Case Summary (G.R. No. L-8373)
Applicable Law
EPIRA allows the ERC to transition from traditional rate-setting methodologies to more contemporary approaches, provided certain conditions are met. Specifically, Section 43(f) permits the ERC to adopt alternative methodologies such as the Performance-Based Regulation (PBR) method.
Procedural Background
Meralco filed for an increase in its distribution rate under the PBR scheme (ERC Case No. 2009-057 RC) on August 7, 2009. Following this, the petitioners submitted Petitions for Intervention opposing Meralco's application. Despite being duly notified, some petitioners, including NASECORE and FOLVA, did not attend subsequent hearings, leading the ERC to rule that their absences constituted a waiver of their right to cross-examine witnesses.
Meralco’s Formal Offer of Evidence
On December 1, 2009, Meralco submitted its Formal Offer of Evidence, which was met with objections from NASECORE regarding the timing of their receipt of documents and the proceedings. On December 14, 2009, the ERC approved Meralco's application, prompting NASECORE to express concerns over the premature nature of this decision due to their pending objections.
Petition for Certiorari and Due Process Claims
Petitioners directly sought relief from the Supreme Court through a Petition for Certiorari, arguing that the ERC's decision was null and void due to violations of their right to due process. They contended that the ERC made its decision without allowing ample time for petitioners to file relevant comments or objections regarding Meralco's Formal Offer of Evidence.
Response from Meralco and ERC
Meralco filed a comment asserting that petitioners had sufficient opportunity to participate in the hearings and that the issues raised were either moot or improperly addressed. ERC similarly argued that petitioners were afforded due process, indicating that their claims regarding procedural violations were unfounded.
Rebuttal and Procedural Concerns
In response to Meralco’s and ERC’s comments, petitioners introduced new arguments claiming Meralco's income exceeded allowable rates as per audit findings, highlighting a need for reconsideration of the rate-setting methodology adopted by ERC. However, the Court noted that these issues had not been raised in initial proceedings and thus could not be considered at this stage without prior motions for reconsideration.
Analysis of Due Process
The Court evaluated whether petitioners had been denied due process, noting that despite ERC's premature issuance of its decision, petitioners were given multiple opportunities to participate in hearings. The ruling emphasized that procedural irregularities could be remedied and that any potential deprivation of due process was mitigated by the subsequent opportunity to comment on Mallillin's motion for reconsideration.
Findings on the Proper Remedy
Petitioners' decision to bypass a motion for reconsideration in favor of direct recourse to the Supreme Court was questioned. The Court affirmed that the proper procedural route nece
...continue readingCase Syllabus (G.R. No. L-8373)
Background of the Case
- The Energy Regulatory Commission (ERC) was established under the Electric Power Industry Reform Act of 2001 (EPIRA).
- Prior to EPIRA, the Return on Rate Base (RORB) method was employed for determining the allowable electricity charges by distribution utilities (DUs) for decades.
- EPIRA's Section 43(f) permits ERC to transition from RORB to alternative internationally accepted methodologies for rate-setting under specific conditions.
- ERC adopted the Performance-Based Regulation (PBR) method for setting rates that DUs can charge customers.
Key Events in the Proceedings
- On August 7, 2009, Meralco, a distribution utility, filed for a rate increase under the PBR methodology (ERC Case No. 2009-057 RC).
- Petitioners NASECORE, FOLVA, FOVA, and Engineer Robert F. Mallillin filed petitions to intervene against Meralco’s application.
- Initial hearings were held on October 6, November 13, and November 19, 2009, where petitioners failed to appear despite due notice, resulting in a waiver of their right to cross-examine witnesses presented by Meralco.
Issues Raised by Petitioners
- Petitioners claimed that ERC's approval of Meralco's application was a violation of their right to due process.
- They alleged that the ERC’s decision was a "patent nullity" due to the lack of due process, asserting that Meralco's customers were not oblig