PECO PLAYS HARDBALL: Long-drawn-out legal battle with MORE Power looms

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ILOILO City – Panay Electric Company (PECO), the sole power distributor in this city for nearly a century, is not giving up its franchise area without a fight. “We will go to the Supreme Court. We will use all legal remedies available,” said its legal counsel Inocencio Ferrer.

PECO’s franchise is expiring on January 2019 and its application for renewal (House Bill No. 6023 submitted in July last year yet) remains stuck in the House of Representatives’ Committee on Legislative Franchises.

Its rival MORE Electric and Power Corporation, whose franchise application (House Bill No. 8302) has been “approved in principle” by the Senate’s Committee on Public Services, plans to take over PECO’s power distribution assets.

“Mabato kami ‘ya…Wala sila assets. Kun mahatagan man sila franchise sa January, ano ubrahon nila kay indi kami ‘ya maghatag voluntarily sang amon assets,” said Ferrer.

On Thursday, PECO did not attend the meeting of the technical working group that the Senate’s Committee on Power Services formed to ensure a smooth transition of power distribution in Iloilo City.

“Kuhaon lang daw nila ang assets sang PECO. Right now I’m telling the franchise committee chairman and members that Panay Electric Company will never sell its assets voluntarily. No, we will never sell our assets to a competitor,” Ferrer stressed.

The PECO legal counsel said MORE Power should prove it is qualified to distribute power in the city.

“Nga-a i-question namon? Kay kadasig-dasig sang approval sang ila franchise sa Lower House. Tan-awon ta sa Supreme Court. Pakitaan nila sang assets nila ang Supreme Court,” said Ferrer.

He also said MORE Power’s Articles of Incorporation was only approved on Sept. 21, 2018 making it a power distribution company – from being originally a mining company – in less than 35 days only.

Ferrer confirmed that PECO was invited to the meeting of the technical working group but the company opted not to attend.

“Ang purpose sang meeting was paglubong sang PECO kag pagpilit baligya sang mga assets kag mga kagamitan, mga poste sang PECO sa MORE Power,” said Ferrer.

Ferrer questioned the constitutionality of MORE Power’s House Bill 8302.

The bill grants PECO’s rival powers to expropriate.

“This unqualified and ill-equipped entity will not only be granted a franchise despite its lack of qualifications; it will also be granted the power to expropriate any and all properties of its competitor, PECO, in clear violation of the latter’s enshrined constitutional rights,” said Ferrer.

He warned that House Bill 8302 would allow MORE to expropriate properties for vague and overbroad reasons such as “the efficient maintenance and operation of services” and to “acquire such private property as is actually necessary for the realization of the purposes for which this franchise is granted.”

Ferrer said MORE Power’s plan to expropriate all the assets of PECO once it is granted a franchise would fail.

“PECO will avail itself of all legal remedies to ensure that this will not take place,” he said.

During Thursday’s meeting of the technical working group, the Energy Regulatory Commission (ERC) proposed a two-year transition period from PECO to MORE Power.

According to ERC, PECO may be authorized to operate for two more years until such time MORE Power has established or acquired its own power distribution system or has completed its transition towards full operation.

Sen. Sherwin Gatchalian, a member of the Senate’s Committee on Power Services, suggested that the transitory period be limited to one year only. Two years is already too long, he said.

For its part, MORE Power said it would take over as Iloilo City’s new power distribution utility only after having obtained a Certificate of Public Convenience and Necessity (CPCN) from the ERC.

“In the public interest, (PECO), notwithstanding the expiration of its franchise, shall be allowed to continue on holdover capacity under its current CPCN until a new entity with a legislative franchise applies for and is granted a CPCN to engage in the transmission and distribution of electricity in the affected franchise area,” MORE Power stated.
If ever both parties are unable to agree on the terms and conditions of the transfer, the franchise holder shall be authorized to exercise the right of eminent domain, MORE further said.
“With the writ of possession issued by the Regional Trial Court with jurisdiction, the franchise holder shall take possession and control of the distribution system assets to operate it to assure the continuity of the services in the franchise area,” it said./PN

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