Facts:

The case involves the Independent Electricity Market Operator of the Philippines, Inc. (IEMOP) as the petitioner and the Energy Regulatory Commission (ERC) as the respondent. The petition was filed on March 23, 2022, seeking a writ of mandamus under Rule 65 of the Rules of Court. The background of the case traces back to the enactment of Republic Act No. 9136, known as the Electric Power Industry Reform Act of 2001 (EPIRA), which aimed to enhance the quality, reliability, and affordability of electric power supply in the Philippines. A significant reform introduced by the EPIRA was the establishment of the Wholesale Electricity Spot Market (WESM), which began commercial operations in various regions of the Philippines between 2006 and 2017.

On November 18, 2003, the Philippine Electricity Market Corporation (PEMC) was incorporated to manage the WESM. Following a series of developments, including the issuance of Department Circular No. DC2018-01-0002 by the Department of Ene...

Facts:

Background and Legal Framework

• The Electric Power Industry Reform Act of 2001 (EPIRA) was enacted to ensure the quality, reliability, security, and affordability of electric power supply, as well as transparent and reasonable electricity prices in a competitive market.
• The Wholesale Electricity Spot Market (WESM) was established under EPIRA to provide a mechanism for setting electricity prices and trading electricity as a commodity.
• The Philippine Electricity Market Corporation (PEMC) was incorporated in 2003 to manage and administer the WESM. It initially operated as the Autonomous Group Market Operator (AGMO).
• In 2018, the Department of Energy (DOE) issued Department Circular No. DC2018-01-0002, mandating the transition from PEMC to an Independent Market Operator (IMO). The IMO was to be a separate, private corporation independent from industry participants and the government.

Transition to IMO

• The Independent Electricity Market Operator of the Philippines, Inc. (IEMOP) was incorporated as a non-stock, non-profit private corporation to assume the role of the IMO.
• On 26 September 2018, IEMOP officially took over the Market Operator functions from PEMC, including the transfer of personnel, assets, and liabilities.

Market Fees Application

• On 18 August 2020, IEMOP filed a Market Fees Application for Calendar Year 2021 with the Energy Regulatory Commission (ERC). The application sought approval for fees necessary to cover the costs of operating the WESM.
• The ERC initially acknowledged receipt of the application but later returned it on 1 September 2020, stating that PEMC, not IEMOP, should file the application. The ERC cited its previous decisions in Case Nos. 2014-092RC and 2015-160RC, where PEMC was recognized as the Market Operator.
• IEMOP submitted additional documents and repeatedly followed up with the ERC, but the ERC failed to act on the application.

DOE and PEMC Confirm IEMOP’s Role

• On 24 May 2021, the DOE Secretary wrote to the ERC, confirming that IEMOP is the duly recognized IMO and should be accorded all rights and authority, including the filing of market fees.
• PEMC also confirmed that it had ceased to be the AGMO and that IEMOP had assumed the role of the IMO.

ERC’s Inaction

• Despite these confirmations, the ERC continued to refuse to act on IEMOP’s application, insisting that PEMC should be the applicant. This led IEMOP to file a Petition for Mandamus to compel the ERC to act on its application.

Issue:

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Ruling:

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Ratio:

1. Mandamus is Proper to Compel Action on Discretionary Duties:

   • While mandamus typically compels the performance of ministerial duties, it may also issue to compel action on discretionary duties when there is grave abuse of discretion, manifest injustice, or palpable excess of authority.
   • The ERC’s duty to approve market fees applications involves discretion, but its refusal to act on IEMOP’s application, despite compliance with requirements and official confirmation from the DOE and PEMC, constitutes unreasonable delay and grave abuse of discretion.

2. IEMOP is the Duly Recognized IMO:

   • The transition from PEMC to IEMOP as the IMO was conducted in accordance with the EPIRA and DOE Circular No. DC2018-01-0002. The ERC has no authority to disregard this transition or to insist that PEMC remains the Market Operator.
   • IEMOP, as the IMO, has the legal right to file the Market Fees Application and to recover the costs of operating the WESM under Section 30 of the EPIRA.

3. ERC’s Inaction is Unlawful:

   • The ERC’s refusal to act on IEMOP’s application, despite its compliance with pre-filing requirements and the DOE’s confirmation of IEMOP’s role, constitutes unlawful neglect of its legal duty.
   • The ERC’s reliance on its previous decisions involving PEMC is misplaced, as those decisions pertained to a time when PEMC was still the AGMO, prior to the transition to IEMOP.

4. No Other Adequate Remedy:

   • IEMOP has no other plain, speedy, and adequate remedy in the ordinary course of law. The ERC’s inaction has left IEMOP without the ability to recover necessary operational costs, jeopardizing the continued operation of the WESM.
   • Mandamus is the only available remedy to compel the ERC to act on the application.

Conclusion:

The Supreme Court ruled in favor of IEMOP, holding that the ERC’s refusal to act on the Market Fees Application constituted grave abuse of discretion and unlawful neglect of its legal duty. The Court granted the writ of mandamus, ordering the ERC to immediately act upon and resolve IEMOP’s application.