Marcos stops Davao power firm’s franchise expansion | Inquirer News

Marcos stops Davao power firm’s franchise expansion

DAVAO CITY—President Marcos has vetoed the bill seeking to expand the franchise of the Aboitiz-owned Davao Light and Power Company (DLPC) due to its “susceptibility” to infringe on the franchise coverage area of the North Davao Electric Cooperative Inc. (Nordeco).

In his veto message addressed to the Senate and the House of Representatives on July 27, the President said Nordeco has existing franchises in the same areas, which will last until 2028 and 2033.


Had the measure become a law, DLPC would distribute electricity for the next 25 years in Tagum City, the Island Garden City of Samal, and the towns of Talaingod, Asuncion, Kapalong, San Isidro, and New Corella, all in Davao del Norte province where Nordeco also operates.

“I am constrained to veto the bill due to the susceptibility of the proposed expansion of the franchise area of Davao Light and Power Company Inc. to legal and/or constitutional challenge due to the apparent overlap and possible infringement into the subsisting franchise, permits, and contracts previously granted to North Davao Electric Cooperative Inc.,” Marcos said.


‘Collateral attack’

He pointed out that the proposed bill violated the provisions of Section 27 of Republic Act No. 9136, or the Electric Power Industry Reform Act (Epira), which mandated that “all existing franchises shall be allowed to their full term.”

Marcos also said that the resulting repeal of Nordeco’s franchise over the said areas would violate the nonimpairment clause under Section 10, Article III of the 1987 Constitution.

“Furthermore, the bill, while on its face, amends the franchise of another entity over the expanded area, is a prohibited collateral attack on (Nordeco) franchise,” he said. “This is contrary to a jurisprudentially settled doctrine that a franchise cannot be subjected to a ‘collateral attack.’”

The measure expanding DLPC’s franchise area was firmed up by the House of Representatives in January, and the Senate approved it by June. It had been pushed by Davao del Norte officials and consumer groups who clamored for lower electricity costs.

This month, DLPC sells electricity to residential customers at P11.6354 per kilowatt-hour while P15.9392 for Nordeco.

But Sen. Grace Poe on Thursday stood firm on the soundness of the approved franchise bill expanding the franchise area of DLPC, despite the grounds cited by Mr. Marcos in vetoing the measure.

In a statement, Poe, chair of the Senate committee on public services which sponsored the measure, said while they respected the President’s exercise of his veto powers, they disagreed with the grounds cited by Malacañang in the veto message.


“Congress made sure in the measure that the franchise expansion would not be violative of existing laws including the (Epira) and any constitutional or case law,” said Poe, who sponsored House Bill No. 10554 when it went through Senate deliberations in the 18th Congress.

Poe, in insisting on the validity of HB 10554, clarified that the Constitution allows franchise expansion through “amendment, alteration or repeal by Congress when the common good requires.”

Better service

“It is the people of Davao themselves who clamored for a new power provider as they have been held hostage by onerous power supply agreements entered into with less than due diligence,” she said.

The proposed expansion of DLPC’s franchise area is not a collateral attack, Poe said, but is purportedly a “response to the appeal of Nordeco’s customers for better power service.”

“The argument of ‘collateral attack’ on franchises may only apply in court or administrative proceedings where parties may otherwise attempt to strike down a law that is legally presumed to be valid,” she said.

In a phone interview, Sen. Sherwin Gatchalian, former chair of the Senate committee on energy, concurred with Mr. Marcos’ veto message, as the reasons cited were the same arguments he espoused in previous deliberations and grounds for abstaining from voting when the bill was passed in the Senate.

Gatchalian expressed concern that had the bill become a law, areas in the Davao region that would be left out of the DLPC franchise would deal with higher electricity rates.

Aboitiz Power Corp. said it was willing to work with the government despite the veto.

“Rest assured that we will cooperate with the relevant authorities and respond to their directions,” said AboitizPower president and CEO Emmanuel Rubio in a text message.

Nordeco, in a statement on Thursday, expressed gratitude to the President. “His recognition of the existing franchise of Nordeco shows his utmost respect for the laws of the land,” it said.

Nordeco vowed to “hold its ground and further improve its operations to ensure quality service” to its member-consumers.

Nordeco operates in Davao del Norte and Davao de Oro provinces while DLPC mainly distributes electricity in Davao City. In 1976, Panabo City and the towns of Carmen, Sto. Tomas and Braulio Dujali in Davao del Norte was added to the franchise area of DLPC.

A group of consumers in Davao del Norte has vowed to continue the crusade for lower power cost and push for the inclusion of their areas under the DLPC franchise.

Ave Rose Castillo, convener of the Davao Consumer Movement, said they were disappointed but confident that the President would eventually heed their demand.

“We are talking here of better services and affordable rates, two things that will not only impact on the economic growth of the province but more so on the livelihood of the majority of the residents,” Castillo said. —WITH REPORTS FROM JORDEENE B. LAGARE AND CHRIS V. PANGANIBAN

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Davao, Ferdinand "Bongbong" Marcos Jr., Marcos
For feedback, complaints, or inquiries, contact us.

News that matters

© Copyright 1997-2022 | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.