PUBLISHED figures on how much Panay Electric Co. (PECO) owes the Iloilo City government in accrued realty taxes, unpaid since 2006, vary from P90 to P98 million.
To collect the amount plus interest, the city would sell PECO’s power distribution assets in a public auction on Dec. 12, starting at the floor price of P106.8 million – unless PECO pays the same amount in full.
So far, only MORE Electric and Power Corp. (MORE Power) has expressed intention to bid. As everybody knows, while it has been granted the congressional franchise to replace PECO, the latter has refused to give way by questioning its constitutionality in Court.
Assuming PECO fails to pay and MORE Power wins the auction, then the former would have to step aside in favor of the latter.
If PECO pays in toto – which is no peanuts as shown by its ungranted plea for installment terms – then it would still have to win its case against MORE Power. Even then, with no franchise to cling to, it is estopped from repositioning as distribution utility.
Will PECO pay, or not?
That question could be one for gamblers to bet on.
For reneging on its tax obligation, PECO’s “good faith” has become questionable. Its easiest way out is to yield to the majesty of the law (Republic Act 11212) which provides for its expropriation by the new franchisee in exchange for “just compensation”. For that purpose, MORE Power has already escrowed at Land Bank of the Philippines the offered amount of P481,842,450.
The amount would be much more than enough to pay City Hall.
In other words, a peaceful turnover of the power-distribution system from PECO to MORE Power would be “the way” to keep Iloilo City energized.
PECO’S management and incorporators know only too well that they could not go on “franchiseless” in the long run; that their delaying tricks are only meant to keep their coffers loaded within a limited time frame. It would therefore be a losing proposition for them to upgrade their electric meters, power lines and crumbling poles.
Lawyers I have talked to could not explain the propriety of a Regional Trial Court (RTC) in Mandaluyong City in declaring the expropriation clauses of RA 11212 “unconstitutional”. Isn’t a law presumed valid unless repealed by Congress or nullified by the Supreme Court?
How could RA 11212 be unconstitutional when it merely reiterates a provision of an older law, RA 9136, passed in 2001? Better known as the “Electric Power Industry Reform Act” (EPIRA), it briefly says in the last paragraph of Section 23:
“Distribution utilities may exercise the power of eminent domain [the power to expropriate] subject to the requirements of the constitution and existing laws.”
And so Judge Yvette Go of the RTC-Iloilo Branch 37, sometime in August this year, granted MORE Power’s application for a writ of possession that would empower MORE Power to take over PECO’s facilities and operation because “it is vested with public interest”. However, having inhibited herself from implementing the writ, another judge took over – Judge Daniel Amular of RTC-Iloilo Branch 35.
After a few hearings, however, MORE’s lawyer Hector Teodosio asked for Amular’s inhibition on the ground of “bias and partiality against plaintiff”.
But the judge suspended action on the case because of “a pending petition for review on certiorari” before the Supreme Court in connection with the decision of another Court declaring two sections of RA 11212 void and unconstitutional.
Oh, well, it’s not every day that the Supreme Court rules ahead of the lower court. (hvego31@gmail.com/PN)
