PBBM vetoes bill expanding Davao Light’s franchise

By Ruth Abbey Gita-Carlos

July 28 2022, 5:40 pm

MANILA – President Ferdinand Marcos Jr. has vetoed the enrolled bill expanding the franchise area of Davao Light and Power Company (DLPC) in Davao del Norte, Malacañang announced Thursday.

“The president vetoed the bill proposing to expand the franchise of the Davao Light and Power Company due to, among others, its susceptibility to infringe on the franchise coverage area of the North Davao Electric Cooperative,” Press Secretary Trixie Cruz-Angeles said in a statement.

The Office of the Press Secretary also released a copy of Marcos’ veto message.

In a letter sent to Congress, Marcos said he is returning enrolled House Bill (HB) 10554 without his signature because of the "susceptibility" of the proposed expansion.

HB 10554 expands the franchise area of DLPC, an Aboitiz Power firm, by including Tagum City, the Island Garden City of Samal (Igacos), Asuncion, Kapalong, New Corella, San Isidro, and Talaingod in Davao del Norte.

The said areas are currently covered by the Northern Davao Electric Cooperative (Nordeco).

To date, the franchise area of DLPC only covers Davao City and Panabo City, Carmen, Dujali, and Sto. Tomas in Davao del Norte.

The bill will grant Davao Light an expanded franchise area for 25 years, which aims to ensure the continuous and uninterrupted supply of electricity in the said areas.

While he recognized the "laudable" intent of the bill, Marcos said he is constrained to veto the bill because of its "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."

"North Davao Electric Cooperative Inc. has existing franchises in the expanded franchise which will subsist until 2028 and until 2033. The bill runs counter to the provisions of Section 27 of Republic Act No. 9136 or the EPIRA mandating that 'all existing franchises shall be allowed to their full term,'" Marcos said.

Marcos also explained that the "resulting repeal" of North Davao Electric Cooperative Inc.'s franchise over the proposed DLPC's expanded franchise area "will violate the non-impairment clause as provided in Section 10, Article III of the 1987 Constitution."

He added that the bill even acknowledged that North Davao Electric Cooperative Inc. has "existing power supply agreements with generation companies that are provisionally or finally approved by the Energy Regulatory Commission."

The existing deals, Marcos said, "will necessarily be terminated or impaired" upon the resulting repeal of North Davao Electric Cooperative Inc.'s franchise.

"Furthermore, the bill, while on its face, amends the franchise of another entity over the expanded area, is a prohibited collateral attack on North Davao Electric Cooperative Inc. franchise. This is contrary to a jurisprudentially settled doctrine that a franchise cannot be subjected to a 'collateral attack,'" Marcos said.

Marcos, nevertheless, emphasized that he remains committed to the total electrification of the country "in a vigorous and systematic manner, with utmost respect for the concomitant rights of the public service entities engaged in supplying electric service, as well as the consumers thereof." (PNA)