SC Junks Petition vs MORE Power Expansion

By Rjay Zuriaga Castor 

The Supreme Court has dismissed the petition for certiorari of the Iloilo Electric Cooperatives, Inc. (ILECOs), challenging the constitutionality of the law that allowed MORE Electric and Power Corp. (MORE Power) to expand to its franchise areas.

In a decision dated July 30, 2024, but was made available earlier this year, the SC upheld the enactment of Republic Act (RA) No. 11918, stating that it was enacted to promote the common good by fostering a competitive environment in Iloilo.

“Ultimately, a franchise is a privilege granted by the State. It is not an exclusive private property of the franchisee and must yield to serve the common good,” the decision read.

RA 11918, which took effect on August 30, 2022, amended MORE’s franchise to include 15 towns and one city previously within the franchise areas of the ILECOs.

The affected areas include Alimodian, Leganes, Leon, Pavia, San Miguel, Santa Barbara, Passi City, Barotac Nuevo, Dingle, Duenas, Dumangas, New Lucena, San Enrique, Zarraga, Anilao, and Banate.

In their petition, the ILECOs argued that  Section 1 of RA 11918 violated the Constitution, as there is no justification rooted in the common good to warrant the alteration of their respective franchises.

They also said it infringes on their right to due process and impairs the obligation of contracts.

They also asserted that it infringes on their exclusive franchises, in violation of the National Electrification Administration (NEA) Decree and the Electric Power Industry Reform Act of 2001.

The SC highlighted that “exclusive franchises are not sanctioned by the Constitution” and that franchises are subject to amendment when the common good requires it.

The High Court also argued that the Constitution prohibits the exclusivity of franchise, and takes precedence over the NEA decree.

“In case of any conflict between the Constitution and a statute, the latter yields to the former because the Constitution is the basic law to which all other laws must conform,” it said.

The SC also pointed out that the ILECOs failed to prove that RA 11918 altered the terms of their contracts with power suppliers.

“Neither does the enactment of RA11918 impose new conditions, dispense with those agreed upon, or withdraw remedies for the enforcement of the rights of the parties in their power supply contracts and/or electric service agreements,” it stressed.

The Philippine Rural Electric Cooperatives Association (PHILRECA), representing 121 electric cooperatives including the petitioners, sought to intervene in the case, arguing that law directly impacts its interests.

The SC also dismissed PHILRECA’s motion to intervene, stating that its interest in the case was not direct or immediate and merely reiterated the arguments raised by the ILECOs.

“PHILRECA merely reiterated the arguments raised by petitioners. Thus, allowing its intervention will serve no other purpose but delay the resolution of this case,” it added.