G.R. No. 190795 - National Association of Electricity Consumers for Reforms, Inc. vs. Energy Regulatory Commission

The Energy Regulatory Commission (ERC), created under the Electric Power Industry Reform Act of 2001 (EPIRA), historically used the Return on Rate Base (RORB) method for setting electricity distribution rates.
Pursuant to Section 43(f) of EPIRA, the ERC has the authority to shift from the RORB method to alternative internationally accepted rate-setting methodologies.
The ERC, through a series of resolutions, adopted the Performance-Based Regulation (PBR) method to determine the allowable rates for distribution utilities (DUs).

Meralco, as a distribution utility, applied for an increase in its distribution rate under the new PBR scheme (MAP 2010 case) on 7 August 2009, docketed as ERC Case No. 2009-057 RC.
Several parties, including NASECORE, FOLVA, FOVA, and Engineer Robert F. Mallillin, filed their interventions to oppose Meralco’s rate increase.
At the initial hearing on 6 October 2009, Meralco, Mallillin, and FOVA appeared, while NASECORE and FOLVA did not attend despite due notice.

Meralco presented witnesses beginning on 13 November 2009 and again on 19 November 2009; on both occasions, petitioners NASECORE, FOLVA, and FOVA were either absent or failed to appear.
Despite NASECORE’s request to be excused from an appearance (while reserving its right to cross-examine), the ERC ruled that non-attendance equated to a waiver of its right to cross-examine Meralco’s witnesses.
At the 26 November 2009 hearing, further absences by NASECORE and FOLVA led to the ERC declaring a waiver of cross-examination rights concerning Meralco’s second witness.
The ERC subsequently provided deadlines for Meralco to file its Formal Offer of Evidence (given five days) and allowed extended periods for petitioners (ten to fifteen days) to file their respective comments or memoranda.
Meralco complied by filing its Formal Offer of Evidence on 1 December 2009 and was later directed on 7 December 2009 to submit additional documents.

NASECORE claimed receipt of Meralco’s evidence and the 7 December 2009 ERC Order on 8 December 2009, arguing that this extended the period for filing their comment until 18 December 2009.
On 10 December 2009, NASECORE filed a Manifestation with Motion requesting:

Meralco be directed to furnish all items specified in the ERC’s 7 December 2009 directive.
A copy of the Records of the Proceedings, particularly for hearings held on 19 and 26 November 2009.
An extension of fifteen days from receipt of compliance for filing its comment.

The ERC approved Meralco’s MAP 2010 rate increase on 14 December 2009, prompting NASECORE’s protest that the approval was premature, as the period for filing comments had not yet expired.
Following the issuance of the decision, Mallillin filed his Motion for Reconsideration (MR) before petitioners resorted to a direct petition for certiorari under Rule 65 with an urgent prayer for a Temporary Restraining Order (TRO).

Petitioners alleged that the premature approval of Meralco’s rate increase by the ERC violated their right to due process by not allowing them the full period to file comments or opposition.
They further contended that Meralco’s rates were excessive, citing a COA Audit Report and arguing that the PBR methodology resulted in unreasonably high profits at the expense of consumers.
Meralco, in its comment and subsequent submissions, argued that petitioners had ample opportunity to participate in the proceedings and that the timely suspension of the 14 December 2009 decision (pending resolution of Mallillin’s MR) rendered the issues moot.
Both Meralco and the ERC maintained that any procedural irregularities were remedied when the ERC subsequently allowed petitioners to file comments on the MR.
Finally, petitioners were critiqued for choosing an improper remedy by bypassing the requisite motion for reconsideration and directly resorting to a petition for certiorari aimed at obtaining an indefinite TRO.

Whether petitioners’ right to due process was violated by the ERC when it issued the 14 December 2009 decision approving Meralco’s rate increase before the expiration of the period granted for petitioners to file their comments.
Whether petitioners’ failure to appear at the hearings constituted a waiver of their right to be heard, and consequently, whether their claims of denial of due process are valid.
Whether petitioners correctly utilized the appropriate remedy by directly filing a petition for certiorari, rather than filing a motion for reconsideration as mandated by the ERC’s rules.