SC junks rules favoring select power producers

MANILA, Philippines — The Department of Energy (DOE) and the Energy Regulatory Commission (ERC) went beyond their authority in mandating consumers to source their electricity from a select group of power producers, the Supreme Court has ruled.

Voting unanimously, the 15-member tribunal said the various circulars that the two state agencies issued in 2016 contravened the contents of Republic Act No. 9136, better known as the Electric Power Industry Reform Act (Epira) of 2001, which was enacted to promote competition in the power industry.

It granted the separate petitions filed by several groups, among them San Beda College-Alabang, Philippine Chamber of Commerce and Industry, Riverbanks Development Corp. and Ateneo de Manila University, which contested the implementation of the retail competition and open access (RCOA) in the electricity market.

As correctly posited by the petitioners, the high court said the use of the phrase “shall allow” in Section 31 of Epira meant that the transfer of consumers to the “contestable market” was just voluntary and not mandatory as the DOE and the ERC had claimed.

“It is well-established that when the law is clear and unambiguous, ‘it should be applied as written.’ Further, the statute must be construed as a whole to give effect to all its provisions,” read a portion of the court’s 39-page ruling.

“Undoubtedly, the assailed issuances are ultra vires for going beyond the limits of authority conferred to respondent administrative agencies,” the court said. “They should, therefore, be struck down.”

The tribunal directed the ERC to come up with a new set of guidelines in implementing the law since the previous circulars it issued were already “void for being bereft of legal basis.”

The decision, penned by Associate Justice Marvic Leonen, was promulgated on March 2, but was released to the public only on Sept. 24.

In 2017, the magistrates issued a temporary restraining order that stopped the DOE and the ERC from enforcing RCOA, a system that allows consumers a monthly average peak demand of at least 1 megawatt to choose their power supplier and directly negotiate for the best rates.

The petitioners had argued that the five circulars and orders issued by the DOE and the ERC limited end users to buy their electricity from 23 power retailers that have been selected by the ERC.