Davao, located on the southeastern coast of Mindanao, encompasses the provinces of Davao de Oro, Davao del Norte, Davao del Sur, Davao Oriental, and Davao Occidental. Davao City, located in Davao del Sur, serves as the commercial and trade hub of Mindanao. It has the makings of a potential global city: seamlessly blending technology with its local traditions and embracing a multicultural identity. In 2023, Davao experienced an impressive 6.7% economic growth, displaying one of the fastest-growing regional economies in the country.
However, the region has been experiencing power outages. This prompted the senate to launch an investigation last year into allegations that the Northern Davao Electric Cooperative (Nordeco) has failed to deliver sufficient services to customers in Samal, an island city in Davao del Norte.
The power outages, which prompted the city to declare a state of calamity, were largely attributed to Nordeco. The cooperative’s aging and deteriorating submarine cables, which have not been replaced since their initial installation, were cited as a major cause of the disruption.
On its official website, Nordeco is described as a power cooperative established in 1971 under Republic Act No. 6038. Its mission is to deliver reliable, affordable, 24-hour electricity to both urban centers and remote rural communities within its service area, located in the country’s southern region.
New bill encounters disinformation campaign
To address the power issue in Davao del Norte and Davao de Oro, the committee approved a bill that might revoke Nordeco’s franchise for not adequately serving the needs of the community. This move would pave the way for an expansion of the Davao Light and Power Company’s franchise area.
Nonetheless, this has sparked the spreading of misinformation and disinformation about the AboitizPower subsidiary, which has been authorized to initiate a bidding process for generators to supply electricity to its newly added service areas.
Ryan Amper, convenor of the Davao Consumer Movement, recently issued a statement in Sun-Star to counter what he described as misleading information being spread by Nordeco and its supporters.
False news about the price increase
According to Amper, Nordeo and its supporters are highlighting a statement from the Energy and Regulatory Commission (ERC) made during the hearings, which indicated that Davao Light’s potential takeover of Nordeco’s service area could lead to a P0.30 per kilowatt-hour increase in rates.
But what was overlooked is that ERC’s statement was based on the condition that Davao Light would take over all of Nordeco’s power contracts. The ERC also indicated that a power rate increase could be avoided due to a provision in the proposed legislation that allows Davao Light to conduct a “competitive selection process” for new power supply contracts. This would likely result in lower rates compared to those currently charged by Nordeco. By fostering competition among suppliers, the process is designed to drive down costs rather than lead to price hikes.
This critical information was reiterated by an AboitizPower executive and emphasized by lawmakers during the hearing, highlighting the potential for reduced electricity costs under Davao Light’s management.
Amper reminded detractors the ERC even indicated that Davao Light’s overall power rates could be lower since the private power distributor serves a larger population and covers a wider area. This broader service base can lead to reduced charges, ultimately resulting in more affordable electricity rates.
As the country’s third biggest private utility company, Davao Light has verbalized its constant goal of securing the most cost-effective power contracts for its clients. Consequently, the claim that Davao Light will raise power rates upon taking over NORDECO’s franchise area is unfounded.
Manila Times columnist Charlie Manalo also stated that NORDECO currently charges more than Davao Light. As of September 2024, consumers of NORDECO are billed at P12.008 per kilowatt-hour, while Davao Light customers pay only P9.47 per kilowatt-hour.
The importance of affordable energy
An article on the Philippines News Agency website outlines the effect of high electricity costs on households, stating that the increasing cost of electricity exacerbates the struggles of low-income families. This pushes them deeper into poverty and restricts their access to vital services such as “clean water, sanitation, and education.”
Moreover, the article discussed how this problem affects businesses, the production of goods, and consumers, creating a cascading impact throughout the economy. High energy costs have extensive repercussions, undermining economic viability, increasing the prices of goods, and lowering the quality of life for many Filipinos.
Meanwhile, the World Health Organization (WHO) highlights electricity’s role in health. Electricity is essential for operating critical medical devices and providing fundamental services like lighting, communication, and clean water. It also plays a vital role in ensuring the availability and reliability of essential health services, contributing to improved health outcomes, including safe childbirth, vaccination efforts, diagnostic capabilities, and emergency response.
Focus should be on the people
According to Amper, the people’s needs should be prioritized. “Right now, it is important for the government to focus on the needs of its people for reliable and cheap power,” he wrote. “This means the government has the power to grant a franchise to a better suited and capable power distributor.”
Prioritizing affordable and reliable electricity is crucial for communities, regardless of who holds the franchise. Access to affordable energy is not just a matter of convenience; it directly impacts the quality of life for residents and businesses alike.
When energy costs are manageable, families can allocate their resources toward other essential needs, such as education, healthcare, and housing. Moreover, businesses benefit from lower operational costs, fostering a more vibrant local economy that can lead to job creation and increased investment.