Freedom From Debt
Coalition (FDC) vs. Energy
Regulatory Commission (EDC),
G.R. No. 161113, June 15, 2004
Topic: Provisional Rates
Rafael Ian L. Andal
FACTS OF THE CASE
MERALCO filed with the ERC an Application for an increase in rates. MERALCO also prayed ex parte for the grant of
a provisional authority to implement the increase according to the schedule attached to its Application.
The ERC issued an Order provisionally approving MERALCO’s ex parte application for rate increases and set the
hearing of the case on a latter date. On the scheduled date of the hearing, the ERC did not revoke the provisional
granted to MERALCO per its prior Order.
The petitioner FDC did not move for reconsideration but filed the instant Petition, arguing that the Order of the ERC is
void for having been issued without legal or statutory authority. It also contends that Rule 3, Section 4(e) of the
Implementing Rules of the EPIRA is unconstitutional for being an undue delegation of legislative power. It further
asserts that the Order is void for having been issued by the ERC with grave abuse of discretion and manifest bias.
The ERC countered and insists that it is authorized to issue provisional orders under the law. ERC argues that it must not
have been the intention of Congress to expand the functions of the ERC, as the successor of the Energy Regulatory
Board (ERB), and clip its powers at the same time.
ISSUES
Whether the ERC has legal authority to grant provisional rate adjustments
under Republic Act (R.A.) No. 9136, otherwise known as the "Electric Power
Industry Reform Act of 2001" (EPIRA); and
Assuming that the ERC has the authority to grant provisional orders, whether
the grant by the ERC of the provisional rate adjustment in question was
committed with grave abuse of discretion amounting to lack or excess of
jurisdiction.
ISSUE:
Whether the ERC has legal authority to grant provisional rate
adjustments under Republic Act (R.A.) No. 9136, otherwise
RULING known as the "Electric Power Industry Reform Act of 2001"
(EPIRA)
The ERC is endowed with the statutory authority to
approve provisional rate adjustments under the aegis
Sec. 44. Transfer of Powers and Functions. — The powers
of Sections 44 and 80 of the Electric Power Industry
and functions of the Energy Regulatory Board not
inconsistent with the provisions of this Act are hereby Reform Act (EPIRA).
transferred to the ERC. X X X The principal powers of the ERB relative to electric
Sec. 80. Applicability and Repealing Clause. — The public utilities transferred to the ERC are the
applicability provisions of Commonwealth Act No. 146, following:
as amended, otherwise known as the "Public Services 1. To regulate and fix the power rates to be charged
Act;" by elective companies;
XXX 2. To issue certificates of public convenience for the
operation of electric power utilities;
…shall continue to have full force and effect except insofar 3. To grant or approve provisional electric rates.
as they are inconsistent with this Act. X X X
ISSUE:
Assuming that the ERC has the authority to grant provisional
orders, whether the grant by the ERC of the provisional rate
RULING adjustment in question was committed with grave abuse of
discretion amounting to lack or excess of jurisdiction.
The publication of the application itself is required, not
merely the notice of hearing issued by the ERC. The
record shows that MERALCO failed to comply with the
Section 4(e), Rule 3, IRR of EPIRA. Any application or petition for rate adjustment or
for any relief affecting the consumers must be verified and accompanied with an publication requirement prescribed by the IRR as its
acknowledgement of receipt of a copy thereof by the LGU Legislative body of the published Notice failed to include the actual application
locality where the applicant or petitioner principally operates together with the
certification of the notice of publication thereof in a newspaper of general circulation in itself.
the same locality.
The ERC may grant provisionally or deny the relief prayed for not later than seventy five
In granting a provisional authority, the ERC must consider
(75) calendar days from the filing of the application or petition, based on the same or not only the evidence submitted by the applicant in
supporting documents attached thereto and such comments or pleadings the customers or
the LGU concerned may have filed within thirty (30) calendar days from receipt of a support thereof, but also the comments of the consumers
copy of the application or petition or from the publication thereof as the case may be. and the Local Government Units (LGUs) concerned.
Thereafter, the ERC shall conduct a formal hearing on the application or petition, giving Without even mentioning the motions and opposition of
proper notices to all parties concerned, with at least one public hearing in the affected
locality, and shall decide the matter on the merits not later than twelve (12) months from FDC and other interested parties, ERC granted the motion
the issuance of the aforementioned provisional order.
for provisional rate increase in its Order.
END OF CASE
