Title
Independent Electricity Market Operator of the Philippines, Inc. vs. Energy Regulatory Commission
Case
G.R. No. 254440
Decision Date
Mar 23, 2022
IEMOP, as the recognized Independent Market Operator, sought mandamus to compel ERC to act on its 2021 Market Fees Application, citing grave abuse of discretion and unlawful neglect. Supreme Court ruled in favor, ordering ERC to resolve the application.

Case Summary (G.R. No. 254440)

Petitioner

Independent Electricity Market Operator of the Philippines, Inc. (IEMOP) — a non-stock, non-profit corporation formed to assume the Market Operator functions of the WESM pursuant to DOE policy and the transition plan.

Respondent

Energy Regulatory Commission (ERC) — the quasi-judicial regulatory agency tasked by EPIRA to enforce implementing rules and to approve market fees for the WESM.

Key Dates and Events

  • EPIRA enacted in 2001 establishing WESM and regulatory framework.
  • DOE Department Circular DC2018-01-0002 and IMO Transition Plan issued/approved in January–February 2018.
  • Operating Agreement between PEMC and IEMOP executed 19 September 2018; IEMOP assumed Market Operator functions 26 September 2018.
  • IEMOP filed Market Fees Application (with motion for provisional authority) on 18 August 2020 for CY 2021.
  • ERC’s Market Operations Service returned the application by e-mail dated 1 September 2020, directing that PEMC should be the applicant.
  • IEMOP submitted further compliance documents and repeated requests; ERC allegedly did not issue a Confirmation of Completeness (CCE) or a Notice of Incomplete Submission Email (NISE) thereafter.
  • DOE and PEMC later confirmed IEMOP’s status as IMO in May 2021.

Applicable Law and Governing Framework

  • 1987 Philippine Constitution (applicable to governmental powers and separation of functions).
  • Republic Act No. 9136 (Electric Power Industry Reform Act of 2001, EPIRA) — Sections 30, 38, 43 and Section 78 addressing implementation and regulatory functions.
  • EPIRA Implementing Rules and Regulations (IRR) — definitions and implementation details on Market Operator and IMO.
  • WESM Rules (Sections cited regarding Market Operator duties and market fees).
  • DOE Department Circular DC2018-01-0002 and the IMO Transition Plan (policy directives on transition to an IMO).
  • ERC Rules of Practice and Procedure (Rule 6 pre-filing requirements) and ERC Guidelines Governing Electronic Applications (Resolution No. 9, series of 2020).
  • Rules of Court, Rule 65 (writ of mandamus); R.A. No. 11032 (Ease of Doing Business Act) on action and processing of government applications.
  • Precedents cited in the decision (e.g., Antiquera v. Baluyot; De Castro v. Judicial and Bar Council; related EPIRA jurisprudence).

Factual Background and Transition to IMO

EPIRA created WESM and mandated that the Market Operator initially be an AGMO and subsequently be transitioned into an IMO endorsed jointly by the DOE and electric power industry participants. PEMC served as AGMO and later became the governance arm; DOE issued a circular and PEMC adopted an IMO Transition Plan. IEMOP was organized as the IMO and, via an Operating Agreement, assumed the Market Operator functions, personnel, assets, and liabilities from PEMC in late September 2018.

Filing and ERC’s Initial Response

IEMOP filed its Market Fees Application for CY 2021 with accompanying pre-filing proofs on 18 August 2020. The ERC acknowledged receipt and referred the matter for technical pre-filing. On 1 September 2020, an ERC Market Operations Service officer e-mailed IEMOP returning the application “as directed by superiors,” instructing that PEMC should be the applicant and attaching a pre-filing checklist. IEMOP submitted additional documents and multiple follow-up communications asserting its authority as IMO and compliance with pre-filing requirements; the ERC did not issue a CCE or further official action on those submissions.

ERC’s Position and Contentions

The ERC maintained that it acted by returning the application due to deficient documentary requirements and that PEMC remained the proper applicant because PEMC had not been officially dissolved and had previously been recognized in ERC decisions. ERC contended that mandamus is unavailable to direct discretionary judgments and that it had not unlawfully neglected its duties.

Procedural Posture and Additional Administrative Correspondence

IEMOP filed the present petition for mandamus on 11 December 2020, following continued inaction. In May 2021, the DOE Secretary wrote the ERC to reiterate DOE policy and to request that the ERC accord IEMOP the rights and authority of the Market Operator, including filing of market fees. PEMC likewise informed the ERC that it had ceased to be AGMO and that IEMOP had assumed Market Operator responsibilities.

Issue Presented

Whether a writ of mandamus is proper to compel the ERC to act upon IEMOP’s Market Fees Application, given the alleged unlawful neglect, delay, and refusal to recognize IEMOP as the Market Operator.

Jurisdictional Basis for the Court’s Intervention

The petition was filed directly with the Supreme Court under the framework of EPIRA, specifically invoking Section 78 which confines enforcement and implementation questions under the Act to the Court. The Court found the matter to be within its jurisdiction because it involves enforcement of EPIRA provisions—particularly Section 30 concerning WESM implementation and Market Operator duties.

Legal Standard for Writ of Mandamus

The writ of mandamus is available where (1) a duty is specifically enjoined by law and results from an office, trust, or station; (2) the petitioner has a clear legal right to the act demanded; (3) the respondent unlawfully neglects the performance of that duty or unlawfully excludes the petitioner from a right or office; (4) the act to be performed is ministerial or there is grave abuse of discretion if discretionary; and (5) no other plain, speedy, and adequate remedy exists. The Court reiterated that mandamus may issue to compel discretionary action where there is grave abuse of discretion, manifest injustice, palpable excess of authority, or unreasonable delay.

Determination that IEMOP Had a Clear Legal Right

The Court found that, under Section 30 of EPIRA, the Market Operator role is vested in either the AGMO or the IMO and that the IMO becomes the Market Operator upon assuming AGMO functions. DOE circulars, the IMO Transition Plan, and the Operating Agreement confirmed the transition; PEMC and the DOE later affirmed IEMOP’s assumption of IMO functions. Statutory and regulatory provisions, the WESM Rules, the DOE circular, the Transition Plan, and the Operating Agreement expressly or implicitly assign the filing and recovery of Market Fees to the Market Operator (i.e., IEMOP). The Court concluded IEMOP therefore possessed a clear legal right to file and to demand action from the ERC on its Market Fees Application.

Compliance with ERC Pre-Filing Requirements

The Court examined Rule 6 of the ERC Rules and related guidance on pre-filing requirements (service on LGU legislative body, publication, and proof thereof). IEMOP had furnished the required proofs (acknowledgment of service by Pasig City Council, affidavit of service, affidavit of publication and newspaper copy) and had submitted additional documents in response to the ERC’s 1 September 2020 e-mail. Consequently, the Court held that IEMOP complied with the pre-filing requirements and that the ERC had no valid basis to refuse to process the application on grounds of lacking documentation.

ERC’s Conduct Characterized as Unlawful Neglect and Exclusion

The Court concluded the ERC unlawfully neglected duties by (1) refusing to implement and recognize the IMO transition despite DOE policy, the Transition Plan, Operating Agreement, and confirmations from DOE and PEMC; (2) failing to act on the Market Fees Application after IEMOP’s compliance with pre-filing requirements and the ERC’s own NISE process; and (3) failing to provide the statutorily and regulatorily required CCE or a further NISE stating specific deficiencies. The 1 September 2020 e-mail was not a formal approval or denial; it did not meet the requirements of RA 11032 for denial or the ERC Guidelines for completion/deficiency notices, thus leaving the application effectively unacted upon. The ERC’s communications to PEMC rather than to IEMOP did not constitute acti

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