries of Development and Advancement (RECOBODA) Representative Godofredo Guya also said it will be violative to the constitutionally guaranteed right to equal protection of laws to the emaciated franchise area of NORDECO.
Apart from expanding the franchise area of DLPC, the measure also aims to revoke the franchise of NORDECO, which is yet to expire in 2033 in IGACOS and in 2028 in the mainland.
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.”
The party list representatives also explained that diminishing the franchise area of NORDECO will result in an increased electricity rate to the remaining areas under NORDECO due to the Stranded Contract Cost.
During the meeting, it was also noted that several stakeholders in the energy sector such as the Energy Regulatory Commission, Department of Energy, and the National Electrification Administration have yet to submit their position papers.
Despite the absence of input from these stakeholders, the measure was already referred to the Floor for Second Reading.
The group believed that there was unnecessary haste in forwarding the Committee Report for approval in the Plenary with no considerations of the insights from said institutions, the issues, concerns, and possible consequences of the measure to the end-consumers were not comprehensively discussed.
In its letter addressed to the house majority leader, the group urged the Committee on Rules to invoke Section 59 of the House Rules and requested that the measure be recommitted to the Committee on Legislative Franchises for further discussion.
NORDECO in an earlier statement emphasized the law which clearly recognizes the significant role of electric cooperatives to promote sustainable development particularly in rural areas.
“DANECO now NORDECO for several decades has been a partner of the government to perform this gargantuan task of implementing the rural electrification program of the government.”
The state shall encourage equity participation in public utilities by the general public, the statement read.
NORDECO also stated that the electric cooperative concept is the only way that people are owning an electric distribution utility.
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