NATIONAL ASSOCIATION OF ELECTRICITY CONSUMERS FOR REFORMS (NASECORE), represented by PETRONILO ILAGAN, FEDERATION OF VILLAGE ASSOCIATIONS (FOVA), represented by SIEGFRIEDO VELOSO, and FEDERATION OF LAS PIÑAS HOMEOWNERS ASSOCIATIONS (FOLPHA), represented by BONIFACIO DAZO, Petitioners, v. ENERGY REGULATORY COMMISSION (ERC) and MANILA ELECTRIC and COMPANY (MERALCO) Respondents.

G.R. NO. 163935 : February 2, 2006

EN BANC

CALLEJO, SR., J.:

FACTS:

1. Electric Power Industry Reform Act of 2001 (EPIRA) was enacted by Congress on 008 June 2001. Energy Regulatory Commission (ERC) was created and superseded the Energy Regulatory Board. 

2.  EPIRA directed all distribution utilities to file with ERC an application for the approval of their

unbundled rates. Respondent Meralco complied and its' application was approved. 

3. However, Meralco was directed to recover the costs of power purchased from the National Power Corporation (NAPOCOR) through the new Generation Rate Adjustment Mechanism (GRAM). Previously, these costs were recovered through the Purchased Power Adjustment (PPA) mechanism.

4.  Meralco reapplied with the title “In the Matter of the Application for the Recovery of the Independent Power Producer Costs under the Generation Rate Adjustment Mechanism (GRAM),” docketed as ERC Case No. 2004-112. Meralco sought to increase its generation charge of P3.1886 per kWh -- earlier allowed in the ERC Order dated January 21, 2004 -- to P3.4664 per kWh, allegedly computed in conformity with the generation rate formula in Section 6[6] of the GRAM implementing rules. 

5. Meralco’s generation charge was approved by ERC on its June 2, 2004 Order. Although only from P3.1886 to P3.3213 per kWh, to take effect immediately.

6. Petitioners Nasecore et al. filed with the Court a Petition for Certiorari, seeking to nullify the June 2, 2004 ERC Order. The lack of requisite publication of Respondent Meralco’s amended application allegedly deprived them of procedural due process. Respondent asserted the inapplicability of Section 4(e), Rule 3 of the IRR of the EPIRA. Its amended application for the increase in its generation charge was supposedly governed by the GRAM Implementing Rules[8] adopted by the ERC in the Order dated February 24, 2003 in ERC Case No. 2003-44.

ISSUE:

Whether or not ERC Case No. 2004-112 approving Meralco's generation charge is effective and valid without publication.

RULING:

NO. It is not valid. EPIRA Law's effectivity 4(e), Rule 3 of the IRR requires the publication of its application in a newspaper of general circulation and the service of a copy on the concerned local government units. Although petitioners participated in public hearings and consultation, that is not tantamount to the requisite publication. These procedural steps (public consultation and submission of comments) are entirely different from the publication of statutes mandated by law, which occurs after their promulgation or adoption. Thus, ERC Case No. 2004-112 is DECLARED VOID and accordingly SET ASIDE.

RATIONALE:

1. The requirement of publication of statutes is to apprise the public of the contents of the laws or rules and regulations that have already been promulgated or adopted.

2. It is not correct to say that under the disputed clause publication may be dispensed with altogether. The reason is that such omission would offend due process insofar as it would deny the public knowledge of the laws that are supposed to govern it. Surely, if the legislature could validly provide that a law shall become effective immediately upon its approval notwithstanding the lack of publication (or after an unreasonably short period after publication), it is not unlikely that persons not aware of it would be prejudiced as a result; and they would be so not because of a failure to comply with it simply because they did not know of its existence. Significantly, this is not true only of penal laws as is commonly supposed. One can think of many non-penal measures, like a law on prescription, which must also be communicated to the persons they may affect before they began to operate.

- Tanada Vs. Tuvera