Sol-Gen rebuts pro-PECO ruling

By: Francis Allan L. Angelo

THE Office of the Solicitor General (OSG) asked the Regional Trial Court Branch 209 in Mandaluyong City, Metro Manila to set aside its ruling that invalidated portions of Republic Act 11212 which granted MORE Electric and Power Corp. (MORE Power) the congressional franchise to distribute electricity in Iloilo City.

In a motion for reconsideration relative to Civil Case No. R-MND-19-00571-SC filed by Panay Electric Co. (PECO) versus MORE Power, the OSG claimed that RTC Branch 209 erred in declaring as unconstitutional Sections 10 and 17 of RA 11212.

Sec. 10 of RA 11212 authorizes MORE Power “to exercise the power of eminent domain in so far as it may be reasonable and necessary for the efficient establishment, improvement, upgrading, rehabilitation, maintenance and operation of services subject to limitations and procedures prescribed by law.”

Meanwhile, Sec. 17 of RA 11212 allows PECO to operate the existing distribution system within the franchise area until MORE Power establishes its own distribution system and completes its transition period which shall not exceed two years from the grant of the franchise.

The OSG, which represented the Philippine government in the case, also pointed out that RTC Branch 209 issued the ruling on July 1, 2019 without considering the OSG’s side on the case.

The OSG said PECO’s assets are already for public use and private interest “must yield to irresistible demands of the public interest on the time-honored justification that the welfare of the people is the supreme law.”

“In the instant case, the authorization made in favour of MORE to exercise the power of eminent domain insofar as it may be reasonably necessary for the efficient establishment, improvement, upgrading, rehabilitation, maintenance and operation of its services is to address the need for an authorized entity such as MORE to render services as a distribution utility for the general benefit of the electricity consumers of Iloilo,” OSG said.

It also noted that PECO’s franchise already expired in January 2019 and that it only continues to function by virtue of the transition period provided by RA 11212.

“Verily, even without such grant in favor of MORE, PECO will not be able to maintain its properties for the purpose of operation of a distribution utility in Iloilo, simply because PECO does not have the authority to do so. Without an entity authorized to operate the properties for properties will inevitably cease to be used for the public –the very situation sought to be avoided hence Sec. 17 of RA 11212.”

Also, the OSG said that the RTC ruling’s stand that RA 11212 is “discriminatory and confiscatory” is not supported by law and jurisprudence.

It noted that MORE Power can only acquire PECO’s assets only as “actually necessary for the realization of the purposes for which [the] granted” and provided that “proper expropriation proceedings shall have been instituted and just compensation [is] paid.”

“Thus, there is no violation of the equal protection clause in this case where no under favor or individual privilege is granted to MORE, and no hostile discrimination is made against other distribution utilities. Neither can it be concluded that Sections 10 and 17 of RA 11212 have discriminatory and confiscatory effect.”

The OSG also claimed that all requisites for the valid exercise of the power of eminent domain are present in the case:

  • The property taken must be private property;
  • There must be genuine necessity to take the private property;
  • There must be payment for just compensation; and
  • The taking must comply with due process

“First, the private property to be expropriated is admittedly private property of PECO. Second, there is genuine necessity to take said private property, as determined by the legislature… Third, it is of no dispute that the electric distribution system of PECO in Iloilo City is currently devoted to public use. Public use is deemed to include any use that is of usefulness, utility, or advantage, or what is productive of general benefit of the public. The requisite of public use is therefore present as long as the use of the property is for the general benefit of the public.”

Also, PECO will be paid just compensation for its assets and can freely participate in the expropriation case filed by MORE Power.