Power plant owners file motion for intervention in ERC case vs Meralco

The Philippine Electric Plant Owners Association Inc. (PEPOA) has filed a motion for intervention with the Supreme Court (SC) in a case filed by the Energy Regulatory Commission (ERC) against the Manila Electric Co. (Meralco), the country’s biggest power distribution utility.

PEPOA, an association of 15 private electric utilities operating in different parts of the country, asked that the case be referred to the SC en banc.

The group, in its motion, said "…the resolution of the instant case will directly affect the pending applications of the movants’ (PEPOA) member companies with the ERC. In fact, the resolution of the instant case will directly affect the rate determination of electric utility companies which serves as the basis for the computation of the consumers’ electric billings…Hence, any adverse effect on the rates necessarily affect their services in their respective franchise areas and accordingly affects the electric consumers all over the country. Indubitably, therefore, the instant case is imbued with public interest."

Saying this involves public interest, PEPOA requested that the case be referred to the en banc of the High Tribunal.

"The decision of the Honorable Court would determine whether these utility companies (movants’ members) and respondent Meralco can survive and still continue to provide services to the public…Whatever decision this Honorable Court may render will therefore have far-reaching effects gravely affecting this entire country," it said.

PEPOA decided to file a motion for intervention during a special board meeting last Oct. 28, 2002. PEPOA members are: Angeles Electric Corp., Cabanatuan Electric Corp., Dagupan Electric Corp., Ibaan Electric and Engineering Corp., La Union Electric Co. Inc., Mansons Corp, San Fernando Electric Light and Power Co., Tarlac Electric Inc., Mactan Electric Corp., Panay Electric Corp., Visayan Electric Corp., Cagayan Electric Power and Light Co. Inc., Cotabato Light and Power Corp., Davao Light and Power Co., and Iligan Light and Power Co. Inc.

The motion for intervention stemmed from G.R. No. 141314. Petitioner is the Republic of the Philippines through the Energy Regulatory Board versus Court of Appeals (CA) and Meralco.

In 1998, the ERC ordered Meralco to refund the alleged excess collection arising from the treatment of income tax as operating expense. Meralco took the ERB decision to the CA.

Meralco argued that the treatment of income tax as part of operating expense is an internationally accepted principle and there was no basis for the disallowance and resulting fund. The ERB decision would automatically stop any utility from achieving a return on rate base (RORB) of 12 percent which is provided by law.

The CA decided in favor of Meralco. Thus, the ERB took the CA decision to the SC. – Donnabelle Gatdula