Republic of the Philippines SUPREME COURT Manila EN BANC BAYAN MUNA REPS.

NERI JAVIER COLMENARES and CARLOS ISAGANI ZARATE, GABRIELA WOMENS PARTY REPS. LUZ ILAGAN and EMMI DE JESUS, ACT TEACHERS PARTY-LIST REP. ANTONIO TINIO, and KABATAAN PARTYLIST REP. TERRY RIDON, Petitioners -versusGR No. 2102 ! Petition for Certiorari an" Prohibition #ith Application for a $e%porar& Restrainin' (r"er an")or Preli%inar& *n+unction

ENERGY REGULATORY COMMISSION ERC! AND MANILA ELECTRIC COMPANY MERALCO!, Respondents. ---------------------------------------------------------

PETITION "OR CERTIORARI AND PROHIBITION .*$/ PRA0ER 1(R A $EMP(RAR0 RE2$RA*N*NG (R3ER AN3)(R PRE4*M*NAR0 *N56NC$*(N
Petitioners, b& counsel, unto this /onorable Court %ost respectfull& aver7

PARTIES Petitioners are all of le'al a'e an" 1ilipinos, to #it7

PE$*$*(NER2 i. Ba&an Muna Representatives N#$% Ja&%#$ C'()#na$#* an" Ca$('* I*a+an% Za$a,#8 Gabriela .o%en9s Part& Representatives L-. I(a+an an" E))% D# J#*-*8 AC$ $eachers Part& Representative An,'n%' T%n%'8 an" :abataan Part&-list Representative T#$$/ R%d'n8 are all present %e%bers of, an" are hol"in' office at, the /ouse of Representatives. $he& are also all Meralco subscribers resi"in' in Metro Manila affecte" b& the rate hi;e. $he& %a& be serve" #ith processes of this /onorable Court at the a""ress of the un"ersi'ne" counsel belo#. RE2P(N3EN$2 ii. $he En#$+/ R#+-(a,'$/ C'))%**%'n ERC!, is the re'ulator& a'enc& %an"ate" to <pro%ote co%petition, encoura'e %ar;et "evelop%ent, ensure custo%er choice an" penali=e abuse of %ar;et po#er in the restructure" electricit& in"ustr&.>1 *t has office a""ress at Pacific Center Buil"in', 2an Mi'uel Ave. (rti'as Center Pasi' Cit&, #here it %a& be serve" #ith court process8 iii. Man%(a E(#0,$%0 C')1an/ M#$a(0'! is the lar'est electric "istribution utilit& in the Philippines. *t has office a""ress at (rti'as Pasi' Cit&, #here it %a& be serve" #ith court process. NATURE O" THE PETITION 1. $his is a special civil action for Certiorari an" Prohibition, brou'ht un"er Rule ?! of the 1@@A Rules of Civil Proce"ure, to assail B1C ERC9s approval of Meralco9s proposal to pass on to consu%ers the increase in the 'eneration cost for Nove%ber 201D an" B2C 2ections ? an" 2@ of Republic Act @1D?, An Act Ordaining Reforms in the Electric Power Industry, Amending for the Purpose Certain Laws and for Other Purposes BElectric Po#er *n"ustr& Refor% Act of 2001, or hereinafter, the EP*RAC. 2. $o prevent %anifest in+ustice an" ineEualit&, Petitioners also pra& for the issuance of a $e%porar& Restrainin' (r"er to en+oin the enforce%ent until final +u"'%ent of the fore'oin' assaile" act of ERC an" 2ections of the EP*RA.
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Sec. 43, RA 9136

JURISDICTIONAL AVERMENTS D. Petitioners invo;e this /onorable Court9s po#er to stri;e "o#n la#s an" re'ulations as inconsistent #ith the 1@FA Constitution. $he& also invo;e this Court9s po#er of +u"icial revie# un"er 2ection 1, Article G*** of the 1@FA ConstitutionHthat is, <to "eter%ine #hether or not there has been 'rave abuse of "iscretion a%ountin' to lac; or e-cess of +uris"iction on the part of an& branch or instru%entalit& of the Govern%ent.>

. $his Petition co%plies #ith all the follo#in' reEuisites for +u"icial revie# per +urispru"ence7 a. an actual case or controvers& callin' for the e-ercise of +u"icial po#er8

b. the stan"in' to Euestion the vali"it& of the sub+ect act or issuance, that is, a personal an" substantial interest in the case such that the part& brin'in' the suit has sustaine", or #ill sustain, "irect in+ur& as a result of its enforce%ent8

c. the Euestion of constitutionalit& is raise" at the earliest opportunit&8 an"

". the issue of constitutionalit& is the ver& lis mota of the case. BLa Bugal-B laan !ri"al Association #$ %ictor O$ Ramos BG.R. No. 12AFF2, 2A 5anuar& 200 C

!. $he po#er rate hi;e that ta;es effect fro% the 3ece%ber billin' an" until March of ne-t &ear is an e-istin' case or controvers& appropriate or ripe for the Court9s "eter%ination. *t is neither con+ectural nor anticipator&, as this hi;e is in fact no# reflecte" in the electric bills of Meralco consu%ers, a"%itte" b& Respon"ents "urin' the 10 3ece%ber 201D public hearin' of the /ouse of Representatives Co%%ittee on Ener'&, an" reporte" in the %e"ia. $he ERC, b& letter to MERA4C( 1irst Gice Presi"ent an" /ea" *vanna "ela PeIa "ate" @ 3ece%ber 201D, approve" the assaile" sta''ere" rate hi;e, a fact #hich %ust be ta;en +u"icial notice b& this Court.

Petitioners are consu%ers resi"in' #ithin the franchise area 'rante" to Meralco un"er Republic Act @20@ 2 Bhereinafter, the 1ranchiseC. As such en"-users of the electric po#er "istribute" b& Meralco, the& are the ones #ho "irectl& suffer the costl& electric bills fro% 3ece%ber 201D to March 201 .
6.

A. Petitioners possess personal an" substantial interest in the ensurin' that Meralco fulfils its responsibilit& to the public of suppl&in' electricit& in the least cost %anner B2ection , R.A. @20@ an" 2ection 2D, R.A. @1D?C, an" that the ERC 'uarantees that it "oes. F. *n Petitioners9 representative an" personal capacities, the& are a%on' the esti%ate" .A %illion %e%bers of Meralco9s captive %ar;et as "efine" in EP*RA. Bein' Part&-4ist Representatives as #ell, the& stan" before this Court on behalf of their constituents #ho resi"e in the cities an" %unicipalities #ithin Meralco9s franchise area.

@. $his Petition raises the constitutional issues at the earliest opportunit&. $his Court has rule" that this <opportunit&> is at the point of a plea"in' before a co%petent court. D $he assaile" act of ERC in <'rantin' MERA4C( the clearance - - - to sta''er i%ple%entation of its 'eneration cost recover&> #as "one throu'h a %ere letter, not b& a final or"er, resolution, or "ecision #hich can be the sub+ect of a %otion for reconsi"eration to the ERC un"er Rule 2D of its Rules of Practice an" Proce"ure. $here #as no <procee"in' belo#> that coul" have enable" Petitioners to assail before ERC the le'alit& of its act, or clothe" it #ith co%petence to ans#er the sa%e. 10. 1urther%ore, 2ection AF of EP*RA also states that <JtKhe i%ple%entation of the provisions of this Act shall not be restraine" or en+oine" e-cept b& an or"er issue" b& the 2upre%e Court of the Philippines.> 11. Petitioners rel& on the +uris"iction of this /onorable Court to stri;e "o#n la#s an" acts as unconstitutional. $hou'h this +uris"iction is e-ercise" concurrentl& #ith Re'ional $rial Courts an" the Court of Appeals, Petitioners believe that "irect an" ur'ent resort
An Act Granting the Manila Electric Company a Franchise to Construct, Operate and Maintain a Distribution System for the Conveyance of Electric o!er to the End"#sers in the Cities$Municipalities of Metro Manila, %ulacan, Cavite and &i'al, and Certain Cities$Municipalities$%arangays in %atangas, (aguna, )ue'on and ampanga, 9 June 2003 3 Matibag v* %enipayo, G.R. No. 149036, 2 April 2002
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to the hi'hest Court of the lan" is #arrante" consi"erin' B1C the brea"th of authorit& of the ERC to re'ulate the po#er in"ustr& in the entire countr&, B2C Meralco9s franchise enco%passes a #i"e area coverin' at least four Re'ions, affectin' nearl& five %illion consu%ers, an" BDC the a%ount passe" on to consu%ers over four %onths is at least P2!.? billion, translatin' to an a""itional 'eneration char'e of PA.?A per ;#h for each househol" in 3ece%ber. 12. A rulin' on the constitutionalit& of EP*RA provisions is in"ispensable to the resolution of the controvers&8 this case cannot be "ispose" of on a 'roun" other than the constitutionalit& of the assaile" provisions. 1D. Assu%in' arguendo that this Petition fails in an& of the above reEuisites, Petitioners assert that revie# b& this Court is nevertheless proper in the na%e of transcen"ental public interest. $his instant case, thou'h havin' onl& Meralco consu%ers as the i%%e"iate victi%s, is "irectl& relate" to the 2tate polic& of protectin' the interest of the public in the entire countr& #ho use electricit&, an" of ensurin' the <affor"abilit& of the suppl& of electric po#er> an" <transparent an" reasonable prices of electricit& - - - an" full public accountabilit&> of businesses "ealin' in an i%%ensel& vital public service. 1 . Petitioners further plea" that this Court e-ercise soun" "iscretion an" rule that it is its "ut& to pass on the constitutional Euestions herein "espite this "irect resort, as the "eter%ination of these Euestions is necessar& to a "ecision of the case. !

"ACTS 1!. *n a 4etter "ate" 3ece%ber !, 201D, respon"ent Meralco infor%e" respon"ent ERC that the total cost of 'eneration to be passe" on to its al%ost ! %illion captive custo%ers a%ounte" to P22.? Billion, eEuivalent to a 'eneration char'e for 3ece%ber 201D billin' of P@.10A0 per ;#h. $his #ill result to an increase of P .1! per ;.h for resi"ential custo%ers. 1?. *n the sa%e 4etter, MERA4C( clai%e" that the abrupt increase in the 'eneration cost #as the suppose" %aintenance shut"o#n of the Mala%pa&a facilit& that supplies natural 'as to three BDC %a+or po#er plants L *li+an, 2an 4oren=o an" 2ta Rita L #hich suppl& an a''re'ate capacit& of 2A00 M. electricit& to its franchise area. *t also sai" that the shut"o#n of Mala%pa&a coinci"e" #ith the sche"ule" %aintenance of t#o B2C other plants, Pa'bilao 2 an" 2ual 1, #hich also collectivel& contribute over @!0 M. to its reEuire%ents.
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Section 2, Chapter I of !IRA eople v* +era, G.R. No. #$4"6%", 16 No&e'(er 193" "

1A. $o suppose"l& %iti'ate the effects of this unprece"ente" increase in the 'eneration cost, Meralco propose" to ERC a sta''ere" rate hi;e to be "istribute" in the %onths of 3ece%ber 201D an" 1ebruar& 201 . /o#ever, since "eferrin' the secon" tranche to 1ebruar& 201 #oul" result to incurrin' a carr&in' cost, Meralco further propose" that it be allo#e" to recover the carr&in' cost atten"ant to the "eferral. 1F. Meralco then then reEueste" clearance fro% the ERC to7 i. Collect a 'eneration char'e of PA.@0 per ;#h in its 3ece%ber 201D billin's to its custo%ers8 an" ii. 3efer to 1ebruar& 201 the recover& of Php D Billion, representin' a portion of the 'eneration costs for the suppl& %onth of Nove%ber 201D not passe" on to custo%ers in 3ece%ber 201D, sub+ect to inclusion of the appropriate carr&in' char'e. A cop& of the aforesai" 4etter "ate" 3ece%ber !, 201D is hereto attache" as ANNE2 3A4. 1@. Mean#hile, reactin' on Meralco9s plans, Petitioners Col%enares an" Marate of Ba&an Muna Part&-list file" on 3ece%ber ?, 201D /ouse Resolution No. !FF callin' the /ouse of Representatives to investi'ate the unprece"ente" planne" po#er rate increase b& Meralco. A cop& of the /ouse Resolution is hereto attache" as ANNE2 3B4. 20. $he /ouse Co%%ittee on Ener'& then i%%e"iatel& inclu"e" in its a'en"a an" sche"ule" the start of the investi'ation on /R No. !FF on 3ece%ber 10, 201D. 21. /o#ever, on 3ece%ber @, 201D, respon"ent ERC approve" the Meralco proposal. *n a 4etter "ate" 3ece%ber @, 201D, ERC rule" L <Accor"in'l&, MERA4C( is authori=e" to i%ple%ent a 'eneration char'e of PhP A.?A);.h in its 3ece%ber 201D billin' an" a"" to its calculate" 'eneration char'e for 1ebruar& 201 billin' the 'eneration rate of PhP 1.00);.h. $he balance on the "eferre" 'eneration a%ount #ithout an& carr&in' cost shall be inclu"e" in MERA4C(9s 'eneration char'e for March 201 . 2houl" MERA4C( see; to recover its carr&in' costs on the entire "eferre" a%ount, it shall file a for%al application for this.
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$he fore'oin' shoul" not in an& #a& be construe" as a confir%ation of MERA4C(9s 'eneration costs incurre" in Nove%ber 201D, #hich shall re%ain sub+ect of the confir%ation an" post-verification procee"in's in accor"ance #ith the applicable ERC resolution on the %atter.> A cop& of the aforesai" 4etter "ate" 3ece%ber @, 201D is hereto attache" as ANNE2 3C4. 22. Nonetheless, "urin' the 3ece%ber 10 /ouse Co%%ittee hearin', 3epart%ent of Ener'& 6n"ersecretar& Raul A'uilos a"%itte" that the "epart%ent is investi'atin' the possible collusion a%on' the po#er pro"ucers in the si%ultaneous an" unplanne" shut"o#n of the po#er plants. i. (n March 2012 the 3epart%ent of Ener'& #as infor%e" b& 2hell Philippines E-ploration B.G. B2PENC #ho operates the Mala%pa&a Gas to Po#er Pro+ect of its planne" %aintenance shut"o#n calle" <Mala%pa&a $urnaroun">, sche"ule" on Nove%ber 1 to 3ece%ber F, 201D. $his sche"ule #as later %ove" b& 2PEN to Nove%ber @-3ece%ber F, 201D an" subseEuentl& resche"ule" to Nove%ber 11 to 3ece%ber 10, 201D. ii. Base" on a 3(E report, Mala%pa&a previousl& shut"o#n its operations for alle'e"l& for %aintenance activities, specificall& on the follo#in' perio"s7 2hut"o#n for A "a&s on (ctober 20 to 2?, 2011 for preventive %aintenance 2hut"o#n for D "a&s on 5une F to 11, 2012 2hut"o#n for F "a&s on 5ul& 1D to 20, 2012 Pro+ecte" shut"o#n for DF "a&s fro% Nove%ber 1 to 3ece%ber F, 201D iii. (n 5ul& D0, 201D, the 3(E con"ucte" a %eetin' #ith 2PEN an" concerne" ener'& a'encies an" suppose" sta;ehol"ers such as Meralco in preparation for the sche"ule" <Mala%pa&a turnaroun">. $#o %ore coor"ination %eetin's #ith the above %entione" parties #ere subseEuentl& hel", one on Au'ust 1?, 201D an" another on

Nove%ber , 201D all inten"e" to ensure a reliable suppl& of ener'& "urin' the shut"o#n. iv. A%on' the a'ree%ents for'e" b& the parties "urin' these %eetin's #ere7 *n"epen"ent po#er pro"ucers #ill ensure the availabilit& of their %a+or po#er plants in Mala&a, Pa'bilao an" CB: #ith Mala&a runnin' at ?10 M.. Meralco si'ne" a po#er suppl& a'ree%ent #ith $her%a Mobile to shiel" the consu%ers fro% bein' "epen"ent on the e-pensive rates in the .E2M. v. *n the Nove%ber , 201D %eetin', it #as a'ree" that the *li+an Bloc; A #ill 'enerate 20 M. fro% Nove%ber @ to 3ece%ber D, 201D8 #hile Mala&a 62 #ill 'enerate D!0 M. an" Mala&a 61 at 2?0 M.. vi. Garious plants on the other han" reporte" that the& #ill also sche"ule their o#n respective <%aintenance> shut"o#ns, specificall&, Pa'bilao 6nit 2 on D1 Au'ust to 1D Nove%ber 201D8 *li+an Bloc; B on @ Nove%ber to 1? 3ece%ber 201D an" Calaca 6nit 2 on 1 3ece%ber 201D to 2F 1ebruar& 201 . 2an 4oren=o 1, #ith a suppose" capacit& of 2?! M., also #ent on %aintenance outa'e until 3ece%ber 10, 201D. $hese %aintenance shut"o#ns overlap #ith each other. vii. 2tran'el&, Mala&a 6nit 1 an" 6nit 2, "espite the a'ree%ent "urin' the coor"ination %eetin's, "i" not operate for the #hole %onth of Nove%ber an" onl& "elivere" ener'& suppl& on 3ece%ber 2 an" at a lesser capacit&, at the tail en" of the Mala%pa&a shut"o#n. viii. Pa'bilao 6nit 2 "i" not 'o on %aintenance outa'e on Au'ust D1 as it initiall& state", but "ela&e" the sa%e to Nove%ber, thereb& failin' to "eliver the suppl& it previousl& co%%itte" to because, alle'e"l& of a <tube lea;>. i-. Pa'bilao 6nit 1 #ent on unannounce" outa'e on Nove%ber 2@ also failin' to "eliver the suppl& it previousl& co%%itte" to, also "ue to an alle'e" <tube lea;>.

-. $her%a Mobile #hich #as contracte" b& Meralco for its 2DF M. ener'& suppl& for a price of PF.?! per ;#h "urin' the Mala%pa&a shut "o#n onl& "elivere" a "rasticall& re"uce" @0 M. suppl& an" sol" the rest of its capacit& to .E2M for a price three ti%es its contract #ith Meralco. -i. Mean#hile GN Po#er 6nit 2, su""enl& shut"o#n too on Nove%ber 2A, 201D clai%in' that, li;e the Pa'bilao 6nit 1 an" Pa'bilao 6nit 2, it also has a <tube lea;>. -ii. Garious plants su""enl& announce" outa'e, na%el& *li+an Bloc; B, Calaca 6nit 2, 2an 4oren=o 1 all coinci"in' #ith perio" of the Mala%pa&a shut"o#n. (nl& Pa'bilao 6nit 2 announce" an outa'e #hich #ill start on Au'ust D1 #hich is a bit earlier than the Mala%pa&a shut"o#n perio". 2urprisin'l&, it "eci"e" to hol" its previousl& announce" shut"o#n at a %uch later perio", #hich b& then coinci"e" #ith the Mala%pa&a shut"o#n in Nove%ber. -iii. (n the other han", %an& plants na%el& Mala&a 6nit 1 an" 6nit 2, Pa'bilao 6nit 1 an" even Pa'bilao 6nit 2 #hich, "urin' the three coor"ination %eetin's #ith the 3(E, #ere e-pecte" to provi"e ener'& suppl& "urin' the Mala%pa&a shut"o#n, su""enl& shut"o#n the%selves to'ether #ith other ener'& suppliers. (ther plants, such as 2ta. Rita, Calaca 1, Masinloc 1 an" 2 an" *li+an also shut "o#n accor"in' to a 3(E report. $her%a Mobile "elivere" ener'& to Meralco but at a capacit& #a& belo# its nor%al capacit&. -iv. Ei'ht po#er 'eneration plants %a"e unsche"ule" shut"o#ns si%ultaneous)overlappin' in Nove%ber, na%el& 2ual 1, Calaca 1, Masinloc 1, GN Po#er 1 an" 2, Masinloc 1 an" 2 an" *li+an plants. 2D. $hese <series of unfortunate events> in a line of suppose" <coinci"ences> resulte" in one of the %ost, if not the %ost, e-pensive rate increase in Philippine histor& because, as respon"ent Meralco clai%s, it #as force" to bu& e-pensive po#er fro% the .holesale Electricit& 2pot Mar;et B.E2MC. 2 . Another factual consi"eration that Petitioners #ishes to raise before this /onorable Court is the increasin'l& habitual shut"o#n of the Mala%pa&a Pro+ect #hich naturall& increases the

rates of ener'& 'eneration even if these #ere pro"uce" b& *PPs at a si%ilarl& lo# cost. 2!. (n its part, officials of 1irst Gas Po#er Corp., #hich operates the 2ta. Rita an" 2an 4oren=o 'as-fe" facilities, also clai%e" "urin' the /ouse Ener'& Co%%ittee hearin' that it #as <force"> to use the %ore e-pensive fuel to ensure the continue" operation its plants an" help avert possible po#er outa'es in 4u=on. 2?. *n the sa%e /ouse Ener'& Co%%ittee hearin', it #as also that onl& three BDC po#er pro"ucers "ictate" the price of electricit& in the #holesale spot %ar;et fro% the perio" (ctober 2? to Nove%ber 2!, 201D Hthe 4i%a& Plant of Millenniu% /ol"in's *nc. o#ne" b& business%an Mi;e Galencia, the $her%a Mobile of the Aboiti= Group, an" the Bauan' 3iesel Po#er Plant, of the 1!@0 Ener'& Corp. 1ro% an avera'e of P1D.A per ;.h before the Mala%pa&a shut"o#n, their spot price s;&roc;ete" to an avera'e of PDD.22 ;.h "urin' the sai" perio" over. 2A. A ver& hi'h price ceilin' #as also reveale", at P?2);.h sol" at .E2M, #hile nor%all& the price is #a& belo# this on the avera'e in the spot %ar;et. 2F. $he in"epen"ent thin; tan; *bon 1oun"ation co%%ente" that the po#er in"ustr& is controlle" b& onl& a fe# pla&ers an" collusion is e-pecte". (nl& five co%panies control F0O of po#er capacit& in the countr&7 Co+uan'co)2MC B22OC, Aboiti= B20OC, 4ope= B1FOC, $& B12OC an" Consun+i BFOC. $hese sa%e fir%s o#n the plants #ith alle'e"l& coor"inate" force" outa'es inclu"in' *li+an BCo+uan'co)2MCC, 2an 4oren=o B4ope=C an" Calaca BConsun+iC8 the other t#o plants are GN Po#er BA&alaC an" Masinloc BAE2C. 2@. E-traor"inar& shut"o#ns an" outa'es have beco%e a vicious c&cle a%on' the %a+or pla&ers in the po#er in"ustr& 'eneration sector. $hat other %a+or po#er plants #ere li;e#ise out of co%%ission #hen the Mala%pa&a natural 'as facilit& #as shut "o#n on Nove%ber 11, 201D to 3ece%ber 10, 201D, is not no# ne#, as reveale" in the sa%e /ouse Ener'& Co%%ittee hearin's. D0. 1or e-a%ple, fro% (ctober 20 to 2?, 2011 #hen a si%ilar shut"o#n of the Mala%pa&a pipeline happene", it suppose"l& force" po#er-'eneration co%panies to s#itch into the use of %ore e-pensive liEui" fuel. D1. 3urin' that perio" Meralco clai%e" that it source" its electricit& reEuire%ents fro% three BDC in"epen"ent po#er pro"ucers B*PPsC7 Pue=on Po#er Philippines 4t".9s coal-fire" facilit&, the 1,000-%e'a#att 2ta. Rita an" the !00-M. 2an 4oren=o facilities. *t also source" fro% the #holesale electricit& spot %ar;et B.E2MC an"
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fro% state-o#ne" National Po#er Corp. Both 2ta. Rita an" 2an 4oren=o plants are both o#ne" b& the 4ope=-le" 1irst Gas /ol"in's. D2. $hen a'ain, in 5une to 5ul& 2012, one unit of the 2ual coal-fire" po#er plant in Pan'asinan that #as then o#ne" b& $ea% Ener'& #as also shut"o#n. $he Mala%pa&a facilit& #as also shut"o#n, as #ell as the Calaca po#er plant an" another $ea% Ener'& o#ne" po#er plant in Pa'bilao. $he Mala&a ther%al po#er plant in Ri=al #as also out. $he outa'es also resulte" in hi'her po#er rates. DD. $hen last Nove%ber, the Mala%pa&a facilit& #as a'ain shut"o#n, %a;in' it no# an al%ost annual activit&, an", as al#a&s it is also acco%panie" b& unsche"ule" outa'es of other po#er plants, resultin' to short-ter% an artificial shorta'e of electricit&. A"%itte"l&, these s&nchroni=e" shut"o#ns, too, resulte" to Meralco9s bu&in' the e-pensive electricit& fro% .E2M. D . /o#ever, "espite these, "urin' the sa%e /ouse Ener'& Co%%ittee hearin's, the ERC clai%s that its approval on Meralco9s increase" rate is no lon'er nee"e" as these char'es are suppose"l& <auto%aticall& passe" on.> ERC also clai%e" that it has no choice but to <'ive clearance> as the sourcin' of ener'& reEuire%ents is Meralco9s "ecision.

ISSUE *. ./E$/ER (R N($ ERC C(MM*$$E3 GRAGE AB62E (1 3*2CRE$*(N AM(6N$*NG $( 4AC: (R ENCE22 (1 56R*23*C$*(N *N APPR(G*NG 2$AGGERE3 /6GE P(.ER RA$E *NCREA2E2 (N $/E BA2*2 (1 MERA4C(92 6NGER*1*E3 4E$$ER PR(P(2A4 AN3 ERC92 3*2REGAR3 (1 36E PR(CE22 REP6*REMEN$2 6N3ER $/E 4A.. ./E$/ER (R N($ $/E ERC9s APPR(GA4 (1 MERA4C(92 M(GE $( PA22 (N $( C(N26MER2 $/E *NCREA2E2 *N $/E GENERA$*(N C(2$ 1(R N(GEMBER 201D *2 A GRAGE AB62E (1 3*2CRE$*(N AM(6N$*NG $( 4AC: (R ENCE22 (1 56R*23*C$*(N BECA62E 2A*3 APPR(GA4 *2 G*(4A$*GE (1 $/E PR(G*2*(N2 (1 EP*RA E2PEC*A440 *$2 MAN3A$E $( PR($EC$ $/E P6B4*C 1R(M AN$*-C(MPE$*$*GE PRAC$*CE2 AN3 AB62E (1 MAR:E$ BE/AG*(R (1 *N362$R0 P4A0ER2.

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11

***.

./E$/ER (R N($ 2EC$*(N2 ? AN3 2@ (1 EP*RA ./*C/ 3EC4ARE2 $/A$ P(.ER GENERA$*(N AN3 26PP40 ARE N($ P6B4*C 6$*4*0 (PERA$*(N2, AN3 $/A$ $/E*R C/ARGE2 $( $/E P6B4*C ARE BE0(N3 $/E REG64A$*(N (1 $/E ERC ARE 6NC(N2$*$6$*(NA4.

DISCUSSION5ARGUMENTS ERC 0'))%,,#d +$a&# a6-*# '7 d%*0$#,%'n a)'-n,%n+ ,' (a08 '$ #90#** '7 :-$%*d%0,%'n %n a11$'&%n+ *,a++#$#d ;-+# 1'<#$ $a,# %n0$#a*#* 'n ,;# 6a*%* '7 M#$a(0'* -n&#$%7%#d (#,,#$ 1$'1'*a( and %n d%*$#+a$d%n+ d-# 1$'0#** $#=-%$#)#n, -nd#$ ,;# (a<. D!. (n D#0#)6#$ >, ?@AB Meralco in an unverifie" letter infor%e" ERC of its intention to pass on to the consu%ers the 'eneration cost it incurre" for the %onth of Nove%ber 201D "ue to the announce" shut"o#n of the 2PEN-Mala%pa&a as #ell as the sche"ule" %aintenance of Pa'bilao 2 an" 2ual 1. D?. $his %ove b& Meralco #as %et #ith #i"esprea" protest fro% consu%ers, as the rate increase propose" a%ount to an increase of PhP .1 );.h in electricit& char'es. DA. (n D#0#)6#$ C, ?@AB, a %ere one #or;in' "a& after Meralco file" the unverifie" letter, an" in an atte%pt to pree%pt the sche"ule" con'ressional investi'ation on the sub+ect rate increase the follo#in' "a&, the ERC approve" the sa%e. DF. ERC 'ravel& abuse" its "iscretion in provisionall& approvin' the proposal of Meralco #ithout affor"in' the affecte" custo%ers the ri'ht to be hear" on the %atter as is reEuire" un"er the la# an" +urispru"ence. D@. $he *%ple%entin' Rules an" Re'ulation of the EP*RA 4a# BRepublic Act No. @1D?C reEuires that -<An& application or petition for rate a"+ust%ent or for an& relief affectin' the consu%ers %ust be verifie", an" acco%panie" #ith
12

an ac;no#le"'%ent of receipt of a cop& thereof b& the 4G6 4e'islative Bo"& of the localit& #here the applicant or petitioner principall& operates to'ether #ith the certification of the notice of publication thereof in a ne#spaper of 'eneral circulation in the sa%e localit&. $he ERC %a& 'rant provisionall& or "en& the relief pra&e" for not later than sevent& five BA!C calen"ar "a&s fro% the filin' of the application or petition, base" on the sa%e an" the supportin' "ocu%ents attache" thereto an" such co%%ents or plea"in's the consu%ers or the 4G6 concerne" %a& have file" #ithin thirt& BD0C calen"ar "a&s fro% receipt of a cop& of the application or petition or fro% the publication thereof as the case %a& be. $hereafter, the ERC shall con"uct a for%al hearin' on the application or petition, 'ivin' proper notices to all parties concerne", #ith at least one public hearin' in the affecte" localit&, an" shall "eci"e the %atter on the %erits not later than t#elve B12C %onths fro% the issuance of the afore%entione" provisional or"er. ---> B2ec. BeC, Rule DC 0. $he provisional approval of Meralco9s proposal per its 4etter violates these reEuire%ents7 a. Meralco9s application is %erel& b& virtue of a letter, an" unverifie" at that8 b. $here is no ac;no#le"'e%ent receipt of the application b& the 4G6 4e'islative Bo"& of the localit& #here Meralco principall& operates8 c. $here is no certification of the notice of publication of the application in a ne#spaper of 'eneral circulation in the sa%e localit&8 ". $here is no for%al hearin' con"ucte" #here all the parties concerne" #ere 'iven proper notices. 1. *t is alrea"& #ell-settle" that 2ec. BeC, Rule D of the EP*RA *RR is applicable to all petitions)applications #hich #oul" result in the a"+ust%ent or chan'e in the total price Bretail rateC pai" b& the en"-users, #hether this chan'e or a"+ust%ent is occasione" b& the a"+ust%ent or chan'e in the char'es for 'eneration, trans%ission, "istribution, suppl&, etc.?

NAS C*R &. RC, GR No. 16393", +e(ruar, 2, 2006 13

2. *n this case, Meralco9s rate increase "ue to 'eneration costs for Nove%ber 201D clearl& affects consu%ers as it #ill result in the increase of the costs of their electricit& consu%ption. D. As earl& as 200 , the 2upre%e CourtA alrea"& outline" the reEuire%ents un"er 2ec. BeC Rule D of the EP*RA *RR7 B1C $he applicant %ust file #ith the ERC a verifie" application)petition for rate a"+ust%ent. *t %ust in"icate that a cop& thereof #as receive" b& the le'islative bo"& of the 4G6 concerne". *t %ust also inclu"e a certification of the notice of publication thereof in a ne#spaper of 'eneral circulation in the sa%e localit&. B2C .ithin D0 "a&s fro% receipt of the application)petition or the publication thereof, an& consu%er affecte" b& the propose" rate a"+ust%ent or the 4G6 concerne" %a& file its co%%ent on the application)petition, as #ell as on the %otion for provisional rate a"+ust%ent. BDC *f such co%%ent is file", the ERC %ust consi"er it in its action on the %otion for provisional rate a"+ust%ent, to'ether #ith the "ocu%ents sub%itte" b& the applicant in support of its application)petition. *f no such co%%ent is file" #ithin the D0-"a& perio", then an" onl& then %a& the ERC resolve the provisional rate a"+ust%ent on the basis of the "ocu%ents sub%itte" b& the applicant. B C /o#ever, the ERC nee" not con"uct a hearin' on the %otion for provisional rate a"+ust%ent. *t is sufficient that it consi"er the #ritten co%%ent, if there is an&. B!C $he ERC %ust resolve the %otion for provisional rate a"+ust%ent #ithin A! "a&s fro% the filin' of the application)petition. B?C $hereafter, the ERC %ust con"uct a full-blo#n hearin' on the application)petition not later than D0 "a&s fro% the "ate of issuance of the provisional or"er. Effectivel&, this provision li%its the lifeti%e of the provisional or"er to onl& 12 %onths. . *n the sai" case, the 2upre%e Court invali"ate" the rate hi;e propose" to be bille" b& Meralco consistin' of 'eneration char'e fro% PD.1FF?);.h to PD.D21D);.h. !.
)

$he sa%e %ust be "one in this case.

+ree-o' +ro' .e(t Coalition &. RC, GR No. 161113, June 1", 2004, a/ cite- in NAS C*R &. RC, /upra 14

ERC* a11$'&a( '7 M#$a(0'* )'&# ,' 1a** 'n ,' 0'n*-)#$* ,;# %n0$#a*#* %n ,;# +#n#$a,%'n 0'*, 7'$ N'&#)6#$ ?@AB %* a +$a&# a6-*# '7 d%*0$#,%'n 6#0a-*# *a%d a11$'&a( %* &%'(a,%&# '7 1$'&%*%'n* '7 EPIRA #*1#0%a((/ %,* )anda,# ,' 1$',#0, ,;# 1-6(%0 7$') an,%-0')1#,%,%&# 1$a0,%0#* and a6-*# '7 )a$8#, 6#;a&%'$ '7 %nd-*,$/ 1(a/#$* ?. $he ERC is reEuire" un"er 2ection D of RA @1D? or the EP*RA la# to <pro%ote co%petition --- penali=e abuse of %ar;et po#er in the restructure" electricit& in"ustr&>. A. $he ERC, consi"erin' the suspiciousl& su""en an" si%ultaneous shut"o#n of various po#er plants to coinci"e #ith the announce" Mala%pa&a <turnaroun">, shoul" not have hastil& approve" the Meralco propose" rate increase barel& three "a&s fro% its sub%ission. $his hast& "ecision violates various provisions in the EP*RA la# inclu"in'7 a. 2ection D B"C #hich reEuires the ERC to <enforce rules an" re'ulations 'overnin' the operations of the electricit& spot %ar;et, an" the activities of the spot %ar;et operator an" other participants in the spot %ar;et, for the purpose of ensurin' 'reater suppl& an" rational pricin' of electricit&>8 b. 2ection 2 BfC #hich "eclares the polic& intent of RA @1D? to <protect public interest as it is affecte" b& the rates an" services of electric utilities an" other provi"ers of electric po#er. F. ERC not onl& has the %an"ate but also the po#er to investi'ate these hi'hl& irre'ular shut"o#ns #hich le" to the rate increase propose", notabl&, 2ection D BpC #hich 'rants the ERC the po#er to inspect pre%ises, recor"s an" accounts <in the e-ercise of its Euasi +u"icial function for purposes of "eter%inin' the e-istence of anti-co%petitive behavior or %ar;et po#er abuse --->. @. $he ERC, ho#ever, blatantl& rene'e" on its "ut& to protect public fro% anti-co%petitive practices an" %ar;et abuse #hen it approve" the P .1! increase "espite clear in"ications of irre'ularit& in the si%ultaneous planne" an" unplanne" shut"o#ns, the heft&
1"

spi;e of electricit& prices in .E2M an" the unprece"ente" increase that Meralco is as;in' for. !0. $he 3(E9s "ecision to investi'ate the suspecte" collusion of electricit& in"ustr& pla&ers an" price %anipulation shoul" have co%pelle" the ERC to stop the i%ple%entation of Meralco9s "ecision of P .1!);#h po#er rate hi;e an" "isapprove Meralco9s reEuest for sta''ere" increase. !1. *t is reall& %in" bo''lin' that the ERC hastil& approve" Meralco9s letter reEuest for sta''ere" increase an" at the sa%e ti%e or"er the investi'ation of the suspecte" collusion or violation of la# of electricit& 'enerators an" "istributor8 thus, %a;in' us believe that the ERC is also in collusion #ith veste" oil interests in their profiteerin' activities. !2. *f Meralco9s po#er rate hi;e is not reverse" an" the ERC9s betra&al of "ut& 'oes unchec;e" an" unpunishe", then, this vicious c&cle #ill be repeate" #here electricit& 'eneratin' co%panies #ill stop enterin' into contract #ith Meralco for a reasonable price or "eliberatel& shut"o#n, full& or partl& its operations, to sell to .E2M for a %uch hi'her price an" the ERC #ill +ust sit i"l& or #orse, not its hea" in approval. !D. B& approvin' the rate increase post haste an" #ithout e-ercisin' its reEuire" re'ulator& role the ERC has clearl& co%%itte" 'rave abuse of "iscretion. S#0,%'n* D and ?C '7 ,;# EPIRA d#0(a$%n+ ,;a, 1'<#$ +#n#$a,%'n and *-11(/ a$# n', 1-6(%0 -,%(%,/ '1#$a,%'n*E and ,;a, ,;#%$ 0;a$+#* ,' ,;# 1-6(%0 a$# 6#/'nd ERC $#+-(a,%'n, a$# -n0'n*,%,-,%'na( ! . 2ection ? an" 2@ of the EP*RA shoul" be stric;en out as unconstitutional. !!. Con'ress in passin' the sai" provisions ha" 'rievousl& erre" in consi"erin' po#er 'eneration an" suppl& as not a public utilit& operation, thus not sub+ect to franchise reEuire%ent an" re'ulation. !?. *n truth an" in fact an" base" on +urispru"ence, po#er 'eneration co%panies, inclu"in' but not li%ite" to po#er 'eneration co%panies contracte" b& Meralco an" other local po#er "istribution
16

co%panies to suppl& po#er in their %ar;ets an" those sellin' in .E2M, are public utilities an" %ust be consi"ere" as such, thus sub+ect to franchise reEuire%ent an" suppl&)price re'ulation. !A. $he ERC, havin' been %an"ate" b& la# an" possessin' the e-pertise to ensure consu%er protection an" prevent %ar;et abuse shoul" have been alrea"& alerte" b& the happenin' of the aforesai" unusual events an" pro%ptl& acte" to stop Meralco9s unprece"ente" po#er rate hi;e. !F. *nstea", an" contrar& to its %an"ate, the ERC turne" a blin" e&e to the facts an" favore" the rate hi;e to the "etri%ent of the consu%ers, assertin' provisions un"er EP*RA, specificall&, 2ection ? an" 2ection 2@ #hich provi"e that the prices to be char'e" b& a 'eneration co%pan& for the suppl& of electricit&, an" the prices to be char'e" b& suppliers for the suppl& of electricit& to the contestable %ar;et, are not sub+ect to re'ulation b& the ERC. $he provisions state7 2EC. ?. Generation 2ector. L G#n#$a,%'n '7 #(#0,$%0 1'<#$, a 6-*%n#** a77#0,#d <%,; 1-6(%0 %n,#$#*,, *;a(( 6# 0')1#,%,%&# and '1#n. --An& la# to the contrar& not#ithstan"in', po#er 'eneration shall not be consi"ere" a public utilit& operation. 1or this purpose, an& person or entit& en'a'e" or #hich shall en'a'e in po#er 'eneration an" suppl& of electricit& shall not be reEuire" to secure a national franchise. 6pon i%ple%entation of retail co%petition an" open access, ,;# 1$%0#* 0;a$+#d 6/ a +#n#$a,%'n 0')1an/ 7'$ ,;# *-11(/ '7 #(#0,$%0%,/ *;a(( n', 6# *-6:#0, ,' $#+-(a,%'n 6/ ,;# ERC #90#1, a* ',;#$<%*# 1$'&%d#d %n ,;%* A0,. N-- BE%phasis supplie"C 2EC. 2@. 2uppl& 2ector. L T;# *-11(/ *#0,'$ %* a 6-*%n#** a77#0,#d <%,; 1-6(%0 %n,#$#*,. E-cept for "istribution utilities an" electric cooperatives #ith respect to their e-istin' franchise areas, all suppliers of electricit& to the contestable %ar;et shall reEuire a license fro% the ERC. --T;# 1$%0#* ,' 6# 0;a$+#d 6/ *-11(%#$* 7'$ ,;# *-11(/ '7 #(#0,$%0%,/ ,' ,;# 0'n,#*,a6(# )a$8#, *;a(( n', 6# *-6:#0, ,' $#+-(a,%'n 6/ ,;# ERC. N-- BE%phasis supplie"C
1)

!@. $he pla&ers in the po#er sector L specificall& the 'eneration an" suppl& sectors L have escape" accountabilit& b& virtue of the EP*RA #hich "ictates that these sectors are be&on" the re'ulatin' po#er of the ERC. 3ue to this provision, the 'eneration an" suppl& sector, especiall& since the& are not consi"ere" public utilities un"er 2ection ? an" 2@ of the EP*RA, are e%bol"ene" in %anipulatin' the %ar;et an" collu"in' #ith one another in or"er to +ac; up electricit& rates. $he ERC on the basis of this provision is also e%bol"ene" in approvin' rate increases inclu"in' hi'hl& irre'ular an" un+ust rate increases. ?0. $hus, Petitioners are challen'in' the constitutionalit& of 2ections ? an" 2@ of the EP*RA #hich "eclare that BiC po#er 'eneration an" suppl& are not consi"ere" public utilit& operations an" po#er 'eneration an" suppl& co%panies are not consi"ere" public utilities8 an" that BiiC the prices char'e" b& the 'eneration co%pan& for the suppl& of electricit&, an" the prices char'e" b& suppliers for the suppl& of electricit& to the %ar;et, shall not be sub+ect to re'ulation b& the ERC. I, %* *#,,(#d ,;a, <;#,;#$ '$ n', 'n# %* a 1-6(%0 -,%(%,/ %* a )a,,#$ '7 :-d%0%a(, n', (#+%*(a,%&# d#,#$)%na,%'n. $he EP*RA "eclaration L that po#er 'eneration #hile i%presse" #ith public interest, is not a public utilit& operation an" therefore the prices it char'es to the public are not sub+ect to re'ulation b& the ERC L is not controllin' to the courts. $hus in North Ne'ros 2u'ar Co. v. /i"al'o F it #as state"7
61.

W;#,;#$ '$ n', a +%&#n 6-*%n#**, %nd-*,$/, '$ *#$&%0# %* a 1-6(%0 -,%(%,/ d'#* n', d#1#nd -1'n (#+%*(a,%&# d#7%n%,%'n, 6-, -1'n ,;# na,-$# '7 ,;# 6-*%n#** '$ *#$&%0# $#nd#$#d, an" an atte%pt to "eclare a co%pan& or enterprise to be a public utilit&, #here it is inherentl& not such, is, b& virtue of the 'uaranties of the fe"eral constitution, voi" #henever it interferes #ith private ri'hts of propert& or contract. 2o a le'islature cannot b& %ere fiat or re'ulator& or"er convert a private business or enterprise into a public utilit&, an" ,;# =-#*,%'n <;#,;#$ '$ n', a 1a$,%0-(a$ 0')1an/ '$ *#$&%0# %* a 1-6(%0 -,%(%,/ %* a :-d%0%a( 'n#, an" %ust be "eter%ine" as such b& a court of co%petent +uris"iction. BE%phasis retaine". 1ootnotes an" citations re%ove"C

63 !hil. 664 019361, cite- in the .i//entin2 *pinion of Ju/tice 3in2a in the ca/e of JG Su''it 4ol-in2/ Inc. &. CA, GR No. 124293, Septe'(er 24, 2003.
%

1%

*n this case, the ver& nature of the po#er 'eneration sector put in #ithin the fra%e#or; of a public utilit&. *n the case of 5G 2u%%it /ol"in's *nc.@, the 2upre%e Court e-plaine" the nature of a public utilit&, thus7 A <1-6(%0 -,%(%,/> is <a business or service en'a'e" in re'ularl& suppl&in' the public #ith so%e co%%o"it& or service of public conseEuence such as electricit&, 'as, #ater, transportation, telephone or tele'raph service.> $o constitute a public utilit&, the facilit& %ust be necessar& for the %aintenance of life an" occupation of the resi"ents. /o#ever, the fact that a business offers services or 'oo"s that pro%ote public 'oo" an" serve the interest of the public "oes not auto%aticall& %a;e it a public utilit&. Public use is not s&non&%ous #ith public interest. As its na%e in"icates, the ter% <public utilit&> i%plies 1-6(%0 -*# an" *#$&%0# ,' ,;# 1-6(%0. $he principal d#,#$)%na,%&# 0;a$a0,#$%*,%0 of a public utilit& is that of service to, or rea"iness to serve, an in"efinite public or portion of the public as such #hich has a le'al ri'ht to "e%an" an" receive its services or co%%o"ities. 2tate" other#ise, the o#ner or person in control of a public utilit& %ust have "evote" it to such use that the public 'enerall& or that part of the public #hich has been serve" an" has accepte" the service, has the ri'ht to "e%an" that use or service so lon' as it is continue", #ith reasonable efficienc& an" un"er proper char'es. 6nli;e a private enterprise #hich in"epen"entl& "eter%ines #ho% it #ill serve, a <public utilit& hol"s out 'enerall& an" %a& not refuse le'iti%ate "e%an" for service.> $hus, in I('%(' I0# and C'(d S,'$a+# C'. &*. P-6(%0 U,%(%,/ B'a$d, this Court "efine" <public use,> #i&7 <Public use> %eans the sa%e as <use b& the public.> $he essential feature of the public use is that it is not confine" to privile'e" in"ivi"uals, but is open to the in"efinite public. *t is this in"efinite or unrestricte" Eualit& that 'ives it its public character. *n "eter%inin' #hether a use is public, #e %ust loo; not onl& to the character of the business to be "one, but also to the propose" %o"e of "oin' it. *f the use is %erel& optional #ith the o#ners, or the public benefit is %erel& inci"ental, it is not a public use, authori=in' the e-ercise of +uris"iction of the public utilit& co%%ission. $here %ust be, in 'eneral, a ri'ht #hich the la# co%pels the o#ner to 'ive to the 'eneral public. *t is not enou'h that the 'eneral prosperit& of the public is pro%ote". Public use is not s&non&%ous #ith public interest. T;# ,$-# 0$%,#$%'n 6/ <;%0; ,' :-d+# ,;# 0;a$a0,#$ '7 ,;# -*# %* <;#,;#$ ,;# 1-6(%0 )a/ #n:'/ %, 6/ $%+;, '$ 'n(/ 6/ 1#$)%**%'n.

JG Su''it 4ol-in2/ Inc. &. CA, GR No. 124293, Septe'(er 24, 2003 19

?2. Appl&in' the criterion above, it is plain that po#er 'eneration co%panies, are public utilities. Po#er 'eneration co%panies, inclu"in' but not li%ite" to po#er 'eneration co%panies contracte" b& Meralco an" other local po#er "istribution co%panies to suppl& po#er an" those sellin' in .E2M are public utilities. ?D. Moreover, these conteste" EP*RA provisions clearl& run afoul of the 1@FA Constitution, pri%aril& Article N**, on the National Econo%& an" Patri%on&. ? . S#0,%'n D '7 A$,%0(# 2II '7 ,;# ACFG C'n*,%,-,%'n , for e-a%ple, clearl& states that7 <$he use of propert& bears a social function, an" all econo%ic a'ents shall contribute to the co%%on 'oo". *n"ivi"uals an" private 'roups, inclu"in' corporations - - shall have the ri'ht to o#n, establish an" operate econo%ic enterprises, sub+ect to the "ut& of the 2tate to pro%ote "istributive +ustice an" to intervene #hen the co%%on 'oo" so "e%an"s.> ?!. EP*RA9s %an"ate, as containe" in 2ections ? an" 2@, for the state to aban"on its po#er to re'ulate the e-cessive i%positions of po#er 'enerators an" suppliers, is clearl& unconstitutional as the sa%e #ill not be for the co%%on 'oo" of the 1ilipinos, the consu%ers particularl&. ??. Generation an" suppl& of po#er, bein' i%bue" #ith public interest, cannot be treate" li;e shares of stoc;s that stoc; %ar;et pla&ers can %anipulate an&ti%e the& #ant. ?A. 3espite the so-calle" <unbun"lin'> of the po#er in"ustr&, it is sub%itte" that this "i" not erase or obliterate the <public utilit&> character of both the 'eneration an" suppl& co%ponents. ?F. 1or true enou'h, the po#er 'eneration an" suppl& facilities are necessaril& still are for <the %aintenance of life an" occupation of the resi"ents.> $he activities bein' con"ucte" b& these co%panies serve or affect a #i"e 'eneral public, an un"eniable characteristic of a public utilit&. ?@. 2ince the services offere" b& the po#er 'eneration an" suppl& co%panies affect a #i"e 'eneral public, all the %ore that the& shoul" be un"er the a%bit of strict re'ulation b& the state, i.e. even reEuirin' the% to secure franchises for its operations. A0. $his fact of not bein' un"er state re'ulation is clearl& bein' use" as a safe cover b& these co%panies in their unbri"le" i%position of increase" char'es an" other anti-consu%er activities li;e the si%ultaneous unsche"ule" outa'es, a%on' others.

20

A1. *n"ee", these provisions on non-re'ulation #ei'he" heavil& on such other EP*RA provisions that %an"ate" ERC, for e-a%ple, to #atch out for <abuse of %ar;et po#er, carteli=ation, an" other anti-co%petitive or "iscri%inator& behaviour> b& the pla&ers in the po#er in"ustr&, or, its %an"ate to ensure <a 'reater suppl& an" rational pricin' of electricit&.> A2. Moreover, these provisions are contrar& to S#0,%'n A A$,%0(# III '7 ,;# ACFG C'n*,%,-,%'n #hich prohibits the ta;in' of propert& #ithout "ue process, since prohibitin' the re'ulation of prices char'e" b& 'eneration co%panies an" suppliers has resulte" in "eprivin' the consu%ers of their har" earne" inco%e in or"er to pa& inor"inatel& hi'h electricit& rates. AD. 2ections ? an" 2@ of the EP*RA, it is ar'ue", even violate S#0,%'n C A$,%0(# II '7 ,;# ACFG C'n*,%,-,%'n #hich reEuires the 2tate to <free the people fro% povert& throu'h policies that provi"e a"eEuate social services --- an" an i%prove" Eualit& of life for all>. 2ections ? an" 2@ of the EP*RA con"e%n the people to povert& instea" of freein' the% fro% this scour'e an" results in a "is%al Eualit& of life "ue to the prohibitive cost of electricit&. A . *t is hi'h ti%e for this /onorable Court to revisit the EP*RA an" finall& save the consu%ers fro% the unreasonable an" un+ust bur"en that this la# has cost the 1ilipino people.

GROUNDS "OR ISSUANCE O" A TEMPORARY RESTRAINING ORDER AND5OR PRELIMINARY INJUNCTION A!. Petitioners pra& for the issuance of a #rit of preli%inar& in+unction en+oinin' respon"ents fro% i%ple%entin' the sa%e pen"in' action b& the /onorable Court. A?. $he alle'ations in this Petition #ill un"oubte"l& "e%onstrate Petitioners9 clear an" un%ista;able ri'hts to affor"able, transparent, an" reasonable prices of electricit&, 10 as #ell as the constitutional ri'ht to "ue process 11 an" ri'ht a'ainst %onopolies "a%a'in' to the public interest.12 AA. As the approval of the sta''ere" rate hi;e is alrea"& in full force an" effect, Petitioners an" the entire captive %ar;et of Meralco are alrea"& sufferin' 'rave an" irreparable in+ur& an", unless the
10 11 12

Section 2, Chapter I of !IRA Section 1, Article III of the 19%) Con/titution Section 19, Article 5II of the 19%) Con/titution 21

i%ple%entation of the rate hi;e is en+oine", #ill continue to suffer 'rave an" irreparable in+ur&. AF. $he po#er rate increases co%e at a #orse ti%e #hen the countr& is still reelin' fro% the #orse ever "isaster brou'ht b& super t&phoon 0olan"a an" the countr& is un"er national cala%it&. A@. Most of the en"-users #ho #ill be sufferin' fro% %ore e-pensive electric bills fro% 3ece%ber to March are those #ho in so%e #a& have been li;e#ise affecte" b& the "isasters #hich recentl& hit the countr&. $he& are survivors of these "isasters, or have relatives #ho are survivors, or have relatives #ho lost their lives. $he aftereffects of these "isasters have un"oubte"l& "raine" or at least si'nificantl& #ea;ene" their finances. Bein' i%pose" #ith a recor"-hi'h increase in electricit& rate #ill be un+ust, especiall& as the sa%e su""enl& sprun' on the% #ithout the %erest hint of a #arnin'.

A "INAL WORD Even before the filin' of the instant Petition, not a fe# have alrea"& e-presse" stron' reservations on the full "ere'ulation of a basic public utilit& li;e the po#er in"ustr& as "ictate" b& EP*RA, as it is bein' stu""e" #ith provisions that are "etri%ental to the interest of the 1ilipino people. *t is hi'h ti%e for this /onorable Court to revisit the EP*RA an" finall& save the consu%ers fro% the unreasonable an" un+ust bur"en that this la# has cost the 1ilipino people. .hen the EP*RA beca%e la# in 2001, #hile ensurin' that the Philippines achieve total electrification, its %ain polic& 1D is to protect
S C3I*N 2. .eclaration of !olic,. 6 It i/ here(, -eclare- the polic, of the State7 (a) To ensure and accelerate the total electrification of the country; (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; 0-1 3o enhance the inflo8 of pri&ate capital an- (roa-en the o8ner/hip (a/e of the po8er 2eneration, tran/'i//ion an- -i/tri(ution /ector/9 0e1 3o en/ure fair an- non$-i/cri'inator, treat'ent of pu(lic anpri&ate /ector entitie/ in the proce// of re/tructurin2 the electric po8er in-u/tr,9
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the consu%ers an" public interest in BiC ensurin' the Eualit&, reliabilit&, securit& an" affor"abilit& of the suppl& of electric po#er8 an" BiiC ensurin' the transparent an" reasonable prices of electricit&. None of these are present to"a&. (ur po#er suppl& is unreliable as %an& parts of the countr& constantl& e-perience blac; outs. (ur electricit& rate is the hi'hest in Asia. A fe# corporations have %ana'e" to %onopoli=e the in"ustr&.

PRAYER ./ERE1(RE, respectfull& pra&7 pre%ises consi"ere", Petitioners %ost

1. $hat this Petition be 'iven "ue course8 2. $hat a $e%porar& Restrainin' (r"er an")or Preli%inar& *n+unction be issue" to restrain the Respon"ents fro% i%ple%entin' the rate hi;e "urin' the pen"enc& of this Petition8 D. $hat an oral ar'u%ent be hel" so that issues coul" be %ore e-haustivel& threshe" out8 . $hat after notice an" hearin', a final or"er be issue" "eclarin' as N644 AN3 G(*3 the provisional 'rant b& public respon"ent ERC of the rate increase for lac; of "ue process8 !. $hat after notice an" hearin', "eclare as 6NC(N2$*$6$*(NA4 2ection ? an" 2@ of the EP*RA 4a#. (ther reliefs +ust an" eEuitable un"er the pre%ises are li;e#ise pra&e" for. Respectfull& sub%itte". Pue=on Cit& for Manila. 3ece%ber 1@, 201D.
(f) To protect the public interest as it is affected by the rates and services of electric utilities and other providers of electric power; 021 3o a//ure /ociall, an- en&iron'entall, co'pati(le ener2, /ource/ an- infra/tructure9 0h1 3o pro'ote the utili:ation of in-i2enou/ an- ne8 an- rene8a(le ener2, re/ource/ in po8er 2eneration in or-er to re-uce -epen-ence on i'porte- ener2,9 0i1 3o pro&i-e for an or-erl, an- tran/parent pri&ati:ation of the a//et/ an- lia(ilitie/ of the National !o8er Corporation 0N!C19 0;1 3o e/ta(li/h a /tron2 an- purel, in-epen-ent re2ulator, (o-, an/,/te' to en/ure con/u'er protection an- enhance the co'petiti&e operation of the electricit, 'ar<et9 an0<1 3o encoura2e the efficient u/e of ener2, an- other 'o-alitie/ of -e'an- /i-e 'ana2e'ent.

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COUNSEL "OR PETITIONERS

MARIA CRISTINA P. YAMBOT No. ! :-Ath 2t., Br'&. .est :a%ias, Pue=on Cit& $el. No.7@21D AD E%ail7 cris.&a%botQ'%ail.co% P$R No. @?11 D2)01-0A-1D)Ri=al *BP No. @22? )01-0F-1D)Ri=al Roll No. !@A00 MC4E Co%pliance No. *G L 001??1?)0 -11-1D COPY "URNISHEDH ENERGY REGULATORY COMMISSION Pacific Center Buil"in', 2an Mi'uel Ave. (rti'as Center Pasi' Cit& MANILA ELECTRIC COMPANY (rti'as Pasi' Cit& O""ICE O" THE SOLICITOR GENERAL (2G Buil"in', 1D A%orsolo 2t. 4e'aspi Gilla'e, Ma;ati Cit& 122@

E2PLANATION O" SERVICE O" PETITION THROUGH REGISTERED MAIL $he service of copies of the instant Petition is %a"e throu'h re'istere" %ail, as personal service thereof cannot be %a"e "ue to "istance an" lac; of available personnel. $his e-planation is %a"e pursuant to Rule 1D, 2ection 11 of the Rules of Court. MARIA CRISTINA YAMBOT

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