COULD non-payment of realty taxes be ground for the Iloilo City government to terminate the business of Panay Electric Co. (PECO)?
I asked Mayor Jerry P. Treñas that question on the phone yesterday.
Yes, he confirmed but would rather not elaborate, short of saying he would cross the bridge when he gets to it.
He had earlier threatened to sell PECO’s facilities at public auction come Dec. 12 for non-renewal of business permit and non-payment of P98 million in realty taxes.
It is doubtful whether PECO would still pay that tax debt because its power-distribution franchise had expired and it is temporarily operating on temporary certificate of public convenience and necessity (CPCN) from the Energy Regulatory Commission. It would have to give way soon to its successor, MORE Electric and Power Corp. (MORE Power).
While writing this column yesterday, I received a text message from a friend saying that MORE Power would join the public auction even if it meant buying PECO’s creaky old posts and obsolete meters. Whaat? I could hardly believe it at first; the new power player would certainly have no use for junk.
On second thought, that just might be an act of corporate social responsibility through which MORE Power could work hand-in-hand with the mayor in his quest to “level up” through modernization of power equipment.
It is proper and fitting that regardless of his good relations with the incorporators of PECO, the mayor should prioritize public welfare that has literally come under fire, according to the Bureau of Fire Protection (BFP), because of PECO’s “inadequately-maintained lines, power outages and hazardous electric posts.”
With no more power lines to keep itself in business, PECO would have no choice but give way to MORE Power as the new distribution utility in accordance with the law (Republic Act 11212) – signed by President Duterte on Feb. 14, 2019 – granting it the 25-year franchise.
PECO would be in no position to disagree with Mayor Treñas, who had written to the Office of the President, “Due to the worsening turn of events, the undersigned is obliged to take the necessary steps to address the needs of the people, considering that the problems and complaints raised against PECO have direct impact not only on the property but on the lives of the residents of Iloilo City.”
The transition from PECO to MORE Power could have glided smoothly had the former abided by the provision (Section 27) authorizing the latter to expropriate the power-distribution system instead of questioning its constitutionality.
Other than RA 11212, there’s “Electric Power Industry Reform Act of 2001” (RA 9136), Sec. 23 of which says, “Distribution utilities may exercise the power of eminent domain subject to the requirements of the constitution and existing laws.”
Eminent domain is defined as “authority to take private property for public use upon observance of due process of law and payment of just compensation.”
PECO has merely been resorting to delaying tactics to stay in business within the two-year transition period allowed by the same law it challenges for being “unconstitutional”. Within that time frame, it would no doubt earn from its 64,000 customers much more than its tax debt.
But the Court of Appeals (CA) has denied its petition for a temporary restraining order (TRO) against the expropriation of its assets by More Electric and Power Corp. (MORE), saying that “as long as MORE has a valid legislative franchise as a distribution utility, it may exercise the power of eminent domain as provided for under Section 23 of the EPIRA [quoted above].” ([email protected]/PN)