Court rules in favor of embattled PECO

Panay Electric Company

Legislation cannot justify takeover of private company in the guise of expropriation.

THE Mandaluyong City Regional Trial Court Branch 209 upheld the petition of the embattled Panay Electric Company (PECO), declaring certain provisions of an upstart power firm franchise as “void and unconstitutional for infringing on PECO’s rights to due process and equal protection of the law,” even lashing out at the Enrique Razon-led outfit MORE Power’s attempt to question the “Court’s jurisdiction over it smacks of bad faith, desperation and deceitfulness.”

The Mandaluyong RTC also ruled that “sufficient grounds exist to declare Sections 10 and 17 of the MORE franchise, RA 11212 (the “assailed provisions”) unconstitutional. Consequently, PECO has no obligation to sell and respondent 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 under the relevant portions of Sections 10 and 17 of RA No. 11212.”

Court records show MORE was questioning the court’s jurisdiction because, according to it, pursuant to R.A. 8975, lower courts are prohibited from issuing injunctions affecting government projects and Section 78 of the EPIRA Law which states that only the Supreme Court may restrain or enjoin any project under the Electric Power Industry Reform Act.

The Court also repudiated the MORE attempt at seizure of PECO properties through the franchise provisions of eminent domain stressing that “the power of eminent domain was never intended to be used as a tool to take ‘private property already being devoted to public use’ from one person and transfer the same to another person to be used for the same public purpose. It does not achieve the ultimate end of eminent domain which, to repeat, is to meet a public need or public exigency.

“Here, PECO’s properties (i.e. distribution assets) are already being devoted to public use, that is, electric power distribution. The only tangible effect of the exercise of eminent domain by virtue of the assailed provisions would be to replace PECO with MORE as the owner of the existing electric power distribution system in Iloilo City. In other words, a corporate take-over,” the Court clarified.

Too, the ruling penned by Presiding Judge Monique A. Quisumbing-Ignacio pointed out that “what the Court is discussing as unconstitutional, lest it be misunderstood, is the transfer of all of PECO’s ‘distribution assets existing at the franchise area’ by virtue of the exercise of the right of eminent domain as provided for in the assailed Provisions.”

For their part PECO officials declared that “in the end, our company and shareholders are thankful that the rule of law and the supremacy of the Constitution prevailed. The RTC confirms that one cannot legislate the illegal takeover of a private company lock stock and barrel in the guise of expropriation.

“We know that this decision will not stop our adversary but we are committed to keep the fight up and defend our rights under the constitution,” the officials said.

At the same time, PECO reaffirmed the commitment never to abandon Iloilo city— “even as we keep up the fight. We will continue our modernization efforts using the latest technology and industry best practices and will continue to work with and for the sustained progress of the Iloilo City.”  

PECO officials added that “consistent with the commitment to work for the benefit of the Ilonggo consumer, PECO will continue its efforts to reduce the rates further while still maintaining reliable flow of energy.

“We share our new city mayor’s objective of providing stable power supply at lower power rates.  We have also begun talks with battery storage companies to help us fully maximize our current contracts to further reduce the rates.”

Moreover, PECO’s smartmetering program “will continue to ensure we give our consumers the most accurate billings possible. We would also like to thank all those who have supported us with their prayers and ask that you continue to pray for us.”