Freedom From Debt Coalition v. MERALCO : 161113 : June 15, 2004 : J. Sandoval-Gutierrez : En Banc : Separate Opinion

EN BANC

[G.R. NO. 161113 : June 15, 2004]

FREEDOM FROM DEBT COALITION, ANA MARIA NEMENZO, as President of FREEDOM FROM DEBT COALITION, MA. TERESA I. DIOKNO-PASCUAL, REP. LORETTA ANN ROSALES (Party-List Akbayan), REP. JOSE VIRGILIO BAUTISTA (Party-List Sanlakas), REP. RENATO MAGTUBO (Party-List Partido Manggagawa), Petitioners, v. ENERGY REGULATORY COMMISSION, MANILA ELECTRIC COMPANY (MERALCO), Respondents.

SEPARATE OPINION

SANDOVAL-GUTIERREZ, J.:

Electricity as the purest form of energy is now the most pervasive energy source propelling the engines of growth in both developed and developing economies, such as ours. Its role has been increasingly important as major technology development in all sectors of the economy has its basis on electric power.

Towards this end, past and present administrations have been exerting efforts to reform the economy and the power sector is a priority area. The Philippine government, given the limited resources and the economys growth and development objectives, has been paving the way for greater private sector capital investment and participation in the power sector.

Initially, the enactment of the Build-Operate-Transfer (BOT) Law in 1987 marked the beginning of the private sectors participation in major power projects, thus, resulting to a substantial amount of independent power producers (IPPs) power capacity coming on-stream. This was followed by the enactment of the Foreign Investment Act allowing 100% foreign ownership in power generation projects.

In fact, government encouragement of immediate entry of IPPs in the early 1990s to end the severe power shortages, has resulted in higher tariffs composed of demand and energy charges as well as foreign currency adjustments.

Now, with the ratification of Republic Act No. 9136, otherwise known as The Electric Power Industry Reform Act (EPIRA) of 2001, the most impressive economic reform in the Philippine energy sector, foreign investors and foreign governments are guardedly optimistic.¹ Their concern, and so should ours is, if such structural reform fails, then electricity prices would not start to moderate through the pressure of market forces, and most importantly, the country would not have a reliable, good supply of electricity, thus, once more the re-surfacing of severe power shortages or blackouts.

Verily, the essential nature of the service that electricity provides to all sectors of the economy requires that electricity prices are set prudently and efficiently.

While this Court concedes the primacy of the public interest in an adequate and efficient service, the same is not necessarily to be equated with non-compensatory electricity rates or prices. Reasonableness in the rates assumes that the same is fair to both the public utility and the consumer.

Indeed, we held in Philippine Communications Satellite Corporation v. Alcuaz² that:

The power of the State to regulate the conduct and business of public utilities is limited by the consideration that it is not the owner of the property of the utility, or clothed with the general power of management incident to ownership, since the private right of ownership to such property remains and is not to be destroyed by the regulatory power.The power to regulate is not the power to destroy useful and harmless enterprises, but is the power to protect, preserve, and control with due regard for the interest, first and foremost, of the public then of the utility and of its patrons.

But how do we strike a balance between ensuring consumer protection, on the one hand, and enhancing the competitive operation of the electricity market, on the other? This is the underlying issue raised in the instant petition.

The ERC has legal and statutory
authority to issue a provisional
order of rate adjustment.
____________________________

Historically, the Energy Regulatory Board (ERB) was created under Executive Order No. 172 to regulate, among others, the distribution of energy resources and to fix rates to be charged by public utilities involved in the distribution of electricity.³ Among the key powers of this regulatory body is provisional rate-fixing, thus:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

SECTION 8. Authority to Grant Provisional Relief. The Board may, upon the filing of an application, petition or complaint or at any stage thereafter and without prior hearing, on the basis of supporting papers duly verified or authenticated, grant provincial relief on motion of a party in the case or on its own initiative, without prejudice to a final decision after hearing, should the Board find that the pleadings, together with such affidavits, documents and other evidence which may be submitted in support of the motion, substantially support the provisional order: Provided, That the Board shall immediately schedule and conduct a hearing thereon within thirty (30) days thereafter, upon publication and notice to all affected parties.

Later, Republic Act No. 9136 or the EPIRA amended Executive Order No. 172 and gave impetus to the creation of the Energy Regulatory Commission (ERC). Thus, Section 38 of the same law provides:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

SECTION 38. Creation of the Energy Regulatory Commission. There is hereby created an independent, quasi-judicial regulatory body to be named the Energy Regulatory Commission (ERC). For this purpose, the existing Energy Regulatory Board (ERB) created under Executive Order No. 172, as amended, is hereby abolished.

Despite ERBs abolition, its powers and functions were transferred to the ERC under Section 44, thus:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

SECTION 44. Transfer of Powers and Functions. The powers and functions of the Energy Regulatory Board not inconsistent with the provisions of this Act are hereby transferred to the ERC. The foregoing transfer of powers and functions shall include all applicable funds and appropriations, records, equipment, property and personnel as may be necessary.

Although the EPIRA does not contain an express provision empowering the ERC to grant provisional orders of rate adjustments, such silence of the law should not ipso facto be interpreted as an amendment by deletion of such a key function.

To begin with, pursuant to the rules on statutory construction, the general rule on amendment by deletion is not applicable when the intent of the legislature to make such change in the meaning of the previous law is not clear.⁴ Ï‚rνll

In In Re: R. McCulloch Dick,⁵ we held that: where the question is whether a statute should be interpreted as having impliedly created a power not given in express words, the preamble may be consulted for the purpose of ascertaining the legislative intent.

The legislative intent for the ERC to retain the authority to issue provisional rate adjustments is gleaned from the express reasons for enacting the law which, under Section 2 of Republic Act No. 9136, are the following:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

SECTION 2. Declaration of Policy. It is hereby declared the policy of the State:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

(a) To ensure and accelerate the total electrification of the country;chanroblesvirtuallawlibrary

(b) To ensure the quality, reliability, security and affordability of the supply of electric power;

(c) To ensure transparent and reasonable prices of electricity in a regime of free and fair competition and full public accountability to achieve greater operational and economic efficiency and enhance the competitiveness of Philippine products in the global market;chanroblesvirtuallawlibrary

(d) To enhance the inflow of private capital and broaden the ownership base of the power generation, transmission and distribution sectors;chanroblesvirtuallawlibrary

(e) To ensure fair and non-discriminatory treatment of public and private sector entities in the process of restructuring the electric power industry;

(f) To protect the public interest as it is affected by the rates and services of electric utilities and other providers of electric power;

(g) To assure socially and environmentally compatible energy sources and infrastructure;chanroblesvirtuallawlibrary

(h) To promote the utilization of indigenous and new and renewable energy resources in power generation in order to reduce dependence on imported energy;chanroblesvirtuallawlibrary

(i) To provide for an orderly and transparent privatization of the assets and liabilities of the National Power Corporation (NPC);chanroblesvirtuallawlibrary

(j) To establish a strong and purely independent regulatory body and system to ensure consumer protection and enhance the competitive operation of the electricity market; andcralawlibrary

(k) To encourage the efficient use of energy and other modalities of demand side management.

To exclude such key function would certainly emasculate the law itself. A law should not be so interpreted as to afford an opportunity to defeat compliance with its terms.

Thus, considering the reasons behind the establishment of the ERC, there is every indication that the legislative intent is for the ERC to retain its authority to issue provisional rate adjustments in order to accomplish its role.

The records of the deliberation of the Committee on Energy (House Panel of the Power Commission) support this position. As early as the deliberation stage in the Power Commission, the intention to retain the ERCs power to issue provisional rate adjustments was discussed, thus:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

THE CHAIRMAN. Thank you and good morning to all. The meeting of the Members of the House contingent of the Power Commission is resumed.

x x x

MR. FRANCISCO. Chairman Badelles, Honorable Members of the House Panel of the Joint Congressional Power Commission, friends and colleagues from the power industry, good morning.

x x x

The EPIRA is the product of a long, and sometimes impassioned debate on countless contentious issues. The result law, therefore, embodies a careful balancing of interests, with the end view of providing all Filipinos, from the smallest household to the largest industrial user, the benefits of quality power at a competitive price.

x x x

First is the ERCs Power to Grant Provisional Approvals and Fix Rates.

At first glance, we find that Rule 4, Section 4 (e) of the new draft finally gives the ERC the power to provisionally approve urgent petitions, without prejudicing the promulgation of a final order following the usual hearings and arguments

x x x

This provision was largely taken from Section 8 of Executive Order 172, creating the ERB, the now defunct ERB. However, we find that certain phrases and requirements were added that defeat the purpose of giving ERC the power to act on urgent petitions. We would recommend that the language found on Section 8 of EO 172 be retained, as follows:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

The ERC may, upon the filing of an application, petition or complaint or at any stage thereafter and without prior hearing on the basis of supporting papers duly verified or authenticated, grant provisional relief on motion of a party without prejudice to a final decision after hearing, should the Board find that the pleadings together with such affidavits, documents and other evidence which may be submitted in support of the motion. Adopting this is provided for by Section 80 of RA 9136, which stipulates that the EO 172 shall continue to have full force and effect except insofar as it is inconsistent with the Act. cralawlibrary

x x x

REP. CONSTANTINO G. JARAULA. Mr. Chairman. I think the first concern refers to the provisional grant vested on the ERC. I am interested in this as this was the subject that we went into yesterday.

x x x

MR. FRANCISCO. x x x.

We never used to be worried that the granting of a provisional authority would be as delayed as we are now currently experiencing and, therefore, we are very happy that Congressman Jaraula seems to agree with us that there should be a time limit as to the response of the regulatory body to a petition. Because if there were a time limit, then the need for a provisional relief will not be as big, but we still think that it would tie the hands of the regulatory commission if its authority to grant provisional relief in the instances where it is really very urgent that they would be tied by the requirement to conduct public hearings. x x x.

x x x

REP. JARAULA. x x x.

The other thing is that, I would agree with you also that it would tie up or it would hamper your operations if it is delayed in the public hearing : May only interest is that, when ERC appreciates and evaluates the petition, the side of the consumers should already be available, if they prefer to have. In other words, by the process of discussion in the local level knowing that a petition will be filed, they can already draft their position in effect without having to go through a public hearing.

And so, as you file, they can also immediately comment without being asked to comment. They can also say, you are going to file today, they will learn of that, they will also immediately file, so that, in the appreciation, it is not one-sided. We give the authority to ERC, but ERC will have the opportunity now to see both sides before conducting a public hearing so that they can determine which is really.

My point here is that rates, I am primarily interested in rates. It is not on management level although I am not an expert in management. On management level, it is only very seldom that 1973 oil crisis would happen, so that management should be able to already forecast what is to come and, therefore, there is not shocking incident that may trigger an immediate petition. These are things that are studied through the months or through the years and, therefore, a petition for a rate increase is not something that is sudden unless there are, as I said, like 73 oil crisis, there are unusual incidents.

x x x.⁶ Ï‚rνll

The clear intent and design of the legislature to confer to the ERC the authority to issue provisional orders is manifest. The cardinal rule in the interpretation of all laws is to ascertain and give effect to the intent of the law.⁷ In Philippine National Bank v. Office of the President ,⁸ we ruled:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

The intent of a statute is the law. If a statute is valid it is to have effect according to the purpose and intent of the lawmaker. The intent is the vital part, the essence of the law, and the primary rule of construction is to ascertain and give effect to the intent. The intention of the legislature in enacting a law is the law itself, and must be enforced when ascertained, although it may not be consistent with the strict letter of the statute. Courts will not follow the letter of a statute when it leads away from the true intent and purpose of the legislature and to conclusions inconsistent with the general purpose of the act. Intent is the spirit which gives life to a legislative enactment. In construing statutes, the proper course is to start out and follow the true intent of the legislature and to adopt that sense which harmonizes best with the context and promotes in the fullest manner the apparent policy and objects of the legislature."chanroblesvirtuallawlibrary

Furthermore, a cardinal rule in statutory construction is that legislative intent must be ascertained from a consideration of the statute as a whole and not merely of a particular provision.⁹ Ï‚rνll

Courts must give effect to the general legislative intent that can be discovered from the four corners of the statute, and in order to ascertain such intent, the whole statute, and not only a particular provision thereof, should be considered.chanroblesvirtuallawlibrary

In resolving the instant case, it is necessary that we consider not only Section 43 of Republic Act No. 9136 but also its other provisions, particularly Section 44 on Transfers of Powers and Functions (earlier quoted) and Section 80¹⁰ on Applicability and Repealing Clause, in order to unravel the legislative intent. All these provisions should be harmonized with each other.

In Gordon v. Veridiano,¹¹ we emphasized the courts duty to reconcile and harmonize laws:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Courts of justice, when confronted with apparently conflicting statutes, should endeavor to reconcile the same instead of declaring outright the invalidity of one as against the other. Such alacrity should be avoided. The wise policy is for the judge to harmonize them if this is possible, bearing in mind that they are equally the handiwork of the same legislature, and so give effect to both while at the same time also according due respect to a coordinate department of the government.

In fine, the pertinent provisions of the EPIRA can well go together with full and unhampered effect to the other provisions, without doing violence to the law, thereby giving spirit to the maxim, interpretare et concordare legibus est optimus interpretandi or every statute must be so construed and harmonized with other statutes as to form a uniform system of jurisprudence.

Petitioner failed to resort to the
primary administrative jurisdiction
and to exhaust administrative
remedies before the ERC.
----------------------------------------------------

At the outset, it bears stressing that only petitioner FDC failed to file a motion for reconsideration with the ERC.¹² Ï‚rνll

Section 43 (u) of Republic Act No. 9136 explicitly provides:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

(u) The ERC shall have the original and exclusive jurisdiction over all cases contesting rates, fees, fines and penalties imposed by the ERC in the exercise of the abovementioned powers, functions and responsibilities and over all cases involving disputes between and among participants or players in the energy sector.

A similar provision is also incorporated in the Implementing Rules and Regulations of Republic Act No. 9136, particularly in Section 4 (n) ¹³ thereof.

Obviously, the authority conferred upon the ERC is intended to befull, clear and complete. In fact, the use of the word original andexclusive is synonymous to sole that emphasizes the unimpaired character of the jurisdiction reposed.

The rationale behind the need for a prior resort to the ERC is highlighted in Lawyers against Monopoly and Poverty (LAMP) v. MERALCO,¹⁴ thus:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Rate fixing call for a technical examination and a specialized review of specific details which the courts are ill-equipped to enter, hence, such matters are primarily entrusted to the administrative or regulating authority.

A careful perusal of the petition reveals that the main thrust of petitioners argument is that the provisional rate adjustment of 12 centavos per kwh was granted by the ERC with palpable and manifest bias considering that the only basis is that respondent MERALCO is in dire economic straits. Definitely, this intricate question of fact requires technical and specialized knowledge that is within the province of the ERC alone.

On this score, the Solicitor General correctly observed and recommended that:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

The oppositors raised serious grounds in opposition to the application for rate case. The same grounds were interposed as reasons for the reconsideration of the provisional authority. Considering the gravity of these grounds, they should be considered by the ERC not only in the main case but also on the issue of the provisional increase. x x x:

x x x

The Office of the Solicitor General, however, hastens to add that these grounds raise factual issues which the ERC should be allowed to resolve. x x x. chanroblesvirtuallawlibrary

x x x

There were several oppositors who filed motions for production of certain documents. Although the ERC directed MERALCO to comment on these motions, the ERC has yet to rule on said motions. These motions should be resolved as it is intimately related to the issue of the propriety of the provisional increase.

x x x

The motions for reconsideration of the provisional increase are properly addressed to the ERC which should be allowed to issue the proper resolution discussing the grounds in support of and in opposition of the provisional increase x x x based on the [application] and supporting documents attached thereto and such comments or pleadings the consumers or the LGU concerned may have filed within thirty (30) calendar days from receipt of a copy of the application or petition or from publication thereof as the case may be.

x x x

RECOMMENDATION

WHEREFORE, it is respectfully prayed that the petition be denied. It is further prayed that the ERC be allowed to expeditiously proceed and hear MERALCO and the oppositors a quo on their arguments and counterarguments on the ERC Order dated November 27, 2003 and to resolve the issue on the propriety of the provisional increase as well as the application on the merits.

x x x.

We take cognizance of the wealth of jurisprudence on the doctrine of primary administrative jurisdiction and exhaustion of administrative remedies. In this era of clogged court dockets, the need for specialized administrative boards or commissions with the special knowledge, experience and capability to hear and determine promptly disputes on technical matters or intricate questions of facts, subject to judicial review in case of grave abuse of discretion, is indispensable. Between the power lodged in an administrative body and a court, the unmistakable trend is to refer it to the former.¹⁵ InPadua v. Ranada,¹⁶ this Court held:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

x x x, if the case is such that its determination requires the expertise, specialized skills and knowledge of the proper administrative bodies because technical matters or intricate questions of facts are involved, then relief must first be obtained in an administrative proceeding before a remedy will be supplied by the courts even though the matter is within the proper jurisdiction of a court.

The ERC committed no grave abuse
of discretion in granting the
provisional rate of increase
------------------------------------------------------

Even granting that petitioners recourse to the instant remedies is in order, still, we cannot rule in its favor.

Although this Court, under Section 4 (p) of the Implementing Rules and Regulations of R.A. No. 9136, has been given jurisdiction, so to speak, to review all actions taken by the ERC, yet, in the exercise thereof, the Court is to merely check whether or not the ERC has gone beyond the limits of its jurisdiction, not that it erred or has a different view. In the absence of a showing that the ERC has committed grave abuse of discretion amounting to lack of jurisdiction, there is no occasion for the court to exercise its corrective power. Indeed, we should not decide a matter which by its nature is for the ERC alone to decide.

In the case at bar, we find no improvident use of power on the part of the ERC which will necessitate the exercise of the courts power of judicial review.

First, the provisional order issued by the ERC did not violate its own Implementing Rules and Regulations, particularly Section 4 (e), Rule 3 thereof.

To be closer to the truth, Section 4(e), Rule 3 of the Implementing Rules and Regulations is reproduced hereunder:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

(e) Any application or petition for rate adjustment or for any relief affecting the consumers must be verified, and accompanied with an acknowledgement of receipt of a copy thereof by the LGU Legislative Body of the locality where the applicant or petitioner principally operates together with the certification of the notice of publication thereof in a newspaper of general circulation in the same locality.

The ERC may grant provisionally or deny the relief prayed for not later than seventy-five (75) calendar days from the filing of the application or petition, based on the same and the supporting documents attached thereto and such comments or pleadings the consumers or the LGU concerned may have filed within thirty (30) calendar days from receipt of a copy of the application or petition or from the publication thereof as the case may be.

Thereafter, the ERC shall conduct a formal hearing on the application or petition, giving proper notices to all parties concerned, with at least one public hearing in the affected locality, and shall decide the matter on the merits not later than twelve (12) months from the issuance of the aforementioned provisional order.

x x x.

Records show that the Sangguniang Panlungsod of Pasig City was furnished a copy of the verified application of MERALCO on October 9, 2003 and then, prior to its filing with the ERC, a notice (of its filing) was published on October 10, 2003 in a newspaper of general circulation, particularly the Manila Times.

Petitioner however insists that a provisional order may only be issued after comments submitted by any oppositor within thirty (30) days from notice. Petitioners interpretation is far from persuasive.

On this score, we find the following discussion of the ERC in its Comment¹⁷ impressed with merit, thus:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

The procedure in Section 4(e), Rule 3 of the Implementing Rules for the issuance of provisional orders does not require the filing of any comments or pleadings by the consumers or the LGU concerned before respondent ERC may grant provisionally or deny the relief prayed for. x x x. In arriving at a decision to provisionally grant or deny the relief prayed for, respondent ERC is authorized to base its decision on the verified application and the supporting documents attached thereto. Within thirty (30) calendar days from receipt of a copy of the application or petition or from the publication thereof as the case may be, the consumers or the LGU concerned may file their comments on the application or petition. Should they do so before the issuance of any provisional order, respondent ERC may likewise base its decision thereof. x x x.

The foregoing provision, x x x, merely echoes what is expressly provided for in Section 8 of E.O. No. 172 that provisional orders may be issued ex parte. Under said provision, the only requirements for its issuance are that the pleadings, affidavits, documents and other evidence must substantially support the provisional order and that a formal hearing must forthwith conducted within thirty days from issuance of the order.

Indeed, after the filing of MERALCOs verified application on October 10, 2003, the ERC, in its Order dated November 3, 2003, directed the oppositors NASECORE, Genario Lualhati, and FDC to file their comments thereon. However, only Lualhati filed his comment on November 21, 2003 or barely one month after manifesting in a letter dated October 24, 2003 his intent to file an opposition to the application. On November 27, 2003 or after forty-eight (48) days from the filing of the application and six (6) days from receipt of Lualhatis comment, the ERC issued the assailed provisional order. This provisional order was issued well-within the reglementary seventy-five (75) day period.

Second, petitioner argues that the ERC has effectively granted MERALCOs application on the merits without full-blown hearings on the matter, in violation of substantive and procedural due process. This argument is totally misplaced.

It bears stressing that the issue raised by petitioner is not novel. We have ruled in a catena of cases that an administrative agency may be empowered to approve provisionally, when demanded by urgent public need, rates of public utilities without a hearing. The reason is easily discerned form the fact that provisional rates are by their nature temporary and subject to adjustment in conformity with the definitive rates approved after final hearing.¹⁸ Ï‚rνll

It may be recalled that Section 16 (c) of the Public Service Law authorizes the Public Service Commission to approve rates proposed by public services provisionally and without necessity of any hearing, x x x.

To clarify the intent as well as the extent of the Commissions power, our ruling in Republic v. Medina¹⁹ is in point, thus:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

x x x. The Public Service Commission practice, moreover, is to hear and approve revised rates without published notices or hearing. The reason is easily discerned: The provisional rates are by their nature temporary and subject to adjustment in conformity with the definitive rates approved, and in the case at bar, the Public Service Commission order of 20 May 1970 expressly so provided.

Subsequently, in Padua v. Ranada,²⁰ citing Maceda v. Energy Regulatory Board, we ruled that while the ERB is not precluded from conducting a hearing on the grant of provisional authority which is of course, the better procedure however, it can not be stigmatized if it failed to conduct one.

In Citizens Alliance for Consumer Protection v. Energy Regulatory Board,²¹ we also held:ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

In the light of Section 8 quoted above, public respondent Board need not even have conducted formal hearings in these cases prior to issuance of its Order of 14 August 1987 granting a provisional increase of prices. The Board, upon its own discretion and on the basis of documents and evidence submitted by private respondents, could have issued an order granting provisional relief immediately upon filing by private respondents of their respective applications. In this respect, the Court considers the evidence presented by private respondents in support of their applications -.i.e., evidence showing that importation costs of petroleum products had gone up; that the peso had depreciated in value; and that the Oil Price Stabilization Fund (OPSF) had been depleted as substantial and hence constitutive of at leastprima facie basis for issuance by the Board of a provisional relief order granting an increase in the prices of petroleum products.

Later, the ERC promulgated, as part of its Implementing Rules, the following provision:

x x x

The ERC may grant provisionally or deny the relief prayed for not later than seventy-five (75) calendar days from the filing of the application or petition, based on the same and the supporting documents attached thereto and such comments or pleadings the consumers or the LGU concerned may have filed within thirty (30) calendar days from receipt of a copy of the application or petition or from the publication thereof as the case may be.

Thereafter, the ERC shall conduct a formal hearing on the application or petition, giving proper notices to all parties concerned, with at least one public hearing in the affected locality, and shall decide the matter on the merits not later than twelve (12) months from the issuance of the aforementioned provisional order.

x x x.

At this point, it bears reiterating that the reasonableness of the provisional rate adjustment is best addressed to the ERC.

Petitioner claims that the ERCs unilateral issuance of a provisional rate adjustment is repugnant to the policy declaration set forth in the EPIRA to protect the public interest as it is affected by the rates and services of the electric utilities and other providers of electric power.

We however note that respondent may likely suffer a severe drawback, with the consequent detriment to the public service, should the assailed Order of the ERC turn out to be improvident.

At present, respondent claims that it is engaged in 42 major capital projects aimed at addressing its system overloads. These projects were undertaken on the premise that its provisional application for rate adjustment would be approved. Consequently, a declaration of nullity of the assailed provisional Order of the ERC would definitely deter such projects and ultimately impair respondents ability to provide safe, adequate and reliable service to the consuming public, thus, depriving its patrons and the consumers of a vital and essential service.

WHEREFORE, I join Mr. Senior Justice Reynato S. Puno in his Dissenting Opinion that the Energy Regulatory Commission (ERC) has the authority to grant provisional rate adjustments ex-parte and vote to DISMISS the petition.

Endnotes:

¹ Transcript of Ambassador Francis Ricciardones Interview with Business World Newspaper, U.S. Supports Privatization, other Reforms in Philippine Energy Sector, December 5, 2002.

² G.R. No. 84818, December 18, 1989, 180 SCRA 218, 231, citing 73 C.J.S. 1005.

³ Republic v. Manila Electric Company, G.R. No. 141314, November 15, 2002, 391 SCRA 700, 708.

⁴ See Dissenting Opinion of Justice A. Panganiban in Gloria v. Court of Appeals, G.R. No. 131012, April 21, 1999, 306 SCRA 287, 313, citing Agpalo, Statutory Construction, 76-77 (1990).

⁵ G.R. No. 1384, April 15, 1918, 38 Phil. 224.

⁶ Transcripts of the Committee on Energy (House Panel of the Power Commission), November 28, 2001, IV-4 to VIII-2.

⁷ David v. COMELEC,G.R. NOS. 127116 & 12809, April 8, 1997, 271 SCRA 90, 100-101, citing Collector of Internal Revenue v. Manila Lodge No. 761,105 Phil. 983; Agpalo, Statutory Construction, 1990 Ed., 36; Francisco, Statutory Construction, Third Ed., 5 and 106; Martin, Statutory Construction, 1979 Ed., 40.

⁸ G.R. No. 104528, January 18, 1996, 252 SCRA 5, 11, citing Ongsiako v. Gamboa, 86 Phil. 50 (1950); Vol. II, Sutherland, Statutory Construction, 693-695.

⁹ Philippine Long Distance Telephone Co., Inc. v. City of Davao, G.R. No. 143867, August 22, 2001, 363 SCRA 522, 531.

¹⁰ Sec.80. Applicability and Repealing Clause. The applicability provisions of Commonwealth Act No. 146, as amended, otherwise known as the Public Services Act; Republic Act 6395, as amended, revising the charter of NPC; Presidential Decree 269, as amended, referred to as the National Electrification Decree; Republic Act 7638, otherwise known as the Department of Energy Act of 1992; Executive Order 172, as amended, creating the ERB; Republic Act 7832 otherwise known as the Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994, shall continue to have full force and effect except insofar as they are inconsistent with this Act.

The provisions with respect to electric power of Section 11 (c) of Republic Act 7916, as amended, and Section 5 (f) of Republic Act 7227, are hereby repealed or modified accordingly.

¹¹ 167 SCRA 51, 58-59 (1988), cited in Republic v. Asuncion, G.R. No. 108208, March 11, 1994, 231 SCRA 211, 230-231.

¹² Records reveal that NASECORE, Lualhati, and other oppositors before the ERC filed their motion for reconsideration of the challenged Order.

¹³ (n) The ERC shall have the original and exclusive jurisdiction over all cases contesting rates, fees, fines and penalties imposed in the exercise of its powers, functions and responsibilities and over all cases involving disputes between and among participants or players in the energy sector relating to the foregoing powers, functions and responsibilities.

¹⁴ G.R. No. 141369, April 9, 2003, citing Republic v. Medina, 41 SCRA 643 (1971).

¹⁵ Padua v. Ranada, G.R. No. 141949, October 14, 2002, 390- SCRA 663, 677, citing Abejo v. Dela Cruz, 149 SCRA 654 (1987).

¹⁶ Ibid., citing Industrial Enterprises, Inc. v. Court of Appeals, 184 SCRA 426 (1990)

¹⁷ Comment at 13-14.

¹⁸ Padua v. Ranada, supra at 683, citing Radio Communications of the Philippines v. National Telecommunications Commission, 184 SCRA 517 (1990).

¹⁹ G.R. No. L-32068, October 4, 1971, 41 SCRA 643, 654.

²⁰ Supra,citing Maceda v. Energy Regulatory Board, 192 SCRA 363 (1990).

²¹ Ibid.,162 SCRA 521 (1988).