THE Supreme Court has upheld a ruling issued by the Court of Appeals declaring valid the memorandum of agreement (MOA) inked in 2008 between the Energy Regulatory Commission and the Philippine Electricity Market Corporation (PEMC) allowing the latter to investigate energy sector participants for possible violation of the rules and manuals of the Wholesale Electricity Spot Market (WESM).
In a decision promulgated on April 17 but made public only on June 29, the High Court’s Second Division junked the petition filed by the Power Sector Assets and Liabilities Management Corporation (PSALM) seeking the nullification of the MOA as well as its accompanying protocol.
To recall, the appellate court in a 2009 ruling held that the PEMC has the authority to probe possible breaches of the rules and manuals of the WESM.
It added that the ERC did not unduly delegate its powers in the assailed MOA with PEMC, contrary to the arguments raised by PSALM.
The appellate court further explained that the PEMC’s investigative powers came from its designation under the Electric Power Industry Reform Act (EPIRA) law as the autonomous group tasked to implement the electricity spot market and formulate the rules.
The case stemmed from the request made by PESM to then Energy Secretary Angelo Reyes seeking approval for the conduct of a formal investigation against PSALM for possible breach of WESM rules with regard to six power-generating plants in Limay Bataan, Sual in Pangasinan, Bauang La Union, Malaya in Laguna, Pagbilao in Quezon and Subic Enron, whose electricity output in needed in the spot market.
PSALM countered that PESM had no jurisdiction to determine possible breaches of the rules by a market participant or player in the energy sector.
“We deny the petition. We hold that the power to investigate violations of the rules is concurrently exercised by the Energy Regulatory Commission and respondent Philippine Electricity Market Corporation. EPIRA provides for the establishment of a spot market, whose rules are to be formulated by the Department of Energy jointly with the industry participants. The said market would also be implemented by a group to be constituted by the Department of Energy with representation from industry participants,” the ruling penned by Senior Associate Justice Marvic Leonen said.
The SC added that the implementing rules and regulations of EPIRA also mandate the Department of Energy and industry participants to establish the governance structure of the WESM.
