CA junks P1.4 billion refund order vs Pampanga power firm

SAFETY FIRST Linemen from the San Fernando Electric Light and Power Co. clear tangled wires and “spaghetti” connections along the power firm’s lines for the safety of the public. The power firm recently gets a legal relief after the Court of Appeals stops an Energy Regulatory Commission order to refund P1.24 billion to its consumers in the provincial capital of Pampanga. —CITY OF SAN FRANCISCO FACEBOOK PHOTO

CITY OF SAN FERNANDO — The Court of Appeals (CA) reversed and set aside the Energy Regulatory Commission’s (ERC) order directing the San Fernando Electric Light and Power Co. Inc. (Sfelapco) to refund a total of P1.42 billion to its customers.

In June last year, the ERC directed Sfelapco to refund these amounts that the commission described as disallowed charges and in excess of the allowed power generation rates from 2014 to 2022.

After the ERC denied Sfelapco’s motion for reconsideration, the power distributor appealed the case at the CA.

READ: Refund P2.4B, ERC tells Pampanga power firm

In its Nov. 30, 2023 decision, the CA’s Special 17th Division declared that ERC’s order to refund the P654,397,381 and P1,769,924,493 lacked legal and factual basis and that it violated Sfelapco’s right to due process, among others.

“Plainly, nowhere was it stated in Section 46 of Republic Act No. 9136 or the Guidelines to Govern the Imposition of Administrative Sanctions in the Form of Fines and Penalties Pursuant to Section 46 of Republic Act No. 9136 that refund is a consequence of an administrative liability in addition to fines and penalties,” the CA stated. RA 9136 is also known as the Electric Power Industry Act of 2001.

‘No due process’

While quasi-judicial entities like the ERC may be free from the rigidity of certain procedural requirements, the CA said they could not entirely disregard the “fundamental and essential requirements” of due process.

The CA said the power distributor was not given the “opportunity to ventilate matters involving the orders of refund adjudged against it” and that it was not given “a fair and reasonable opportunity to explain or defend itself.”

On the issues relating to who should pay the alleged excess power distribution rates, the CA said the distribution company Aboitiz Power Renewable, Inc. (Apri) merely passed on to Sfelapco the distribution charges, and the propriety and the basis of refund and its computation “have not been subjected to a proper proceeding where petitioner (Sfelapco) could have been given the opportunity to present its side.”

READ: Cheaper power rates seen in Pampanga’s capital with new energy suppliers

Although immediate administration of action implies a speedy trial, “speed is not the chief objective of a trial,” the court said.

The CA said the ERC merely stated in its decision that Sfelapco should pay P654,397,381 as refund and without further proceedings imposed an additional set of refund in the amount of P1,769,924,493.

“Clearly, these amounts were arbitrarily imposed against petitioner without giving it the opportunity to be heard,” it said.

The appellate court also stated that in penalizing public utilities like electric power distributors which are engaged in services imbued with public interest, due process requirements should always be observed and that they should not be denied of their right to due process even in the context of an administrative setting.

Penalty upheld

While the CA set aside the ERC decision on the P2,424,321,874 refund, it upheld the ERC’s imposition of P21,600,000 administrative fine or penalty for collecting generation charges from consumers during the period without the commission’s approval.

In a local television interview on Tuesday, ERC chairperson Monalisa Dimalanta said the commission has already filed a motion for reconsideration before the CA through the Office of the Solicitor General, hoping for the reversal of the appellate court’s decision.

The ERC decision and order against Sfelapco were made based on the letter personally brought by this city’s Mayor Vilma Caluag to Dimalanta on Jan. 26 last year. Caluag asked the ERC in the letter to intervene in the expected higher power rate to be imposed by Sfelapco following the expiration of its power generation agreement with Apri.

The next day, Jan. 27, the ERC issued an order directing Sfelapco to refund the excess generation rates collected from consumers. No amount of refund was mentioned in the order. But over a month later, on March 3, the ERC issued another order directing the power distributor company to refund P654,397,381 to its customers and pay a fine of P21,600,000.

After the Sfelapco filed a motion for reconsideration, the ERC issued its third order on June 1 last year dismissing the former’s motion and directing it to refund an additional P1,769,924,493 to its customers.

Sfelapco serves some 125,000 households, government offices and business establishments in this capital city, in Floridablanca town and parts of Bacolor town, according to Irwin Nucum, the company’s corporate communications head. INQ