Tougher battle ahead
HIDDEN AGENDA - Mary Ann LL. Reyes (The Philippine Star) - November 17, 2019 - 12:00am

Panay Electric Co. (PECO), which had been distributing electricity in Iloilo City for the last 96 years until its franchise expired and a new one covering the same area granted by Congress to another power company, has announced that it is applying for a new legislative franchise.

But even before facing another tough battle in Congress (the House committee on legislative franchise earlier denied PECO’s application for a new 25-year franchise), PECO has to raise P97 million if it wants to keep its electricity distribution assets.

Iloilo City Mayor Jerry Trenas has announced that on Dec. 12, PECO’s distribution assets, including its electricity poles, will be auctioned off as payment for the utility company’s P97 million real estate tax arrears with the city. If it is unable to pay before that date, PECO can still redeem the assets but it has to pay a higher amount of P106 million.

Then of course there is still this problem with More Electric and Power Corp., the company which was granted the Iloilo City electricity distribution franchise by virtue of Republic Act 11212. The law allowed More to expropriate PECO’s distribution assets after paying just compensation.

The Mandaluyong Regional Trial Court earlier declared portions of More’s legislative franchise, including that which granted it expropriation powers, as void and unconstitutional. More questioned the RTC ruling when it filed an action for a temporary restraining order and writ of preliminary injunction. The Supreme Court denied the TRO petition and required More to show cause why it should not be declared in contempt for continuing with the expropriation.

In another case, the Court of Appeals denied PECO’s petition to stop More from expropriating the former’s distribution assets. The CA said that only the SC can stop the implementation of the EPIRA law, which grants eminent domain powers to distribution utilities in their franchise areas.

At the end of the day, it will be the High Tribunal which will decide whether or not More can expropriate PECO’s assets which the former will use to distribute electricity in Iloilo City.

According to PECO top executive Marcelo Cacho, allowing More to expropriate PECO’s assets can set a bad precedent and threaten every electric cooperative in the country which can be taken over by big business by the mere expediency of the power of eminent domain being written in every franchise.

In her decision, Mandaluyong RTC Judge Monique Ignacio noted that the power of eminent domain was never intended to be used as a tool to take private property already being devoted for public use from one person and transfer the same to another person to be used for the same public purpose.

PECO has dismissed any possible settlement with More if it involves selling its power assets at any price. It has also cited National Electrification Administration and Energy Regulatory Commission records showing PECO’s exemplary performance as power utility.

Meanwhile, the Iloilo City government seems hell bent in auctioning off PECO’s distribution assets on Dec. 12 after the company failed in negotiations with the City Treasurer’s Office on a package to settle its tax obligations.

Trenas pointed out that PECO’s dispute with the city government over its realty tax arrears had been going on since 2006 when the city treasurer made a ruling based on court decisions that taxes due from private utilities included real estate taxes, and in PECO’s case including the land where its 30,000 electricity poles stand on.

The city treasurer has also ordered the Iloilo City Business Permit and Licenses Office not to renew PECO’s business permit this year until it pays its tax obligation with the city.

Trenas had an eye on ensuring a regular stream of revenues from the utility’s real estate when he first approved the tax assessment in 2006, and was surprised to learn when he reassumed the post as the city’s chief executive that it remained uncollected.

PECO had also been in conflict with the Iloilo City Council which earlier passed a unanimous resolution calling on the two chambers of Congress to deny PECO’s application for the renewal of its franchise that expired last Jan. 18. 

Performance first

The latest Pulse Asia Ulat sa Bayan survey has shown House Speaker Allan Peter Cayetano  garnering a 62 percent trust rating and a 64 percent approval rating, which are both higher than what Vice President Leni Robredo has received. Cayetano’s rating is also higher than that of his predecessors, among them, former president Gloria Macapagal Arroyo and Davao del Norte Rep. Pantaleon Alvarez. Cayetano was able to achieve this in his first two months as Speaker.

 Meanwhile, the 2020 General Appropriations Bill was approved by the House on third and final reading in record time. Cayetano has made sure that the bill contains no pork, no illegal insertions and no “parked” funds.  

The House of Representatives has also performed beyond expectations, with the President’s priority reform measures he mentioned in his 4th State-of-the-Nation Address (SONA) progressing rapidly in the House under Cayetano’s leadership. The Corporate Income Tax and Incentive Rationalization Act (CITIRA), the Passive Income and Financial Intermediary Taxation Act (PIFITA), the bill further increasing the excise taxes on alcohol products and e-cigarettes, and the amendments to the Foreign Investments Act were all approved on third and final reading.

All these may have caused the President to rethink this term-sharing arrangement between Cayetano and Marinduque Rep. Lord Allan Velasco. Under the supposed term-sharing agreement, Cayetano will serve the first 15 months as Speaker while Velasco will take over for the rest of the 21 months of the 18th Congress.

Marinduque Rep. Lord Allan Velasco and his wife, Rowena, recently celebrated their birthdays in San Juan with President Duterte as their guest of honor.

According to sources, the President delivered a short speech at the birthday gathering  with Velasco expecting him to announce some piece of good news, in confirming that the term-sharing agreement for the House Speakership between Velasco and Cayetano will push through. 

 But that did not happen as the President was non-committal. He told the congressmen present at the gathering: “Kung iyan ang usapan, term-sharing, nasa inyo na ‘yan if the parties would honor.”

 The President added he was not forcing anybody to take a stand. “It’s your choice because the agreement and the choice is yours. You can make or unmake the Speaker,” he said.  

Velasco was expecting the President to correct the earlier statement of presidential spokesperson and chief presidential legal counsel Salvador Panelo, who said  that the President merely suggested the term-sharing deal, and it is now up to the members of the House of Representatives to decide for themselves whether this agreement should still stand. 

 Unfortunately for Velasco, the President made no such announcement in his favor.

 The president of the National Unity Party (NUP),  Cavite Rep. Elpidio Barzaga Jr., has said that the term-sharing agreement may not be followed by House members, noting that if Cayetano sustains his good performance as shown by his high trust and approval ratings in the latest Pulse Asia quarterly report, there would be a groundswell among House members and the public for him to stay on. The NUP is a significant bloc in the House with over 50 congressmen under its wing and is allied with the majority coalition. 

For comments, e-mail at mareyes@philstarmedia.com

PANAY ELECTRIC CO.
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