MORE Power expansion legal

By Herbert Vego

THERE is no more doubt on the constitutionality of the law (Republic Act No. 11918) expanding the franchise area of MORE Electric and Power Corporation (MORE Power) to 15 municipalities and one city in Iloilo province.

The Supreme Court (SC) has upheld the constitutionality of RA No. 11918, in effect dismissing a petition filed by three Iloilo electric cooperatives (ILECO I, II and III) to nullify the expansion, in effect allowing MORE Power to compete in areas previously served exclusively by the cooperatives.

The law is an amendment to RA No. 11212 granting MORE Power the franchise to distribute electricity to end users in Iloilo City only.

In a belatedly released decision (promulgated on 30 July 2024 yet), the SC ruled that MORE Power may distribute power in certain franchise areas of ILECO I, namely the towns of Alimodian, Leganes, Leon, Pavia, San Miguel and Santa Barbara; of ILECO II, namely Passi City, Barotac Nuevo, Dingle, Duenas, Dumangas, New Lucena, San Enrique and Zarraga; and of ILECO III covering Anilao and Banate.

As penned by SC Associate Justice Rodil V. Zalameda, the decision stems from the principle that exclusive franchises are not constitutionally protected, contrary to the common opinion of ILECO and the Philippine Rural Electric Cooperatives Association (PHILRECA). Hence, public utilities may compete, which could improve services and lower electricity rates.

The cooperatives and PHILRECA had argued that the expansion law violated constitutional provisions on non-impairment of contracts, due process, and equal protection under the Electric Power Industry Reform Act of 2001 (EPIRA).

The SC decision, however, reaffirmed the government’s authority to prioritize public welfare over contractual obligations, citing its police power as “superior to property rights, including non-impairment of contracts.”

No doubt it would also be advantageous to ILECO employees who could not cope with their volume of work due to lack of manpower and mobile equipment.

The different electricity rates imposed by the three ILECOs in the province are usually much higher than MORE Power’s.

In fact, no less than the Sangguniang Bayan (SB) of Pavia has approved a resolution calling for the implementation of MORE Power’s expansion. Indeed, there are now MORE Power electric poles and primary lines rising in Pavia.

The Pavia SB has even urged MORE Power to consider a Joint Venture Agreement (JVA) with ILECO I, as it did with the Central Negros Electric Cooperative, Inc. (CENECO) in Bacolod City, which is now known as Negros Electric and Power Corporation (NEPC).

In a conversation with this writer in a coffee shop, MORE Power President/CEO Roel Z. Castro said he would be willing to go into a joint venture with ILECO, but only if the other party is as willing.

Obviously, the concept of monopoly through an exclusive utility does not square with fair competition. It is a reality in business that a better competitor would win more customers because, according to the economies of scale, “the greater the quantity of output produced, the lower the per-unit fixed cost.”

We hope and pray that the SC ruling, being an incentive for the power utilities to improve performance at more affordable rates, would indeed reduce electricity rates.

-oOo-

TREÑAS WARNS DRUG PUSHERS

MAYOR Jerry Treñas has warned illegal drug peddlers against trying their luck in Iloilo City during the Dinagyang Festival this week because the eyes and ears of the Iloilo City Police Station (ICPS) are on the alert.

“We are providing  the  police 13 cars to enhance their mobility and effectiveness,” the mayor said.

Last Thursday, the ICPO arrested three drug suspects for possession of 600 grams of shabu worth ₱4 million and confiscated a firearm in Barangay Balabago, Jaro, Iloilo City.

The news report said that an “alias Lucky,” the main target of the operation, was unlucky. He fired at police officers but missed, prompting the police to fire back.

He is now licking his wound in a hospital, awaiting recovery and detention.