Case Summary (G.R. No. 174697)
Petitioner Background
CREBA is a non-stock, non-profit corporation founded to promote the interests of the housing and real estate sector in the Philippines. With nearly 4,500 members comprising developers, brokers, contractors, and other professionals in real estate, CREBA claims that Section 2.6 forces residential customers located beyond 30 meters from existing power lines to advance costs for electrical line extensions, contradicting legislative objectives aimed at promoting access to electricity.
Respondent Background
ERC serves as a quasi-judicial regulatory body created under the EPIRA, with the charge of overseeing the electric industry in the Philippines. MERALCO, the primary distribution utility in the country, is responsible for the provision of electricity service to consumers. The ERC promulgated the DSOAR, which includes the Magna Carta for Residential Electricity Consumers designed to protect consumer rights in relation to electric service.
Provisions of the DSOAR
Section 2.6 delineates the responsibilities regarding line extensions for consumers beyond the specified distance from existing lines. It permits residential consumers within 30 meters to have extensions at the utility’s expense, while those beyond this distance must advance the costs. Refund provisions are also included, stipulating that advances can be recovered over a five-year period at a rate of 25% of the gross distribution revenue from connected customers.
Petitioner’s Arguments
CREBA argues that Section 2.6 is unconstitutional because it allegedly violates due process and equal protection rights, contravenes the EPIRA which focuses on consumer protection and affordability of power, and leads to unjust enrichment for utilities. The petitioner further claims that shifting installation costs to consumers hinders electrification efforts and places undue burdens on residential users beyond the specified distance.
Respondents’ Arguments
The ERC defends its regulation as a valid exercise of police power aimed at promoting public welfare by ensuring cost-sharing among users who benefit from line extensions. They assert that the distinctions made between consumers based on proximity are reasonable and necessary for effective service provision. MERALCO echoes these defenses, asserting the legal distinction between regular consumers and developers and arguing that the petitioner lacks standing to bring the suit, as they are not affected end-users.
Legal Standing Issues
The Court determined that CREBA lacks the necessary legal standing to challenge the DSOAR's constitutionality. Legal standing requires a direct interest or injury from the regulatory action, which CREBA cannot demonstrate as its members do not qualify as residential end-users and therefore do not suffer any direct harm from Section 2.6.
Incorrect Remedy Pursued
The Court found that the petition for certiorari was incorrectly used, as the action targeted a quasi-legislative rul
...continue readingCase Syllabus (G.R. No. 174697)
Case Background
- This case involves a Petition for Certiorari with a request for a Temporary Restraining Order and/or Writ of Preliminary Injunction to nullify Section 2.6 of the Distribution Services and Open Access Rules (DSOAR) enacted by the Energy Regulatory Commission (ERC) on January 18, 2006.
- The petitioner, Chamber of Real Estate and Builders' Associations, Inc. (CREBA), claims that Section 2.6 is unconstitutional and contradicts Republic Act No. 9136, known as "The Electric Power Industry Reform Act of 2001" (EPIRA).
- CREBA is a non-stock, non-profit corporation representing nearly 4,500 members in the housing and real estate sectors, including developers, brokers, and contractors.
Parties Involved
Petitioner: Chamber of Real Estate and Builders' Associations, Inc. (CREBA)
- Represents developers, brokers, appraisers, contractors, and other housing-related entities.
Respondents:
Energy Regulatory Commission (ERC)
- A quasi-judicial and quasi-legislative regulatory body created under EPIRA, responsible for overseeing the Philippine electric industry.
Manila Electric Company (MERALCO)
- The largest electricity distributor in the Philippines, engaged in power production, transmission, and distribution.
Provisions of the DSOAR
- Section 2.6 outlines the rights of residential end-users related to the extension of lines and facilities.
- Section 2.6.1: Consumers within 30 meters from existing lines have the right to extensions at the utility's expense, while those beyond must advance costs.
- Section 2.6.2: Refunds for costs advanced by consu