Pasig court issues TRO versus RCOA rules

by Myrna Velasco – June 17, 2016

from Manila Bulletin

A Pasig regional trial court (RTC) has granted the petition of Manila Electric Company (Meralco) for a temporary restraining order (TRO) preventing the Energy Regulatory Commission (ERC) from enforcing for the time being its newly issued rules on retail competition and open access (RCOA) and previous Circulars of the Department of Energy (DOE) for the restructured electricity sector.

A ruling penned by Pasig RTC Presiding Judge Gregorio L. Vega Jr., has stipulated that the TRO “shall be effective for a period of 20 days from service to respondents DOE and ERC of this Order together with a bond to be posted by the petitioner, amounting to P1.0 million in cash or surety.”

In issuing the TRO, the RTC primarily recognizes the rights of petitioner-Meralco on its local retail electricity supplier (Local RES) business segment as upheld in the previous ERC rulings and as provided under the Electric Power Industry Reform Act (EPIRA) and its implementing rules and regulations.

Contestable customers are end-users that can already exercise their power of choice in purchasing or contracting their respective electricity supply. The initial threshold was set at 1.0 megawatt on a voluntary basis of implementation.

Nevertheless, the court reckoned that an “impending damage or injury which is quantifiable will not justify the issuance of the injunctive relief prayed for by the petitioner.” In the ruling, it was stipulated that during the passage of the EPIRA, “it was evident that Congress intended for distribution utilities like the petitioner to participate as suppliers of electricity,” under the RCOA regime.

The same was purportedly expressed in DOE Circulars in 2012 and 2013; and the ERC resolutions from 2005 to 2013.

But in the July 1, 2016 resolution of the ERC, the local RES function of DUs like that of Meralco’s MPower had been correspondingly omitted, hence, the petitioner took its legal recourse with the courts.

The court so far had given weight to Meralco’s stipulation that previous rules and DOE issuances recognizing its Local RES MPower had been “effectively amended or curtailed by aforesaid recent questioned issuances of respondents DOE and ERC without legal basis and in violation of petitioner’s aforementioned rights.”

MPower’s allegation of financial loss has also been taken into consideration in the Pasig RTC’s verdict; as well as the higher cost impact on its captive customers.

“The prohibition or restriction imposed on the petitioner and MPower directly translates into a major loss of its investments in capital, personnel, technical equipment and other related peripherals arising out of the unbundling of its regulated and unregulated activities in compliance with requirements earlier issued by DOE/ERC,” but which were just negated in recently issued rules.