THE Northern Davao Electric Cooperative (NORDECO) has opposed four House bills proposing to expand the franchise area of the Davao Light and Power Company, Inc. (DLPC), saying it will violate the Constitution and the Electric Power Industry Reform Act (EPIRA) of 2001.
“The Constitution does not allow laws that impair contracts. With House Bills 5077, 6740, 6995, and 7047, existing contracts of NORDECO will be substantially impaired. For example, power supply contracts will be servicing a much smaller franchise area,” lawyer Jeorge Rapista, legal counsel for NORDECO, told the House Committee on Legislative Franchises on Monday.
Party-list Reps. Sergio Dagooc (APEC) and Presley De Jesus (PHILRECA) agreed with Rapista’s opinion, citing the non-impairment clause under Article III, Section 10 of the 1987 Constitution, as well as Section 27 of the EPIRA which provides that “all existing franchises be allowed to their full term.”
NORDECO said that if the measures are enacted, it would substantially amend the current franchises held by distributors currently serving most of the municipalities and cities that were proposed to be transferred to DLPC.
“If these HBs are passed it would create a disastrous precedent that can be abused. It encourages cutthroat behavior among competitors for the same franchise areas. Essentially, it overwrites the due process required by the EPIRA law to suspend or revoke franchise rights,” Rapista said.
DLPC currently serves Davao City and some parts of Davao del Norte, such as Panabo City and the towns of Carmen, Sto. Tomas and Braulio Dujali.
In 2022, President Marcos Jr. vetoed an earlier version of the bill on the same grounds, pointing to the “apparent overlap and possible infringement into the subsisting franchise, permits, and contracts previously granted to [NORDECO],” and called it a “prohibited collateral attack” on its franchise.
To address the legal challenges hounding the bills, lawmakers proposed a series of measures such as adopting the right administrative process to review the franchises in question, as well as an additional provision within the measures protecting the existing contracts of the concerned electric cooperatives.
Davao del Norte Rep. Pantaleon Alvarez this year refiled the measure now under HB 5077, which, like HB 6740 of Rep. Margarita Ignacia Nograles (PL, PBA), provides for the expansion of the DLPC franchise in Maco, Davao de Oro.
HB 6695, filed by Davao del Norte Rep. Alan Dujali and Davao de Oro Rep. Maria Carmen Zamora, seeks the inclusion of the Island Garden City of Samal (Igacos) in the DLPC’s franchise area.
Rep. Sandro Gonzles’ HB 7047 seeks to include Tagum City, Samal Island and the municipalities of Asuncion, Kapalong, New Corella, San Isidro and Talaingod in Davao del Norte and Maco in Davao de Oro in the service area of the DLPC.
