Mandaluyong City RTC stops takeover of PECO’s operations in Iloilo City

Published March 13, 2019, 4:23 PM

by AJ Siytangco


By Rey Panaligan

The Mandaluyong City regional trial court (RTC) has stopped temporarily MORE Electric and Power Corporation from taking over the operations and assets of Panay Electric Company, Inc. (PECO) in Iloilo City.

In a temporary restraining order (TRO) issued last Tuesday, RTC Judge Monique A. Quisumbing Ignacio enjoined the implementation of MORE’s franchise under Republic Act No. 11212.


The order issued by the trial court stated:

“WHEREFORE, premises considered, petitioner PECO’s prayer for the issuance of a TEMPORARY RESTRAINING ORDER is hereby GRANTED.

“Accordingly, upon petitioner PECO’s filing, within five (5) days, of a bond in the sum of Five Million Pesos (Php5,000,000.00) conditioned on petitioner’s paying all damages respondents may sustain by reason of this TRO if this court should finally decide that the petitioner is not entitled thereto let a TEMPORARY RESTRAINING ORDER be issued effective for twenty (20) days from receipt hereof.”

The trial court ruled that MORE, the Department of Energy (DoE) and the Energy Regulatory Commission (ERC) or their representatives are enjoined “from enforcing, implementing and exercising any of the rights and obligations set forth under RA 11212,including but not limited to: (a) commencement of the expropriation proceedings against petitioner PECO under the assailed provisions; (b) takeover by respondent MORE of petitioner PECO’s distribution assets in the franchise area; and (c) issuance by respondents DOE/ERC of the Certificate of Public Convenience and Necessity (CPCN), provisional authority to operate or any other permits or licenses for the operation of respondent MORE in the franchise area; or if one had already been issued, to suspend the same pending the resolution of the case, so as not to render moot the Petition.”

It also set the hearing for the conversion of the 20-day TRO to a preliminary injunction at 8:30 a.m. on April 2, 2019.

The TRO was issued on PECO’s petition which challenged Sections 10 and 17 of RA 11212 that authorized MORE to “establish, operate, and maintain, for commercial purposes and in the public interest, a distribution system for the conveyance of electric power to end users in Iloilo City.”

It alleged as “arbitrary and confiscatory” the transfer of its franchise to MORE because the transfer is tantamount to the taking of its assets by the government in favor of another private entity and not for a public purpose.

“The assailed provisions… refer to no other than petitioner PECO’s assets, which the law specifically indicates as subject to respondent MORE’s right of eminent domain,” it said.

“In essence, RA 11212 legislates the takeover of petitioner PECO’s business by seizing its assets under the veil of expropriation. This cannot be done without violating petitioner PECO’s right to substantive due process,” it stressed.

PECO also alleged that MORE’s franchise violated the equal protection clause in the Constitution.

It pointed out that MORE “has no system of its own” and “has not complied with the standard requirements for all applicants for legislative franchise.”

The sole basis for the grant of new franchise was the delegation of power of eminent domain, it said.

In granting the TRO, the trial court said that “petitioner PECO was able to establish that the implementation or enforcement of Sections 10 and 17 of RA 11212 will materially and substantially invade its rights to equal protection under the law, due process, and against unlawful taking of property, since respondent MORE, by invoking Sections 10 and 17 of RA 11212, can easily take away, under the guise of eminent domain, petitioner PECO’s distribution assets.”

It noted that that while the plea for TRO was being heard, MORE filed on March 11, 2010 a complaint for expropriation against PECO before the RTC of Iloilo city.

“This unexpected deveIopment only serves to bolster the urgency of issuing a TRO considering that Section 10 of RA 11212 authorizes respondent MORE to take immediate possession of petitioner PECO’s distribution assets after filing of expropriation proceedings, due notice, and deposit of the assessed value of the assets in question,” the trial court said.

At the same time, the trial court pointed out: “MORE’s Certificate of Public Convenience and Necessity (CPCN) or Provisional Authority is scheduled for hearing on 27 March 2019. If the CPCN were to be granted, this will give rise to a situation where two electrical companies are operating in the same franchise area since PECO was given transitory authority to operate for two (2) more years under RA 11212.”

“All told, the foregoing facts clearly show that there is no other ordinary, speedy and adequate remedy to prevent the infliction of irreparable injury to PECO except through the issuance of a TRO,” it said.

Read more: Razon firm files for expropriation of Iloilo power firm