NATIONAL GRID CORPORATION OF THE PHILIPPINES, PETITIONER, VS. MANILA ELECTRIC COMPANY, RESPONDENT.
- G.R. Number: G.R. No. 239829
- Promulgated: 2024-05-29
- Ponente: ZALAMEDA, J.
Doctrine
The National Transmission Corporation (TRANSCO) and Manila Electric Company (Meralco) entered into a contract for the sale of certain sub-transmission assets (STAs). They filed a joint application with the Energy Regulatory Commission (ERC) for approval. The ERC approved the sale of some assets but disapproved the sale of the Dasmariñas-Abubot-Rosario 115 kV Line and Rosario Substation Equipment (DAR Assets), because another utility, the Cavite Economic Zone (CEZ), was also connected to them. The ERC ruled that Section 8 of the EPIRA requires the formation of a consortium between Meralco and CEZ for the sale to proceed, despite CEZ's waiver of its right to purchase. The Court of Appeals eventually reversed the ERC, approving the sale to Meralco alone, prompting the National Grid Corporation of the Philippines (NGCP) to file a petition with the Supreme Court.
Facts
The National Transmission Corporation (TRANSCO) and Manila Electric Company (Meralco) entered into a contract for the sale of certain sub-transmission assets (STAs). They filed a joint application with the Energy Regulatory Commission (ERC) for approval. The ERC approved the sale of some assets but disapproved the sale of the Dasmariñas-Abubot-Rosario 115 kV Line and Rosario Substation Equipment (DAR Assets), because another utility, the Cavite Economic Zone (CEZ), was also connected to them. The ERC ruled that Section 8 of the EPIRA requires the formation of a consortium between Meralco and CEZ for the sale to proceed, despite CEZ's waiver of its right to purchase. The Court of Appeals eventually reversed the ERC, approving the sale to Meralco alone, prompting the National Grid Corporation of the Philippines (NGCP) to file a petition with the Supreme Court.
Issues
1. Whether the Court of Appeals (CA) had jurisdiction over the appeal from the ERC. 2. Whether the consortium requirement under Section 8 of the Electric Power Industry Reform Act (EPIRA) can be waived by a distribution utility. 3. Whether the CA's ruling amounted to judicial legislation. 4. Whether the CA erred in overturning the decision of the ERC, a specialized quasi-judicial agency. 5. Whether the assets in question are transmission assets and no longer subject to sale.
Ruling
The Supreme Court granted the petition, reversing the Amended Decision of the Court of Appeals. The Court held that Section 8 of the EPIRA is clear and its language is mandatory; the use of the word "shall" requires that where there are two or more connected distribution utilities, a consortium "shall be formed by and composed of all of them." Therefore, the waiver by one utility (PEZA/CEZ) does not eliminate the mandatory requirement to form a consortium. The Court also affirmed the ERC's factual and technical finding that the assets should be reclassified as transmission assets and were thus no longer subject to sale as sub-transmission assets.
Keywords
Rule 45 Rules of Court, Republic Act No. 9136, Republic Act No. 7916 Section 12(c), Plain Meaning Rule, Verba Legis, Index Animi Sermo, Verba Legis Non Est Recedendum, Electric Power Industry, Sub-transmission Assets, Consortium Requirement, Statutory Construction, Administrative Law, Petition for Review on Certiorari, Motion for Reconsideration, Petition for Intervention, Joint Application, Waiver of Rights, Franchise, Regulatory Asset Base, Transmission Asset Reclassification