G.R. No. 246940 - Ilocos Norte Electric Cooperative, Inc. vs. Energy Regulatory Commission

Ilocos Norte Electric Cooperative, Inc. (INEC) filed a Petition for Review on Certiorari assailing decisions and resolutions of the Court of Appeals (CA) that affirmed the Energy Regulatory Commission’s (ERC) orders.
The ERC, acting under Republic Act No. 9136 (the Electric Power Industry Reform Act of 2001 or EPIRA), issued orders directing INEC to refund over-recoveries amounting to approximately PhP394,911,640.39.
The refund order covered over-collections from electric billings for the period 2004 to 2010 and was based on the application docketed as ERC Case No. 2011-023 CF.

EPIRA established the ERC as an independent quasi-judicial regulatory body tasked with promoting competition, ensuring reasonable and non-discriminatory rates, and regulating the electric power industry.
The ERC adopted various issuances including:

An Order on October 13, 2004, in ERC Case No. 2004-322, providing guidelines for the automatic adjustment of generation and system loss rates by Distribution Utilities (DUs).
ERC Resolution No. 19, Series of 2005, which laid down the formula for transmission rate adjustments.
ERC Resolution No. 16, Series of 2009, later amended by Resolution No. 21, Series of 2010, which consolidated and refined the formulae for computing over/under-recoveries for various components (generation, transmission, system loss, lifeline subsidy, inter-class cross subsidy, and prompt payment discount).

INEC, a non-profit electric cooperative established under Presidential Decree No. 269, submitted its application for the approval of over/under-recoveries pursuant to the newly issued adjustment mechanisms by the ERC.
The ERC initially approved INEC’s application on August 12, 2013, with modifications, directing the cooperative to refund the over-recoveries in specified amounts for each component (e.g., generation, transmission, system loss, lifeline subsidy, inter-class cross subsidy, and prompt payment discount).
INEC subsequently filed a Motion for Reconsideration contesting:

The method of computation of over/under-recoveries.
The computation process particularly for the generation and system loss rates.
The extension of the refund period and the denial of a detailed computation of the over/under-recoveries.

On May 30, 2017, the ERC partially granted the Motion for Reconsideration by recomputing certain elements, extending the refund period from 36 to 48 months, and upholding some components of the original computation.

The manner of computation of its over-recoveries under the ERC’s adopted formulae (specifically, the application of Resolution 16-09 retroactively).
The alleged failure of the ERC to verify the generation and system loss rates based on the stipulated six-month verification period under ERC Case No. 2004-322.
The denial of its request for detailed data and supporting documents used by the ERC, which it argued deprived it of procedural due process.

The CA, in its Decision dated November 15, 2018, affirmed the ERC’s orders, ruling that:

The retroactive application of Resolution 16-09 did not affect any vested rights of INEC since no specific formula for computing over/under-recoveries was available prior to the resolution.
The ERC’s actions were within its regulatory discretion and sufficiently explained.

INEC then filed a Motion for Reconsideration on the CA’s Decision, which was denied in the Resolution dated May 3, 2019, leading to the current petition for review.

Whether the ERC failed to verify the generation and system loss rates within the stipulated six-month period, thereby rendering those rates final and confirmed.
Whether the retroactive application of ERC Resolution No. 16, Series of 2009 (as amended by Resolution No. 21, Series of 2010) violated INEC’s substantive due process by impairing its vested property rights in the collections from its monthly billings.
Whether the denial of INEC’s motion for data and information – requested to ascertain the correctness of the ERC’s computation – amounted to a violation of its procedural due process rights.
Whether the Court of Appeals erred in affirming the ERC’s computation of over-recoveries and in holding that issues not raised in the prior proceedings cannot be raised for the first time on appeal.