SC clears way for Davao Light expansion in Davao del Norte

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The Supreme Court en banc denied Nordeco’s motion for reconsideration challenging the expansion of Davao Light’s franchise under Republic Act No. 12144.

In a resolution dated April 29 and made public over the weekend, the Court also denied and dismissed Nordeco’s petitions involving the expropriation of its distribution assets in Samal, Tagum City and several municipalities of Davao del Norte.

SC: franchise is not an exclusive territory

The Court reaffirmed its earlier finding that Congress has the authority to expand Davao Light’s franchise into areas covered by another public utility’s franchise.

A franchise, it said, is a privilege granted by the State, not an exclusive ownership right over a particular service area.

Congress may also amend, change or revoke a franchise when the common good requires it.

The Court found no violation of Nordeco’s right to due process, noting that Congress had extensively deliberated on the proposed expansion and that Nordeco was given opportunities to participate in the legislative process.

It also ruled that the expansion did not violate Nordeco’s existing contracts with its power suppliers.

Nordeco assets may be taken — with compensation

The ruling also addresses one of the most contentious parts of the transition: the fate of Nordeco’s distribution infrastructure.

The Court affirmed that Davao Light may acquire through expropriation distribution assets reasonably necessary to efficiently maintain and operate electricity services within its expanded franchise.

This means the ruling does not simply hand Nordeco’s assets to Davao Light. The transfer remains subject to the judicial process governing expropriation and compensation.

“As we move forward, our priority remains the same — to provide safe, reliable and dependable electric service to the communities we serve,” Tia said.

He said Davao Light will continue working with government agencies, local governments and other stakeholders to ensure the transition is carried out in an orderly manner.

The real test begins now

The expansion covers communities that have long dealt with questions surrounding the quality, cost and reliability of power service.

The real measure of the transition will therefore be felt not in courtrooms but in homes, businesses and communities.

Consumers will ultimately want to know whether the change will mean fewer outages, quicker restoration, better customer service and electricity rates that remain fair and transparent.

For consumers, the harder test is whether the promised benefits of the expansion will actually reach their electric meters.

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