CA affirms ERC’s power vs retail electricity suppliers

The Court of Appeals has affirmed the jurisdiction of the Energy Regulatory Commission, including its power to issue cease and desist orders, and resolve contractual disputes concerning retail electricity suppliers or RES.

A recent ruling of the 11th division of the appellate court stemmed from the petitions filed by Manila Electric Co. and its subsidiary, a local RES, MPower.

In a press statement on Thursday night, the ERC said the six petitions for certiorari filed by Meralco and MPower had been dismissed by the CA.

These petitions challenge the authority of the ERC in handling disputes related to contracts in the retail market.

Traditional deference

"The decisions of administrative agencies are accorded great respect, owing to a traditional deference given to such administrative agencies equipped with the special knowledge, experience, and capability to hear and determine promptly disputes on technical matters," the CA order read.

"In the exercise of such powers, an agency has the authority to interpret and apply contracts and determine the rights of private parties under such contracts," it added.

The CA also reiterated that in its decision, the ERC only acted under its statutory powers as per Section 43 (u) of the Electric Power Industry Reform Act or EPIRA.

Jurisdiction over disputes

Additionally, the Office of the Solicitor General or OSG, which served as CA's counsel, also affirmed that the ERC has jurisdiction over these disputes and this carries with it the authority to go over the provisions of the Retail Electricity Service Agreement or RESA.

The ERC also noted that Meralco and MPower were involved in contractual disputes concerning fuel adjustment costs in their customers' contracts as per the Retail Competition and Open Access or RCOA policy.

However, some customers opposed the fuel pass-through imposition, which led to the disconnection of their electricity supply by Meralco and MPower.

The two firms' service disconnection threats were deemed as an act of abuse of market power, which should not be allowed by the ERC to the detriment of electricity consumers in the Philippines.