LAWMAKERS will file a test case before the Supreme Court to challenge the decision of a Mandaluyong City court to entertain a case over disputes involving electricity rates which they believe is a usurpation of the exclusive power of the Energy Regulatory Commission (ERC).
“We have to thresh out first the legal context of the EPIRA (Electric Power Industry Reform Act of 2001),” said Anakalusugan party-list Rep. Michael Defensor, chair of the committee on public accounts which is investigating the power companies and electric cooperatives that owe the government billions in arrears.
Leyte Rep. Vicente Veloso has earlier slammed the decision of Mandaluyong City Regional Trial Court (RTC) Branch 208 to entertain a case filed by the South Premier Power Corp.
(SPPC), an affiliate of San Miguel Corp. (SMC), contesting P23.9 billion in accumulated billings sent to it by state-owned Power Sector Assets and Liabilities Management (PSALM) Corp. for SPPC’s administration of the 1,200-megawatt Ilijan power plant in Batangas.
SPPC was prompted to seek legal remedy after the PSALM unilaterally cancelled in 2015 the private firm’s administrator contract to operate the Ilijan power plant and demanded the payment of P23.9 billion in alleged unpaid obligations to the government.
The Mandaluyong City court has prohibited PSALM from terminating its contract with SPPC.
Veloso, who chairs the House committee on justice, said the law does not allow courts lower than the Court of Appeals to meddle in cases involving electricity rates and other power-related issues.
“RTC judges should not entertain such petitions. I will bring up this matter of intervention with the Supreme Court,” said Veloso, whose committee has oversight function over the judiciary.
Defensor could not say yet what sanctions the RTC judge could face once the House of Representatives brings the case to the SC.
“Let’s see. Another thing is I think the present judge just inherited the case from the predecessor,” he said.
Veloso quoted section 43 of the EPIRA, which provides that the ERC “shall have the original and exclusive jurisdiction over all cases contesting rates, fees, fines and penalties imposed by the ERC… and over all cases involving disputes between and among participants or players in the energy sector.”
Veloso, who was a Court of Appeals (CA) justice for 11 years, said the law also provides that ERC decisions can be appealed with the CA.
During a joint committee hearing last week, Veloso had an exchange with a lawyer of SPPC on the RTC’s decision to hear the SMC affiliate’s petition against PSALM.
The lawyer said SPPC filed its complaint with the Mandaluyong court because that is the venue specified in its contract with PSALM for any dispute arising from its Ilijan plant administration contract.
The case was brought to light after members of the committee on public accounts and the committee on good government and public accountability launched an inquiry into P95 billion in debts owed by power generators to the government.
“Our inquiry is principally in aid of legislation, though we at the same time want to help the executive branch to collect this huge amount of receivables,” Defensor said.
He said he and his joint inquiry chairman, Rep. Jose Antonio Sy-Alvarado of Bulacan, believe that section 43 of EPIRA “is clear enough on jurisdiction over disputes.”
“But if it needs further clarification for all concerned, including judges, we can recommend remedial legislation,” Defensor said.
Northern Renewables Generation Corp., one of the three firms named by the PSALM to still have outstanding obligations with the government, said it has already paid its debt under a settlement agreement approved by a Cebu City RTC.
Aside from the SPPC’s debt, the other uncollected fees from private corporations and cooperatives include the P35.44 billion from Power and Universal Charges (UC), P33.62 billion from Independent Power Producer Administrator (IPPA) and P26.35 billion from litigation, for reconciliation and adjustment as of December 31 last year.
There are also overdue accounts for generation payments under the IPPA from Northern Renewables Generation Corporation worth P4.579 billion, FDC Misamis Power Corp., P2.630 billion, FDC Utilities Inc., P1.167 billion, Good Friends Hydro Resources Corp., P1.214 billion and Waterfront Mactan Casino Hotel Inc., P87 million.
The PSALM is also set to receive P14.9 billion from Manila Electric Company (Meralco) under litigation, for reconciliation and adjustment payment.
The two committees have already been assured by representatives of Meralco and three other power firms that they would soon settle their P23.4 billion in financial obligations to the government.