Nordeco to seek legal remedies over franchise areas

NORTHERN DAVAO Electric Cooperative, Inc. (Nordeco) said it will explore all legal options to defend its franchise areas following the passage of a law allowing Davao Light and Power Co. (DLPC) to operate in additional areas.

“Nordeco strongly opposes this law and shall pursue all available legal remedies to defend the sanctity of the cooperative’s franchises, the welfare of its member-consumer-owners, and the integrity of the rural electrification program,” the cooperative said in a statement over the weekend.

Republic Act (RA) No. 12144 allows Samal Island, as well as the municipalities of Asuncion, Kapalong, New Corella, San Isidro, and Talaingod in the province of Davao del Norte, and the municipalities of Compostela, Laak, Mabini, Maco, Maragusan, Mawab, Monkayo, Montevista, Nabunturan, New Bataan, and Pantukan in Davao de Oro, to be included in DLPC’s franchise areas.

House Bill No. 11072 lapsed into law on April 6 without the signature of President Ferdinand R. Marcos, Jr.

“The enactment of this law by the inaction of the President raises significant legal concerns, particularly regarding potential violations of established franchise boundaries, as the Supreme Court has declared that franchises are property rights under the constitutionally guaranteed due process clause,” Nordeco said.

The cooperative said that the law “directly affects” its contractual obligations in the areas as mandated by Presidential Decree No. 269 and reinforced by the Electric Power Industry Reform Act and RA No. 10531, known as the National Electrification Administration Reform Act.

“We urge our member-consumer-owners to keep calm, continue your support and patronage of the cooperative as this will pass and we can all overcome this challenge as we did in decades,” the cooperative said.

“Nordeco stands firm in its position to uphold its valid and existing franchises to protect the interests of the member-consumer-owners it serves. We will not yield even an inch of Nordeco’s franchises,” it added.

Nordeco, which serves parts of Davao de Oro and Davao del Norte, was established to provide electricity to urban and remote areas, based on its website. Its franchise area is adjacent to Davao Oriental Electric Cooperative, Inc. in the western part, Agusan del Sur Electric Cooperative, Inc. in the northern part, and privately owned DLPC in the eastern part.

DLPC, one of the distribution utilities of Aboitiz Power Corp., is the country’s third-largest electric distribution utility in terms of customers and annual kilowatt-hour sales.

It holds a legislative franchise to build, operate, and maintain a power system in Davao City, Panabo City, and the municipalities of Carmen, Dujali, and Santo Tomas in Davao del Norte for 25 years or until September 2025.

The franchise term was extended for another 25 years or until September 2050 under RA No. 11515.

Sought for comment, AboitizPower said it has yet to receive official communication from the Office of the President or the concerned national government agencies.

“In the meantime, we are staying focused on delivering reliable and affordable electricity across all areas we serve,” the company said. — Sheldeen Joy Talavera