President Ferdinand "Bongbong" Marcos, Jr. vetoed House Bill No. 10554 or an Act Expanding the Franchise Area of Davao Light and Power Company, Inc.
In a letter addressed to the Senate, President Marcos said he is constrained to veto the bill due to the susceptibility of the proposed expansion of the franchise area of Davao Light and Power Company, Inc. to 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, Inc.
"North Davao Electric Cooperative, Inc. has existing franchises in the expanded franchise area 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," the President wrote.
The President also mentioned that “Echoing the declared national policy in Presidential Decree No. 269, the total electrification of the Philippines remains vital to the welfare of our people and the sound development of the Nation. I remain committed to the pursuit and attainment of this objective 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.”
The National Electrification Administration (NEA), which vehemently opposes the bill, also asserted Section 27 of EPIRA on its position paper sent to the Committee of Legislative Franchises. NEA said that Tagum City, the Island Garden City of Samal, Asuncion, Kapalong, New Corella, San Isidro and Talaingod in Davao del Norte, and Maco in Davao de Oro will remain with NORDECO as the cooperative has still 11 years before its franchise expires.
Moreover, the President added in his veto message that "the resulting repeal of North Davao Electric Cooperative, Inc.'s franchise over the expanded franchise area will violate the non-impairment clause as provided in Section 10, Article III of the 1987 Constitution. As acknowledged by the bill, North Davao Electric Cooperative Inc. has "existing power supply agreements with generation companies that are provisionally or finally approved by the Energy Regulatory Commission" that will necessarily be terminated or impaired upon the resulting repeal of North Davao Electric Cooperative Inc.'s franchise over the expanded area.”
Furthermore, the bill, while on its face, amends the franchise of another entity over the expanded area, is 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."
NEA Administrator Emmanuel Juaneza expressed his gratitude to the President for the veto of the bill. "We thank the President for upholding the existing NORDECO franchise," the Administrator said.
NEA attended various public hearings in the House of Representatives and the Senate to oppose HB 10554. The agency defended the franchise of NORDECO, a vital partner of NEA in achieving total electrification and sustainable rural development in the country.
