Last February, the Philippine Senate approved on third and final reading Senate Bill No. 2888, which seeks to expand the franchise area of Davao Light and Power Company, Inc. (Davao Light).
This legislative measure proposes to include Tagum City, the Island Garden City of Samal, and the municipalities of Asuncion, Kapalong, New Corella, San Isidro, and Talaingod in Davao del Norte, as well as the municipality of Maco in Davao de Oro, into Davao Light’s service coverage.
The bill also aims to address the persistent power outages and high electricity rates experienced in these areas under the current provider, Northern Davao Electric Cooperative (Nordeco).
Consumers have welcomed the bill’s passage, seeing it as a step toward reliable and affordable electricity. The Davao Consumer Movement stated that residents are eager for change after years of costly, unstable power.
With the Senate’s approval, the bill now awaits President Marcos’s signature to be enacted into law.
(Also read: What SAIDI and SAIFI Mean for Consumers)
A comparison of services
During a Senate plenary session in January, Senator Juan Miguel Zubiri pointed out that electricity rates under Nordeco were P3 to P4 higher compared to those charged by Davao Light.
When it came to outage durations, Senator Zubiri cited Department of Energy (DOE) data to highlight the difference between providers. He noted that Davao Light averaged 209 minutes of outages per year—about 17 minutes per month—while Nordeco experienced 242 minutes per month.
Even the frequency of blackouts showed a stark contrast. Zubiri noted that while Davao Light faced around three power interruptions per year, Nordeco experienced nearly five each month.
In an opinion piece by Jake Maderazo, it was mentioned that Senators Zubiri and Pimentel were surprised that Nordeco received a Double A rating from the National Electrification Administration (NEA) despite its service issues. Pimentel questioned how cooperatives with lower ratings might be performing, given Nordeco’s 242-minute monthly outage average.
Maderazo further emphasized that Filipino households typically allocate 14 to 30% of their expenses to housing and utilities, depending on location and development. This means that such costs, including electricity, take up a large share of the household budget.
Because of this, Maderazo raised the question of whether power distributors are making the right investments to ensure long-term stability and reliability in electricity supply. A key measure of this commitment is whether their financial decisions result in tangible improvements in outage duration, outage frequency, and overall electricity costs.
A second attempt
But this isn’t the first time lawmakers and consumers have pushed for Davao Light’s expansion. In 2022, President Ferdinand Marcos Jr. vetoed the initial attempt to extend Davao Light’s franchise area.
His reasons for vetoing the bill included concerns that it would violate Nordeco’s franchises, which remain valid until 2028 and 2033. He pointed to the Electric Power Industry Reform Act’s (EPIRA) requirement that franchises run their full terms and warned that changing Nordeco’s rights prematurely would breach the Constitution’s non-impairment clause.
However, in a landmark decision last July 2024, the Supreme Court of the Philippines upheld MORE Electric and Power Corporation’s franchise expansion into areas served by an electric cooperative. It dismissed the Iloilo Electric Cooperative, Inc. I, II, and III’s (ILECOs) petition against Republic Act No. 11918, which allowed MORE Power to operate in 15 municipalities and one city in Iloilo province.
The Court emphasized that, according to the 1987 Constitution, franchises granted for public utilities are not exclusive. It stated that a franchise is a privilege granted by the state and must serve the common good as determined by Congress.
A key factor in the decision was the promotion of healthy competition, as MORE was capable of offering lower energy rates and potentially better services.
Refiling the bill
Davao del Norte Rep. Pantaleon “Bebot” Alvarez refiled the Davao Light Franchise Bill, aiming to bring affordable, reliable power to his province. The bill will then be finalized, endorsed by congressional leaders, and sent to the President for approval.
“Umaasa po kami ngayon na sana mabigyan ng tamang gabay si Pangulong Marcos na magdesisyon ng tama at huwag na niyang i-veto. Isipin naman niya ang kalagayan ng taong bayan at hindi lang yung kooperatiba na napatunayang hindi kaya solusyunan ang brownout at mahal na singil ng kuryente sa amin (We are now hoping that President Marcos will be properly guided to make the right decision and not veto the bill. He should consider the situation of the people, not just the cooperative, which has been proven incapable of solving power outages and high electricity rates in our area.),” Alvarez said.
He stressed that power issues affect everyone, especially businesses. He pointed out that blackouts disrupt hospitals and education while risking lives.
“With this bill becoming into a law, investors will be encouraged to locate in the First District of Davao del Norte. Where the supply and distribution of electricity will be much more reliable, businesses will flourish. At dadami sigurado ang may trabaho dito sa probinsya (More jobs will be created here in the province),” he added.
(Also read: Davao Light franchise bill will boost investment and address power issues–Alvarez)
Nordeco’s appeal
Last month, Nordeco urged the President to reject the bill through a formal letter.
Meanwhile, a Davao Light official stated that the company is open to discussions with Nordeco for a seamless transition if the franchise expansion is approved.
“We will be there to sit down with the existing NORDECO once we transitioned and talk about, we also need employees and they have their existing employees, they have their resources, the assets, the hardware is there, so we will sit down together with them and discuss this thoroughly for a smooth transition anyway at the end of the day we have a common interest which is to really serve the customers better,” explained Davao Light President and Chief Operating Officer Enriczar Tia.
In his article, Maderazo explained that frequent blackouts and high electricity costs justify consumers demanding better service, whether from the current provider or a new one. Understanding metrics “gives us the ammunition to debunk propaganda and effectively argue — on objective terms — for the changes we would want to see,” he concluded.
Sources:
https://opinion.inquirer.net/181574/a-power-sector-alphabet-soup
https://sc.judiciary.gov.ph/sc-exclusive-franchises-are-prohibited-by-the-constitution
https://www.philstar.com/business/2025/01/27/2417048/no-more-exclusive-franchises
https://edgedavao.net/latest-news/2025/03/enactment-of-bill-expanding-franchise-of-davao-light-to-lure-investors-alvarez
https://edgedavao.net/latest-news/2025/03/davao-light-willing-to-sit-down-with-nordeco/
https://www.sunstar.com.ph/davao/consumer-groups-residents-back-house-approval-of-davao-light-franchise
