THE Court of Appeals has paved the way for the Energy Regulatory Commission (ERC) to hear and resolve accusations that the Manila Electric Co. and subsidiaries of the Aboitiz Power Corp. engaged in anti-competitive behavior and other unfair trade practices in shutting down the Malampaya gas facility in 2013.
The CA’s Special 12th Division through Associate Justice Apolinario Bruselas dismissed the petition filed by Meralco and Aboitiz subsidiaries Therma Mobile Inc., (TMO) and AP Renewables, Inc. seeking the dismissal of the complaint filed by ERC’s investigating unit on the ground of lack of jurisdiction.
The CA junked the assertion of the petitioners that it is the Philippine Competition Commission that has jurisdiction over the complaint.
The appellate court ruled that since the complaints against the petitioners were filed before the passage of Republic Act No. 10667 or the Philippine Competition Act, the PCC has no jurisdiction over the petitioners’ cases.
On Dec. 26, 2013, the ERC issued an order constituting an investigating unit (IU) to probe the possible commission of anti-competitive behavior, abuse of market power, or other unfair trade and practices in connection with the Malampaya plant shutdown.
After the investigation, IU found prima facie case against Meralco, TMO and AP Renewables.
On June 4, 2015, a formal complaint for anti-competitive behavior was lodged before the ERC against Meralco, TMO and AP Renewables particularly for alleged “economic withholding” under Rule 11, Section 1 of the Electric Power Industry Reform Act (EPIRA) Implementing Rules and Regulations (IRR).
The said provision prohibits electric power industry participants from using physical operating practices or bidding strategies that will limit the market participation of a generation unit under conditions that will result in significant increases in market prices.
The petitioners sought the dismissal of the complaint, insisting that all competition related issues under the Philippine Competition Act (PCA) or Republic Act No. 10667 should be conferred to the PCC.
They pointed out that Section 55 of the PCA expressly repealed Section 43 (u) of EPIRA, thus, divesting the ERC any jurisdiction to resolve the case against them.
Section 43 (u) of the EPIRA conferred to the ERC the original and primary jurisdiction over all cases contesting rates, fees, fines and penalties imposed in the exercise of its powers, functions, and responsibilities.
However, the ERC denied Meralco and Aboitiz’s motion to dismiss the complaint, prompting them to elevate the issue to the CA.
In its decision, the appellate court agreed with petitioners that the PCA did not only repeal Section 43 (u) of the EPIRA but its Section 45, which give the ERC the power to monitor and penalize anti-competitive or discriminatory behavior in the electric power industry.
But the appellate court said the jurisdiction to hear and resolve the complaint remains with the ERC considering that the PCA has no retroactive affect.
It noted that the complaints against the petitioners were filed with the ERC on June 24, 2015 and June 9, 2015 while the PCA was signed into law only on July 21, 2015.
“Verily, the PCA was still non-existent and the EPIRA was still the governing law when the complainants against petitioners were filed. EPIRA, then the law in force, explicitly vested the ERC with jurisdiction to resolve petitioners’ cases,” the CA declared citing Section 56 of the PCA.
The said provision specifically states that the act “shall have no retroactive effect.
“Because the legislature did not intend for the PCA to apply retroactively, however, the PCC may only exercise authority and jurisdiction over anti-competition cases and complaints prospective to its creation,” the appellate court said.
“Since the complaints against the petitioners were validly filed prior to the enactment of the PCA, the PCC has no jurisdiction over the petitioners’ cases. The jurisdiction to try their cases remains with the ERC, the body conferred with jurisdiction by EPIRA, the law then in force when the complaints against them were filed,” it added.
Associate Justices Carmelita Salandanan Manahan and Rafael Antonio Santos concurred with the ruling.