THE INEVITABLE happened although we can’t fault some quarters for “wishful thinking”. All we can do is wish them well and pray they’ll accept the final decision and move on.
Electric cooperatives do not have a constitutional right to an exclusive franchise within their coverage areas.
This was the ruling of the Supreme Court En Banc in a Decision dated July 30, 2024, penned by Associate Justice Rodil V. Zalameda. The Court dismissed the petition of Iloilo Electric Cooperative, Inc. (ILECO) I, II, and III challenging the validity of Republic Act No. (RA) 11918. The law expanded the franchise of another electricity provider, MORE Electric and Power Corporation (MORE), to areas within ILECOs’ franchise.
Simply put, it means that the Supreme Court has upheld the validity of the franchise expansion of MORE Power into several towns in Iloilo province, effectively saying that electric cooperatives do not have a constitutional right for an exclusive franchise in their area.
“A franchise, as a privilege granted by the state, is not the exclusive private property of the franchisee. Thus, it must yield to serve the common good, as determined by Congress.”
This recent high court ruling allows MORE Power to expand its service areas to the towns of Alimodian, Anilao, Banate, Barotac Nuevo, Dingle, Dueñas, Dumangas, Leganes, Leon, New Lucena, Pavia, San Enrique, San Miguel, Santa Barbara, Zarraga, and Passi City.
Take note that, these areas are currently being served by ILECO I, II, and III with franchise certificates to operate electric light/power services in the above municipalities in the province of Iloilo.
Previously, the three ILECOs filed a petition at the Supreme Court for certiorari and prohibition with prayer for the issuance of a temporary restraining order and writ of preliminary injunction.
They were questioning the validity of Section 1 of RA 11918 for alleged violation of their rights to exclusive franchises, due process, non-impairment of contracts, and equal protection.
The dismissal of the petition means that the Supreme Court ruled that Section11, Article XII of the Constitution prohibits exclusive franchises and that a franchise granted by the state is not the exclusive private property of the franchisee.
The high court stressed that when Congress enacted RA 11918, the purpose is to make electricity more affordable to the people of Iloilo province, expanding MORE Power’s franchise is promoting healthy competition as they are more than capable of lowering energy rates.
According to the Supreme Court, without competition, ILECO can easily dictate the price of electricity. Allowing the entry of another player thus benefits consumers, who no longer have to wait until the three ILECOs’ franchises expire in 2029, 2039, and 2053.
It added that contract rights must give way to the broader authority of the state’s police power when exercised for the general welfare, as in this case. In this case, the tribunal ruled that the ILECOs failed to show how RA 11918 affected their contracts with their suppliers.
Likewise RA 11918 does not give preferential treatment in favor of MORE Power. Since they are a new franchise holder and do not have the advantages of a power utility already in place.
The Supreme Court’s decision also said that giving these rights to MORE Power ensures that they will provide uninterrupted electricity to its covered areas.
Meanwhile, MORE Power President/CEO Roel Castro said that MORE Power already extended their primary lines to the boundary of Iloilo City and Pavia, the expansion’s jump-off point, Megaworld substation as the main supply point for Pavia due to its proximity to the town.
The expansion is projected to take four to five years to complete the expansion to all 15 towns, with initial investments between P2 billion and P2.5 billion.
Of course, MORE Power is willing to work with ILECO I, II, and III during the expansion “for the welfare of consumers” and leave it to consumers to choose their preferred power distribution utility.
Well played, indeed, Nong Moroy./PN
