Government loses appeal vs 2013 power rate hikes

MANILA, Philippines — The government has lost its bid in the Court of Appeals (CA) to strike down the increase in power prices in the Wholesale Electricity Spot Market (WESM) during the shutdown of the Malampaya gas facility in 2013.

The CA dismissed the appeal of the Energy Regulatory Commission (ERC) on its earlier ruling that upheld the power price increase in WESM, the country’s trading floor for electricity.

In a 20-page resolution promulgated last March 29, the former 15th division of the appellate court instead affirmed its November 2017 decision that nullified four assailed orders of ERC which voided the power price hike.

This ruling leaves to the Manila Electric Co. (Meralco) the burden of shouldering the increase in power generation costs, which the power distributor was supposed to pass to consumers through its record rate hike of P4.15 per kilowatt-hour (kwh) that was stopped by the Supreme Court through a temporary restraining order issued in December 2013.

The CA also denied the separate motions for reconsideration filed by Meralco in this case.

It stood firm with its ruling that the ERC had no authority to control the market prices through its orders dated March 3, March 27, May 4 and Oct. 15, 2014 under both the Constitution and the Electric Power Industry Reform Act (EPIRA).

“The absence of delegated authority empowering the ERC to impose agency rates as an exercise of police power ordinarily moots any need to determine the concurrence of a lawful subject and lawful means to justify the power’s exercise. It also reveals that when the ERC issued the nullified orders, believing that it had been empowered by the EPIRA, it had performed quasi judicial functions,” read the ruling penned by Associate Justice Marlene Gonzales - Sison.