G.R. No. 210245 /G.R. No. 210255/G.R. No. 210502, August 3, 2021.
Case Parties:

BAYAN MUNA REPRESENTATIVES NERI JAVIER COLMENARES AND CARLOS ISAGANI ZARATE, GABRIELA WOMEN’S PARTY REPRESENTATIVES LUZ ILAGAN AND EMMI DE JESUS, ACT TEACHERS PARTY-LIST REPRESENTATIVE ANTONIO TINIO, AND KABATAAN PARTY-LIST REPRESENTATIVE TERRY RIDON, PETITIONERS, VS. ENERGY REGULATORY COMMISSION (ERC) AND MANILA ELECTRIC COMPANY (MERALCO), RESPONDENTS.
[G.R. No. 210255]
NATIONAL ASSOCIATION OF ELECTRICITY CONSUMERS FOR REFORMS (NASECORE), REPRESENTED BY PETRONILO L. ILAGAN, FEDERATION OF VILLAGE ASSOCIATIONS (FOYA), REPRESENTED BY SIEGFRIEDO A. VELOSO, FEDERATION OF LAS PIÑAS HOMEOWNERS ASSOCIATION (FOLPHA), REPRESENTED BY BONIFACIO DAZO AND RODRIGO C. DOMINGO, JR., PETITIONERS, VS. MANILA ELECTRIC COMPANY (MERALCO), ENERGY REGULATORY COMMISSION (ERC) AND DEPARTMENT OF ENERGY (DOE), RESPONDENTS.
[G.R. No. 210502]
MANILA ELECTRIC COMPANY (MERALCO), PETITIONER, VS. PHILIPPINE ELECTRICITY MARKET CORPORATION, FIRST GAS POWER CORPORATION, SOUTH PREMIERE POWER CORPORATION, SAN MIGUEL ENERGY CORPORATION, MASINLOC POWER PARTNERS, CO., LTD., QUEZON POWER (PHILS.) LTD. CO., THERMA LUZON, INC., SEM-CALACA POWER CORPORATION, FGP CORPORATION AND NATIONAL GRID CORPORATION OF THE PHILIPPINES, AND THE FOLLOWING GENERATION COMPANIES THAT TRADE IN THE WESM NAMELY: 1590 ENERGY CORPORATION, AP RENEWABLES, INC., BAC-MAN ENERGY DEVELOPMENT CORPORATION/BAC-MAN GEOTHERMAL, INC., FIRST GEN HYDRO POWER CORPORATION, GNPOWER MARIVELES COAL PLANT LTD. CO., PANASIA ENERGY HOLDINGS, INC., POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION, SN ABOITIZ POWER, STRATEGIC POWER DEVELOPMENT CORPORATION, BULACAN POWER GENERATION CORPORATION AND VIVANT STA. CLARA NORTHERN RENEWABLES GENERATION CORPORATION, RESPONDENTS.

FACTS

On December 5, 2013, Manila Electric Company (MERALCO) wrote the Energy Regulatory Commission (ERC) regarding its plan to charge consumers higher rates to recover generation costs for November 2013, estimated at a P4.15 per kWh increase. MERALCO cited the shutdown of the Malampaya natural gas facility and maintenance of other power plants. While the AGRA Rules authorized automatic reflection of this cost in the December 2013 billing, MERALCO proposed to mitigate the increase by implementing a lower generation charge in December and deferring recovery of the remaining P3 billion to February 2014 billing, with carrying costs. On December 9, 2013, the ERC approved MERALCO’s proposal via a letter, authorizing a staggered implementation but disallowing carrying costs on the deferred amount. This prompted the filing of petitions before the Supreme Court by Bayan Muna et al. and NASECORE et al., challenging the ERC’s approval for lack of due process and questioning the constitutionality of relevant EPIRA provisions. The Court issued a temporary restraining order on December 23, 2013.

ISSUE

Whether the Energy Regulatory Commission committed grave abuse of discretion in approving MERALCO’s request for a staggered collection of automatic rate adjustments without observing the requirements of notice and hearing.

RULING

(Dissenting Opinion of Justice Leonen)
The Energy Regulatory Commission committed grave abuse of discretion. As a quasi-judicial body with broad inquisitorial powers representing the public interest, the ERC has a positive duty to observe notice and hearing before ruling on a distribution utility’s application to impose higher rates. A plea for relief that seeks more than an automatic adjustment, such as simultaneously seeking to recover carrying costs, is not perfunctory and cannot dispense with these requirements. The ERC acted with grave abuse by allowing the collection of prohibitive rates after spending only a single working day on review, based solely on MERALCO’s unrefuted letter and presentation, thereby failing to exercise its vast competencies to examine and investigate. This course of action betrayed a failure to act prudently and in the public interest.