Limited court jurisdiction
For the ERC to grant the petition of the SMC group is to grant them special treatment not otherwise available to other bidders in state-supervised contracts.
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For the ERC to grant the petition of the SMC group is to grant them special treatment not otherwise available to other bidders in state-supervised contracts.
San Miguel Corporation, through its affiliate South Premiere Power Corporation, is desperate to circumvent its contractual obligation.
It will be recalled that SPPC participated in bidding for the supply of electricity to the Manila Electric Company, which will distribute the electricity to consumers over ten years. The PSA will make the cost of electricity in the country stable for the next decade.
Because SPPC submitted the lowest bid, it won the power supply agreement with Meralco.
Considering that the PSA involves quite a sum of investment funds, it is reasonable to presume that SPPC studied its finances before submitting its bid, and winning the PSA with Meralco.
It turned out that SPPC did not do its homework.
According to SPPC, there were errors and oversights in their bid for the PSA, and it will need to recoup P5 billion out of its alleged losses of P15 billion due to higher coal prices and problems with the supply of natural gas in Malampaya, off the coast of Palawan.
Thus, SPPC, together with its affiliate SMC Energy Corporation, petitioned the Energy Regulatory Commission (which has authority over power supply agreements in the country) for permission to charge rates higher than those recited in its bid. This will translate to added costs to be shouldered by consumers.
In several recent editorials, the Daily Tribune pointed out that the petition of the SMC group is tantamount to an attempt at an illegal revision of the terms and conditions of the winning bid for the PSA.
The editorials stressed that the SMC group cannot be allowed to belatedly alter its bid after discovering that the same was not feasible financially.
Therefore, for the ERC to grant the petition of the SMC group is to grant them special treatment not otherwise available to other bidders in state-supervised contracts. It's manifestly unjust and unfair to allow the SMC group to have its way.
The SMC group's winning bid was to the exclusion of other enterprises who could have won the contract, had it not been for their bids which were higher than that of the SMC group.
Besides, nobody forced the SMC group to bid for the PSA.
Thus, the SMC group should bear the consequences of its own contractual oversight and improvidence.
On 5 October 2022, the ERC dismissed the petition of the SPPC.
Undaunted, the SPPC filed a petition for certiorari with the Court of Appeals. The SPPC unilaterally convinced the CA to issue a temporary restraining order valid for 60 days. Because of the TRO, the PSA is temporarily suspended.
The public is aghast over this development. Even President Ferdinand Marcos Jr. urged the CA to reconsider the TRO.
As expected, the Office of the Solicitor General, as legal counsel of the ERC, will oppose the SPPC petition.
Despite the gloomy landscape created by the TRO, not all is lost. Under the law, the jurisdiction of the CA over the SPPC petition is limited.
In a petition for certiorari, the sole issue to be resolved by the CA is whether or not the ERC committed a grave abuse of discretion in dismissing the SPPC petition. Under established jurisprudence, the CA cannot venture into the merits of the case in a petition for certiorari. A petition for certiorari is, after all, not the same as an appeal, where the entire case is subject to judicial review.
The Supreme Court has defined grave abuse of discretion as a capricious and whimsical exercise of judgment. Did the ERC commit a grave abuse of its discretion when it dismissed the SPPC petition?
From all indications, the answer is negative. As discussed earlier, the order of ERC dismissing the SPPC petition conforms with the law governing bids for state-supervised projects. There is no way of characterizing the order as one issued with grave abuse of discretion.
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