SC affirms decision on ‘bidding’ for power supply deals

FILE: Supreme Court of the Philippines (File Photo By Mike Gonzalez (TheCoffee) – Own work, CC BY-SA 3.0)

MANILA — The Supreme Court (SC) affirmed with finality its decision directing the Energy Regulatory Commission (ERC) to conduct a competitive selection process (CSP) on all power supply agreements (PSAs) submitted by distribution utilities.

In an advisory Wednesday, SC Public Information Office chief and spokesperson Brian Hokasa confirmed that resolution was made during Tuesday’s en banc session and denied the motions for reconsiderations filed by the Office of the Solicitor General (OSG) on behalf of the ERC and the counsel for Panay Energy Development Corporation (PEDC).

“Acting on the following motions for reconsideration of the decision dated May 3, 2019, the Court resolved, by the same vote and with Associate Justice Henri Jean Paul Inting joining the majority , to deny with finality the said motions for reconsideration as the basic issues raised therein have been passed upon by this Court and no substantial arguments were presented to warrant the reversal of the questioned decision,” the Court ruled.

In its original May 3, 2019 decision, the Court held that the ERC gravely abused its discretion and therefore exceeded its jurisdiction when it unilaterally postponed the effectivity of the CSP requirement for power distributors to get at least two offers for supply of electricity before awarding a PSA, ensuring the least cost for electricity consumers.

The Court pointed out that the authority of the ERC was limited only to the implementation of the CSP, and that the ERC had no power and authority to postpone the CSP’s application.

All PSA applications submitted by the DUs on or after June 30, 2015, were required to comply with the CSP in accordance with 2015 circular issued by the Department of Energy (DOE).

In the same ruling, the SC ordered that the power purchase cost after compliance with the CSP shall retroact to the date of the effectivity of the PSA, “but in no case earlier than June 30, 2015, for purposes of passing the purchase cost to the consumers.”

The petitioner in the case claim that by extending the CSP deadline from November 2015 to April 2016, the ERC allowed Meralco, along with its seven affiliated power generating companies, tying up 3,551 megawatts, or 90 percent of its supply, to enter 20-year contracts that would cost consumers PHP12.44 billion a year.