PECO SCORES VS MORE: Court halts enforcement of MORE Power franchise for 20 days

By: Emme Rose Santiagudo and Jennifer P. Rendon

THE plan of MORE Electric and Power Co. (MORE Power) to expropriate the assets of Panay Electric Company, Inc. (PECO) is temporarily on hold.

This, as the Mandaluyong City Regional Trial Court Branch 209 granted on March 13, 2019 PECO’s petition for a Temporary Restraining Order (TRO) against MORE Power.

In a five-page decision, Presiding Judge Monique Quisumbing-Ignacio granted a 20-day TRO enjoining the “respondents and/or any of their representatives from enforcing, implementing, and exercising any of the rights and obligations set forth under Republic Act 11212.”

The order was signed March 12, 2019 and was received by Divina Law, PECO’s counsel, the following day.

The TRO, which will last for 20 days, is part of the petition for declaratory relief filed by PECO questioning the legality of Republic Act No. 11212 which granted MORE Power the franchise to distribute electricity in Iloilo City.

PECO filed the petition on March 6, 2019 and was docketed as Civil Case No. R-MND-19-00571 for declaratory relief with application for temporary restraining order and/or writ of preliminary injunction against the Razon-owned MORE Electric and Power Corporation (MORE), Department of Energy (DOE), Energy Regulatory Commission (ERC), and all other governmental agencies tasked to implement RA 11212.

President Rodrigo Duterte signed RA 11212 into law on Feb 14, 2019, almost a month after PECO’s franchise expired on Jan 18.

RA 11212 grants MORE Power the authority to establish, operate, and maintain, for commercial purposes and in the public interest, a distribution system for the conveyance of electric power to end users in the city of Iloilo. It also delegates the power of eminent domain to the Razon-led firm, allowing it to acquire assets and properties needed for its operations upon payment of just compensation.

The TRO was issued two days after MORE Power filed an expropriation complaint against PECO with the Iloilo Regional Trial Court on Mar 11.

 

IMMINENT DANGER

Based on the RTC order, PECO is seeking the TRO against MORE Power because their (PECO) infrastructure and equipment are in imminent danger of being expropriated by MORE.

“Now that the law is in effect, PECO’s existing assets, which they invested on and built over the course of almost a century, including but not limited to poles, wires, cables, transformers, switching equipment and stations, building, infrastructure, machineries and equipment, are in imminent danger of being expropriated by MORE Power,” the order said.

The RTC cited Sections 10 and 17 of RA 11212 where MORE Power is given unbridled authority to exercise the power of eminent domain over all the distribution assets and properties of PECO in the franchise area.

“These sections violate PECO’s rights to due process, equal protection under the law and against unlawful taking of property, all of which are guaranteed under the Constitution. Sections 10 and 17 violate PECO’s right to due process because it allows MORE to seize PECO’s private property under the guise of eminent domain. In essence, it directs the turnover of PECO’s business to MORE as the new franchise holder and authorizes MORE to usurp all the distribution assets that PECO has built, developed, and invested in over the years,” it added.

According to the court, instead of requiring MORE to put up its own distribution system like all distribution utilities have done, “the law grants broad eminent domain powers that all but compels PECO to sell its distribution system to MORE, which is patently unfair, unjust and in violation of PECO’s rights.”

The court averred that PECO was able to establish that the enforcement of RA 11212, specifically Sections 10 and 17, “will materially and substantially invade its rights to equal protection under the law and therefore there is an urgent need for a TRO.”

“This unexpected development only serves to bolster the urgency of issuing a TRO considering that Section 10 of RA 11212 authorizes respondent MORE to take immediate possession of petitioner PECO’s distribution assets after filing of expropriation proceedings, due notice, and deposit of the assessed value of the assets in question,” the RTC order added.

The court then decided that a TRO be issued and take effect upon receipt of MORE Power.

It enjoins respondents and/or any of their representatives from enforcing, implementing and exercising any of the rights and obligations set forth under RA 11212, including but not limited to:

(a) commencement of the expropriation proceedings against petitioner PECO under the assailed provisions;

(b) takeover by respondent MORE of petitioner PECO’s distribution assets in the franchise area; and

(c) issuance by respondents DOE/ERC of the Certificate of Public Convenience and Necessity (CPCN), provisional authority to operate or any other permits or licenses for the operation of respondent MORE in the franchise area; or if one had already been issued, to suspend the same pending the resolution Of the case, so as not to render moot the Petition.

In a statement, MORE Power CEO and President Roel Z. Castro said “As we are always saying, we will respect the decision of the court.”

INJUNCTION

In an interview, PECO Administrative Manager Marcelo Cacho said their next move is to seek a preliminary injunction against MORE Power which will ultimately stop its franchise from being enforced.

“The next move for PECO is for hearings to continue and we will also go for a preliminary injunction kasi TRO is for 20 days,” he said.

Cacho said they are confident that they will be granted the preliminary injunction citing that the law is on their side.

“As the case of PECO has lots of merits, there is an immediate risk to PECO and the constitutional rights of PECO so we were quite confident that we should be able to get the injunction. The law naman is on our side,” he said.

Cacho maintained that granting the franchise to MORE Power through a hasty process will scare away investors in public utilities.

“Because what will happen is anybody that has clout in the Congress and the Senate can just all of a sudden apply for franchise with an expropriation to get all your properties,” he said.

Cacho emphasized that franchises should be carefully deliberated.

“I think, at the end of the day nakita sang judge diri is a precedent. Heavy matters which means that this is going to shape not only the entire electrical distribution industry but all other utilities industries that are franchise based. It has to be deliberated whether the grant is correct and if it is legal,” he said.

MORE Power has already applied for a CPCN with the Energy Regulatory Commission which will supposedly lay down the parameters on how the firm will operate.

The TRO issued by the court immediately puts a stop to the hearings both for the CPCN and the expropriation case.

According to Cacho, the TRO will prevent MORE Power from expropriating and will also prevent the Energy Regulatory Commission (ERC) and Department of Energy (DOE) from conducting CPCN hearings for MORE Power.

Meanwhile, the hearing on converting the TRO into a Writ of Preliminary Injunction is set on April 2, 2019.

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