House Bill 11072, which aims to expand the franchise area of Davao Light and Power Company (Davao Light), passed its second reading on December 10, 2024. This legislative move marks a significant step toward transferring service areas previously under the Northern Davao Electric Cooperative (NORDECO).
The proposed expansion covers Maco in Davao de Oro, along with Tagum City, Samal Island, and the towns of Asuncion, Kapalong, New Corella, San Isidro, and Talaingod in Davao del Norte.
A new provision, Section 21-A, has been introduced to guide the operational transition from NORDECO to Davao Light. To maintain electricity supply during the transition, NORDECO will temporarily manage the distribution system and honor current power supply agreements with approved generation companies. This interim arrangement, outlined in Section 1 of the Act, allows NORDECO to operate for up to two years until Davao Light assumes full control.
No power price hike
Davao City Councilor Louie John Bonguyan expressed confidence that Davao Light can manage the expanded franchise area without raising electricity rates. He said that last October, Davao Light assured him that rates in the provincial capital would not rise, citing cost efficiency from bulk electricity purchases. “They guaranteed na dili musaka ang atoang electricity rate diri sa Davao City (They guaranteed that there will be no rate increase in the electricity rate here in Davao City),” Bonguyan said.
He further explained that Davao Light had forecasted the energy needs of the expanded areas and confirmed sufficient supply, noting Mindanao’s electricity surplus, which also supports the Visayas region through interconnectivity. The councilor reassured residents that there would be no rotational blackouts or rate increases.
Assistant Secretary Romeo Montenegro of the Mindanao Development Authority (MinDa) echoed these sentiments, highlighting the advantages of private distribution utilities like Davao Light. “If the expansion covers an area being served by a private distribution utility, then most likely it can deal with an increasing demand in electricity,” he said. Montenegro added that private utilities have the financial flexibility to invest in infrastructure and services, unlike electric cooperatives, which operate on a non-profit basis.
NORDECO’s reaction
NORDECO expressed its disappointment after the bill was passed by the committee and is now set for a third reading before being presented to the full plenary for approval.
Additionally, the cooperative believes it has the right to operate within its current franchise areas until the end of its contract terms, with its agreements for Samal Island expiring in 2033 and De Oro in 2028.
The Philippine Rural Electric Cooperatives Association, Inc. (PHILRECA) also expressed concerns about the bill’s approval in the House of Representatives. The organization emphasized that electric cooperatives should remain community-owned, serving the interests of their member-consumer-owners rather than being controlled by corporations. “Allowing NORDECO, or any electric cooperative for that matter, to be a victim of a corporate take-over or privatization that sacrifices service over profitability is contrary to the State’s national policy,” it added.
Consumer group applauds bill’s approval
However, the Davao Consumer Movement celebrated the approval of the House Bill, calling it “a victory for the people of Davao del Norte and Davao de Oro.”
The movement has long advocated for the expansion of Davao Light’s franchise area, citing the subpar service and high rates from Nordeco as major issues. They credited local leaders and business groups for supporting the bill and pushing for improvements to the power supply.
Local residents echoed these sentiments. Joberth Campos from Kapalong, Davao del Norte, shared that the expansion would significantly improve life in the area. “The problem is that we have been experiencing frequent brownouts for so many decades now. Literal, substandard service. I think this is a good step that finally justice will be served to us, to the consumers.”
Belinda Torres, outgoing president of the Davao City Chamber of Commerce & Industry Inc. (DCCCII), called the bill “a significant milestone for the business community in our region.”
Torres explained that the expanded service area will support residential growth, meet the rising demand for housing, and boost economic activities. “Reliable and efficient power supply is crucial for economic growth, and this development will undoubtedly enhance business operations, attract more investments, and support the expansion of key industries,” she stated.
Sources:
https://manilastandard.net/news/314533246/davao-power-coop-slams-approval-of-hb-11072.html
https://www.facebook.com/PHILRECA.INC/posts/620192160338981
https://edgedavao.net/latest-news/2024/12/group-lauds-congress-for-bill-that-expands-franchise-area-of-davao-light/
