Devanadera hails SC decision on ERC’s control over WESM

By Lenie Lectura June 25, 2020

https://businessmirror.com.ph/2020/06/25/devanadera-hails-sc-decision-on-ercs-control-over-wesm

The Energy Regulatory Commission (ERC) on Wednesday welcomed the Supreme Court’s (SC) ruling, which affirmed the commission’s delegated police powers on spot market prices.

“We are happy that the Supreme Court appreciated the real intention behind ERC’s action when it imposed price controls for the spot market back in 2006, which is to protect the consumers from unusually high market prices. The interest of the consuming public has always been the ERC’s paramount concern and consideration,” said ERC Chairman and Chief Executive Officer Agnes VST Devanadera.

The SC’s 15-page ruling denied the petition filed by the Power Sector Assets and Liabilities Management Corporation (PSALM) seeking the reversal of the Court of Appeal’s (CA) 2009 decision and affirming the delegated police power vested by the law on ERC.

The SC order effectively prevents collection by the PSALM of a total of P9 billion in supposed accumulated billings that would have impacted consumers.

The High Tribunal basically agreed with the CA’s decision dated August 28, 2009 and Resolution dated November 6, 2009 in CA-G.R. SP 106322, upholding the ERC’s order directing the implementation and adjustment of the Wholesale Electricity Spot Market settlement prices for the third and fourth billing periods for the year 2006.

The SC affirmed that the ERC has been vested with police power under the Electric Power Industry Reform Act (Epira) which provides that in the exercise of its investigative and quasi-judicial powers, it may act against any participant, or player, in the energy sector for violation of any law, rule or regulations and penalize abuse of market power.

The ERC, in its assailed decision, ruled to adopt the National Power Corp.’s time-of-use rates as substitute prices, instead of the actual market prices for the relevant periods considering that the historical data were not reflective of the market conditions prevailing during the relevant period.  The NPC-TOU rates were used as benchmark for the said rates have passed the test of reasonableness.

“The Supreme Court’s ruling is very much appreciated as it confirms and validates the efforts of ERC in protecting the consumers as they are affected by the rates,” Devanadera added.