Northern Davao Electric Cooperative on Tuesday expressed opposition of proposed bills that aim to expand the franchise area of Davao Light and Power Company Inc.
Nordeco legal counsel Jeorge Rapista warned of a possible “constitutional crisis” if the four bills seeking to amend the franchise areas of electricity distributors in Mindanao were passed.
House Bill Nos. 5077, 6740, 6995 and 7047 proposed to expand Davao Light’s franchise area.
The bills were deliberated upon by lawmakers for its alleged violations to the Constitution and the Electric Power Industry Reform Act of 2001.
“The Constitution does not allow laws that impair contracts. With HBs 5077, 6740, 6995 and 7047, existing contracts of Nordeco will be substantially impaired. For example, power supply contracts will be servicing a much smaller franchise area,” said Rapista, who attended the session of the Committee on Legislative Franchises.
“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 said.
He said APEC Partylist Rep. Sergio Dagooc and PHILRECA Partylist Rep. Presley De Jesus agreed with his opinion.
The lawmakers noted 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 EPIRA which provided that “all existing franchises be allowed to their full term.”
Rapista said if the measures were passed into law, it would substantially amend the current franchises held by distributors such as the Nordeco, which is serving most of the municipalities and cities that were proposed to be transferred to Davao Light.
President Ferdinand Marcos Jr. vetoed an earlier version of the bill in 2022 for the possible “apparent overlap and possible infringement into the subsisting franchise, permits, and contracts previously granted to [Nordeco].”
The lawmakers proposed a series of measures such as adopting the right administrative process to review the franchises in question and an additional provision protecting the existing contracts of the concerned electric cooperatives.
