SC upholds decision on MORE Power franchise

By Francis Allan L. Angelo

The Supreme Court junked the motion for reconsideration filed by Panay Electric Co. (PECO) seeking to reverse the High Tribunal’s September 2020 decision upholding certain provisions of the congressional franchise granted to MORE Power as the distribution utility of Iloilo City.

Voting 8-6 (not 9-6 as reporter earlier), the SC en banc did not find reason to overturn or set aside its decision last year declaring Sections 10 and 17 of Republic Act No. 11212 as valid and constitutional.

In a press statement, the SC said the denial of the said motion for reconsideration was in connection with the following cases:

1.) More Electric and Power Corporation vs. Panay Electric Company, Incorporated, G.R. No. 248061, and

2.) Republic of the Philippines vs. Panay Electric Company, Inc. and More Electric and Power Corporation, G.R. No. 249406.

 

The resolution/decision denying the motion for reconsideration of Panay Electric Company, Incorporated was penned by Justice Rosmari D. Carandang.

The denial of the motion for reconsideration was concurred by:

1.) Chief Justice Diosdado M. Peralta,

2.) Senior Associate Justice Estela M. Perlas-Bernabe,

3.) J. Alfredo Benjamin S. Caguioa,

4.) J. Alexander G. Gesmundo,

5.) J. Ramon Paul L. Hernando.

6.) J. Henri Jean Paul B. Inting,

7.) J. Ricardo R. Rosario, and

8.) J. Jhosep Y. Lopez.

The Justices who dissented were:

1.) J. Marvic M.V.F. Leonen,

2.) J. Amy C. Lazaro- Javier,

3.) J. Rodil V. Zalameda,

4.) J. Mario V. Lopez,

5.) J. Edgardo L. De Los Santos, and

6.) J. Samuel H. Gaerlan.

To recall, the SC reversed the judgment of the Regional Trial Court Branch 209 of Mandaluyong City in Civil Case No. R-MND-19-00571 and declared the two sections as valid.

Section 10 authorizes MORE to exercise the power of eminent domain and acquire such private property as is actually necessary for the realization of the purpose for which the franchise is granted.

Section 17 states the power of MORE, as grantee, to effectively acquire power distribution assets. The distribution assets that exist within the franchise area could only refer to those of PECO.

Right after MORE Power’s franchise was signed into law on Feb 14, 2019, PECO questioned RA 11212 before the Mandaluyong RTC.

The case was filed against defendants MORE, Department of Energy, Energy Regulatory Commission and all other agencies tasked to implement RA No. 11212.

In July 2019, Regional Trial Court Branch 209 Judge Monique Quisumbing-Ignacio ruled that PECO has no obligation to sell and MORE has no right to expropriate PECO’s assets under Sections 10 and 17 of RA No. 11212 and PECO’s rights to its properties are protected against arbitrary and confiscatory taking.

“Wherefore, premises considered, judgment is hereby rendered declaring Sections 10 and 17 of RA No. 11212 void and unconstitutional for infringing on PECO’s rights to due process and equal protection of the law,” reads the dispositive portion of Judge Ignacio’s ruling.

“The power of eminent domain had never been intended to be used as a tool to take private property already being devoted to public use for the same public purpose,” the ruling added.

But MORE Power was able to secure a temporary restraining order (TRO) from the SC in December 2019, which paved the way for the Iloilo Regional Trial Court Branch 23 to greenlight the takeover of PECO’s assets on Feb 28, 2020.

In March 2020, the Energy Regulatory Commission granted a provisional authority to MORE Power effectively revoking the certificate of public convenience and necessity (CPCN) given to PECO. Two months later, the Iloilo City government revoked PECO’s business permit for lack of franchise and CPCN.

The case was elevated to the Supreme Court and docketed as:

1.) More Electric and Power Corporation vs. Panay Electric Company, Inc. (GR No. 248061) and

2.) Republic of the Philippines, More Electric and Power Corporation vs. Panay Electric Company, Inc. (GR No. 249406).

While MORE Power took over the electricity distribution services in Iloilo City, it is also pursuing an expropriation case against PECO’s assets before the Regional Trial Court in Iloilo.

An expropriation case is the act of a government claiming privately owned property ostensibly for the benefit of the overall public after just compensation of the original owner.

According to the court filings, MORE Power valued the distribution assets at least P481,842,450.

The Iloilo RTC is still determining the final assets valuation and compensation to PECO.

(This story was updated to correct the number of justices who voted for and against the motion for reconsideration)