AC 5364; (August, 2008) (Digest)
March 13, 2026GR L 9866; (November, 1964) (Digest)
March 13, 2026G.R. No. 227670, [FULL DATE TO BE INSERTED BASED ON FINAL DECISION]
PARTIES: [Petitioner/s] vs. ENERGY REGULATORY COMMISSION (ERC)
FACTS
The Department of Energy (DOE) issued Department Circular No. DC2015-06-0008 on June 11, 2015, mandating all Distribution Utilities (DUs) to procure Power Supply Agreements (PSAs) only through a Competitive Selection Process (CSP) effective June 30, 2015. The Circular required the DOE and the ERC to jointly issue implementing guidelines within 120 days. On October 20, 2015, the DOE and ERC issued Joint Resolution No. 1, agreeing that the ERC “shall issue the appropriate regulations to implement the CSP.” On the same day, the ERC issued its own Resolution No. 13, Series of 2015, which directed DUs to conduct a CSP but set its effectivity on November 7, 2015, thereby creating a window period between the DOE Circular’s effectivity and the ERC resolution’s effectivity.
Subsequently, on March 15, 2016, the ERC issued the assailed Resolution No. 01, Series of 2016, which “clarified” or “restated” the effectivity date of its earlier Resolution No. 13. This 2016 Resolution effectively moved the CSP’s mandatory application date to April 30, 2016. This action allowed numerous PSAs, negotiated without a CSP during the extended window period, to be filed and approved by the ERC. The petitioners challenged the ERC’s 2016 Resolution as a grave abuse of discretion, arguing it unlawfully suspended the CSP mandate which was already effective under the DOE Circular.
ISSUE
Did the Energy Regulatory Commission (ERC) commit grave abuse of discretion amounting to lack or excess of jurisdiction when it issued Resolution No. 01, Series of 2016, which deferred the mandatory effectivity of the Competitive Selection Process (CSP)?
RULING
Yes, the ERC committed grave abuse of discretion. Justice Perlas-Bernabe, in her Separate Concurring Opinion, concurs with the main ruling but provides a qualified analysis and specific remedies.
The Ratio Decidendi of the concurring opinion is anchored on the statutory roles and necessary coordination between the DOE and ERC under the EPIRA (Electric Power Industry Reform Act). The logic proceeds as follows:
1. The DOE Circular was the operative and effective CSP mandate. The DOE, pursuant to its policy-making authority under EPIRA, validly issued the CSP mandate effective June 30, 2015. The ERC’s role, as outlined in the same Circular, was to issue supplemental guidelines and procedures for the CSP’s design and execution, but only “upon its determination and in coordination with the DOE.”
2. The ERC’s authority was limited and required coordination. The Joint Resolution of October 20, 2015, wherein the DOE agreed the ERC shall issue “appropriate regulations,” must be interpreted in context. It did not grant the ERC a blanket, unilateral power to alter the fundamental policy or suspend the effectivity of the CSP itself. The “appropriate regulations” referred only to the supplemental implementing details, not to the core mandate. By issuing Resolution No. 01, Series of 2016, which effectively suspended the already-effective CSP requirement, the ERC acted without the required prior determination and coordination with the DOE. This unilateral alteration of a settled policy constituted grave abuse of discretion.
3. Specific Invalidity and Application of the Operative Fact Doctrine. The concurrence qualifies that only ERC Resolution No. 01, Series of 2016 should be declared null and void for this grave abuse. The first paragraph of Section 4 of the earlier ERC Resolution No. 13 (which set the original November 7, 2015 effectivity) presents a separate, distinct issue not directly addressed in this petition. Furthermore, applying the doctrine of operative fact, the legal effects of the PSAs already approved by the ERC prior to the declaration of invalidity of the 2016 Resolution must be recognized to avoid massive disruption to the power industry and the public. These PSAs, though procured without a CSP during the contested period, should not be automatically invalidated. Their validity should be recognized up to a point, subject to future transitory regulations from the proper agencies to allow for a CSP-compliant supplier to take over for the remaining contract term.
DISPOSITIVE:
Justice Perlas-Bernabe voted to GRANT the petition. She declared ERC Resolution No. 01, Series of 2016 INVALID for having been issued with grave abuse of discretion. She further held that Power Supply Agreements approved on or after November 7, 2015, despite CSP non-compliance, should not be invalidated per se but shall be subject to appropriate transitory regulations to be issued by the proper governing agency/agencies.
