Panay Electric questions 'takeover' provisions in Razon-backed firm's franchise

Mike Navallo, ABS-CBN News

Posted at Mar 08 2019 05:00 PM

MANILA -- Panay Electric Company challenged before a Mandaluyong City court certain provisions of the franchise to operate a power firm in Iloilo granted to its rival MORE Electric and Power Corp owned by billionaire Enrique Razon.
 
PECO said the provisions amounted to a “takeover” of its assets and asked the court to stop the Department of Energy and the Energy Regulatory Commission from implementing the law that granted MORE its franchise.

Section 10 and 17 of the law allows MORE to expropriate PECO’s private assets, including poles, wires, cables, transformers, switching equipment, stations and buildings, machinery and equipment, currently being used for distributing electricity in the province.
 
Section 10 also allows MORE to possess and operate PECO’s assets upon filing of a petition for expropriation in court and depositing in a bank the full amount of the assessed value of PECO’s properties.
 
PECO said these provisions violated its right to due process because the “takeover” is arbitrary and confiscatory.
 
“Through this irregular grant of the power of eminent domain, a shell company without any assets, facilities or equipment whatsoever [for distribution of electric power], in the blink of an eye, becomes the new owner of an entire distribution system owned by its competitor who invested money, time, effort and labor into these assets, facilities or equipment,” the petition read.
 
PECO has operated in Iloilo for 95 years. Its franchise expired last Jan. 18. A petition to extend the franchise failed to prosper.

The petition also claimed violation of equal protection because MORE’s application for a franchise was allegedly given “favorable treatment.”

PECO urged the court to issue a temporary restraining order and/or a writ of preliminary injunction to prevent MORE’s takeover of its assets.
 
It also asked the court to declare that sections 10 and 17 of RA 11212 are unconstitutional and that PECO had no obligation to sell and MORE has no right to expropriate its assets.

ABS-CBN Corp's sister company, First Philippine Holdings, is a minority shareholder in PECO.