Legal tussle over Iloilo City’s power woes reaches SC

MANILA, Philippines — Power consumers of Iloilo City are still left in the dark as the legal tussle over the city’s power distribution service has reached the Supreme Court (SC).

It has been more than eight months since President Duterte signed Republic Act (RA) No. 11212, the law granting MORE Electric and Power Corp. of port magnate Enrique Razon a franchise to own and operate a power distribution utility.

Meanwhile, Panay Electric Co. (PECO) sought to renew its franchise – which expired last Jan. 19 – but was not granted by Congress.

At that time, the Department of Energy (DOE) and Energy Regulatory Commission (ERC) agreed to allow PECO to continue operating while the resolution of the franchise was still pending to ensure continued power service to electricity consumers in Iloilo City.

The ERC based the extension on the Certificate of Public Convenience and Necessity (CPCN) issued by then Energy Regulatory Board (ERB) to PECO, which mandates it to guarantee the provision of electricity for the promotion and protection of consumer interest.

The CPCN is the authorization issued by the ERB/ERC to entities engaged in the transmission or distribution of electricity for the operation of a transmission or distribution system.

The ERB, ERC’s predecessor office, issued the CPCN to PECO on May 31, 1996 effective until May 25, 2019. This was extended until MORE Energy completes its two-year transition towards full operations.

ERC chairperson Agnes Devanadera, however, clarified the provisional CPCN granted to PECO is not equal to extending the franchise of PECO, which can only be done by Congress.

“MORE, on the other hand, can exercise its right of eminent domain whereby it may acquire such private property that is actually necessary to enable it to perform its obligation to provide uninterrupted supply of electricity in Iloilo City,” she said.

With no assets to operate a power distribution service, MORE Energy needs to expropriate PECO’s assets as granted under Sections 10 and 17 of RA 11212 and had petitioned the Iloilo Regional Trial Court (RTC) for the go signal.

However, PECO argued that the provision violates its right to due process and constitutional right to equal protection of the law, to which a Mandaluyong RTC issued an order to stop MORE Energy to stop expropriating the former’s assets.

The Mandaluyong RTC also declared RA 11212 as unconstitutional “for infringing on PECO’s rights to due process and equal protection of the law.” 

In response, MORE Energy turned to the Court of Appeals (CA) to stop the Mandaluyong City RTC from preventing the expropriation of the distribution assets of PECO, which was cleared by Iloilo RTC Judge Yvette Marie Go.

The CA has also backed MORE Electric to expropriate PECO’s assets to ensure continuous and assured electricity supply for 50,000 Ilonggo homes and businesses by the new distribution utility franchise holder.

However, PECO argued that the CA order is already moot and academic since the legal matter is now with the SC.

“The Court of Appeals case is already moot and has been overtaken by events because the matter is now with the Supreme Court, the highest court of the land.  The SC has already ruled in favor of PECO in denying MORE’s prayer for temporary restraining order sought by MORE,” PECO legal counsel Estrella Elamparo said.

PECO has asked the SC to hold in contempt Iloilo RTC Judge Go who issued the expropriation ruling favorable to MORE Energy.

On the other hand, the Razon-led firm asked the SC for a temporary restraining order (TRO) against the Mandaluyong court ruling.

However, in a resolution dated Aug. 14, the SC Second Division denied MORE Energy’s prayer for a TRO on the Mandaluyong RTC resolution, upholding the permanent discontinuation of the expropriation case.