PANAY ELECTRIC Company, Inc. (PECO), which is poised to lose its 95-year power distribution license in Iloilo City, is seeking a temporary restraining order (TRO) order barring the takeover of new entrant MORE Power and Electric Co. (MORE Power).
The court filing marks the first move in the legal dispute between PECO and MORE, which needs to acquire PECO’s assets in order to operate, by eminent domain if necessary.
Republic Act 11212 granted MORE the franchise to distribute power in the city.
The petition for declaratory relief with TRO application, filed on March 6 before the Mandaluyong Regional Trial Court Branch 209, names as respondents MORE Power, the Department of Energy, Energy Regulatory Commission, “and all other governmental agencies tasked to implement Republic Act 11212.”
The Iloilo City power distributor is questioning in particular sections 10 and 17 of the new law, which allows MORE Power to expropriate PECO’s assets.
Section 10 reads in part: “The grantee may acquire such private property as is actually necessary for the realization of the purposes for which this franchise is granted, including but not limited to poles, wires, cables, transformers, switching equipment and stations, building, infrastructure, machineries and equipment previously, currently or actually used, or intended to be used.”
Section 17, on the other hand, states: “The provisional authority to operate during the transition period shall not be construed as extending the franchise of PECO after its expiration on Jan. 18, 2019, and it shall not prevent the grantee from exercising the right of eminent domain over the distribution assets existing at the franchise area…”
PECO has been given up to two years to continue operating until MORE Power is ready to take over.
The “authority granted to more for the taking of PECO’s assets is arbitrary and confiscatory” and “the law authorizes taking what is not for a public purpose,” the company said in its petition.
“The delegated eminent domain authority granted under the assailed provisions all but hostages petitioner PECO to turn over its assets and business to MORE,” it added.
PECO Administrative Manager Marcelo U. Cacho told Businessworld that expropriating a private business is not allowed under the Constitution.
“What MORE (will do) is expropriate an entire business, which (according to) the Constitution, is illegal. The problem is the assets are currently owned by PECO. This is unjust enrichment to the benefit of MORE Power… everyone should be given equal protection under the law, and not (one party) benefiting from the other,” he said.
Mr. Cacho added that MORE Power’s authority to expropriate is unprecedented.
“The problem is the assets are currently owned by PECO and the provision in MORE Power’s franchise of expropriation is the first of its kind. There has been no other franchise with this kind of appropriation… this has never happened in any part of the country and in any industry,” he said.
In its petition, PECO also noted the apparent haste in the granting the franchise to MORE Power.
“There is a lack of the discretion on the part of Congress (which) never gave PECO the opportunity to (extend) its franchise. As the prior operator, there is a rule you could be given the first opportunity to (obtain) the franchise and that all legal remedies should be exhausted before granting a franchise to the new franchisee,” Mr. Cacho said.
MORE Power officials were asked to comment but declined to do so. — Emme Rose S. Santiagudo