BY GEROME DALIPE IV
ILOILO City – Iloilo Electric Cooperatives (ILECO) I, II, and III are studying the Supreme Court’s recent ruling before initiating their next legal moves.
In an en banc decision dated July 30, the high tribunal dismissed the petition of the three ILECOs which questioned the validity of Republic Act No. (RA) 11918, the law that expands MORE Electric and Power Corporation’s (MORE Power) franchise into several towns in Iloilo province.
The tribunal ruled that electric cooperatives do not have a constitutional right to an exclusive franchise within their coverage areas.
“A franchise, as a privilege granted by the state, is not the exclusive private property of the franchisee. Thus, it must yield to serve the common good, as determined by Congress,” read the SC decision penned by Associate Justice Rodil V. Zalameda.
The recent high court ruling means that MORE Power can now expand its service areas to the towns of Alimodian, Anilao, Banate, Barotac Nuevo, Dingle, Dueñas, Dumangas, Leganes, Leon, New Lucena, Pavia, San Enrique, San Miguel, Santa Barbara, Zarraga, and the component city of Passi.
These areas are currently being served by the ILECOs.
But even as the ILECOs mull their next legal moves, they issued a challenge to MORE Power.
“They have to comply with the promise of a six pesos rate when they applied for expansion to some parts of Iloilo province. People are expecting six pesos per kWh rate,” said Engr. Jose Redmond Eric Roquios, general manager of ILECO II.
MORE Power’s average residential rate has increased to P12.8566 per kWh in July this year, primarily due to the increase in the generation charge.
Roquios issued the statement when sought his reaction to the ruling of the Supreme Court, which upheld the validity of MORE Power’s franchise expansion to 15 municipalities and one component city in Iloilo.
MORE Power initially held a franchise to operate in Iloilo City until the passage of RA 11918, which in effect, expanded its franchise to include 15 municipalities and one component city previously within ILECO’s exclusive franchise area.
ILECOs earlier filed a petition for certiorari and prohibition with prayer for issuing a temporary restraining order and writ of preliminary injunction before the Supreme Court.
They questioned the validity of Section 1 of RA 11918 for alleged violation of their rights to exclusive franchises, due process, non-impairment of contracts, and equal protection.
In dismissing the petition, the high court ruled that Section 11, Article XII of the Constitution prohibits exclusive franchises.
The tribunal stressed that a franchise, as a privilege granted by the state, is not the exclusive private property of the franchisee.
In the case of MORE Power, the high court pointed out that Congress enacted RA 11918 to make electricity more affordable for the people of Iloilo province.
Congress determined that expanding MORE’s franchise would promote healthy competition since MORE was capable of offering lower energy rates, the tribunal said.
“Without competition, ILECOs can easily dictate the price of electricity. Allowing the entry of another player thus benefits consumers, who no longer have to wait until ILECOs’ franchises expire in 2029, 2039, and 2053. This is under the Electric Power Industry Reform Act (EPIRA), which encourages competition in the electricity industry,” the SC said.
It added that contract rights must give way to the broader authority of the state’s police power when exercised for the general welfare, as in this case. In this case, the tribunal ruled that ILECOs failed to show how RA 11918 affected their contracts with their suppliers.
Hence, the high court added the powers granted to MORE Power are needed to ensure it could provide an uninterrupted supply of electricity to its covered areas./PN
