CA upholds ERC ruling vs PASAR

THE Court of Appeals upheld the decision of the Energy Regulatory Commission (ERC) in dismissing the bid of the Philippine Associated Smelting and Refining Corporation (PASAR) to stop the Power Sector Assets and Liabilities Management Corporation PSALM from recovering over P50-billion stranded contract costs for the years 2007 to 2010.

Its ruling in effect justified the ERC 2013 decision approving additional universal charge of 19 centavos per kilowatt-hour that is being shouldered by consumers since March 2013. The amount for recovery is P53.581 billion instead of the P74.298-billion.

The case stemmed when PSALM sought ERC’s approval to recover National Power Corporation’s (NPC) stranded costs incurred from 2007 to 2010 at P74.298-billion. PSALM is mandated under the Electric Power Industry Reform Act of 2001 to calculate the amount of stranded costs of NPC and to liquidate it.

PASAR intervened and said PSALM’s bid to recover the National Power Corporations’ (NPC) Stranded debts has already been prescribed and can no longer be recovered. PSALM manages the costs and debts of NPC.

Napocor’s stranded contract cost refers to the excess of the contracted cost of electricity under the eligible contracts of Napocor with IPPs over the actual selling price of the contracted energy output of such contracts in the market.

PASAR, which owns and operates the only copper smelter and refinery in the Philippines, added that even if the prescription has not been prescribed, PSALM’s claim was prematurely filed because the financial statements as the basis of the petition are unaudited.

It added that PASAR argued that the general public should not bear the burden of shouldering the costs of additional loans incurred by PSALM since the EPIRA  provides that these obligations must be collaterized and/or guaranteed  by the national government.

But the industry regulator denied PASAR’s motion for lack of merit, prompting PASAR to take its case to the Court of Appeals.

The ERC, then pushed through with hearing PASAR’s bid and in 2013 ruled that the recovery amount is P53-billion instead of P74-billion. ERC said PSALM failed to take into account the additional revenues to be realized by PSALM from the eligible contracts of Napocor with the IPPs under PSALM’s pending applications for adjustment in generation rates pursuant to the Generation Rate Adjustment and Incremental Currency Exchange Rate Adjustment (GRAM and ICERA) mechanisms.

In a 14-page decision penned by Associate Justice Sesinando Villon, the appeals court’s 13th Division said the orders of the ERC  on June 14, 2012 and October 24, 2012  has already attained finality because of PASAR’s failure to file an appeal within the prescribed period under the Rules of Court.

It noted that upon its receipt of the June 14, 2012 order of the ERC denying its motion for reconsideration, PASAR, on June 27, 2012 filed a second motion for reconsideration, a prohibited motion under the rules of the ERC.

The appeals court added that it was only on December 10, 2012 that PASAR instituted its petition for certiorari, which is beyond the 60-day reglementary period.

It pointed out that even in exceptional cases where a second motion for reconsideration is allowed, the Supreme Court has ruled that  the 60-day period within which to file a petition for certiorari must be reckoned from the receipt of the first motion for reconsideration.

“Hence, the herein assailed orders have already attained finality. Well-settled is the rule that a final and executory decision or order can no longer be disturbed or reopened no matter how erroneous it may be,” the appeals court added.

The appeals court added that PASAR also failed to prove that the ERC has committed grave abuse of discretion in dismissing their motion.

“The abuse must have been committed in a manner so patent and so gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. Nothing of that sort is obtaining in this case,” the CA added.

Concurring with the ruling were Associate Justices Rodil Zalameda and Pedro Corales.