G.R. No. 127373 March 25, 1999
ENERGY REGULATORY BOARD and ILIGAN LIGHT & POWER, INC., petitioners, vs. COURT OF APPEALS and ASSOCIATION OF MINDANAO INDUSTRIES (AMI), respondents.

FACTS

The members of the Association of Mindanao Industries (AMI), which are BOI-registered enterprises operating within the franchise area of Iligan Light & Power, Inc. (ILPI), obtained their electric power supply directly from the National Power Corporation (NPC), bypassing the local franchise holder, ILPI. On October 12, 1993, ILPI filed a petition with the Energy Regulatory Board (ERB) seeking the implementation of the 1987 Cabinet Policy Reforms in the Power Sector, specifically praying for the discontinuance of NPC’s direct power supply to industries within its franchise area. The Cabinet Policy provided that direct connections could continue until the appropriate regulatory board determined they were no longer necessary, based on the utility’s financial and technical capability.
AMI filed a motion to dismiss the ERB petition, primarily on the ground of lack of jurisdiction, arguing that the ERB’s non-price regulatory functions, including matters of direct connection and energy distribution, had been transferred to the Department of Energy (DOE) under Republic Act No. 7638 . The ERB denied the motion to dismiss and its subsequent reconsideration, prompting AMI to file a petition for certiorari and prohibition with the Court of Appeals.

ISSUE

Whether the Energy Regulatory Board (ERB) or the Department of Energy (DOE) has jurisdiction to hear and decide the dispute involving the direct supply of power by NPC to industries within a private utility’s franchise area.

RULING

The Supreme Court affirmed the Court of Appeals’ decision, ruling that the DOE, not the ERB, has jurisdiction over the dispute. The legal logic hinges on the statutory transfer of functions under R.A. No. 7638 , the Department of Energy Act of 1992. The Court clarified that the core of ILPI’s petition, while styled as an implementation of policy reforms, ultimately sought the discontinuance of direct power supply—a matter pertaining to the distribution or marketing of energy resources. This is a non-price regulatory matter.
Section 18 of R.A. No. 7638 explicitly transferred the non-price regulatory jurisdiction and functions of the ERB to the DOE. The law defines “energy resources” broadly and non-restrictively, using the phrase “such as but not limited to,” which unequivocally includes electricity. Furthermore, Section 5 of the same law grants the DOE the power to regulate private sector activities relative to energy projects, which encompass the distribution and utilization of all forms of energy. Consequently, the authority to determine the necessity of direct NPC connections, as contemplated in the Cabinet Policy Reforms, now resides with the DOE following the enactment of R.A. No. 7638 . The ERB therefore lacked jurisdiction to entertain ILPI’s petition.