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SC upholds Razon takeover of Iloilo power firm

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THE Supreme Court upheld the validity of the provisions of the law allowing Razon-led MORE Electric and Power Corp. to take over the power distribution assets in Iloilo City.

Brian Keith F. Hosaka, the court’s public information chief, told reporters the justices voted 8-6 in favor of MORE.

“In granting the petitions, the Supreme Court reversed the Judgment of the Regional Trial Court of Mandaluyong City Branch 209 in Civil Case No. R-MND-19-00571, and declared Section 10 and 17 of RA No. 11212 constitutional,” he told reporters via Viber.

The six justices who dissented were Justices Marvic Mario Victor F. Leonen, Amy C. Lazaro-Javier, Henri Jean Paul B. Inting, Rodil V. Zalameda, Mario V. Lopez, and Samuel H. Gearlan. Justice Priscilla J. Baltazar-Padilla did not take part.

MORE, led by businessman Enrique K. Razon Jr., in February 2019 was granted a 25-year franchise to provide electricity to Iloilo City, replacing Panay Electric Co., Inc. (PECO).

PECO was the electric provider of Iloilo for more than 90 years, but its legislative franchise expired in January 2019.

Estrella C. Elamparo, PECO’s legal counsel, said the side of the city’s previous electricity distributor was “saddened” by the decision of the Supreme Court.

“It was a close vote on a novel issue that had never been raised before our Highest Court, but will certainly have reverberating consequences that open the power of expropriation to abuse. The tight vote lends support to our position that the takeover of PECO’s properties is not the exercise of eminent domain contemplated by our laws, but a violation of constitutional rights,” she said in a statement.

“The ponente proceeded with the decision just days before his retirement from the judiciary. Although this is a massive hurdle, we will not give up on our fight and we will continue to pursue the available legal remedies to defend PECO’s constitutional rights. Despite this temporary setback, we remain optimistic that we will ultimately be vindicated not just for PECO but for the people of Iloilo,” Ms. Elamparo added.

The Mandaluyong court last year declared as unconstitutional the two provisions in the legislative franchise of MORE following a petition from PECO.

Section 10 of Republic Act 11212 authorizes MORE to exercise the power of eminent domain as necessary for the efficient establishment, improvement, and maintenance of its services and acquire private property “as is actually necessary for the realization of the purpose for which the franchise is granted.”

Meanwhile, Section 17 provides that PECO is to operate the existing distribution system in the franchise area until MORE completes its own distribution system within two years.

MORE raised to the Supreme Court the ruling of the trial court and secured a temporary restraining order in December 2019.

Early this year, an Iloilo court issued a writ of possession, allowing MORE to take over PECO’s assets.

PECO last week said it had filed an anti-competition complaint against MORE for allegedly prohibiting competition in electricity distribution in Iloilo city. — Vann Marlo M. Villegas with Adam J. Ang

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