SC orders rebidding of power supply deals
MANILA, Philippines — The Supreme Court has ordered the rebidding of all power supply agreements submitted by distribution utilities (DU) from June 30, 2015.
In a ruling released Monday, the Court through Senior Associate Justice Antonio Carpio said the Energy Regulatory Commission committed “grave abuse of discretion” when it issued resolutions postponing the effectivity of the competitive selection process (CSP) requirement.
The 2015 DOE Circular, which became effective on June 30, 2015, mandated all DUs to undergo CSP in securing power supply agreements.
CSP is a form of competitive public bidding for the purchase of electricity by DUs. The requirement for competitive public bidding in the power sector is primarily aimed at ensuring a fair, reasonable, and cost-effective generation charge for consumers, under a transparent power sale mechanism between the generation companies and the DUs. The CSP was formulated for the protection of the consuming public.
The Court said the authority of the ERC was limited to the implementation of the CSP, and that the ERC has no power and authority to postpone the CSP’s application.
Thus, the Court the resolution that caused the postponement of the implementation of CSP under the ERC circular.
“The ERC’s delegated authority is limited to implementing or executing Competitive Selection Process (CSP) in accordance with the 2015 DOE Circular, not postponing CSP so as to freeze CSP for at least 20 years, effectively suspending CSP for one entire generation of Filipinos,” Carpio said.
“The delegated authority to implement CSP does not include the authority to postpone or suspend CSP for 20 years, beyond the seven-year terms of office of the ERC Commissioners postponing or suspending the CSP, and beyond the seven-year terms of office of their next successors, as well as beyond the six-year terms of office of three Presidents of the Republic,” Carpio added.
The Court noted that there are 90 PSAs submitted for ERCs approval from April 16, 2016 to April 29, 2016.
Concurring with this ruling are Chief Justice Lucas Bersamin and Associate Justices Diosdado Peralta, Mariano Del Castillo, Estela Perlas-Bernabe, Marvic Leonen, Jose Reyes Jr., Ramon Paul Hernando, Rosmari Carandang and Amy Lazaro-Javier.
Two magistrates — Associate Justices Alfredo Benjamin Caguioa and Andres Reyes Jr. — dissented from the decision.
Meanwhile, Bayan Muna chairman Neri Colmenares and Rep. Carlos Zarate welcomed the Supreme Court’s ruling.
“This is a very positive development because it spared consumers another burden that we would have to bear for 20 years. We commend the ABP for its vigilance. Their victory is a victory for all electricity consumers in the country,” said Colmenares who also serves as ABP’s legal adviser.
“We believe that some ERC officials bent backwards several times to accommodate these power deals,” he added.
Bayan Muna also have pending petitions before the Supreme Court, including a six-year-old case against Manila Electric Company’s (Meralco) power rate increase and how it can be resolved the soonest possible time./ee
