Philreca challenges proposed Nordeco franchise takeover, cites lower rates

The Philippine Rural Electric Cooperatives Association (Philreca) has expressed concerns about Senate Bill No. 2888, which could allow Davao Light and Power Company, Inc. (DLPC) to take over the franchise area of the Northern Davao Electric Cooperative, Inc. (Nordeco).

In a letter to lawmakers supporting the bill, Philreca stated that this move poses âa serious threat to the long-term welfare of our member-consumer-owners and the integrity of rural electrification in the Philippines.â

Philreca disputed claims made during the Senate hearing on DLPCâs potential expansion, clarifying that Nordeco has lower Distribution Supply Metering (DSM) rates. DSM covers a distribution utility's operating costs. "Nordeco's DSM rate is P1.5372 per kilowatt-hour (kWh), while DLPC's is P2.3552/kWh," Philreca stated.

The association also challenged the data presented regarding Nordecoâs System Average Interruption Frequency Index (SAIFI) and System Average Interruption Duration Index (SAIDI), calling it âinaccurate and deliberately skewed.â They explained, "DLPC's annual data of 3.1 SAIFI and 209 minutes SAIDI was compared to Nordeco's six-month data of 4.99 SAIFI and 242.33 SAIDI, misrepresented as monthly figures, creating a false impression of DLPC's superior service reliability."

Philreca refuted claims that Nordeco only improved its services in Davao in anticipation of its franchise renewal, explaining that maintenance and system upgrades were planned in advance. âThese advancements are the result of careful planning, responsible fiscal management, and an unwavering commitment to serving the people, not profit. In fact, Nordeco achieved an AA rating from the National Electrification Administration (NEA),â Philreca asserted.

Philreca argues that passing the bill to reduce Nordecoâs franchise would disadvantage consumers, citing concerns over âprofit-driven interestsâ and emphasizing that electric cooperatives (ECs) are non-profit entities.

Source: https://mb.com.ph/2025/2/3/philreca-backs-nordeco-against-scaling-down-its-franchise