Davao Light spending P1 billion for network expansion

DAVAO CITY, Philippines — Aboitiz-owned Davao Light and Power Co. Inc. is setting aside at least P1 billion to acquire Northern Davao Electric Cooperative Inc.’s (Nordeco) electricity distribution assets.

In a media briefing, Davao Light president and COO Enriczar Tia said the company has extended an initial offer to Nordeco for its assets in Davao del Norte and Davao de Oro.

“But that’s subject to the negotiation with Nordeco. Right now, we still need to get all the data of their assets,” he said.

This comes after Republic Act 12144 lapsed into law on April 6, effectively expanding Davao Light’s franchise to include Tagum City, Samal Island and several areas in Davao del Norte and Davao de Oro.

As part of the transition period, the law allows Nordeco to operate in those areas for up to two years to ensure an uninterrupted supply of electricity to consumers.

Tia, however, said the power cooperative was “resistive” and even pursued legal actions to challenge the constitutionality of the franchise expansion.

He said the takeover’s impact has yet to reach consumers, as Davao Light has not formally started operations in the newly covered areas.

“One thing I can say is that several things will happen once we take over. First, since this is a Davao Light franchise expansion, they (consumers) will automatically benefit from lower (power) rates,” Tia said.

In July, Davao Light charged consumers just P9.20 per kilowatt-hour, which, according to Tia, was way lower than Nordeco’s average rate of around P12 to P13 per kWh.

Beyond lower rates, Tia said Davao Light could also deliver a more reliable power supply and swift response to consumer needs.

“In Davao Light, in one year, imagine you’ll just experience an average of three (power) interruptions, although I cannot guarantee that it will happen overnight because to do that, you need to have a reliable power system,” Tia said.

Over the next five years, the company is expected to allocate resources to upgrade and recondition the assets to be acquired from Nordeco, he said.

Davao Light, the country’s third-largest power utility after Pangilinan-led Manila Electric Co. and another Aboitiz firm, Visayan Electric Co., currently serves over 500,000 customers.