The Supreme Court (SC) has paved the way for the Enrique Razon-led More Electric and Power Corp.’s (MORE) unhampered expropriation of the power distribution system in Iloilo City.
In an-18 resolution released on Tuesday, the Court, voting 9-6, affirmed with finality its September 20, 2020 decision which settled the dispute between MORE and Panay Electric Co. (PECO) over the control of power distribution business in Iloilo City.
The Court upheld the constitutionality of Sections 10 and 17 of Republic Act (RA) 11212 (MORE’s franchise).
The said provisions give MORE the powers of eminent domain and to expropriate any asset, including existing distribution assets in the city.
“Clearly, in granting MORE the right to exercise eminent domain, the primordial concern of the Congress is the welfare of the residents of Iloilo City who rely on the distribution system of PECO. There is no question that PECO’s franchise was not renewed, thus, it can no longer operate the distribution system in Iloilo City,” the SC ruled.
“More as the new franchisee, is mandated under Section 2 of RA 11212 to operate and maintain the distribution system in the best manner possible. To be able to do so, its right to expropriate the distribution system in Iloilo City to ensure uninterrupted supply of electricity should not be hampered by unfounded allegations of undue benefit and corporate takeover,” it added.
The Court did not give weight to the arguments raised by PECO in its motion for reconsideration saying that these “have been squarely and extensively” discussed in its September 15 ruling.
In opposing PECO’s appeal, MORE argued that its rival has no absolute discretion on how and when to dispose its distribution assets since these are regulated assets established for the sole purpose of supplying electricity to end-users in Iloilo City.
MORE said PECO lost its right to occupy public streets and skyline when its franchise expired, thus, had the obligation to uproot, dismantle and remove its posts, wires, transformers and electric meters.
It added that to require it to build a new distribution system is “anti-consumer” and would deny the consumers of Iloilo City their right to continued service.
In siding with MORE, the SC said the authority granted to MORE under its franchise to expropriate the existing distribution system of PECO is a valid delegation of power.
“The power of eminent domain is exercised by the legislature. However, it may be delegated by Congress to the President, administrative bodies, local government units and even to private enterprise performing public services,” the Court said.
The SC also stressed that the expropriation of the power distribution assets is necessary to ensure uninterrupted electricity in Iloilo City.
“In sum, expropriation by MORE of the distribution system of PECO under Section 10 and 17 of RA 11212 serves both the general public interest of conveying power and electricity in Iloilo City and the peculiar public interest and security of ensuring the uninterrupted supply of electricity,” the Court pointed out.
The High Tribunal did not give credence to the claim of PECO that it was singled out and that MORE was given undue benefit which should invalidate the grant of franchise to the latter.
The Court noted that there is only one franchise holder in Iloilo City prior to the enactment of RA 11212, thus, it is only natural for PECO being the lone previous franchise holder, to oppose all subsequent franchise holder exercising the right to eminent domain.