Davao Provinces Struggle Without Reliable, Affordable Power

November 6, 2025
Balitang Mindanao
Industry News
0

The Independent Electricity Market Operator of the Philippines, Inc. (IEMOP) has barred the Northern Davao Electric Cooperative (Nordeco) from the Wholesale Electricity Spot Market (WESM) starting September 25, 2025, following reports of an unpaid power debt reportedly totaling ₱318.4 million.

Under Clause 3.15.8 of the WESM Rules, IEMOP has suspended Nordeco for repeatedly failing to settle its energy obligations. The ban will remain until the electric cooperative (EC) clears its arrears and receives official notice ending the restriction. As mandated by the Electric Power Industry Reform Act (EPIRA), IEMOP is tasked to ensure an open and fair electricity trading system.

“Participation in WESM requires strict compliance with market rules and financial accountability,” stated the IEMOP. “Nordeco’s suspension highlights the consequences of non-settlement and reinforces the importance of transparency in the power sector.”

Nordeco rejected the advisory as “misleading” and urged its member-consumer-owners (MCOs) to disregard circulating reports. It asserted that it has brought the matter to the Supreme Court and local courts, claiming that negative social media posts were attempts to damage its reputation and sway judicial attention. However, IEMOP noted that the EC has yet to directly address its debt.

Data from the Davao Consumer Movement (DCM) showed that Nordeco’s outstanding debt was approximately ₱379.9 million as of August 31, the highest among all WESM participants, and had decreased slightly to around ₱337.6 million by late September.

Suspension threatens Davao’s power

Because nearly half of Nordeco’s power came from WESM as of July 2025, consumer groups and entrepreneurs in Davao del Norte and Davao de Oro warned that the suspension could worsen the region’s fragile electricity supply. Forced to rely solely on bilateral agreements, the EC may face rotational brownouts, higher costs, and reduced reliability for homes and businesses.

DCM criticized Nordeco for failing to inform consumers about its WESM suspension. The notice, posted on September 17, 2025, went unaddressed by the EC. “We demand that Nordeco clarify this matter,” declared DCM. “No clarification shows a lack of accountability, lack of transparency, and disrespect to the member-consumer owners.”

The group stressed that cooperatives have a basic responsibility to be transparent, particularly when decisions could directly affect electricity supply and service reliability. DCM pressed Nordeco’s management and board to explain the suspension, present a clear debt repayment plan, and ensure a steady electricity supply in the months ahead.

It further urged the National Electrification Administration (NEA) and the Energy Regulatory Commission (ERC) to scrutinize the EC’s finances and operations to safeguard consumer welfare.

(Also read: How Reliable Power Fuels Mindanao’s Rising Economy)

Ongoing customer frustration

Years of criticism for poor service, high rates, and chronic inefficiency have culminated in Nordeco’s suspension. Congressional data revealed that its customers pay ₱3 to ₱5 more per kilowatt-hour (kWh) than Davao Light and Power Company, Inc. (Davao Light) users, while facing roughly four hours of outages monthly, compared with just 17 minutes for Davao Light.

In 2024, several local governments, including Davao del Norte, passed resolutions urging the revocation of Nordeco’s franchise due to ongoing service failures.

These efforts resulted in the enactment of Republic Act 12144 (RA 12144) in April 2025. The law extended the franchise of Davao Light into territories previously served by the EC, transferring service rights for roughly 80,000 consumers. This includes areas in Davao del Norte—such as Tagum, Samal, Asuncion, Kapalong, New Corella, San Isidro, and Talaingod—and parts of Davao de Oro, including Compostela, Laak, Mabini, Maco, Maragusan, Mawab, Monkayo, Montevista, Nabunturan, New Bataan, and Pantukan.

But implementing the new law faces immediate hurdles, as Nordeco has challenged it in the Supreme Court. The High Court has yet to issue a ruling on the matter, leaving the EC’s future uncertain.

Nordeco’s WESM suspension also comes amid mounting opposition to its franchise renewal. The Tagum City Chamber of Commerce and Industry, Inc. (TCCCII) has joined calls to block the EC’s bid, saying that it has hindered local businesses and stifled economic growth.

TCCCII slammed Nordeco for “skyrocketing power bills, recurring outages, and unreliable service”, saying local businesses have had to replace damaged equipment and buy generators to stay operational. The group voiced support for Davao del Norte Governor Edwin Jubahib and recent provincial council resolutions blocking Nordeco’s franchise renewal.

“The Chamber believes that there needs to be a change in the power regime in Davao del Norte,” stated the group. “We cannot continue to operate business as is because it is simply expensive with Nordeco having the most expensive power rate in Davao Region and having to invest in modular generator sets.”

Additionally, TCCCII questioned Nordeco’s push for a new franchise despite unresolved problems. “The business community has been petitioning for Nordeco to change and resolve its issues, but it seems like our concerns have fallen on deaf ears,” it highlighted.

Meanwhile, Davao Light has begun preparing for its expanded franchise, including the ceremonial installation of 45 new poles in its new service areas and the groundbreaking of a digital substation and warehouse in Tagum. The company has also reportedly allocated ₱1 billion for the potential acquisition of Nordeco’s assets, pending the Supreme Court’s decision.

Nordeco has so far remained silent on the WESM suspension and has not responded to growing demands for accountability.

Samal joins calls for Nordeco to step down

The Samal Island Food Establishment Association (SIFEA) echoed these concerns, emphasizing that dependable electricity is vital for tourism and food safety, and voiced support for bringing in a “more capable distributor” to serve the island.

Samal Mayor Lemuel Reyes highlighted that the island is preparing for a surge in tourism, with around two million visitors recorded in 2024 and numbers expected to double by 2026 once the power supply stabilizes. He stressed the critical link between electricity and basic services. “Electricity is really our problem here. [Energy] goes hand-in-hand with water. Because if there’s no electricity, we don’t have water too. There are days when we experience brownouts,” he stated.

Power fluctuations in Samal are largely due to the island’s reliance on eight generator sets, Reyes said, noting that only four may be operational at times, resulting in daily outages of 30 to 50 minutes. He added that the generators are environmentally unsustainable and insufficient for reliable electricity.

“The problem is, when we have more guests, they don’t stay for more than one or three days. It’s a big loss for our tourism sector,” he lamented. “For example, [some people] book a place for three days. But after one day, they leave because the electricity is not good.”

Samal’s popular resorts and local businesses have suffered the most, with Nordeco’s unreliable service reportedly causing annual losses of ₱120 to ₱150 million, including around ₱50 million from the tourism sector alone.

The city hall has sought to lessen its dependence on the EC by using 400 kW of solar power during the day. The mayor’s office reported that this shift saves roughly ₱220,000 each month.

Despite current challenges, Reyes anticipates an improvement in the island’s power situation next year with the planned shift from Nordeco to Davao Light. This transition would reduce reliance on generators and allow for the integration of submarine cables. Reyes warned that continued dependence on unstable gensets could drive costs even higher, noting that residents are already paying over ₱10 per kWh on average.

Davao Light has pledged to lower electricity rates, with costs expected to drop to as low as ₱9 per kWh.

(Also read: Nordeco’s Samal Submarine Cable: A 6-Year Promise Still Out of Reach)

Better service for Davao consumers now

Manila Standard columnist Ray Eñano wrote that the ERC is set to play a crucial role in resolving pending electricity distribution issues. The commission plans to fast-track critical applications through summary proceedings to ensure reliable, affordable power and support the government’s push for total electrification.

ERC Chairman Francis Saturnino Juan said the move reflects the agency’s commitment to more efficient regulation. “We will do everything we can to accelerate the resolution of applications filed before the ERC,” he vowed. “Streamlining our processes is key to fulfilling our commitment to a more responsive and revitalized ERC.”

According to Eñano, the ERC could quickly settle Davao’s energy problem “by granting a Certificate of Public Convenience and Necessity to Davao Light. This would allow the company to take over Nordeco’s franchise area.”

He added, “Small-scale electric cooperatives may have outlived their usefulness, given the increasing electricity demand from an expanding population and technology advances.”

The columnist also believes the Philippines’ limited power supply and steep electricity costs remain major obstacles to building an inclusive and thriving economy. “Electricity consumers deserve a break,” he ended.

Sources:

https://www.sunstar.com.ph/davao/nordeco-suspended-from-wesm

https://www.sunstar.com.ph/davao/group-slams-nordeco-over-wesm-suspension