The urgency of PECO-to-MORE transition

IT IS UNFORTUNATE that conflict of interest has derailed the smooth turnover of electricity distribution in Iloilo City from Panay Electric Co. (PECO) to MORE Electric and Power Corporation (MORE Power). It could have been as easy as “ABC” with the former passing the torch to the latter as the new 25-year-franchisee.

Let us recall that following the expiration of PECO’s franchise on January 19, 2019, President’s Duterte signed the law granting the new franchise to MORE Power (RA 11212) on February 14.

The only reason why PECO still lawfully operates is its possession of a temporary certificate of public conveyance and necessity (CPCN) granted by the Energy Regulatory Board (ERC).

The natural course of transition should have been for both companies to negotiate on the law’s provisions aimed at conveying customers from one company to another. Two provisions are vital in justifying expropriation or the “right of eminent domain,” which is “the power of the state to forcibly take private property for public use upon payment of just compensation.”

First, there’s Section 10 of RA 11212: “The grantee may acquire such private property as is actually necessary for the realization of the purposes for which this franchise is granted, including but not limited to poles, wires, cables, transformers… Provided, that proper expropriation proceedings shall have been instituted and just compensation paid.”

Second, Section 17 specifies, “Panay Electric Co. (PECO) shall in the interim be authorized to operate the existing distribution system within the franchise area… until the establishment or acquisition by the grantee of its own distribution system and its complete transition towards full operations as determined by the ERC.”

Instead of heeding the law, however, PECO questioned its Constitutionality based on Article 3, Section 1, of the Philippine Constitution: “No person shall be deprived of life, liberty or property without due process of law nor shall any person be denied the equal protection of the laws.”

But Section 9 of the same Article clarifies, “Private property shall not be taken for public use without just compensation.”  Clearly, it’s not a case of stealing private property. This constitutional provision jibes with the “just compensation” reiterated in Section 10 of RA 11212.

The “just compensation” stated in the Constitution and RA 11212 also shows up in Republic Act No. 9136 or the “Electric Power Industry Reform Act” (EPIRA), specifying that “the costs for the acquisition, construction and the establishment of the power distribution system were allowed to be recovered through the retail rate approved by the Energy Regulatory Commission (ERC), which retail rate covers full recovery of the costs/funds used to acquire, construct and establish these power distribution system assets.”

In other words, the costs of power lines, lights and other components are embedded in the monthly bills that PECO slaps customers with.

So, what has PECO to lose from “just compensation” when it has already lost its franchise in the first place?

Nothing! On the contrary, it stands to gain P481,842,450, which is the amount that MORE Power is willing to pay in its petition for writ of possession pending at the Regional Trial Court (Branch 37). The money has been deposited at Landbank.

Rule 67, Section 2 of the Rules of Civil Procedure allows plaintiff with writ of possession “to take or enter upon the possession of the real property involved if he deposits with the authorized government depository an amount equivalent to the assessed value of the property.”

As MORE Power’s president Roel Castro was saying, “We won’t be using those assets for our own good. Those are for the consumers and that is the essence of the expropriation proceedings.” ([email protected]/PN)


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