MANILA, Philippines — The Supreme Court (SC) on Thursday said that electric cooperatives do not have a right to an exclusive franchise in an area.
The Iloilo Electric Cooperative Inc. I, II, and III (ILECOs) had challenged Republic Act No. (RA) 11918, which granted the right to electricity firm MORE Electric and Power Corp. (MORE) the right to operate within ILECOs’ areas.
“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,” the SC said in a statement.
According to the SC, ILECOs had the franchise certificates to operate in the municipalities of the province of Iloilo, as well Passi City.
“MORE initially held a franchise to operate the same in Iloilo City until RA 11918 expanded its franchise to include 15 municipalities and one city previously within ILECO’s exclusive franchise area,” the SC said.
As a result, ILECOs filed a petition for certiorari and prohibition, as well as a temporary restraining order and writ of preliminary injunction to the law. The firm cited that it violated their right to exclusive franchises.
However, the SC said that competition is needed to keep the prices of electricity in control.
“Without competition, ILECOs can easily dictate the price of electricity. Allowing the entry of another player thus benefits consumers, who no longer have to wait until ILECOs’ franchises expire in 2029, 2039 and 2053,” the SC said.
The SC also said that RA 11918 did not favor MORE. As a new franchise holder, MORE does not have the same edge as other utilities with existing systems.
“The added powers granted to MORE are needed to ensure it is able to provide uninterrupted supply of electricity to its covered areas,” the SC said.
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