Supreme Court Upholds Constitutionality of Davao Light Expansion Act
The Supreme Court of the Philippines has firmly upheld the constitutionality of Republic Act No. 12144, affirming the validity of the Davao Light Expansion Act. This decision dismisses petitions that sought to nullify the law, which expands the franchise of Davao Light and Power Company (Davao Light) into territories previously served by Northern Davao Electric Cooperative (Nordeco).
Legal Ruling and Constitutional Compliance
In a Notice of Resolution dated January 14, 2026, under G.R. Nos. 280275 and 280734, the High Court ruled that the title of RA 12144 complies with Section 26(1), Article VI of the Constitution. This section requires that a law embrace only one subject, which must be expressed in its title. Petitioners had argued that the measure's title failed to reflect provisions affecting Nordeco's existing franchise, including asset valuation, escrow arrangements, and potential surcharges.
The High Court disagreed, explaining that the law's title sufficiently states its general subject—the expansion of Davao Light's franchise area—and is not required to serve as a detailed index of all its consequences. The Court declared, "All told, the title of Republic Act No. 12144 conforms with Section 26(1), Article VI of the Constitution," and dismissed the petitions, effectively denying Nordeco's supplemental petition and application for a temporary restraining order (TRO).
Background of the Franchise Dispute
Republic Act No. 12144, which lapsed into law in April 2025, amended Davao Light's legislative franchise to include Tagum City, the Island Garden City of Samal, and several municipalities in Davao del Norte and Davao de Oro. These areas had long been under Nordeco's distribution coverage. The passage followed years of public debate over electricity reliability in parts of northern Davao, with local government officials, business groups, and consumer advocates raising concerns over recurring outages and the need for stronger capital investments in distribution infrastructure.
Proponents of the expansion argued that Davao Light, backed by the Aboitiz group, possesses the financial capacity and technical resources to modernize facilities and improve service quality. Nordeco, however, challenged the law before the Supreme Court, asserting that it undermined its existing franchise rights and raised constitutional and due process concerns, claiming encroachment on its service territory and impacts on assets and contractual obligations.
Regulatory Developments and Consumer Reactions
While the legal dispute was pending, regulators and Davao Light moved forward with preparatory measures. In December 2025, the Energy Regulatory Commission (ERC) granted provisional authority for Davao Light to begin connecting customers in the newly expanded franchise areas under RA 12144. This allowed the company to start accepting applications and preparing distribution facilities, though full implementation depends on negotiations with Nordeco regarding asset valuation and transfer arrangements.
Following the Supreme Court's ruling, the Davao Consumers Movement issued a statement expressing support, welcoming the decision as a turning point that prioritizes consumer welfare and opens the possibility of improved service standards. They highlighted expectations for more stable power and world-class service at affordable rates.
Nordeco's Response and Economic Implications
On February 21, Nordeco released a statement reiterating its commitment to continue delivering service to its entire franchise area until 2028 for the mainland and 2033 for the Island Garden City of Samal, while acknowledging Davao Light's operation subject to legal requirements. The cooperative emphasized that its franchise was not revoked and cited similarities with other electric cooperatives operating within shared areas.
Energy analysts note that the Davao region's economic growth, driven by agribusiness, commerce, and urban expansion, requires dependable electricity supply to attract investments and sustain industrial activity. The inclusion of Tagum City and other municipalities under Davao Light's franchise is expected to promote infrastructure upgrades, such as new substations, feeder lines, and digital monitoring systems, with Davao Light planning capital-intensive improvements pending regulatory approval and asset turnover processes.
