Mandaluyong court stops Razon move to expropriate PECO power assets

By: Daxim L. Lucas - 05:09 PM March 13, 2019

https://business.inquirer.net/266585/mandaluyong-court-stops-razon-move-to-expropriate-peco-power-assets?utm_expid=.XqNwTug2W6nwDVUSgFJXed.1

MANILA, Philippines — Embattled Iloilo power distributor Panay Electric Co. on Tuesday won a temporary reprieve against a rival’s move to seize its transmission assets after a regional trial court issued a 20-day injunction against the firm of tycoon Enrique Razon Jr.

In a decision released to the media, Judge Monique Quisumbing-Ignacio of Mandaluyong City said the congressional franchise enacted into law by President Rodrigo Duterte in favor of Razon’s More Electric and Power Corp. (More) “will materially and substantially invade” the rights of the Cacho family-owned PECO “to equal protection under the law, due process, and against the unlawful taking of of property.”

The judge said the provisions of More’s franchise — Republic Act No. 11212 — will allow the private firm to “easily take away, under the guise of eminent domain” PECO’s electricity distribution assets.

PECO retails electricity to an estimated 65,000 commercial and residential customers in Iloilo City, and has been owned by the Cacho family for 97 years. Razon’s camp says that the family runs a monopoly that had failed to invest in new technology resulting in complaints of poor service and overbilling by the city’s residents.

The ports and gaming tycoon made a P6-billion offer to the Cacho family to buy PECO last year, but his offer was rebuffed. The firm’s owners have since said that they are being strong-armed to sell the firm that their family has controlled for almost a century.

Subsequently, it was revealed that PECO was operating without a Congressional franchise but only a provisional license from the National Electrification Administration. While PECO’s application for a formal franchise was pending with Congress, Razon overtook them after lawmakers granted his new firm, More, an exclusive franchise to distribute power in Iloilo, signed into law by Mr. Duterte last month.

The Mandaluyong court noted, however, that More’s move to expropriate PECO’s assets, as provided for in the new congressional franchise, allows the latter “to invoke the issue of constitutionality of law as a defense in expropriation proceedings.”

PECO, in its bid for declaratory relief filed at the Mandaluyong Regional Trial Court, stressed “there is no substantial due process when private property is taken by the government from one private person and given to another person for the latter’s direct benefit.”

PECO’s legal challenge to newly minted R.A. 11212’s sections 10 and 17, which grants upstart power firm Monte Oro Resources and Energy (MORE) to expropriate PECO assets violates PECO’s right to due process and constitutional right to equal protection of the law.

The court gave PECO five days to post a P5-million bond for the 20-day injunction that covered any actions on this issue by More, the Department of Energy, the Energy Regulatory Commission, ”and all other government agencies” tasked to implement the franchise of the Razon-owned firm.