G.R. No. 239829 - National Grid Corporation of the Philippines vs. Manila Electric Company

On December 12, 2011, the National Transmission Corporation (TRANSCO) and Manila Electric Company (Meralco) entered into a Contract to Sell involving several subtransmission assets (STAs): Dasmariñas-Abubot-Rosario 115 kV Line, Rosario Substation Equipment, Tayabas 115 kV Switchyard, and Ternate Substation Equipment.
On April 17, 2012, TRANSCO and Meralco jointly filed an application with the Energy Regulatory Commission (ERC) seeking approval for the sale of the subject STAs under their contract.
ERC found the application sufficient and set a hearing on July 4, 2012.

On June 29, 2015, National Grid Corporation of the Philippines (NGCP) filed a Petition for Intervention claiming it was not informed about the sale.
NGCP cited its authority and responsibility under the EPIRA to operate, maintain, and manage the national transmission system.
NGCP alleged it incurred improvement and upgrade costs on the STAs which were not included in the sale contract, claiming Meralco should pay these additional costs.
The ERC granted NGCP’s petition for intervention.

ERC approved with modifications the joint application to sell certain STAs to Meralco for PHP 109,186,604.30.
Specifically, the sale of Tayabas 115 kV Switchyard and Ternate Substation Equipment was approved.
The sale of Dasmariñas-Abubot-Rosario 115 kV Line and Rosario Substation Equipment (DAR Assets) was disapproved.
ERC ruled that DAR Assets served not only Meralco but also Cavite Economic Zone (CEZ), managed by the Philippine Economic Zone Authority (PEZA).
Per Section 8 of EPIRA, where two or more distribution utilities are connected, a consortium or juridical entity must be formed by all utilities as a prerequisite for acquisition.
ERC mandated that Meralco and TRANSCO must file a new application involving a consortium with CEZ.

Meralco and TRANSCO filed partial motions for reconsideration contesting the requirement for a consortium and citing PEZA’s waiver of rights in favor of Meralco.
On May 5, 2014, ERC denied motions, holding the consortium requirement mandatory with no right to abdication through waiver.
ERC ordered the DAR Assets to be reverted to TRANSCO’s Regulatory Asset Base.
Meralco’s subsequent motion for reconsideration and clarification was denied on June 16, 2014.
Meralco attempted to form a consortium but PEZA cited legal impediments.
Meralco filed a Motion to Re-open Proceedings raising the new substantive issue of PEZA’s inability to join consortium; this was denied by ERC on March 4, 2015.

Meralco filed a petition for review with the Court of Appeals (CA).
CA initially dismissed petition (August 12, 2016), ruling the ERC’s Third Order finally disposed of case, triggering the reckoning of the appeal period.
CA affirmed the consortium requirement under Section 8 of EPIRA as mandatory.
CA invalidated PEZA’s waiver as it involved a non-waivable function mandated by law.
CA agreed that DAR Assets should be reclassified as transmission assets, thus not subject to sale to Meralco.
CA denied Meralco’s motion for reconsideration initially but later granted it on September 15, 2017, reversing earlier dismissal and declaring the sale of DAR Assets to Meralco approved.
CA reasoned that PEZA’s waiver dispensed with consortium requirement and acquisition by Meralco would benefit consumers.

NGCP filed motions for reconsideration and for inhibition, denied on May 31, 2018.
NGCP then filed the present Petition for Review on Certiorari before the Supreme Court.

Whether the Court of Appeals had jurisdiction to entertain and reverse a final and executory decision of the ERC.
Whether the CA erred in ruling the consortium and franchise requirements of Section 8 of EPIRA may be waived by a distribution utility.
Whether the CA's interpretation of Section 8 of EPIRA amounted to judicial legislation.
Whether the CA erred in overturning the ERC’s rulings, which have been consistently applied since EPIRA’s enactment.
Whether the DAR Assets are transmission assets, which may no longer be divested to any other entity.