The Supreme Court dismissed the petition of Iloilo Electric Cooperative (ILECO I, II, and III) challenging Republic Act 11918, which expanded the franchise of MORE Electric and Power Corp. (MORE) into areas previously under ILECO’s jurisdiction. The ruling was penned by Associate Justice Rodil Zalameda last July 30, 2024.
ILECO is authorized to provide electricity in multiple Iloilo municipalities and Passi City. MORE originally operated only in Iloilo City, but the law extended its coverage to 15 municipalities.
SC’s reasons for the denial
ILECO petitioned the Court to nullify Section 1 of RA 11918, arguing it violated their exclusive franchise rights, due process, contract protections, and equal treatment. They also requested a temporary restraining order and an injunction to halt its enforcement.
However, the Court rejected the petition, citing both the 1987 and 1973 Constitutions, which prohibit exclusive franchises. It highlighted that under Section II, Article XII of the 1987 Constitution, “Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration or repeal by the Congress when the common good so requires.”
By passing RA 11918, Congress allowed the expansion of MORE’s jurisdiction to encourage competition and benefit consumers, without waiting for ILECO’s franchises to expire. “Without competition, ILECOs can easily dictate the price of electricity,” stated the court. “This is in accordance with the Electric Power Industry Reform Act (EPIRA), which encourages competition in the electricity industry.”
The Court’s decision was grounded in the tenet that exclusive franchises are not constitutionally safeguarded. It referenced sections from the 1935, 1973, and 1987 Philippine Constitutions, where the framers rejected the notion of exclusive franchises, especially regarding utility services.
Additionally, the Court highlighted that RA 11918 does not offer a special advantage to MORE, as it differs from other utilities with established distribution networks. It explained that the “added powers given to MORE are needed to ensure it is able to provide uninterrupted supply of electricity to its covered areas.”
Better service for Filipinos
The Davao Consumer Movement (DCM) supported the Supreme Court’s ruling, which rejects the idea that electric cooperatives hold franchises indefinitely. The group stated, “This means that electric cooperatives that continue to arrogantly refuse to hear our demands to improve services can be gotten rid of. The law allows the entry of another power service provider that would better benefit the consumers.”
DCM celebrated the decision as the Senate approved Senate Bill 2888 on its third and final reading, allowing Davao Light and Power Company Inc. to expand its franchise to seven more areas in Davao del Norte and Davao de Oro. These areas were previously under the Northern Davao Electric Cooperative (NORDECO), which had been criticized for inefficiency and high electricity rates.
Meanwhile, senators raised alarm over steep electricity rates in Iloilo and viewed MORE’s arrival as a possible remedy. Former Senator and current Finance Secretary Ralph Recto stressed that fostering competition could help drive down electricity costs for consumers.
Sources:
https://www.pna.gov.ph/articles/1230320
https://tribune.net.ph/2025/01/19/sc-junks-challenge-on-more-franchise
