SC right venue for power rate increase

The commentary by Oscar Franklin Tan on the Supreme Court’s hearing on the temporary restraining order on Manila Electric Co.’s rate hike of P4.15 per kilowatt hour characterized Meralco counsel Victor Lazatin’s presentation as “authoritative.” (Opinion, 2/6/14)

Tan is certainly entitled to his opinion on Lazatin’s performance, but Lazatin obviously failed to convince the Court and the public that Meralco had no role in causing the spike in power generation charges that it tried to stick to its consumers. Indeed, it was Meralco’s order to Therma Mobile (whose power is 100 percent contracted to Meralco) to bid at the maximum allowable price of P62/kWh no less than 25 times during the month the Malampaya natural gas facility went offline for maintenance, which was mainly responsible for the steep price that Meralco had to pay at the Wholesale Electricity Spot Market for the power deficit created by the unexplained shutdown of seven of its power suppliers.

Lazatin’s performance was like an engine sputtering when he tried to explain Meralco’s behavior, which shows that there are limits to the ability of the country’s top corporate law firms to sanitize a clear instance of market abuse.

The TRO petitioners, on the other hand, may have been less than stellar in their pleading, as Tan points out, but they were definitely right in bringing the case to the Supreme Court and not to the Energy Regulatory Commission. For due diligence is the last thing to describe the ERC’s approval of what was the highest rate hike in Meralco’s history. Headed by Arroyo appointee Zenaida Ducut,  the ERC did not call a public hearing or conduct even a minimum of investigation, approving the rate increase in one pro-forma session on Dec. 9. Indeed, Speaker Feliciano Belmonte Jr. pointed out, Meralco announced the rate increase several days before the ERC approved it, meaning it assumed ERC approval, just as the agency had rubber-stamped previous Meralco rate hikes that have resulted in the massive increase in the monopoly’s profits since the Electric Power Industry Reform Act  took effect in 2001.

In our investigation of the Meralco price increase, we in the House committee on energy had direct experience with Ducut’s desultory and dilatory style.  At a hearing last Dec. 10, the ERC was asked by committee chair Rep. Rey Umali to submit a report on why it approved the rate hike.  A month and 10 days later, on Jan. 20, committee members received a 10-page response the gist of which was that it would take an indefinite period of time to comply with the committee’s request.  Infuriated committee members immediately branded it a “non-report.”

It is not the Supreme Court’s role to regulate. But with the ERC nonfunctional and the executive branch unwilling to wake it from its slumber, it is not surprising that the 5.3 million consumers affected by the power price hike now look to the Court to uncover the truth, interpret the law, and provide them relief.  In those rare cases where the regulator has clearly abdicated and abandoned its responsibilities, as has happened in this case, the Court has to step in.

Yes, as Tan notes, the energy issues the Court will have to deal with are complex, but energy issues are no more complex than other areas of judicial concern. The justices should not have accepted their nomination to the body in the first place if they did not feel they were capable of venturing into certain areas.  Capacity to venture into the recesses of the most esoteric black holes in order to illuminate the law is why being a Supreme Court justice demands the highest level of competence.

The Meralco TRO is the kind of judicial activism that is appropriate, one that steps into a role that is abdicated by the agency delegated to fill it.  This is, by the way, in contrast to the inappropriate behavior that one might call judicial imperialism that the Court engaged in when it issued a TRO on the Reproductive Health Law, which had already been affirmed as constitutional after 14 years of debate by Congress in its exercise of its legislative function—a point that Tan rightly makes in an earlier commentary (Opinion, 2/5/14).

—WALDEN BELLO AND BARRY GUTIERREZ, Akbayan representatives