SC upholds 2013 ERC order allowing Meralco to impose power rate hike

The Supreme Court (SC) has upheld the Energy Regulatory Commission's approval in 2013 of power distribution firm Meralco's proposal to charge its consumers on a staggered basis and recover P22.64 billion in generation costs.

Voting 6-5, the High Tribunal ruled that the ERC did not commit grave abuse of discretion when it allowed the utility to pass the cost to its consumers.

The SC said the approval was in accordance with the Guidelines for the Automatic Adjustment of  Generation  Rate and  System Loss Rates by Distribution (AGRA Rules) and the commission only acted within its power.

“Instead of evading its positive duty, the ERC, in fact, acted in such a manner that is compliant with the law, and the rules and regulation applicable,” the High Court said.

The decision penned by Associate Justice Jhosep Lopez was promulgated on August 3, 2021, but was only made available on the SC website on July 1, 2022.

To recall, the ERC in December 2013 allowed Meralco to increase electricity rates by P4.15/kWh in three tranches from December 2013 to March 2014 following the maintenance shutdown of SPEX-Malampaya which prompted them to buy higher-priced electricity supply from the Wholesale Electricity Spot Market (WESM).

The ERC, however, denied Meralco’s request to charge the carrying costs.

Sought for comment, Meralco said it has yet to receive the official copy of the SC decision.

“Once we receive it though, we will need to study the reported SC decision to understand and see what the actual impact will be,” the power distributor said.

In his dissenting opinion, Associate Justice Marvic Leonen said the commission’s approval was “null and void” citing its lack of publication and hearing. He further argued the regulatory firm did not conduct an investigation on Meralco’s computation.

The majority of the justices disagreed.

“Whether the ERC could have ‘done better,’ as what the dissents would have wanted the Court to undertake, is an unwarranted journey into the functions of the administrative body that has the expertise to regulate the power industry,” the decision said.

“Even if it were conceded that the ERC could have done better, that it did not do so does not mean that the ERC committed grave abuse of discretion - as it was, again, simply following the AGRA Rules,” it added.

Among those who concurred with Lopez are Associate Justices Ramon Paul Hernando, Rosmari Carandang, Henri Jean Paul Inting, Mario Lopez, and Samuel Gaerlan.

Joining Leonen as dissenters are Chief Justice Alexander Gesmundo and Associate Justices Rodil Zalameda, Ricardo Rosario and Amy C. Lazaro-Javier.

Associate Justices Estella Perlas-Bernabe and Alfredo Benjamin Caguioa, meanwhile, did not take part. —NB/AOL, GMA News