RTC rules MORE takeover of Peco’s operations ‘illegal’
By Lenie Lectura – July 10, 2019
from Business Mirror
PANAY Electric Co. (Peco) said Tuesday Branch 209 of the Mandaluyong City Regional Trial Court made permanent a temporary restraining order (TRO) issued last March in connection with MORE Power and Electric Co.’s (MORE Power) takeover of the utility firm’s assets.
“In the end, our company and shareholders are thankful that the rule of law and the supremacy of the Constitution prevailed. The RTC confirms that one cannot legislate the illegal takeover of a private company lock stock and barrel in the guise of expropriation,” Peco officials said in a statement. “We know that this decision will not stop our adversary, but we are committed to keep the fight up and defend our rights under the constitution.”
In her nine-page order dated July 1, Judge Monique Quisumbing-Ignacio said “the TRO dated March 14, 2019, insofar as it enjoins respondent MORE from enforcing, implementing and exercising any of its rights and obligations set forth under RA 11212, including but not limited to commencing or pursuing the expropriation proceedings against petitioner Peco under the assailed provisions; and takeover by MORE of Peco’s distribution assets in the franchise area is hereby made permanent.”
The court also declared “Sections 10 and 17 of RA 11212 void and unconstitutional for infringing on Peco’s rights to due process and equal protection of the law.
Consequently, Peco has no obligation to sell and MORE has no right to expropriate Peco’s assets under Sections 10 and 17 of RA 11212; and, Peco’s rights to its properties are protected against arbitrary and confiscatory taking under the relevant portions of Sections 10 and 17 of RA 11212.”
Republic Act 11212 granted MORE the franchise to distribute power in Iloilo City. Under Sections 10 and 17 of RA 11212, MORE is authorized to exercise the power of eminent domain over all the distribution assets and properties of Peco in the franchise area.
Peco had applied for the issuance of a TRO because its existing assets are in danger of being expropriated by MORE.
The court noted that Peco’s distribution assets are already being utilized. Hence, the only tangible effect of the exercise of eminent domain by virtue of the assailed provisions would be to replace Peco with MORE are the owner of the existing electric power distribution system in Iloilo City. “In other words, a corporate takeover. To achieve this, the state should not intervene. This should be a private matter between Peco and MORE.”
However, the court clarified that what it declared as unconstitutional is the transfer of all Peco’s distribution assets existing at the franchise area. “The grant of the franchise is another matter which is not the issue in the present petition,” it said.
Peco reaffirmed the commitment never to abandon Iloilo City— “even as we keep up the fight. We will continue our modernization efforts using the latest technology and industry best practices and will continue to work with and for the sustained progress of the Iloilo City.”
It vowed to reduce the rates further while providing stable power supply. “We have also begun talks with battery storage companies to help us fully maximize our current contracts to further reduce the rates.”
Peco’s smart metering program, it said, “will continue to ensure we give our consumers the most accurate billings possible.”
