EXCLUSIVE franchises are prohibited by the Constitution.
This was the ruling of the Supreme Court en banc dated July 30, 2024 when it dismissed the petition filed by Iloilo Electric Cooperative (ILECO) Inc.1, II and III challenging the validity of Republic Act 11918.
The said law expanded the franchise of another electricity provider, MORE Electric and Power Corp., to areas within ILECOs’ franchise.
ILECOs hold franchise certificates to operate electric light and power services in various municipalities in the province of Iloilo and in Passi City.
MORE initially held a franchise to operate the same services in Iloilo City until RA 11918 expanded its franchise to include 15 municipalities and one city previously within ILECOs’ exclusive franchise area.
With this, ILECOs filed a petition for certiorari and prohibition, with prayer for the High Court to issue a temporary restraining order and writ of preliminary injunction, to invalidate Section 1 of RA 11918.
In filing its petition, ILECOs said Section 1 RA 11918 violated their rights to exclusive franchises, due process, non-impairment of contracts, and equal protection.
