Bayan wins Court of Appeals case vs. Meralco: CA annuls ERC order for rate unbundling : QC IMC

The cause-oriented group Bagong Alyansang Makabayan (Bayan) hailed as a major victory for consumers the recent decision of the Court of Appeals that annulled the Energy Regulatory Commission’s decision on the unbundling of rates of power distributor Meralco.

Bayan, together with other cause-oriented groups and Mr. Genaro Lualhati, through the Public Interest Law Center, filed a petition with the CA last year questioning the ERC’s approval of the unbundling of rates which among others caused an increase in Meralco rates.

In its decision CA-GR SP No. 77559 signed by Associate Justice Martin Villarama, Jr., the Court of Appeals said that the ERC decisions on March 20, 2003 and May 30, 2003 in ERC case Nos. 2001-646 and 2001-900 are both “annulled and set aside”. The CA further said that the case is “remanded to the ERC for further proceedings, and the ERC is further ordered to direct the Commission on Audit to audit the books, records and accounts of Meralco” pursuant to the Administrative Code of 1987.

The decision also states that the ERC committed “grave abuse of discretion” when the ERC “brushed aside issues raised by the oppositors without properly considering their evidence and ordering a COA audit to verify their claims.”

“This is another major victory for consumers who have long been assailed by high power rates. We have labored for more than a year in opposing Meralco’s unbundling of rates and rate increases. It is a great relief for the oppositors and the consuming public that the Court of Appeals annulled the ERC’s decision,” said Bayan spokesperson Renato M. Reyes, Jr.

Back to 2003 rates, suspension of new rate hikes

“We plan to take up this matter (today) with the ERC. We believe that with this decision, there should be a significant reduction of power rates or a return to the 2003 rates, before the granting of the unbundling of rates. Proceedings regarding future rate increases should also be suspended pending the resolution of the unbundling of rates,” Reyes added.

The group is also contemplating the possibility of another refund in the light of the CA decision. “This decision of the CA has far reaching implications. It has been more than a year now since the unbundled rates have taken effect. There have been several increases as well. The ERC must heed the decision of the CA and must uphold public interest in this very important issue. There should be an immediate review of the collections made by Meralco after the implementation of the unbundled rates. There should be no new increases in the meantime,” Reyes said.

Unbundled rates and the EPIRA

The unbundling of rates was one of the provisions of the Electric Power Industry Reform Act. Electricity rates will be divided into generation, transmission, distribution and meter charges. In its petition to the CA, Bayan questioned Meralco’s contracts with its Independent Power Producers (IPPs) which the group said resulted in very high generation rates.

Bayan also argued that the unbundling of rates would result in higher rates and the legitimization of onerous power contracts with Lopez-owned IPPs.