Supreme Court voids ERC ruling allowing Meralco to raise rates

The Supreme Court voided yesterday an order of the Energy Regulatory Commission (ERC) allowing the Manila Electric Co. to raise electricity rates by 0.1327 centavos per kilowatt hour.

In a 36-page en banc decision, the high court ruled that Meralco’s application for an increase in its generation charge should have been published in a newspapers of general circulation as required by the implementing rules and regulations of the Electricity Power Industry Reforms Act of 2001.

"The lack of publication of respondent Meralco’s amended application for the increase of its generation charge is thus fatal," read the SC’s decision.

"By this omission, the consumers were deprived of the right to file their comments thereon."

The SC said due process requires that consumers be notified of any application and be apprised of its contents. In the present case, the consumers have the right to be informed about the basis of Meralco’s amended application for the increase of generation charge in order to effectively contest the same, the SC added.

The SC dismissed Meralco’s arguments that requiring it to comply with the publication requirement violated its right to due process because it would be subjected to a long and tedious process of recovering its fuel and purchased power costs.

"This is properly addressed by the ERC’s power to grant provisional rate adjustments," read the SC’s decision.

The high court said it had already outlined the requirements of EPIRA’s implementing rules and regulations when it voided the 0.12 centavo per kilowatt hour provisional rate increase granted to Meralco in the case of "Freedom from Debt Coalition vs ERC."

Among the important requirements introduced under the foregoing process are "the publication of the application itself, not merely the notice of hearing issued by the ERC, in a newspaper of general circulation in the locality where the applicant operates," the SC added.

The SC said the records do not show that the rules had been published in the Official Gazette or in a newspaper of general circulation.

Executive Order 200 which repealed Article 2 of the Civil Code, provides that "laws shall take effect after 15 days following the completion of their publication either in the Official Gazette or in a newspaper of general circulation in the Philippines, unless it is otherwise provided," the SC added.

The National Association of Electricity Consumers for Reforms, Federation of Village Associations and Federation of Las Piñas Homeowners Associations sought the voiding of the June 2, 2004 order of the ERC for being devoid of any basis as Meralco did not comply with the requisite publication.

Meralco’s amended application was not published in a newspaper of general circulation as required under the Civil Code as amended by Executive Order 200.

The petitioners said the omission prevented them from filing their comments on Meralco’s amended application for increase of generation charge and deprived them of procedural due process.