ERC Grants Provisional Authority to Davao Light for Expanded Franchise Operations
The Energy Regulatory Commission (ERC) has officially stated that Davao Light and Power Co. is authorized to commence operations in its newly expanded franchise areas. This decision comes after the commission granted the utility provisional authority, directly addressing and countering claims made by the Northern Davao Electric Cooperative (Nordeco) regarding the uncertainty of Davao Light's mandate.
Certificate of Public Convenience and Necessity at the Heart of the Dispute
Central to this ongoing controversy is Davao Light's application for a Certificate of Public Convenience and Necessity (CPCN). This permit is essential for electric utilities to fully operate within a designated service area. The ERC, which regulates power rates and oversees utility expansions to ensure reliable service and consumer protection, has been evaluating this application through a process that includes public hearings along with technical and financial assessments.
Nordeco has consistently argued that Davao Light's CPCN application remains under review and has not yet received final approval. However, in a significant development during an en banc meeting on December 12, 2025, the ERC granted Davao Light provisional authority. This move allows the company to initiate limited operations while its full CPCN application continues to undergo comprehensive evaluation.
Legal Framework and Operational Scope Under Provisional Authority
According to ERC legal services director III lawyer Ma. Corazon C. Fines, who spoke during the meeting, "ERC granted provisional CPCN to Davao Light so they can already start operating in the area where they have already constructed the distribution system." Under this provisional authority and in alignment with Republic Act 12144, Davao Light is permitted to:
- Install power lines in the specified regions
- Accept new consumers within the expanded areas
- Process applications for new electrical connections
These activities are authorized in parts of Davao del Norte and Davao de Oro. The ERC has emphasized that this provisional authority does not constitute final approval and may be subject to modification or revocation based on the outcomes of ongoing regulatory proceedings.
Nordeco's Position and Legal Challenges
Nordeco has maintained a firm stance against Davao Light's expansion. The cooperative earlier advised its member-consumers not to transfer to Davao Light, asserting that the company's authority to operate in Davao del Norte and Davao de Oro remains provisional and is still facing regulatory and legal challenges.
In an advisory issued on January 20, 2026, Nordeco declared that it continues to be the legitimate distribution utility in the two provinces. This claim is supported by the pending review of Republic Act 12144 before the Supreme Court. Nordeco stated, "Ang balaod sa pag-expand sa Davao Light ngadto sa Nordeco franchise area, dili pa final kay gipasaka pa sa Supreme Court ang pag-question sa maong bala-udnon (The law expanding Davao Light's operations into Nordeco's franchise area is not yet final because its validity has been questioned before the Supreme Court)."
The legal landscape is further complicated by Republic Act 12144, which lapsed into law on April 6, 2025, expanding Davao Light's franchise into areas traditionally served by Nordeco. In response, Nordeco filed a petition before the Supreme Court in June 2025, seeking to declare the law unconstitutional and to halt its implementation through a temporary restraining order.
Additionally, lawmakers introduced House Bill No. 7006 on December 22, 2025, proposing a separate franchise for Nordeco to operate electric distribution systems in Davao del Norte and Davao de Oro, adding another layer to this multifaceted dispute.
Rising Power Rates in the Davao Region
As the franchise dispute continues to unfold, electricity rates in the region have also captured significant public attention. Davao Light's residential rate increased to P11.72 per kilowatt-hour for the billing period spanning January 11 to February 10, 2026. This represents an approximate rise of P2.01 per kWh compared to December 2025.
The utility attributed this increase primarily to higher generation costs from the Wholesale Electricity Spot Market and the implementation of the Green Energy Auction Allowance. These factors were partially offset by lower feed-in tariff charges.
Meanwhile, Nordeco posted the highest residential power rate in the Davao Region for January 2026. According to the Davao Consumer Movement, Nordeco's residential rate climbed to P14.81 per kWh from P12.70 per kWh in December, based on collected electric bills. Nordeco has yet to release its official rate for January, but consumer groups suggest that higher generation charges and elevated spot market prices likely contributed to this increase.
This situation highlights the complex interplay between regulatory decisions, legal challenges, and economic factors affecting consumers in the Davao Region.
