CA orders SolGen to answer ERC on unbundling of rates

The Court of Appeals has ordered the Office of the Solicitor General to answer the motion for reconsideration filed by the Energy Regulatory Commission (ERC) on the unbundling of rates by the Manila Electric Co. (Meralco).

In a one-page resolution dated Aug. 17, the CA gave the government counsel 10 days to submit its comment.

In its motion, the ERC claimed the OSG made a mistake in saying that the regulatory body failed to require the Commission on Audit to look into the books, records and accounts of Meralco before deciding on its application for rate unbundling and rate increase.

The ERC also asserted before the CA that "judicial inquiry must necessarily come to an end" as it asked to be left alone in performing its task to fix the rates of Meralco as mandated by law.

The ERC asked the appellate court to set aside its July 22 ruling that nullified the commission’s orders that allowed Meralco’s unbundling of rates which caused a 17-centavo per kilowatt-hour increase in electricity which in June of last year.

ERC said it did not commit any grave abuse of discretion when it authorized Meralco’s unbundling of rates since there was no law making a COA audit a precondition to rate-fixing.

And assuming that such auditing is indispensable in rate-fixing, the ERC said it sought COA’s assistance to examine the financial condition of Meralco before it arrived at the reasonable rates for the company, contrary to the claims of the OSG.

The ERC also pointed out it took into consideration all oppositions, comments and evidence filed and offered by all interested parties, including the petitioners in the case.

"It is thus painful for ERC to be at the receiving end of baseless charges of dereliction of duty and plain incompetence," it said.

In its decision penned by Justice Martin Villarama Jr., the CA said ERC should have first required the audit of Meralco’s books and accounts before it was allowed to break down or unbundled its charges and then to raise them.

The ERC belied the claims of the Office of the Solicitor General that it did not even consider COA’s findings though it was not a requirement. The proof, it noted, was that Meralco did not get the tariff adjustments it asked for.

"But to say that ERC erred in deciding the cases in the absence of a COA audit is like saying that, ERC cannot validly exercise its own statutorily-granted jurisdiction without COA’s intervention," it said.

The ERC further said the requirement of due process as enshrined in the Constitution was not violated as all concerned parties were duly heard at the more than 50 hearings conducted by the commission.