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Appeals Court sustains ERC on Malampaya plant shutdown

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By Rey Panaligan

The Court of Appeals (CA) has allowed the Energy Regulatory Commission (ERC) to proceed with the resolution of the anti-competitive behavior and unfair trade practices allegedly committed by the Manila Electric Company (Meralco) and the subsidiaries of Aboitiz Power Corporation in connection with the 2013 shutdown of Malampaya plant in Palawan.

Court of Appeals (KJ ROSALES / MANILA BULLETIN FILE PHOTO)

Court of Appeals (KJ Rosales | Manila Bulletin file photo)

With the ruling, the CA — in a decision written by Associate Justice Apolinario Bruselas Jr. – denied the petition filed by Meralco and Aboitiz’s subsidiaries Therma Mobile, Inc. (TMO) and AP Renewables, Inc.

The CA dismissed the allegations of both Meralco and Aboitiz’s subsidiaries that it is the Philippine Competition Commission (PCC) and not the ERC which has jurisdiction over the complaints filed against them.

On Dec. 26, 2013, the ERC constituted an investigating unit (IU) to look into the possible anti-competitive behavior and unfair trade practices in connection with the Malampaya plant shutdown.

After investigation, the IU found a case against Meralco, TMO, and AP Renewables and filed a formal complaint for violation of Rule LL, Section 1 of the implementing rules and regulations of the Electric Power Industry Reform Act (EPIRA).

The regulation prohibits electric power industry participants from using physical operating practices or bidding strategies that will limit the market participation of a generation unit under conditions that will result in significant increases in market prices.

Meralco, TMO and AP Renewables claimed that all competition-related issues under the Philippine Competition Act (PCA) or Republic Act No. 10667 has been conferred to the PCC.

When their motion to dismiss the complaint was denied by the ERC, they elevated the issue before the CA.

Dismissing their petition, the CA said the jurisdiction to hear and resolve the complaint remains with the ERC considering that the PCA has no retroactive effect.

It pointed out that the complaint against Meralco, TMO, and AP Renewables was filed with the ERC on June 24, 2015 and June 9, 2015 while the PCA was signed into law only on July 21, 2015.

“Verily, the PCA was still non-existent and the EPIRA was still the governing law when the complainants against petitioners were filed. EPIRA, then the law in force, explicitly vested the ERC with jurisdiction to resolve petitioners’ cases,” the CA said.

It also said:

“Because the legislature did not intend for the PCA to apply retroactively, however, the PCC may only exercise authority and jurisdiction over anti-competition cases and complaints prospective to its creation.

“Since the complaints against the petitioners were validly filed prior to the enactment of the PCA, the PCC has no jurisdiction over the petitioners’ cases. The jurisdiction to try their cases remains with the ERC, the body conferred with jurisdiction by EPIRA, the law then in force when the complaints against them were filed.”

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