PECO asks ERC to reverse order

March 09, 2020
Panay Electric Company

PANAY Electric Company, Inc. (PECO) is seeking the suspension of the revocation order issued by the Energy Regulatory Commission (ERC) of PECO’s Certificate of Public Convenience and Necessity (CPCN), claiming that its rival More Electric and Power Corporation (MORE) made false claims that led to ERC’s decision to transfer power distribution rights.

A 25-page Urgent Motion for Reconsideration was filed yesterday by PECO legal counsel Atty. Estrella Elamparo praying for the reinstatement of PECO’s CPCN and the revocation of MORE’s Provisional Authority until the situation has been thoroughly examined.

MORE was granted a Provisional Authority to operate by the ERC in a three-page resolution dated March 5. However, this was on the basis that MORE had acquired its own distribution system and the full transition of operations from PECO is completed.

“This is an illegal corporate takeover,” said PECO Head of Public Engagement and Government Affairs Marcelo Cacho in a press briefing on March 9. “They have taken over our facilities, they are trying to get our own employees, and they are trying to usurp our contracts as well as our distribution rates.”

The motion read that the ERC committed a “reversible error” when it granted MORE its Provisional Authority because its application was not supported by verified and authenticated documents or affidavits as required by Section 8 of Executive Order No.172 Creating the Energy Regulatory Board.

“What verified and authenticated documents were submitted? None. Zero. They only submitted a Manifestation with Urgent Motion for Early Resolution,” Elamparo said, noting that it contained falsehoods and mere “say-so” of MORE’s counsel. “They can’t submit anything other than their misinterpretations.”

Additionally, PECO asserted that MORE’s provisional authority was based on its “serious misrepresentations and misapprehension of facts.”

Despite the pending Supreme Court case regarding the constitutionality of the expropriation case, RTC Iloilo directed the issuance of the Writ of Possession last February 20, to which PECO filed a Motion for Clarification and a Petition for Certiorari with the Court of Appeals in Cebu on February 27.

MORE proceeded with the “violent” takeover the following day, says Elamparo, but Judge Emerald Contreras of the Iloilo RTC reiterated the following day that the addendum clearly states that “the operation should still be handled by PECO personnel who have the technical expertise” and that MORE is only meant to observe during the transition” and subsequently ordered MORE to return operations to PECO.

“I was so shocked when I was informed by the sheriff that apparently MORE had changed its mind,” stressed Elamparo when she recounted following up on information on the writ. “The response of the sheriff was ‘yun po ang sabi ng MORE eh, wala na kami magawa.’”

The motion declares that it is “inaccurate” and “misleading” for MORE to claim that it had taken full control of operations of the distribution facilities based on what had transpired.

PECO’s camp noted the revocation of PECO’s CPCN was also an error as MORE has yet to prove its financial and technical capabilities to operate.

Section 17 of Republic Act 11212, MORE’s franchise, explicitly states that “Panay Electric Company, Inc. (PECO), shall in the interim be authorized to operate the existing distribution system.”

“If MORE truly wanted to fulfill its mandate of providing a public service, then it would focus less on taking and instead do more building,” read the motion. “Even the taking, however, is being done illegally.”

MORE has not yet fully transitioned towards full operations and cannot prove its financial and technical capabilities, says Cacho. According to him, there are only 40 formerly contractual PECO employees who have transferred to MORE’s employ and only a single supervisor.

Furthermore, during a March 2 hearing, it was raised that based on the Sheriff’s Return on the Writ of Possession, the sheriff mentioned that both MORE and PECO agreed that “the status quo of the electric operation will be maintained.” Also, it is currently only PECO that purchases power for distribution on a daily basis through its current power supply contracts from the Wholesale Electricity Spot Market (WESM).

“PECO is the only entity in Iloilo that is registered with WESM and to this day, it is the one that gets billed by said entity for power purchases through it, as evidenced by the WESM bill sent to PECO,” revealed the statement.

The final grounds which the PECO says the resolution must be reversed stated that authorizing MORE to source power requirements from PECO’s current power generation suppliers violates the principle of relativity of contracts as stated in Article 1311 of the Civil Code.

“The basic principle of relativity of contracts is that contracts can only bind the parties who entered into it and cannot favor or prejudice a third person,” noted the motion in reference to MORE as the “third person.”

PECO asserts that all three elements are present for tortious interference, because MORE is aware of PECO’s valid contracts and it has no legal justification to interfere with them.

“Had the Honorable Commission found that MORE is technically and financially capable of operating the distribution system, then why would it authorize MORE to source its power requirements from the current power generation suppliers of PECO.”

“The fight is far from over. We caution MORE from prematurely celebrating and informing everybody that they are in control,” said Elamparo.