Peco seeks reversal of SC decision over control of Iloilo City’s power distribution system

ILOILO CITY — The Panay Electric Company (Peco) has appealed a Supreme Court decision that affirmed provisions of the law granting its rival More Power Electric Corp. (More Power) the authority to expropriate its distribution assets.

In a 37-page motion for reconsideration filed on December 11 through its counsels under the Divina law firm, Peco called on the high court to “take a second hard look at the unprecedented circumstances of the case, not to mention the far-reaching legal implications” of the court’s decision.

It argued among others that only the government has the right to expropriate Peco’s property if the government decides to operate and maintain the electric distribution system and not another private entity.

Voting 8-6, the high court on September 15 reversed a July 1, 2019 decision of the Mandaluyong Regional Trial Court declaring that Sections 10 and 17 of Republic Act (RA) No. 11212 as unconstitutional.

RA No. 11212 signed by President Duterte on February 14, 2019 granted a 25-year franchise to More Power to establish, operate and maintain a power distribution system in Iloilo City.

Peco’s franchise expired on January 18 and under RA No. 11212, More Power has to put up its own assets or acquire existing ones not later than two years after the franchise took effect.

More Power took over the distribution assets of Peco in February after the Iloilo City Regional Trial Court issued a writ of possession.

The full text of the high court’s decision was only made public on November 27 when it was posted on the high court’s website.

In its decision, the high court ruled that Peco’s distribution assets are “susceptible to expropriation for the same public purpose of power and electricity distribution” and that the expropriation of its distribution system by More Power satisfies the “constitutional requirements of due process and equal protection.”

It cited Peco’s legislative franchises which provide that the government can expropriate its distribution system to put to the very same public use on or before its franchise expiration.

The high court also ruled that the expropriation by More Power of Peco’s distribution system “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.”

But in his 21-page dissenting opinion, Associate Justice Marvic Leonen said the case “is a classic example of abuse of eminent domain powers and a deprivation of property without due process of law.”

“Under a semblance of legitimacy, a private entity is allowed to take private property for its own proprietary interests. A law was passed to mask a forced corporate takeover by a private entity. These practices should have no place in a fair and just society,” he said.

Leonen said the provision that grants More Power the right of eminent domain “confers unwarranted benefits to a specific corporation…that are not conferred to other public utilities similarly situated to it.”

He said the provision “permits the taking of private property already devoted to the same public purpose by an entity with no experience whatsoever in electricity distribution, and who will be operating as a monopoly.”

“…Therefore, there will be no benefit to the public. The taking serves nothing but private interests,” he said.