PECO has no obligation to sell its power assets to MORE, court rules

Published July 9, 2019, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2019/07/09/peco-has-no-obligation-to-sell-its-power-assets-to-more-court-rules/

The Mandaluyong Regional Trial Court (RTC) Branch 209 has ruled that Panay Electric Company (PECO) cannot be compelled to sell or give up its power distribution assets to the Razon-led MORE Electric and Power Corporation.

A decision penned by RTC Presiding Judge Monique A. Quisumbing-Ignacio further stipulated that there are “sufficient grounds” to declare the assailed provisions of MORE franchise – primarily Sections 10 and 17, as “unconstitutional.”

The court has in essence declared certain provisions of Republic Act 11212 or the MORE Power franchise as “void and unconstitutional for infringing on PECO’s rights to due process and equal protection of the law.”

With the MORE Power franchise effectively voided, it has been ruled that “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.”

As could be culled from Court records though, MORE Power has been questioning the Mandaluyong RTC’s jurisdiction over the case – citing prescriptions of Republic Act 8975 that lower courts are prohibited from issuing injunctions to matters relating to government undertakings.

At the same time, MORE Power argued that a provision of the Electric Power Industry Reform Act (EPIRA) sets forth that “only the Supreme Court may restrain” the implementation of any provision of the power industry reform law.

In particular, the Court trounced MORE’s attempt to seize the properties of PECO by invoking provisions of its franchise latching on “eminent domain” precept.

“The power of eminent domain, according to the RTC, was “never intended to be used as a tool to take private property already being devoted for public use from one person and transfer the same to another person to be used for the same public purpose.

Such, the court emphasized, “does not achieve the ultimate end of eminent domain which, to repeat, is to meet a public need or public exigency.”

The Court emphasized that, in the case at hand, “PECO’s properties are already being devoted to public use, that is, electric power distribution.”

On that premise then “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,” which in other words, the Court said shall be “a corporate take-over.”