Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
EIGHTEENTH CONGRESS 
Third Regular Session 
HOUSE BILL NO. ___________ 
Introduced by HON. ALFREDO A. GARBIN, JR. 
EXPLANATORY NOTE 
This bill seeks to grant Davao Light Power and Company, Inc. (“Davao Light”) a 
franchise to establish, operate, and maintain, for commercial purposes and in the public 
interest, a distribution system for the conveyance of electric power to the end-users in the 
Municipality of Maco, in the Province of Davao De Oro and in the Municipalities of 
Asuncion, Kapalong, New Corella, San Isidro and Talaingod, and in the City of Tagum 
and Island Garden City of Samal, in the Province of Davao Del Norte (the “Franchise 
Area”). 
Currently, the electrical distribution in the Franchise Area is handled by the 
Northern Davao Electric Cooperative, Inc. (“NORDECO”), formerly known as Davao del 
Norte Cooperative, Inc. (“DANECO”). DANECO is an electric cooperative which was 
granted a franchise by virtue of Certificates No. 017 and 103 issued by the National 
Electrification Administration for a period of fifty (50) years from 1978 and 1983, 
respectively. It was organized to provide affordable and dependable electricity over the 
Franchise Area. In its 2019 Annual General Membership Assembly, consumer-members 
agreed to rename it into a unified entity as NORDECO. 
Over the years, NORDECO has suffered from losses and conflicting factions 
within the cooperative which have led to inadequate infrastructure, piling debts to 
service providers including power suppliers, cancelled power supply contracts, excessive 
systems losses and failure to energize parts of its franchise area even up to this time. With 
these inefficiencies in the delivery of power distribution services and failure to ensure the 
reliable supply of power, the Franchise Area continues to experience frequent power 
outages, while facing high power rates, thereby impeding economic development 
therein. Sadly, the Franchise Area has been left behind by its neighboring municipalities 
and cities, particularly, those within the franchise area of Davao Light, which have 
continued to enjoy stable electricity services. Thus, even as the Davao Region has been 
tagged as a fast growing economy (region-wise) and a primary growth center in the 
Southern Philippines, it is indeed unfortunate that the Franchise Area has lagged far 
behind.  
In order to alleviate the plight of constituents in the Franchise Area, and consistent 
with the government’s goals to pursue overall growth in Mindanao, the same 
constituents have clamored for their local governments to cause the betterment of electric 
services in the Franchise Area, particularly, by enabling Davao Light to take over as 
distribution utility therein. In the exercise of its power to promote the general welfare, 
enhance economic prosperity and social justice and preserve the comfort and 
August 16, 2021
2:42 pm
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convenience of inhabitants within the Franchise Area, the local governments in Davao de 
Oro and Davao del Norte have issued resolutions, in support of the takeover by Davao 
Light of the distribution services within the NORDECO franchise. 
Given its stature as the third largest privately-owned electric distribution utility in 
the country, with respect to customer size and annual kilowatt-hour sales, as well as its 
track record for excellent service, Davao Light possesses the required expertise to 
effectively and efficiently provide electricity distribution services in the Franchise Area. 
The operation by Davao Light of the electricity distribution services in the Franchise Area 
will redound to the greater good of residents in the Franchise Area and will bring about 
stable and reliable supply, and, ultimately, economic progress therein.  
The member-consumers in the Franchise Area have long been deprived of the 
stable and efficient delivery of a basic commodity, hence, it is high time that their call for 
change is heeded. Thus, as representatives of the constituents within the Franchise Area, 
their local governments have consolidated their call for the takeover by Davao Light of 
the Franchise Area and, accordingly, submit this bill for the grant to Davao Light of the 
exclusive franchise over the Franchise Area.  
In view of the foregoing, the approval of this bill is earnestly requested. 
HON. ALFREDO A. GARBIN, JR. 
AKO BICOL Party List 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
EIGHTEENTH CONGRESS 
Third Regular Session 
HOUSE BILL NO. ___________ 
Introduced by HON. ALFREDO A. GARBIN, JR. 
AN ACT 
GRANTING DAVAO LIGHT AND POWER COMPANY, INC. A FRANCHISE TO 
ESTABLISH, OPERATE AND MAINTAIN, FOR COMMERCIAL PURPOSES AND 
IN THE PUBLIC INTEREST, A DISTRIBUTION SYSTEM FOR THE 
CONVEYANCE OF ELECTRIC POWER TO END-USERS IN THE MUNICIPALITY 
OF MACO IN THE PROVINCE OF DAVAO DE ORO, AND THE 
MUNICIPALITIES OF ASUNCION, KAPALONG, NEW CORELLA, SAN ISIDRO 
AND TALAINGOD, AND IN THE CITY OF TAGUM AND ISLAND GARDEN 
CITY OF SAMAL, IN THE PROVINCE OF DAVAO DEL NORTE, AND ENSURING 
THE CONTINUOUS AND UNINTERRUPTED SUPPLY OF ELECTRICITY IN THE 
FRANCHISE AREA 
Be it enacted by the Senate and the House of Representatives of the Republic of the 
Philippines in Congress assembled:  
SECTION 1.    Nature and Scope of Franchise. Subject to the provisions of the 
Constitution and applicable laws, rules and regulations, there is hereby granted to Davao 
Light Power and Company, Inc., hereunder referred to as the grantee, its successors or 
assigns, a franchise to establish, operate and maintain for commercial purposes and in 
the public interest, a distribution system for the conveyance of electricity to the end-users 
of the Municipality of Maco in the Province of Davao de Oro, and the Municipalities of 
Asuncion, Kapalong, New Corella, San Isidro and Talaingod, and in the City of Tagum 
and Island Garden City of Samal, in the Province of Davao del Norte. 
As used in this Act, distribution system refers to the system of wires and associated 
facilities including subtransmission lines belonging to or used by a franchised 
distribution utility, extending between the delivery point on the national transmission 
system or generating facility and the metering point or facility of the end-user. 
SECTION 2.    Manner of Operation of Facilities. – All  electric distribution 
facilities, lines, and systems for electric services owned, maintained, operated, or 
managed by the grantee, its  successors  or assignees, shall be operated and maintained 
at all times in the best manner. It shall be the duty of the grantee, its successors or 
assignees, to continuously improve its facilities and employ the latest technology and 
innovations that promote eﬃciency and is beneﬁcial to consumers. It shall comply with 
the standards set by the Energy Regulatory Commission (ERC) such as those found in 
the Philippine Distribution Code, its resolutions, and other issuances. The grantee shall 
also implement measures required by the ERC, the Department of Energy (DOE), or their 
legal successors, or any other government agency concerned, to modify, improve, 
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upgrade, and change such facilities, systems, or the management and maintenance 
thereof. 
 
Whenever practicable and for purposes of maintaining order, safety, and 
aesthetics along highways, roads, streets, alleys, or easements, the grantee may allow the 
use of its poles, facilities, or easements by interested parties upon reasonable 
compensation to the grantee considering costs incurred to accommodate and administer 
the use of the grantee's facilities by such parties. The ERC shall resolve cases of dispute 
or disagreement between and among parties. 
 
SECTION 3.     Authority of the Energy Regulatory Commission. – The grantee 
shall secure from the ERC or any other government agency which has jurisdiction over 
the operation of the herein grantee, the necessary certiﬁcate of public convenience and 
necessity and other appropriate permits and licenses for the construction and operation 
of its electric distribution system. 
 
SECTION 4.    Excavation and Restoration Works. — For the purpose of erecting 
and maintaining poles and other supports for wires or other conductors for the laying 
and maintaining of underground  wires,  cables, pipes, or other conductors, the grantee, 
its successors or assignees, is authorized to make excavations or lay conduits in any of 
the public places, roads, highways, streets, lanes, alleys, avenues, sidewalks, or bridges 
of said province, cities and/or municipalities, subject to prior approval of the Department 
of Public Works and Highways (DPWH) or the local government units (LGUs) 
concerned: Provided, however, That any public place, road, highway, street, lane, alley, 
avenue, sidewalk, or bridge disturbed, altered, or changed by reason of erection of poles 
or other supports or  the underground laying of wires, other conductors or conduits, shall 
be repaired or replaced in workmanlike manner at the expense of the grantee, its 
successors or assignees, in accordance with the standards set by the DPWH or the LGU 
concerned. Should the grantee, its successors or assignees, after the ten (10)-day notice 
from the said authority, fail, refuse, or neglect to repair or replace any part of a public 
place, road, highway, street, lane, alley, avenue, sidewalk, or bridge that has been 
disturbed, altered, or changed by the said grantee, its successors or assignees, then the 
DPWH or the LGU concerned shall have the right to have the same repaired or replaced 
in good order and condition and charge  the  grantee,  its  successors  or assignees at 
double the amount of the costs and expenses for such repair or replacement. 
 
SECTION 5. Responsibility to the Public. — The grantee shall supply electricity 
to its captive market in the urban and rural portions of its franchise area in the least cost 
manner. In the interest of the public good, as far as feasible and whenever required by 
the ERC, the grantee shall modify, improve, or change its facilities, poles, lines, systems, 
and equipment for the purpose of providing eﬃcient and reliable service and reduced 
electricity costs. The grantee shall charge reasonable and just power rates for its services 
to all types of consumers within its franchise areas. 
 
The grantee is required to source and procure its power requirements in 
accordance with the applicable rules and orders of the ERC: Provided, That, the grantee, 
immediately after the enactment of this Act, may be allowed to avail of the negotiated 
procurement of emergency power supply under the DOE circular DC 2018-02-0003, as 
revised, or any subsequent circular, rule or regulation issued by the DOE or ERC or their 
legal successors allowing emergency procurement: Provided, further, That such 
emergency contract, shall only be for a period of one (1) year and the rates must not be 
higher than the latest ERC-approved generation tariff for the same or similar technologies 
in the area. 


 
The grantee shall have the obligation to provide open and non-discriminatory 
access to its distribution system and services for any end-user within its franchise area 
consistent with Republic Act No. 9136, otherwise known as the "Electric Power Industry 
Reform Act of 2001." The grantee shall not engage in any activity that will constitute an 
abuse of market power such as unfair trade practices, monopolistic schemes, and other 
activities that will hinder competitiveness of businesses and industries.  
 
SECTION 6.  Rates for Services. — The retail rates and charges for the 
distribution of electric power by the grantee to its end-users shall be regulated by and be 
subject to the approval of the ERC or its legal successor. 
 
The grantee shall identify and itemize in the statement of account it issues to end-
users the components of the retail rate charged pursuant to Republic Act No. 9136. Such 
rates charged by the grantee shall be made public and transparent. The grantee shall 
implement a lifeline rate to marginalized end-users for as long as it is in effect as 
mandated under Republic Act No. 9136, as amended. 
 
SECTION 7. Protection of Consumer Interests. — The herein grantee shall 
establish a consumer desk that will handle consumer complaints and ensure adequate 
protection of consumer interests. The grantee shall act with dispatch on all complaints 
brought before it. 
 
SECTION 8. Right of the Government. — A special right is hereby reserved to 
the President of the Philippines, in times of war, rebellion, public peril, calamity, 
emergency, disaster or disturbance of peace and order: to temporarily take over and 
operate the distribution system of the grantee, to temporarily suspend the operation of 
any station or facility in the interest of public safety, security and public welfare; or to 
authorize the temporary use and operation thereof by any agency of the government, 
upon due compensation to the grantee, for the use of said distribution system during the 
period when they shall be so operated. 
 
SECTION 9.   Right of Eminent Domain. — Subject to the limitations and 
procedures prescribed by law, the grantee is authorized to exercise the power of eminent 
domain insofar as it may be reasonably necessary for the eﬃcient establishment, 
improvement, upgrading, rehabilitation, maintenance and operation of its services. The 
grantee is authorized to install and maintain its poles wires, and other facilities over, 
under, and across public property, including streets, highways, parks, and other similar 
property of the Government of the Philippines, its branches, or any of its 
instrumentalities. The grantee may acquire such private property as is actually necessary 
for the realization of the purposes for which this franchise is granted, including, but not 
limited to poles, wires, cables, transformers, switching equipment and stations, buildings, 
infrastructure, machineries and equipment previously, currently or actually used, or 
intended to be used, or have been abandoned, unused or underutilized, or which 
obstructs its facilities, for the operation of a distribution system for the conveyance of 
electric power to end-users in its franchise area. Provided, That proper expropriation 
proceedings shall have been instituted and just compensation paid. 
 
SECTION 10.     Term of Franchise. — This franchise shall be for a term of twenty-
ﬁve (25) years from the date of effectivity of this Act, unless sooner cancelled or revoked. 
This franchise shall be deemed ipso facto revoked in the event that the grantee fails to 
operate continuously for two (2) years. 
 


 
SECTION 11. Renewal, Extension, or Revocation of Franchise. — The grantee 
shall apply for the renewal or extension of its franchise ﬁve (5) years before its expiration 
date which shall be reckoned ﬁfteen (15) days after the publication of the franchise in the 
Oﬃcial Gazette or in a newspaper of general circulation, whichever comes earlier. Upon 
reasonable notice and hearing, this franchise may be revoked by Congress when the 
public interest so requires or when the grantee fails to reasonably comply with regulatory 
standards. 
 
SECTION 12. Warranty in Favor of the National and Local Governments. — The 
grantee shall hold the national, provincial, city, and municipal governments of the 
Philippines free from all claims, liabilities, demands, or actions arising out of accidents 
that cause injury to persons and damage to properties, during the construction, 
installation, operation, and maintenance of the distribution system of the grantee. 
 
SECTION 13.  Liability for Damages. — The grantee shall be liable for any injury 
to persons and damage to property arising from or caused by any accident arising from 
any defective construction of any infrastructure built pursuant to the operation of its 
business under this franchise, or by any neglect or failure to keep its poles and wires in 
safe condition. 
 
SECTION 14.   Sale, Lease, Transfer, Grant of Usufruct, or Assignment of 
Franchise. — The grantee shall not sell, lease, transfer, grant the usufruct of, nor assign 
this franchise or the rights and privileges acquired thereunder to any person, ﬁrm, 
company, corporation or other commercial or  legal entity, nor merge with any other 
corporation or entity, nor shall transfer the controlling interest of the grantee, whether as 
a 
whole 
or 
in 
part,  
and 
whether 
simultaneously 
or 
contemporaneously, 
to  any  person,  ﬁrm, company, corporation, or entity without the prior approval of the 
Congress of the Philippines: Congress shall be informed of any sale, lease, transfer, grant 
of usufruct, or assignment of franchise or the rights and privileges acquired thereunder, 
or of the merger or transfer of the controlling interest of the grantee, within sixty (60) days 
after the completion of the said transaction. Failure to report to Congress such change of 
ownership shall render the franchise ipso facto revoked. Any person or entity to which 
this franchise is sold, transferred, or assigned shall be subject to the same conditions, 
terms, restrictions, and limitations of this Act. 
 
SECTION 15. Dispersal of Ownership. — In accordance with the constitutional 
provision to encourage public participation in public utilities, the grantee shall offer to 
the public, speciﬁcally Filipino citizens, at least thirty percent (30%) or a higher 
percentage that may hereafter be provided by law of its outstanding capital stock in any 
securities exchange in the Philippines within ﬁve (5) years from the commencement of its 
operations: Provided, That in cases where a public offer of shares is not applicable, other 
methods of encouraging public participation by citizens and corporations operating 
public utilities must be implemented. Non-compliance therewith shall render the 
franchise ipso facto revoked. 
 
SECTION 16.       Transition of Operations. — In the public interest and to ensure 
uninterrupted supply of electricity, Northern Davao Electric Cooperative, Inc. 
(NORDECO) shall in the interim be authorized to operate the existing distribution system 
within the franchise area, as well as implement its existing power supply agreements 
with generation companies that had been provisionally or ﬁnally approved by the ERC 
until the establishment or acquisition by the grantee of its own distribution system and 
its complete transition towards full  operations as determined  by  the ERC, which period 
shall in no case exceed two (2) years from the grant of this legislative franchise. 


 
Upon compliance with its rules, the ERC shall grant NORDECO the necessary 
provisional certiﬁcate of public convenience and necessity (CPCN) covering such interim 
period. The applicable generation rate shall be the provisional or final rate approved by 
the ERC. 
 
This provisional authority to operate during the transition period shall not be 
construed as reviving or extending the franchise of NORDECO over the franchise area, 
which for all intents and purposes shall be deemed revoked by virtue of this Act, and it 
shall not prevent the grantee from exercising the right of eminent domain over the 
distribution assets existing at the franchise area as provided in Section 9 of this Act. 
During such interim period, the ERC shall require NORDECO to settle the full amount 
which the ERC has directed to refund to its customers in connection with all the cases 
filed against it. 
 
To reduce the length of the transition period, the ERC and all agencies issuing the 
requisite licenses shall prioritize all applications relevant to the establishment and 
operation of the distribution system under its franchise. 
 
The grantee shall, as far as practicable and subject to required qualiﬁcations, 
accord preference to hiring former employees of NORDECO upon commencement of 
business operations. 
 
An information dissemination campaign regarding public services and operations 
of the grantee shall be made to all end-users in the franchise area. 
 
The grantee and NORDECO shall jointly ensure that employees not hired by the 
grantee shall receive all separation and/or retirement beneﬁts they are entitled to in 
accordance with applicable laws. 
 
The DOE shall, during the transition, ensure that there will be uninterrupted 
supply of electricity in the existing franchise area. 
 
SECTION 17. Commitment to Provide and Promote the Creation of 
Employment Opportunities. — The grantee shall create employment opportunities and 
shall allow on-the-job trainings in  their  franchise operation: Provided, that priority shall 
be accorded to the residents where their principal oﬃce is located: Provided, further, That 
the grantee shall follow the applicable labor standards and allowance entitlement  under 
existing labor laws, rules and regulations and similar issuances: Provided, finally, That 
the employment opportunities or jobs created shall be reﬂected in the General 
Information Sheet (GIS) to be submitted to Securities and Exchange Commission (SEC) 
annually. 
 
SECTION 18.  Reportorial Requirement. — The grantee shall submit an annual 
report to the Congress of the Philippines, through the Committee on Legislative 
Franchises of the House of Representatives and the Committee on Public Services of the 
Senate, on its compliance with the terms and conditions of the franchise and on its 
operations on or before April 30 of the succeeding year. 
 
The annual report shall include an update on the roll-out, development, operation 
and/or expansion of business; audited ﬁnancial statements; latest GIS; certiﬁcation of the 
ERC on the status of its permits and operations; and an update on the dispersal of 
ownership undertaking, if applicable. 


 
A reportorial compliance certiﬁcate issued by Congress shall be required before 
any application for permit or certiﬁcate is accepted by the ERC. 
 
SECTION 19. Fine. — Failure of the grantee to submit the requisite annual report 
to Congress shall be penalized by a ﬁne of Five Hundred Pesos (P500.00) per working 
day of noncompliance. The ﬁne shall be collected by the ERC from the delinquent 
franchise grantee separate from the reportorial penalties imposed by the ERC and the 
same shall be remitted to the National Treasury. 
 
SECTION 20. Equality Clause. — Any advantage, favor, privilege, exemption, or 
immunity granted under existing franchises, or which may hereafter be granted to power 
distribution franchises, upon prior review and approval of Congress, shall become part 
of this franchise and shall be accorded immediately and unconditionally to the herein 
grantee. Provided, That the foregoing shall neither apply to nor affect provisions 
concerning territorial coverage, the term, or the type of service authorized by the 
franchise. 
 
SECTION 21. Applicability of Existing Laws. — The grantee shall comply with 
and be subject to the provisions of Commonwealth Act No. 146, or the "Public Service 
Act," as amended, and Republic Act No. 9136. 
 
SECTION 22. Repealability and Nonexclusivity Clause.  — This franchise shall 
be subject to amendment, alteration, or repeal by the Congress of the Philippines when 
the public interest so requires and shall not be interpreted as an exclusive grant of the 
privileges herein provided for. 
 
SECTION 23. Separability Clause. — If any of the sections or provisions of this 
Act is held invalid, all other provisions not affected thereby shall remain valid. 
 
SECTION 24. Repealing Clause. — All laws,  decrees,  orders, resolutions, 
instructions and rules and regulations or parts thereof, which are inconsistent with this 
Act, are hereby deemed repealed or modiﬁed accordingly. 
 
SECTION 25.       Effectivity. — This Act shall take effect ﬁfteen (15) days after its 
publication in the Official Gazette or in a newspaper of general circulation. 
 
Approved,