Case Digest (G.R. No. 190795)
Facts:
NASECORE, FOVA, and FOLVA (as intervenors) opposed Manila Electric Company, Inc. (Meralco)’s application for increased distribution rates under the Performance-Based Regulation (PBR) method adopted by the Energy Regulatory Commission (ERC), docketed as ERC Case No. 2009-057 RC (MAP 2010 case). Despite due notice, NASECORE and FOLVA repeatedly failed to attend ERC hearings, and ERC ruled their non-appearance amounted to waiver of the right to cross-examine Meralco’s witnesses.On 14 December 2009, ERC approved Meralco’s application, which petitioners assailed as premature because ERC issued the decision before the expiration of their period to comment on Meralco’s Formal Offer of Evidence. Instead of filing a Motion for Reconsideration with ERC, petitioners filed a Petition for Certiorari under Rule 65 in the Supreme Court and sought a TRO/Status quo order. During the pendency of the petition, ERC later suspended the implementation of the assailed decision and, on 10 March 2010,
Case Digest (G.R. No. 190795)
Facts:
- Creation of the regulatory framework and rate-setting methodology
- The Energy Regulatory Commission (ERC) was created under the Electric Power Industry Reform Act of 2001 (EPIRA).
- Before the EPIRA, ERC historically used the Return on Rate Base (RORB) method to determine allowable electricity charges in the Philippines.
- Section 43(f) of EPIRA allowed ERC to shift from RORB to alternative forms of internationally accepted rate-setting methodology, subject to multiple conditions.
- ERC adopted the Performance-Based Regulation (PBR) method through a series of resolutions to set allowable rates that distribution utilities (DUs) may charge customers.
- Meralco’s application under the PBR scheme and the intervention attempts
- Manila Electric Company, Inc. (Meralco), acting as a DU, applied for an increase in its distribution rate.
- Meralco’s application was docketed as ERC Case No. 2009-057 RC (MAP 2010 case).
- Meralco filed the application on 7 August 2009.
- Petitioners National Association of Electricity Consumers for Reforms, Inc. (NASECORE), Federation of Village Associations (FOVA), and Federation of Las Pinas Village (FOLVA) filed their own Petitions for Intervention to oppose Meralco’s application.
- Petitioners Engineer Robert F. Mallillin (Mallillin) also filed a Petition for Intervention to oppose Meralco’s application.
- At the initial hearing on 6 October 2009, the following entered appearances: (1) Meralco, (2) Mallillin, and (3) FOVA.
- Petitioners NASECORE and FOLVA failed to appear despite due notice.
- ERC hearings and petitioners’ repeated non-appearance affecting cross-examination rights
- Meralco presented its first witness on 13 November 2009.
- At the time of that hearing, FOLVA failed to appear despite due notice.
- On 19 November 2009, during the continuation of Meralco’s presentation of its witness, petitioners NASECORE, FOVA, and FOLVA failed to appear despite due notice.
- NASECORE had sent a letter requesting it be excused from the hearing but reserved its right to cross-examine Meralco’s first witness.
- Meralco objected based on ERC’s Rules of Practice and Procedure.
- ERC ruled that the absence of NASECORE and FOVA was deemed a waiver of their right to cross-examine Meralco’s first witness.
- On 26 November 2009, NASECORE and FOLVA again failed to attend despite due notice.
- Upon Meralco’s motion, ERC declared that NASECORE waived its right to cross-examine Meralco’s second witness for failure to attend.
- ERC gave Meralco five (5) days to file its Formal Offer of Evidence.
- ERC gave FOVA and all other intervenors ten (10) days from receipt to file comments thereon.
- ERC gave FOVA and all other intervenors fifteen (15) days from receipt to file their position papers or memoranda.
- Filing of Formal Offer of Evidence, ERC directives, and petitioners’ claim of shortened time
- On 1 December 2009, Meralco filed its Formal Offer of Evidence with compliance.
- On 7 December 2009, ERC directed Meralco to submit additional documents to facilitate the evaluation of its application.
- NASECORE claimed that it received Meralco’s Formal Offer of Evidence and the copy of the 7 December 2009 ERC Order only on 8 December 2009.
- NASECORE claimed it believed it had until 18 December 2009 to file its comment thereon.
- On 10 December 2009, NASECORE filed a Manifestation with Motion dated 9 December 2009, requesting that ERC direct Meralco to:
- Furnish intervenor NASECORE all items in ERC’s directive/order dated 7 December 2009.
- Furnish intervenor NASECORE a copy of the Records of the Proceedings of hearings held on 19 and 26 November 2009.
- Grant the same intervenor fifteen (15) days, from receipt of applicant’s compliance with the 7 December 2009 Order, within which to file its comment to applicant’s Formal Offer of Evidence.
- Petitioners alleged that ERC’s approval of Meralco’s application occurred before their claimed full period to oppose, and before their receipt of the additional documents.
- ERC approval of Meralco’s MAP 2010 application and the claimed due process violation
- On 14 December 2009, ERC approved Meralco’s application in the MAP 2010 case.
- NASECORE protested, asserting that approval was premature because:
- Four days remained before expiration of NASECORE’s period to file opposition to the Formal Offer of Evidence.
- NASECORE had not yet received copies of the documents required under ERC’s 7 December 2009 Order.
- NASECORE alleged it received the additional documents on 15 December 2009, a day after the decision.
- Mallillin filed a Motion for Reconsideration (MR) before ERC.
- Instead of filing their own motions for reconsideration, petitioners proceeded directly to the Supreme Court via a Petition for Certiorari under Rule 65 with an urgent prayer for a TRO or Status Quo Order.
- Petitioners’ Rule 65 allegations and requested interim relief
- Petitioners asserted that the ERC Decision approving MAP 2010 was null and void for violation of their right to due process.
- Petitioners asked the Court to stay execution of the ERC Decision for being void.
- Petitioners claimed that a void decision could not be a source of rights for Meralco to collect additional charges.
- Petitioners alleged that the 4.3 million customers had no obligation to pay additional distribution charges.
- Petitioners characterized implementation as oppressive, confiscatory, and unjust.
- Petitioners requested issuance of a TRO or Status Quo Order.
- Meralco’s and ERC’s responses
- On 26 January 2010, Meralco filed its Comment.
- Meralco argued that the petition should be dismissed or denied due course for:
- Improper remedy.
- Failure to observe proper hierarchy of courts.
- Adequate opportunity to be heard and participation in the proceedings.
- Mootness because Meralco voluntarily suspended implementation of the approved MAP 2010 rates.
- Meralco opposed the TRO/Status quo prayer, asserting failure to show “urgent and paramount necessity.”
- Meralco relied on the fact that Meralco had already voluntarily suspended implementation of the assailed Decision pending resolution of Mallillin’s MR.
- ERC issued an order on 1 February 2010 suspending implementation of the 14 December 2009 Decision pending resolution of Mallillin’s MR.
- ERC filed its Comment on 27 August 2010.
- ERC argued:
- Certiorari under Rule 65 was not the proper remedy.
- Petitioners were not denied procedural due process.
- ERC’s 10 March 2010 order rendered the petition moot.
- ERC resolution of Mallillin’s MR and subsequent implementation of revised rates
- After Mallillin’s MR, ERC granted the MR and directed implementation of revised distribution rates.
- On 10 March 2010, ERC issued an Order granting the MR with modification.
- The dispositive portion directed Meralco to implement revised distribution rates excluding all rate distortions as shown in the table.
- It lifted the February 1, 2010 order granting deferment of implementation of the December 14, 2009 Decision pending final resolution of Mallillin’s motions.
- Petitioners’ Reply and new issues raised for the first time
- On 8 April 2010, petitioners filed their Reply to Meralco’s Comment.
- Petitioners for the first time raised arguments that:
- Meralco, from 2003–2008, allegedly earned more than the 12% rate of recovery considered just and reasonable by law.
- Petitioners asserted COA validated that excess existed based on a COA Audit Report showing Meralco’s income exceeded the 12% mandated by law.
- Petitioners concluded that the 2003 rate increase of P0.0865/KWh was unnecessary and unreasonable.
- Petitioners sought rollback of rates an...(Subscriber-Only)