MANILA - Panay Electric Company (PECO) secured a win in its legal battle to prevent the expropriation of its assets by power firm MORE Electric and Power Corp., owned by ports magnate Enrique Razon.
Razon's MORE now holds a franchise to distribute power in Iloilo after PECO's franchise expired last Jan. 18 following 95 years of operation in the area.
PECO, however, challenged the legality of MORE's franchise saying 2 of the provisions there, which allow Razon's firm to seize PECO's power assets, were unconstitutional.
Sections 10 and 17 of the franchise allow MORE to expropriate PECO’s private assets, including poles, wires, cables, transformers, switching equipment, stations and buildings, machinery and equipment, currently being used to distribute electricity in the province.
In a ruling dated July 1, the Mandaluyong Regional Trial Court (RTC) ruled that PECO has no obligation to sell its assets, and MORE has no right to expropriate PECO's properties.
"The discriminatory and confiscatory effect of the assailed provisions cannot be denied," said the ruling signed by Judge Monique Quisumbing-Ignacio of the Mandaluyong RTC Branch 209.
PECO's rights to equal protection under the law were violated by the provisions, the court ruled.
The firm said it will use this decision in its application for franchise in the opening of the 18th Congress.
PECO’s administrative manager Marcelo Cacho said the Mandaluyong Court's ruling will have an effect on the expropriation case filed by MORE against PECO before the Iloilo RTC.
Cacho said that since MORE will not have any facilities for power distribution, its franchise will be of no use.
"So that means that unless they decide to put up their own facilities, well they won't be able to operate," Cacho said in an interview with ANC's Business Nightly.
The next hearing before the Iloilo RTC for the expropriation of PECO’s assets has been set on July 11, 2019.
Meanwhile, MORE legal counsel Atty. Hector Teodosio said they could still appeal the decision before the Court of Appeals and the Supreme Court.
Teodosio also said that the decision of the Mandaluyong RTC does not present a huge problem for MORE.
"If MORE has no franchise, they would be in the same situation. But the problem is MORE has a franchise. Under the law, a power utility cannot operate without a franchise. Since MORE has a franchise, they still have the advantage," Teodosio said.
MORE president and CEO Roel Castro said that they are still exploring their legal options, but the company is still confident over its franchise.
"Nothing has changed as far as we are concerned," Castro said in an interview with ANC.
ABS-CBN Corp's sister company, First Philippine Holdings, is a minority shareholder in PECO.
- With a report from Jennifer Garcia Hernandez, ABS-CBN News