ERC asks RTC to dismiss Meralco suit seeking TRO of RCOA

by Lenie Lectura - June 16, 2016
http://www.businessmirror.com.ph/erc-asks-rtc-to-dismiss-meralco-suit-seeking-tro-of-rcoa/

THE Energy Regulatory Commission (ERC) has asked the Regional Trial Court in Pasig City to dismiss the petition of the Manila Electric Co. (Meralco), which is seeking for a temporary restraining order (TRO) and/or writ of preliminary injunction in connection with its three resolutions on the Retail Competition and Open Access (RCOA).

The ERC, through the Office of the Solicitor General, stated in its 30-page memorandum the court should dismiss the instant petition because, for one, the RTC has no jurisdiction over the petition. Second, Meralco is not entitled to a TRO and/or of writ preliminary injunction.

It cited Section 28 of the Electric Power Industry Reform Act (Epira) of 2001, which provides that no court, except for the Supreme Court, has the power to restrain or enjoin the implementation of the provisions of Epira.

“From the foregoing, it is clear that any action against the implementation of Epira deprives a lower court of jurisdiction to issue an injunctive relief, either as a main or ancillary remedy,” the ERC said.

Epira, it said, provides for the implementation of RCOA. The ERC, it claimed, is mandated to implement this. As such, it issued a series of resolutions throughout the years for the full implementation of the RCOA.

These resolutions effectively prohibit distribution utilities’ (DUs) local retail electricity suppliers (RES) from participating in the RCOA as suppliers of electricity. While they allow DU-affiliate RES to participate in the RCOA, ERC Resolution 11 unduly imposed a 30-percent market cap, whereby all RES shall not be allowed to supply more than 30 percent of the total average monthly peak demand in the retail market.

In addition, the same resolution also prohibits RES from supplying more than 50 percent of the capacity requirements of their affiliate contestable customers (CC).

ERC Resolution 10 and Department of Energy (DOE) Circular 2015-06-0010 also provide for mandatory contestability and exclude local RES in their scope. Besides, the ERC said, Meralco is not entitled to a TRO and/or writ of preliminary injunction because it failed to establish that it is entitled to such. “It failed to discharge the burden of clearly showing the clear and unmistakable right to be protected, the violation of such right and the grave and irreparable injury it is to suffer.”

In its petition, Meralco said the assailed ERC resolutions cause grave and irreparable damage and injury to it by loss of significant financial losses it will sustain due to loss of significant business, capital, personnel and technical equipment, among others, due to the forced shutdown of MPower, its local RES.

The ERC disagreed. It said local RES are given three years to wind down its business.

The ERC also said Meralco, as a DU, shall continue to supply electricity to its captive customers. As such, its business in the captive market under its present franchise is not disturbed.

Also, Meralco is not prevented from setting up a RES, as an affiliate, to continue to supply electricity to the contestable market.

Meralco, the ERC said, will not be affected by the 30-percent cap. The ERC noted MPower currently supplies 18 percent of the total CC, a figure way below the cap. “Petitioner has still room to increase and grow its business as a RES-DU affiliate before it reaches the set market cap.”

Besides, the ERC said, Meralco knew since 2006 of the imminent transition from the captive market to contestable market, since there were public consultations prior to the approval and release of the resolutions. “Thus being the case, petitioner had sufficient time to restructure its contracts and set up its own RES-DU affiliate.” “In other words, petitioner knew from the beginning of this eventuality and had all the chance and opportunity to mitigate probable loses it may incur by virtue of the implementation of the RCOA,” the ERC said.