MANILA, Philippines – The Supreme Court (SC) overturned Department of Energy (DOE) and Energy Regulatory Commission (ERC) regulations that required large consumers of electricity to source electricity from a select group of accredited suppliers.
In a 37-page decision, promulgated on March 2 but uploaded to the High Court’s website on September 24, the SC granted the motions to quash DOE Circular (DC) 2015-06-0110 and ERC Resolutions 5 , 10, 11 and 28 regarding the implementation of Commercial Competition and Open Access (RCOA).
In the decision, the SC stressed that the mandate of the DOE is to formulate rules to achieve the objectives of the EPIRA, and that the ERC should enforce these rules and not “replace” these rules with its own emissions, declaring the contested broadcasts “void because there is no legal basis” and ordered the ERC to promulgate guidelines in support of the 2017 corrected circulars issued by the DOE.
According to the High Court, RCOA is a policy under Republic Law 9136 or the “Electric Power Industry Reform Act 2001 (EPIRA)” that gives consumers the power to choose their own supplier for their electricity needs.
Various groups, including the Philippine Chamber of Commerce and Industry (PCCI) have argued that the DOE and ERC broadcasts are unconstitutional and go against the “power of choice” of consumers.
The respondents in the case were DOE Secretary Alfonso Cusi and former ERC officials led by President Jose Vicente Salazar, as well as Commissioners Alfredo Non, Gloria Victoria Yap-Taruc, Josefina Patricia Asirit and Geronimo Sta . Ana.
These issues were subject to a Temporary Restrictive Order (TRO) issued in February 2017.
READ: DOE and ERC stop implementing rules against contestable electricity market
It regulated large electricity consumers to source electricity only from the 23 retail electricity providers (RES) chosen by the ERC – failure to comply would result in the disconnection of their respective distribution services (DUs) .
The policies also prohibited DUs from participating as suppliers and ordered all local RESs to cease operations, further limiting the number of RESs where consumers could source electricity.
The petitioners argued that migration to another provider should be “voluntary” in accordance with the provisions of EPIRA, making the policies “patently unconstitutional” and in violation of free enterprise and antitrust law.
They added that the DOE and ERC have gone beyond their legal authority to interpret and implement EPIRA.
Meanwhile, the DOE and ERC, for their part, have asserted that “migration is mandatory,” further insisting that the DOE has the power and function to formulate rules to implement the goals. of EPIRA.
The SC, however, said that “respondents are wrong” and that the EPIRA was evident when using “must allow” regarding the transfer of a qualified end user to the contestable market, which should not be automatic.
“It is well established that when the law is clear and unambiguous, ‘it must be applied as it is written,” the ruling reads.
The EPIRA, according to the High Court ruling, also included utilities like DUs and electric cooperatives as suppliers in the contestable market.
The SC further stated that previous shows “emphasized customer choice” by giving qualified consumers the “freedom to source from authorized and authorized local RES”, in accordance with the underlying objective. of EPIRA to “create a free and competitive market that will provide reliable electricity at reasonable prices.”
In its commentary on the bundled requests, the DOE itself admitted that the broadcasts had “palpable inconsistencies with EPIRA”, particularly on the mandatory migration of eligible end-users and the ban on DUs.
The DOE then issued DC 2017-12-0013 and DC2017-12-0014 to rectify the attacked emissions, allowing the voluntary migration of clients and DUs to continue participating as RES.
SC at DOE, ERC: Respond to petition against contestable electricity market rules
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