“IT HURTS to say goodbye,” so an old song laments. It could be true for Panay Electric Co. (PECO). But it should be sport enough to bow out as the sole electricity distributor in Iloilo City. After all, very few other business ventures reach 96 years old.
Through an executive order dated May 8, 2020, Mayor Jerry P. Treñas revoked PECO’s business permit. Simply put, it’s because the distribution utility has lost its legislative franchise on expiration; as well as its certificate of public convenience and necessity (CPCN), which had been revoked by the Energy Regulatory Commission (ERC).
Both important requirements, necessary before the city’s Business Permits and Licensing Office (BPLO) could renew PECO’s business permit, are now in the hands of MORE Electric and Power Corp. (MORE Power),
PECO, however, may still collect payment for electric bills that its customers have not yet paid, including the February 2020 billing period.
PECO’s franchise expired on Jan. 19, 2019 yet but managed to hold on by questioning the constitutionality of Republic Act 11212, the franchise law expropriating the distribution system in favor of MORE Power, in an unlikely venue – the Regional Trial Court of Mandaluyong City. While the case was pending, ERC had no choice but to issue a provisional CPCN to PECO.
The mayor’s executive order followed an earlier decision of Judge Emerald Requiña-Contreras (Iloilo Regional Trial Court, Branch 23) in civil case 19-34158, dated April 16, 2020, which affirmed the cancellation of PECO’s CPCN and its issuance to MORE Power. The transfer of CPCN could not be questioned because “the court recognizes the Energy Regulatory Commission as the lone quasi-judicial entity which has the sole jurisdiction over the operation of electric distribution utilities.”
The judge resolved PECO’s motion for implementation of her “addendum” to the writ of possession, allowing the outgoing power distributor to operate while in the transition period, to wit:
“The court would have wanted PECO to still be at the helm of the operation during the transition, considering that besides having a CPCN, it has been in the power distribution for almost a century while MORE is new to the business.”
It would have been an awkward scenario where the new player had the franchise without CPCN while the old player had the CPCN without the franchise.
As it turned out by then, however, ERC had already revoked PECO’s CPCN and granted the same to MORE Power; and the technical people of PECO had transferred to MORE Power, thus ensuring the continuity of service through full operation by the old hands working for the new employer.
What’s left for the RTC Branch 23 to hear (as soon as the COVID-19 crisis would have departed) is the second phase of the expropriation case, specifically the payment of “just compensation” as provided by Section 10 of RA 11212, the law shifting the power franchise from PECO to MORE Power.
MORE Power has escrowed P481,842,450 at Landbank, which is the “just compensation” it is offering to pay PECO, which may agree or disagree, since the amount is subject to final decision by the judge based on evidence to be presented. The court requires each player to nominate three “commissioners” to participate in the second phase.
PECO is thus provided with the opportunity to gain from its expropriation, which may be considered “bonus” because the cost of its facilities has already been recovered, being embedded in the customers’ monthly bills.
So let it be said that Republic Act 11212 is mutually beneficial to the past and present players. (hvego31@gmail.com/PN)
