NORDECO fights for intact franchise area
CONSTITUTIONAL crisis is imminent should the bills seeking to amend the franchise areas of electricity distributors in Mindanao are to be passed.
This issue was raised by the legal counsel of the Northern Davao Electric Cooperative (NORDECO) during the hearing of the House Committee on Legislative Franchises, opposing the pending measures.
The committee is deliberating on House Bills 5077, 6740, 6995, and 7047 — all proposing to expand the franchise area of Davao Light and Power Company, Inc.(Davao Light).
According to Atty. Jeorge Rapista, legal counsel for NORDECO, the constitution does not allow laws that impair contracts.
With HBs 5077, 6740, 6995, and 7047, existing contracts of NORDECO will be substantially impaired, Rapista said.
APEC Party-list Rep. Sergio Dagooc and PHILRECA Party-list Rep. Presley de Jesus agreed with Rapista’s statement.
The lawmakers cited the Non-Impairment Clause (Article III, Section 10) under the 1987 Constitution as a key challenge to the bills, as well as Section 27 of the landmark energy legislation Electric Power Industry Reform Act (EPIRA) or RA 9137 which provided that “all existing franchises be allowed to their full term.”
Should the measures pass into law, it would substantially amend the current franchises held by distributors such as the Northern Davao Electric Cooperative (NORDECO), which is currently serving most of the municipalities and cities that were proposed to be transferred to Davao Light.
In 2022, President Ferdinand “Bongbong” Marcos Jr. himself already 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.
“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 added.
To date,NORDECO serves most of the municipalities and cities that were proposed to be transferred to Davao Light. On the other hand, Davao Light’s franchise area covers Davao City, areas of Panabo City anf the municipalities of Carmen, Dujali and Santo Tomas in Davao del Norte.
