power and water

Supreme Court clears way for Razon’s MORE to take over Iloilo power distribution

Lian Buan

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Supreme Court clears way for Razon’s MORE to take over Iloilo power distribution

POWER LINES. Multiple transmission line projects have been delayed due to right-of-way issues and construction complications.

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Defeated Panay Electric Company says the close 8-6 vote supports its position that the takeover is unconstitutional

The Supreme Court (SC) en banc voted in favor of MORE Electric Power and Corporation, clearing the way for its takeover of Iloilo’s power distribution system.

SC Spokesperson Brian Keith Hosaka confirmed to reporters on Wednesday, September 16, that the en banc voted 8-6 to rule in favor of the Enrique Razon Jr-owned MORE, ending its heated saga with longtime power provider Panay Electric Company (PECO).

The 6 dissenting justices are Associate Justices Marvic Leonen, Amy Lazaro Javier, Henri Jean Paul Inting, Rodil Zalameda, Mario Lopez, and Samuel Gaerlan. Associate Justice Priscilla Baltazar Padilla did not take part. 

“In granting the petitions, the Supreme Court reversed the judgment of the Regional Trial Court (RTC) of Mandaluyong City Branch 209 in Civil Case No. R-MND-19-00571, and declared Section 10 and 17 of RA (Republic Act) No. 11212 constitutional,” Hosaka said.

Lower court drama

Hosaka was referring to the decision of Mandaluyong RTC Branch 209 on July 1, 2019, that declared as unconstitutional the takeover provisions in MORE’s franchise law.

PECO’s electricity distribution franchise in Iloilo expired in January 2019. A month later, President Rodrigo Duterte signed RA No. 11212 granting a 25-year distribution franchise to MORE.

The House committee on legislative franchises denied PECO’s bid for a 25-year distribution franchise renewal in September 2019.

RA No. 11212 authorized MORE to acquire PECO’s assets – in essence, a takeover. MORE started taking over the assets of PECO earlier this year.

The legal battle was fought out in the lower courts first, with PECO scoring the first victory at the Mandaluyong court which said that the takeover provisions were arbitrary, and therefore unconstitutional.

But in August 2019, MORE’s expropriation of the assets, or the takeover, was given the green light by Iloilo RTC Branch 37.

These clashing lower court rulings prompted both PECO and MORE to go to the SC.

In March 2020, the  Energy Regulatory Commission revoked the provisional Certificate of Public Convenience and Necessity (CPCN) – or the permit – earlier given to PECO because MORE had essentially completed a takeover of its assets.

Despite that, PECO refused to stand down, citing the pending SC case.

This recent ruling removes the final stumbling block for MORE to take over Iloilo’s electricity distribution.

Close vote

In a statement on Wednesday, PECO’s legal counsel Estrella Elamparo said the ruling “will certainly have reverberating consequences that open the power of expropriation to abuse.”

Elamparo said the close vote “lends support to our position that the takeover of PECO’s properties is not the exercise of eminent domain contemplated by our laws, but a violation of constitutional rights.”

“Curiously, the ponente proceeded with the decision just 4 days before his retirement from the judiciary,” said Elamparo.

The ponente was Associate Justice Jose Reyes Jr, who will retire on Friday, September 18.

Elamparo said their legal battle is not yet over.

“Although this is a massive hurdle, we will not give up on our fight and we will continue to pursue the available legal remedies to defend PECO’s constitutional rights,” she said.

ABS-CBN Corporation’s sister company, First Philippine Holdings, is a minority stakeholder in PECO. – Rappler.com

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Lian Buan

Lian Buan is a senior investigative reporter, and minder of Rappler's justice, human rights and crime cluster.