ASG Law

Tag: Electric Power Industry Reform Act

  • Concurrent Jurisdiction: PEMC’s Authority to Investigate WESM Rule Breaches

    In a significant ruling, the Supreme Court affirmed that the Philippine Electricity Market Corporation (PEMC) possesses the authority to investigate potential violations of the Wholesale Electricity Spot Market (WESM) rules. This authority is exercised concurrently with the Energy Regulatory Commission (ERC). This decision clarifies the division of responsibilities in the energy sector, empowering PEMC to ensure compliance and maintain the integrity of the electricity market, while also recognizing the ERC’s broader regulatory oversight. The ruling underscores the importance of collaboration between regulatory bodies in fostering a competitive and efficient energy landscape.

    Navigating the Electricity Market: Who Polices the Rules of the Game?

    The Power Sector Assets and Liabilities Management Corporation (PSALM) challenged the authority of the Philippine Electricity Market Corporation (PEMC) to investigate potential breaches of the Wholesale Electricity Spot Market (WESM) rules. PSALM argued that the Energy Regulatory Commission (ERC) held exclusive jurisdiction over disputes among electricity market participants. The central legal question was whether PEMC’s investigative powers encroached upon the ERC’s regulatory authority, potentially undermining the established framework for the electricity market.

    The case arose from a request by PEMC to the Energy Secretary seeking approval to formally investigate PSALM for potential breaches of the WESM rules. These alleged breaches involved several power generating plants traded in the spot market, raising concerns about compliance with dispatch instructions and offer submission requirements. PSALM, in response, filed a Petition for Prohibition with the Court of Appeals, arguing that PEMC lacked the jurisdiction to conduct such an investigation.

    The Court of Appeals dismissed PSALM’s petition, prompting PSALM to elevate the matter to the Supreme Court. PSALM contended that the ERC’s exclusive and original jurisdiction over disputes among electricity market participants necessarily included the investigative powers that PEMC sought to exercise. They further argued that the ERC could not delegate its powers to another body, asserting that it was duty-bound to exercise these powers directly, as granted by the Electric Power Industry Reform Act of 2001 (EPIRA).

    The Supreme Court disagreed with PSALM’s arguments, emphasizing that EPIRA empowered the Department of Energy (DOE), in conjunction with industry participants, to develop the governance structure of the Wholesale Electricity Spot Market. This structure, as defined in the WESM rules, authorized PEMC to investigate breaches and ensure compliance. The Court found that PEMC’s actions were within the scope of its legally bestowed powers, concurrently exercised with the ERC.

    The Court referenced key provisions of EPIRA and its implementing rules and regulations, highlighting the collaborative approach to establishing the WESM governance structure. The WESM rules, jointly formulated by the DOE and industry participants, specifically empower PEMC to investigate breaches and impose sanctions, subject to the ERC’s broader authority. This framework ensures a balance between PEMC’s role in maintaining market integrity and the ERC’s regulatory oversight.

    The Court further explained the delineation of responsibilities between PEMC and the ERC, particularly concerning the investigation and sanction of breaches and anti-competitive behavior. The Memorandum of Agreement and Protocol between the two entities outline the procedures for handling such matters, ensuring a coordinated approach to market regulation. For instance, PEMC is authorized to initially investigate breaches of WESM rules, while the ERC retains oversight and can direct investigations into anti-competitive conduct.

    The decision also addressed PSALM’s argument that it was not bound by the terms of the market participation agreement. The Court noted that PSALM, as a market participant, had endorsed the WESM rules and entered into a market participation agreement, thereby agreeing to be bound by those rules. This contractual basis further supports PEMC’s authority to exercise investigative and punitive powers, independently of the ERC’s regulatory functions. The Supreme Court emphasized the importance of upholding the agreements and rules that govern the electricity market to ensure its stability and efficiency.

    The Supreme Court emphasized that while Section 43(r) of EPIRA grants the ERC the responsibility to act against any participant for violations, it does not mandate that the ERC perform all related functions exclusively. The Commission can exercise these functions concurrently with PEMC. The court looked at Section 43(r) of EPIRA, which states that the ERC is responsible to:

    act against any participant or player in the energy sector for violations of any law, rule and regulation governing the same, including the rules on cross-ownership, anti-competitive practices, abuse of market positions and similar or related acts by any participant in the energy sector or by any person, as may be provided by law, and require any person or entity to submit any report or data relative to any investigation or hearing conducted pursuant to this Act.

    This concurrent jurisdiction allows for a more efficient and effective regulatory framework. PEMC’s focused oversight of WESM operations complements the ERC’s broader regulatory responsibilities, ensuring that the electricity market operates fairly and transparently. This division of labor promotes accountability and encourages compliance with the established rules and regulations.

    Building on this principle, the Supreme Court rejected PSALM’s claim that PEMC’s investigative powers encroached upon the ERC’s exclusive jurisdiction. The Court found that PSALM failed to demonstrate how PEMC’s actions undermined the ERC’s authority or exceeded the powers granted to PEMC under EPIRA and the WESM rules. The Court emphasized the importance of respecting the regulatory framework established by law and the agreements entered into by market participants.

    The Supreme Court’s decision in Power Sector Assets and Liabilities Management Corporation vs. Energy Regulatory Commission and Philippine Electricity Market Corporation reaffirms the importance of a collaborative and well-defined regulatory framework for the electricity market. By recognizing PEMC’s authority to investigate WESM rule breaches, the Court promotes compliance, transparency, and fairness in the energy sector. This decision clarifies the roles and responsibilities of regulatory bodies, ensuring a stable and efficient electricity market that benefits both participants and consumers.

    FAQs

    What was the key issue in this case? The key issue was whether the Philippine Electricity Market Corporation (PEMC) has the power to investigate possible breaches of the Wholesale Electricity Spot Market (WESM) rules, or if that power belongs exclusively to the Energy Regulatory Commission (ERC).
    What is the Philippine Electricity Market Corporation (PEMC)? PEMC is a private corporation constituted under the Electric Power Industry Reform Act of 2001 (EPIRA) and its implementing rules to prepare for and implement the Wholesale Electricity Spot Market (WESM).
    What is the Wholesale Electricity Spot Market (WESM)? WESM is the electricity trading market where electricity is bought and sold in the Philippines. It operates under specific rules and regulations to ensure fair and transparent transactions.
    What was the role of the Energy Regulatory Commission (ERC) in this case? The ERC is an independent, quasi-judicial regulatory body tasked to promote competition, encourage market development, and penalize abuse of market power in the electricity industry. It oversees the operations of PEMC.
    What did the Court decide regarding PEMC’s investigative powers? The Court decided that PEMC does have the power to investigate possible breaches of the WESM rules. This power is exercised concurrently with the ERC, meaning both entities have the authority to conduct investigations.
    What is the basis for PEMC’s authority to investigate? PEMC’s authority stems from the Electric Power Industry Reform Act of 2001 (EPIRA), its implementing rules and regulations, and the WESM rules themselves, which empower PEMC to ensure compliance and maintain market integrity.
    What was PSALM’s argument against PEMC’s investigative powers? PSALM argued that the ERC has exclusive jurisdiction over disputes among electricity market participants and that PEMC’s investigative powers encroach upon the ERC’s regulatory authority.
    Did the Memorandum of Agreement between PEMC and ERC delegate powers? The Court found that the Memorandum of Agreement (MOA) and Protocol between PEMC and ERC did not delegate powers but merely clarified the procedures for investigating breaches, ensuring a coordinated approach.

    In conclusion, the Supreme Court’s decision underscores the importance of a collaborative and well-defined regulatory framework for the Philippine electricity market. By affirming PEMC’s concurrent authority to investigate WESM rule breaches, the Court promotes compliance, transparency, and fairness in the energy sector, ensuring a stable and efficient electricity market for all stakeholders.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION vs ENERGY REGULATORY COMMISSION AND PHILIPPINE ELECTRICITY MARKET CORPORATION, G.R. No. 193521, April 17, 2023

  • ERC’s Duty to Act: Mandamus and the Independent Market Operator

    The Supreme Court’s decision emphasizes that the Energy Regulatory Commission (ERC) must act on applications filed by the Independent Electricity Market Operator of the Philippines, Inc. (IEMOP) for market fees. The Court granted a petition for mandamus, compelling the ERC to immediately consider and resolve IEMOP’s application. This ruling reinforces that while the ERC has discretionary powers, it cannot disregard rules and regulations set by the Department of Energy (DOE) under the Electric Power Industry Reform Act (EPIRA). This decision ensures that the transition to an independent market operator is recognized and that IEMOP can fulfill its functions without undue delay, fostering stability and transparency in the energy market.

    Powering Through Red Tape: Can the ERC Delay the Market’s Transition?

    The case revolves around the transition from the Philippine Electricity Market Corporation (PEMC), as the Autonomous Group Market Operator (AGMO), to IEMOP, as the Independent Market Operator (IMO) of the Wholesale Electricity Spot Market (WESM). IEMOP filed a Market Fees Application for Calendar Year 2021 with the ERC, seeking approval to recover the costs of administering and operating the WESM. However, the ERC refused to act on IEMOP’s application, insisting that PEMC should be the applicant, citing previous decisions where PEMC was considered the Market Operator. This prompted IEMOP to file a Petition for Mandamus with the Supreme Court, seeking to compel the ERC to act on its application.

    The central legal question is whether the ERC unlawfully neglected its duty to act on IEMOP’s application, thereby impeding the transition to an independent market operator as envisioned under the EPIRA. The EPIRA aims to ensure the quality, reliability, security, and affordability of electric power through a transparent and competitive market. The establishment of the WESM and the transition to an IMO are key components of this reform.

    The Supreme Court anchored its decision on Section 78 of the EPIRA, which grants the Court jurisdiction over cases involving the implementation of the Act’s provisions. The Court noted that this case directly involves the enforcement of Section 30 of the EPIRA, concerning the implementation of the WESM through the Market Operator and the recovery of operational costs. Thus, the Court asserted its authority to exercise jurisdiction over the petition.

    Building on this, the Court outlined the requisites for the issuance of mandamus, which include: (1) a clear legal right on the part of the petitioner; (2) a corresponding duty on the part of the respondent; (3) unlawful neglect in the performance of that duty; (4) a ministerial act to be performed; and (5) the absence of any other plain, speedy, and adequate remedy. The Court found that all these requisites were present in IEMOP’s case. IEMOP, as the Market Operator, has a clear legal right to file the application for market fees, supported by Section 30 of the EPIRA and its Implementing Rules and Regulations (IRR). The EPIRA IRR defines the “Market Operator” as either the AGMO or the IMO, with the IMO assuming the functions after a transition period.

    Moreover, the DOE and electric power industry participants jointly endorsed the transition from PEMC (AGMO) to IEMOP (IMO), fulfilling the requirements of Section 30 of the EPIRA. This endorsement was evident in the DOE’s Department Circular No. DC2018-01-0002 and the IMO Transition Plan. To further solidify this transition, PEMC and IEMOP executed an Operating Agreement, formalizing the transfer of functions and acknowledging IEMOP as the duly incorporated IMO. The ERC’s insistence that PEMC should file the application was, therefore, unfounded.

    The Supreme Court also highlighted that the ERC unlawfully neglected its duties under the EPIRA. Section 43 of the EPIRA outlines the functions and responsibilities of the ERC, which include enforcing the rules and regulations governing the WESM and the activities of the Market Operator. The Court emphasized that while the ERC is an independent body, it must adhere to the rules, regulations, and circulars issued by the DOE under the EPIRA. The ERC’s refusal to recognize IEMOP as the IMO and its insistence that PEMC should file the application directly contradicted the directives of the DOE and the agreements between PEMC and IEMOP.

    Furthermore, the ERC’s failure to act on IEMOP’s application violated Section 4(a) of R.A. No. 11032, the “Ease of Doing Business and Efficient Government Service Delivery Act of 2018,” which defines “action” as a written approval or disapproval. The ERC’s email returning the application was not considered an “action” because it did not state whether the application was approved or disapproved. The Court also noted that the ERC failed to verify the completeness of IEMOP’s pre-filing requirements, as mandated by its own rules and guidelines.

    The Court addressed the argument that mandamus cannot be issued to direct the exercise of discretion, stating that mandamus is proper in cases of grave abuse of discretion, manifest injustice, or palpable excess of authority. While the evaluation of the application involves discretion, the act of considering and acting upon it is ministerial. The ERC’s continued refusal to act, despite the DOE’s and PEMC’s confirmations of IEMOP’s status as the IMO, constituted a grave abuse of discretion. Finally, the Court noted that IEMOP had no other plain, speedy, and adequate remedy against the ERC’s inaction, making mandamus the appropriate recourse.

    FAQs

    What was the key issue in this case? The key issue was whether the Energy Regulatory Commission (ERC) unlawfully neglected its duty by refusing to act on the market fees application filed by the Independent Electricity Market Operator of the Philippines, Inc. (IEMOP).
    Who is IEMOP and what is its role? IEMOP is the Independent Market Operator (IMO) of the Wholesale Electricity Spot Market (WESM). It is responsible for administering and operating the WESM, ensuring a transparent and competitive electricity market.
    What is a petition for mandamus? A petition for mandamus is a legal remedy that seeks to compel a government agency or official to perform a duty that they are legally obligated to perform. It is used when there is a clear legal right and a corresponding duty that is being neglected.
    Why did the ERC refuse to act on IEMOP’s application? The ERC refused to act on IEMOP’s application because it insisted that the Philippine Electricity Market Corporation (PEMC) should be the applicant. The ERC cited previous decisions where PEMC was considered the Market Operator.
    What is the significance of the EPIRA in this case? The Electric Power Industry Reform Act (EPIRA) provides the legal framework for the restructuring of the Philippine electricity industry. It mandates the establishment of an independent market operator and the transition from the autonomous group market operator (PEMC) to the IMO (IEMOP).
    What did the Supreme Court rule in this case? The Supreme Court ruled in favor of IEMOP and granted the petition for mandamus. The Court ordered the ERC to immediately act upon and resolve IEMOP’s market fees application for Calendar Year 2021.
    What does this ruling mean for the energy sector? This ruling ensures that the transition to an independent market operator is recognized and that IEMOP can fulfill its functions without undue delay. It promotes stability, transparency, and competitiveness in the electricity market.
    What are market fees and why are they important? Market fees are charges imposed on market members to cover the costs of administering and operating the WESM. They are essential for the financial viability of the WESM and the effective functioning of the electricity market.
    What was the ERC’s main argument against the petition for mandamus? ERC argued that mandamus was only for ministerial acts and did not extend to acts requiring discretion. ERC further stated that they acted on IEMOP’s petition when they returned it to the petitioner due to the view that it was not the proper party to file.

    The Supreme Court’s decision serves as a crucial reminder to regulatory bodies like the ERC that they must adhere to the laws and regulations that govern their actions. By compelling the ERC to act on IEMOP’s application, the Court has reinforced the importance of the transition to an independent market operator, fostering a more transparent and efficient electricity market in the Philippines. The ERC’s failure to recognize the transition undermined the objectives of the EPIRA.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: IEMOP vs ERC, G.R. No. 254440, March 23, 2022

  • Government Contracts and COA Concurrence: Striking a Balance Between Oversight and Efficiency

    The Supreme Court addressed the critical issue of when and how the Commission on Audit (COA) must act on requests for concurrence in government contracts, particularly those involving the hiring of legal advisors. The Court held that the COA’s inordinate delay in acting on such requests can constitute grave abuse of discretion, especially when it hinders the government’s ability to fulfill its mandates. This decision underscores the importance of timely and reasonable action by the COA, ensuring that government operations are not unduly delayed while still maintaining fiscal responsibility. It sets a precedent for balancing oversight and efficiency in government contract approvals, which will affect how agencies secure necessary expertise.

    PSALM’s Pursuit of Legal Expertise: Did COA’s Delay Undermine Public Interest?

    This case revolves around the Power Sector Assets and Liabilities Management (PSALM) Corporation’s engagement of legal advisors for the privatization of power assets. PSALM sought COA’s concurrence for hiring these advisors, but COA took three years to respond, ultimately denying the request because PSALM proceeded with the engagement without prior approval. The Supreme Court had to consider whether this delay and denial were justified, given PSALM’s mandate to privatize power assets under strict timelines set by the Electric Power Industry Reform Act (EPIRA). The Court’s analysis hinged on whether COA’s actions constituted grave abuse of discretion, and what remedies are available when government agencies face such bureaucratic obstacles.

    The Supreme Court, in its decision, emphasized that while the COA has the constitutional mandate to ensure proper auditing of government funds, this power must be exercised reasonably and without causing undue delay. The court acknowledged that the COA’s prior written concurrence for engaging private counsel is a form of pre-audit, aimed at preventing irregular or excessive expenditures. However, the Court also recognized that the COA’s own circulars had, at times, lifted the pre-audit requirement to expedite government transactions. Building on this principle, the Court highlighted the importance of balancing fiscal responsibility with the need for efficient government operations.

    The Court carefully dissected the timeline of events, noting that PSALM had specifically informed the COA of the urgent need for concurrence due to EPIRA’s timelines. Despite this, the COA took an unreasonable amount of time to respond, and its eventual denial was based solely on the lack of prior concurrence—a situation caused by the COA’s own inaction. Quoting Section 16, Article III of the Constitution, the Court reiterated that:

    Section 16. All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-judicial, or administrative bodies.

    The Court found that the COA’s inordinate delay violated PSALM’s right to a speedy disposition of its case, and amounted to grave abuse of discretion. This abuse occurred because the COA’s delay prevented PSALM from securing the required concurrence, thereby undermining its ability to fulfill its mandate under the EPIRA. Moreover, the Court also reiterated that the Commission Proper has original jurisdiction over requests for concurrence in the hiring of legal retainers by government agencies. Furthermore, Section 49 of Presidential Decree No. 1445 provides:

    Section 49. Period for rendering decisions of the Commission. The Commission shall decide any case brought before it within sixty days from the date of its submission for resolution. If the account or claim involved in the case needs reference to other persons or offices, or to a party interested, the period shall be counted from the time the last comment necessary to a proper decision is received by it. (Emphasis supplied)

    Moreover, The Court further clarified that PSALM should not be faulted for proceeding with the engagement of legal advisors to avoid breaching its mandate to privatize, as delaying would result in the serious breach of its mandate to privatize. This underscores the principle that government agencies must be able to make reasonable judgments to achieve their objectives, especially when faced with bureaucratic delays. Consequently, the Court ruled that the PSALM officers who approved the legal advisors’ contracts should not be held personally liable for payment of the advisors’ fees, as they acted in good faith and for the benefit of the public.

    To prevent similar situations in the future, the Supreme Court laid down a set of remedial measures. It stipulated that government agencies needing to hire private counsel must submit their requests for concurrence to the COA no later than sixty calendar days prior to the estimated date of engagement. The COA, in turn, must act on these requests within sixty calendar days from the date of receipt. Should the COA fail to act within this period, the request is deemed approved. This is to balance the competing needs to have a functioning COA and working government agencies.

    The Court emphasized that the prior determination by the Office of the Government Corporate Counsel (OGCC) or the Office of the Solicitor General (OSG) regarding the necessity and reasonableness of hiring private counsel is entitled to great respect by the COA. This is because the OGCC and OSG possess the expertise and mandate to assess the need for legal services within government agencies. Hence, the COA should primarily focus on compliance with appropriations law, sufficiency of funds, and the overall reasonableness of the compensation, while respecting the OGCC’s or OSG’s judgment on the necessity of the engagement.

    The Court’s decision has far-reaching implications for government agencies, private legal practitioners, and the COA. It clarifies the limits of COA’s authority to require prior concurrence and sets a clear timeline for acting on such requests. This ensures that government operations are not unduly delayed by bureaucratic processes, while still maintaining fiscal responsibility. For private legal practitioners, the decision affirms their right to receive compensation for services rendered under valid contracts, even if those contracts were not initially approved by the COA. It is important to note, however, that Circular No. 2021-003 provides the conditions when to exempt agencies and GOCCs from COA’s prior concurrence for engagement of lawyers and legal consultants. If any of these conditions are not met, COA’s prior concurrence shall be required.

    As previously stated, the remedial measures put in place by the Supreme Court are: following the period of sixty (60) days prescribed under Section 49 of Presidential Decree No. 1445 and Section 4, Rule X of COA’s 2009 Revised Rules of Procedure, the Court reiterates that government agencies needing to hire private counsel locally or abroad for any form of legal services must submit to COA their respective requests for concurrence not later than sixty (60) calendar days prior to the estimated date of engagement or retainer, attaching thereto the written conformity or acquiescence of the OGCC. This procedure will apply when the engagement of lawyer and legal consultant would not fall in the requirements where COA’s concurrence is exempted.

    In conclusion, this Supreme Court decision strikes a delicate balance between ensuring fiscal responsibility and promoting efficient government operations. The COA’s oversight is essential, but it must be exercised in a timely and reasonable manner. The new guidelines set by the Court provide a framework for achieving this balance, ensuring that government agencies can secure the expertise they need without being unduly hampered by bureaucratic delays.

    FAQs

    What was the key issue in this case? The key issue was whether the Commission on Audit (COA) gravely abused its discretion by taking three years to act on PSALM’s request for concurrence to engage legal advisors, and then denying it. The Court had to determine if COA’s actions were justified and what remedies are available when government agencies face such obstacles.
    What is the main practical implication of the ruling? The ruling emphasizes that COA must act on requests for concurrence in a timely manner, to avoid hindering government operations, specifically within 60 days. It sets a precedent for balancing oversight and efficiency in government contract approvals.
    What is the process for government agencies to get COA concurrence? Government agencies must submit their requests for concurrence to the COA at least sixty calendar days before the estimated engagement date, with written conformity from the OGCC or OSG. The COA must then act on these requests within sixty calendar days from receipt.
    What happens if COA fails to act within the 60-day period? If the COA fails to act within the specified 60-day period, the request for concurrence is deemed approved, allowing the government agency to proceed with the engagement.
    Did COA’s inordinate delay amount to grave abuse of discretion? Yes, the Supreme Court held that COA’s delay of three years in acting on PSALM’s request constituted grave abuse of discretion, violating PSALM’s right to a speedy disposition of its case.
    What does prior written concurrence essentially entail? Prior written concurrence involves a review that encompasses both the processes and goals of a pre-audit, which essentially focuses to determine the reasonableness of the legal fees of the lawyer and the assurance of consistency in legal policies and practices of State agencies
    What is the effect of COA Circular No. 2021-003? COA Circular No. 2021-003 provides conditions under which agencies and GOCCs are exempt from COA’s prior concurrence for engaging lawyers and legal consultants and should those not be met, COA’s concurrence is necessary.
    Are PSALM officers liable for the payment of legal advisors’ fees? No, the Court ruled that the PSALM officers who approved the contracts should not be held personally liable, as they acted in good faith and were motivated by the desire to accomplish the EPIRA mandate.

    This ruling serves as a crucial reminder to government bodies about the importance of efficiency, fairness, and accountability in their operations. By setting clear guidelines and expectations, the Supreme Court has paved the way for a more streamlined and effective process for engaging necessary expertise in the public sector.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT (PSALM) CORPORATION v. COMMISSION ON AUDIT, G.R. No. 247924, November 16, 2021

  • Navigating the Philippine Electric Power Industry: Understanding Mandatory vs. Voluntary Migration

    Voluntary Migration in the Electric Power Industry: A Key to Competition and Choice

    Philippine Chamber of Commerce and Industry, et al. v. Department of Energy, et al., G.R. Nos. 228588, 229143, 229453, March 21, 2021

    Imagine a bustling factory in the heart of Manila, where the hum of machinery is suddenly interrupted by a power outage. The cost of electricity, a critical factor in the factory’s operations, becomes a pressing concern. This scenario underscores the importance of the electric power industry’s structure and the impact of regulations on businesses and consumers alike. At the center of this issue is the debate over mandatory versus voluntary migration in the contestable market, a topic that was recently addressed by the Philippine Supreme Court in a landmark decision involving the Electric Power Industry Reform Act of 2001 (EPIRA).

    The case revolved around the Department of Energy’s (DOE) circular mandating contestable customers to switch to the competitive retail electricity market, a move challenged by various stakeholders including the Philippine Chamber of Commerce and Industry and several educational institutions. The central legal question was whether such mandatory migration was consistent with the EPIRA’s goal of promoting competition and customer choice.

    Legal Context: Understanding EPIRA and the Contestable Market

    The Electric Power Industry Reform Act of 2001 (EPIRA) was enacted to restructure the electric power industry in the Philippines, aiming to create a competitive market that would provide reliable electricity at reasonable prices. Under EPIRA, the industry is divided into four sectors: generation, transmission, distribution, and supply. The law introduced the concept of a contestable market, where end-users with a monthly average peak demand of at least one megawatt could choose their electricity supplier.

    Key to understanding this case is the term “contestable market,” which refers to the segment of electricity consumers who can freely choose their electricity supplier, as opposed to the captive market, where consumers are served by a designated supplier. Section 31 of EPIRA states that the Energy Regulatory Commission (ERC) “shall allow” end-users with a monthly average peak demand of at least one megawatt to be part of the contestable market, leading to debates over whether this implies mandatory or voluntary migration.

    The EPIRA also distinguishes between distribution utilities (DUs), which are public utilities that distribute electricity within a specific franchise area, and retail electricity suppliers (RES), which are non-regulated entities that can supply electricity to the contestable market. The law requires DUs to unbundle their business activities and rates to promote competition and efficiency.

    Case Breakdown: From Mandatory to Voluntary Migration

    The controversy began with DOE Circular No. DC2015-06-0010, which mandated all contestable customers with an average demand of one megawatt and above to secure retail supply contracts by June 25, 2016. This directive was challenged by various petitioners, including businesses and educational institutions, who argued that it violated the voluntary nature of migration as intended by EPIRA.

    The Supreme Court’s decision hinged on the interpretation of “shall allow” in Section 31 of EPIRA. The Court ruled that this phrase implies that end-users must request to transfer to the contestable market, and the ERC is mandated to approve such requests if the end-users meet the necessary criteria. The Court emphasized that nothing in Section 31 suggests an automatic or mandatory migration.

    The Court’s reasoning was further supported by DOE’s own circulars, which initially upheld the voluntary nature of migration. For instance, DOE Circular No. DC2012-05-0005 recognized the contestable customer’s choice in sourcing electricity. However, the 2015 circular marked a departure from this policy, leading to the legal challenge.

    Justice Leonen, writing for the Court, stated, “A plain interpretation of the phrase ‘shall allow’ implies that an end-user has requested to transfer to the contestable market to the Energy Regulatory Commission for its approval.” The Court also noted that the DOE later admitted the inconsistencies between the 2015 circular and EPIRA, leading to the issuance of new circulars in 2017 that rectified the policy to reflect voluntary migration.

    The procedural journey of the case saw multiple petitions consolidated before the Supreme Court, with the DOE eventually withdrawing its support for the mandatory migration policy. The Court’s decision to strike down the 2015 circular and related ERC resolutions was based on the principle that administrative agencies must adhere to the law they seek to implement.

    Practical Implications: Empowering Customers and Promoting Competition

    This ruling reaffirms the EPIRA’s goal of promoting competition and customer choice in the electric power industry. Businesses and consumers in the contestable market now have the freedom to choose their electricity supplier based on their needs and preferences, rather than being forced into a particular arrangement.

    For businesses, this means the ability to negotiate better rates and services, potentially leading to cost savings and improved operations. For the electric power industry, the ruling encourages more players to enter the market, fostering competition that can drive down prices and improve service quality.

    Key Lessons:

    • Understand your rights as a contestable customer under EPIRA, including the ability to choose your electricity supplier.
    • Stay informed about regulatory changes that may affect your business operations and electricity costs.
    • Engage with industry associations and legal experts to advocate for policies that promote competition and customer choice.

    Frequently Asked Questions

    What is the difference between the captive and contestable markets?
    The captive market consists of consumers who are served by a designated electricity supplier within a specific franchise area. In contrast, the contestable market allows consumers with a certain level of electricity demand to choose their supplier from a competitive pool.

    How does the Supreme Court’s ruling affect my business?
    If your business is part of the contestable market, you now have the freedom to choose your electricity supplier, potentially leading to cost savings and better service.

    Can distribution utilities still supply electricity to contestable customers?
    Yes, distribution utilities can supply electricity to contestable customers within their franchise area, provided they comply with the unbundling requirements of EPIRA.

    What should I do if I want to switch electricity suppliers?
    Contact the Energy Regulatory Commission to request certification as a contestable customer and explore available retail supply contracts from licensed suppliers.

    How can I stay updated on changes in the electric power industry?
    Subscribe to industry newsletters, engage with business associations, and consult with legal experts specializing in energy law.

    ASG Law specializes in energy law and regulatory compliance. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Can You Evict a Public Utility from Your Property? Understanding Eminent Domain and Unlawful Detainer

    When Public Interest Trumps Property Rights: The Limits of Unlawful Detainer Against Public Utilities

    National Power Corporation v. Spouses Rufo and Tomasa Llorin, G.R. No. 195217, January 13, 2021

    Imagine waking up one day to find that a power company has installed transmission lines on your property without your consent. You demand they leave, but they refuse, citing public necessity. This scenario isn’t hypothetical; it’s the heart of the case between the National Power Corporation (NPC) and Spouses Rufo and Tomasa Llorin. At its core, the case raises a critical question: can a property owner evict a public utility using an unlawful detainer action when the utility claims it’s acting in the public interest?

    The Llorins discovered in 1978 that NPC had occupied part of their property in Naga City to install power transmission lines. Despite assurances that the occupation was temporary, NPC remained on the property. When the Llorins demanded NPC vacate and pay rent, NPC refused, leading to a legal battle that escalated to the Supreme Court. The central issue was whether the Llorins could use an unlawful detainer action to force NPC to leave their property.

    Understanding Eminent Domain and Unlawful Detainer

    To grasp the significance of this case, it’s essential to understand two key legal concepts: eminent domain and unlawful detainer. Eminent domain is the power of the state to take private property for public use, provided just compensation is paid to the owner. This power is often delegated to public utilities like NPC, which can use it to build infrastructure necessary for public services.

    Unlawful detainer, on the other hand, is a legal action used to recover possession of property from someone who has no legal right to remain there. It’s typically used in landlord-tenant disputes but can also apply to other situations where someone occupies property without permission.

    In the Philippines, the Electric Power Industry Reform Act of 2001 (Republic Act No. 9136) transferred NPC’s transmission functions to the National Transmission Corporation (TRANSCO). This law also granted TRANSCO the power of eminent domain, which became central to the Llorins’ case against NPC.

    The Legal Journey of the Llorins’ Case

    The Llorins’ journey began with a complaint for unlawful detainer filed in the Municipal Trial Court in Cities (MTCC) of Naga City. They sought to evict NPC and recover monthly rentals for the use of their land. The MTCC ruled in their favor, ordering NPC to vacate and pay rent. NPC appealed to the Regional Trial Court (RTC), which affirmed the MTCC’s decision. Undeterred, NPC took the case to the Court of Appeals, which also upheld the lower courts’ rulings.

    However, the Supreme Court reversed these decisions. It ruled that the Llorins could not use an unlawful detainer action to evict NPC because the property was being used for a public purpose. The Court cited the case of National Transmission Corp. v. Bermuda Development Corp., which established that public utilities cannot be evicted through unlawful detainer when they occupy property for public service.

    Key quotes from the Supreme Court’s decision include:

    “The proper recourse is for the ejectment court: (1) to dismiss the case without prejudice to the landowner filing the proper action for recovery of just compensation and consequential damages; or (2) to dismiss the case and direct the public utility corporation to institute the proper expropriation or condemnation proceedings and to pay the just compensation and consequential damages assessed therein; or (3) to continue with the case as if it were an expropriation case and determine the just compensation and consequential damages pursuant to Rule 67 (Expropriation) of the Rules of Court, if the ejectment court has jurisdiction over the value of the subject land.”

    “Any action to compel the public utility corporation to vacate such property is unavailing since the landowner is denied the remedies of ejectment and injunction for reasons of public policy and public necessity as well as equitable estoppel.”

    Implications for Property Owners and Public Utilities

    This ruling has significant implications for property owners and public utilities. Property owners cannot use unlawful detainer to evict public utilities that occupy their land for public purposes. Instead, they must seek just compensation through expropriation proceedings. This means that if a public utility occupies your property, your best course of action is to negotiate for fair compensation rather than trying to evict them.

    For public utilities, this case reinforces their ability to use eminent domain to fulfill their public service obligations. However, it also underscores the importance of initiating proper expropriation proceedings to avoid legal disputes and ensure fair compensation for affected property owners.

    Key Lessons:

    • Understand the limitations of unlawful detainer actions against public utilities.
    • If a public utility occupies your property, focus on seeking just compensation through expropriation.
    • Public utilities should always initiate formal expropriation proceedings to avoid legal challenges.

    Frequently Asked Questions

    Can I file an unlawful detainer action against a public utility?
    No, you cannot use an unlawful detainer action to evict a public utility that occupies your property for public purposes. Instead, you should seek just compensation through expropriation proceedings.

    What is eminent domain?
    Eminent domain is the government’s power to take private property for public use, provided just compensation is paid to the owner.

    What should I do if a public utility occupies my property without consent?
    You should seek legal advice and negotiate for just compensation. The public utility should initiate expropriation proceedings to formalize their occupation and ensure you receive fair payment.

    Can I demand rent from a public utility occupying my property?
    While you cannot force a public utility to pay rent through an unlawful detainer action, you can seek just compensation through expropriation proceedings, which may include compensation for the use of your property.

    What is the Electric Power Industry Reform Act of 2001?
    This law reformed the electric power industry in the Philippines, transferring NPC’s transmission functions to TRANSCO and granting TRANSCO the power of eminent domain.

    What are the steps to file for just compensation?
    You should consult with a lawyer who specializes in eminent domain cases. They can help you file a claim for just compensation and guide you through the expropriation process.

    ASG Law specializes in property law and eminent domain. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Government Mandate vs. Trade: Untangling VAT Obligations in Asset Privatization

    The Supreme Court ruled that the Power Sector Assets and Liabilities Management Corporation (PSALM) is not liable for value-added tax (VAT) on the sale of its assets and certain financial activities because these actions were part of its governmental mandate to privatize assets, not commercial activities. This decision clarifies that government entities are not subject to VAT when performing legally mandated duties aimed at liquidating public assets. This ruling saves PSALM from a substantial tax liability, reinforcing the principle that VAT applies to trade and business, not to the execution of governmental functions.

    PSALM’s Assets: Governmental Mandate or Commercial Trade?

    At the heart of this case is the question of whether PSALM’s activities, specifically the sale of generating assets and collection of certain income, should be classified as commercial trade subject to VAT, or as an exercise of its governmental mandate exempt from such taxation. The Commissioner of Internal Revenue (CIR) assessed PSALM a deficiency VAT for the taxable year 2008, arguing that PSALM’s activities fell within the scope of VAT regulations. PSALM contested, stating that its privatization activities were not commercial but mandated by law. The Court of Tax Appeals (CTA) initially sided with the CIR, but the Supreme Court ultimately reversed this decision, clarifying the scope of VAT applicability for government entities fulfilling specific legal mandates.

    The controversy began when the BIR issued a Final Assessment Notice (FAN) asserting that PSALM owed over P10 billion in deficiency VAT for the year 2008. This assessment included proceeds from sales of generating assets, lease of the Naga Complex, and collection of various incomes and receivables. PSALM administratively protested this assessment, arguing that its activities were part of its original mandate under Republic Act No. 9136, also known as the Electric Power Industry Reform Act of 2001 (EPIRA), and therefore not subject to VAT. The CIR denied PSALM’s protest, leading to a petition for review before the CTA.

    The CTA Third Division partially granted PSALM’s petition, allowing certain input tax credits but upholding the deficiency VAT assessment. The CTA reasoned that Republic Act No. 9337 superseded earlier rulings that had exempted PSALM from VAT. The CTA En Banc affirmed this decision, emphasizing that PSALM’s transactions were conducted “in the course of trade or business,” thus making them subject to VAT. However, the Supreme Court disagreed, emphasizing the core mission of PSALM as defined by EPIRA.

    The Supreme Court’s decision hinged on interpreting Section 105 of the National Internal Revenue Code (NIRC), which specifies who is liable for VAT:

    SEC. 105. Persons Liable. – Any person who, in the course of trade or business, sells, barters, exchanges, leases goods or properties, renders services, and any person who imports goods shall be subject to the value-added tax (VAT) imposed in Sections 106 to 108 of this Code.

    The critical phrase, “in the course of trade or business,” is further defined in the NIRC to mean “the regular conduct or pursuit of a commercial or an economic activity, including transactions incidental thereto, by any person regardless of whether or not the person engaged therein is a nonstock, nonprofit private organization… or government entity.” The Supreme Court had to determine whether PSALM’s actions met this definition, or whether they fell under the exception of governmental functions.

    The Supreme Court cited its previous ruling in G.R. No. 198146, Power Sector Assets and Liabilities Management Corporation v. Commissioner on Internal Revenue, which addressed similar issues. The Court reiterated that PSALM’s principal purpose, as defined by Section 50 of the EPIRA law, is “to manage the orderly sale, disposition, and privatization of NPC generation assets… with the objective of liquidating all NPC financial obligations and stranded contract costs in an optimal manner.” This mandate, the Court argued, distinguishes PSALM from entities engaged in regular commercial activities.

    Furthermore, the Supreme Court addressed the CIR’s argument that the repeal of NPC’s VAT exemption under Republic Act No. 6395 by Republic Act No. 9337 extended to PSALM as NPC’s successor-in-interest. The Court rejected this argument, clarifying that PSALM is not a successor-in-interest of NPC. Instead, PSALM was specifically created under EPIRA to manage and privatize NPC’s assets, a function distinct from NPC’s original mandate to develop and generate power.

    Building on this, the Court emphasized that even if PSALM were considered a successor-in-interest, the sale of power plants would still not be considered “in the course of trade or business” under Section 105 of the NIRC. The Court reasoned that these sales were not commercial or economic activities but part of a governmental function mandated by law to privatize NPC generation assets.

    In support of its decision, the Supreme Court referenced Commissioner of Internal Revenue v. Magsaysay Lines, Inc., where the sale of vessels by the National Development Company (NDC) was deemed not subject to VAT because it was an involuntary act pursuant to the government’s privatization policy. The Court in Magsaysay had highlighted that the phrase “course of business” implies regularity of activity. Since the NDC’s sale was an isolated transaction related to privatization, it was not subject to VAT. The same principle, the Supreme Court asserted, applied to PSALM’s sale of power plants.

    Furthermore, the Supreme Court addressed the VAT liability concerning the lease of the Naga Complex and the collection of various incomes and receivables. The Court found that these activities were within PSALM’s powers necessary to fulfill its mandate under the EPIRA law. VAT is a tax on consumption levied on the sale, barter, or exchange of goods or services by entities engaged in such activities “in the course of trade or business.” Since PSALM’s actions were part of its mandated governmental function, they were not subject to VAT.

    The implications of this decision are significant for government-owned and controlled corporations (GOCCs) tasked with specific mandates that involve asset sales or similar financial activities. The Supreme Court’s clarification provides a legal basis for distinguishing between commercial activities subject to VAT and governmental functions exempt from it. This distinction is crucial for financial planning and compliance within the public sector.

    FAQs

    What was the key issue in this case? The central issue was whether PSALM’s sale of assets and collection of income were subject to value-added tax (VAT), or if these activities were part of its governmental mandate and thus exempt.
    What is PSALM’s primary mandate? PSALM’s primary mandate is to manage the orderly sale, disposition, and privatization of the National Power Corporation’s (NPC) assets, with the goal of liquidating NPC’s financial obligations.
    Why did the CIR assess PSALM for deficiency VAT? The Commissioner of Internal Revenue (CIR) assessed PSALM for deficiency VAT based on the proceeds from the sale of generating assets, lease of the Naga Complex, and collection of income and receivables.
    What was the Supreme Court’s ruling in this case? The Supreme Court ruled that PSALM was not liable for VAT on the sale of its assets and related activities because these were part of its governmental mandate and not commercial activities.
    How did the Supreme Court distinguish between commercial activities and governmental functions in this context? The Court distinguished between commercial activities, which are subject to VAT, and governmental functions, which are not, by emphasizing that PSALM was acting under a legal mandate to privatize NPC assets, not engaging in regular trade or business.
    Was PSALM considered a successor-in-interest of NPC? No, the Supreme Court clarified that PSALM is not a successor-in-interest of NPC. It was created with a distinct function to manage and privatize NPC’s assets.
    What prior Supreme Court ruling influenced this decision? The Supreme Court referenced its previous ruling in G.R. No. 198146, Power Sector Assets and Liabilities Management Corporation v. Commissioner on Internal Revenue, which addressed similar issues.
    What is the significance of this ruling for other government-owned and controlled corporations (GOCCs)? This ruling provides legal clarity for GOCCs regarding when their activities are considered commercial and subject to VAT versus when they are acting under a governmental mandate and exempt from VAT.

    In conclusion, the Supreme Court’s decision provides essential clarification on the VAT obligations of government entities engaged in privatization activities. By distinguishing between commercial trade and governmental mandates, the Court has set a precedent that supports the financial stability and operational clarity of GOCCs like PSALM. This case underscores the importance of understanding the legal basis of an organization’s activities when determining tax liabilities, especially in the context of public service and asset management.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION v. COMMISSIONER OF INTERNAL REVENUE, G.R. No. 226556, July 03, 2019

  • Upholding Transparency: Competitive Bidding Mandate in Power Supply Agreements

    The Supreme Court declared that the Energy Regulatory Commission (ERC) does not have the statutory authority to postpone the implementation of Competitive Selection Process (CSP) for Power Supply Agreements (PSAs). This decision ensures that all PSAs submitted after June 30, 2015, must undergo CSP, which mandates competitive public bidding to secure transparent and reasonable electricity prices for consumers. The Court emphasized that ERC’s actions, which effectively delayed CSP implementation, were a grave abuse of discretion that compromised the public’s interest in affordable and fair electricity rates. As a result, power purchase costs from non-compliant PSAs cannot be passed on to consumers, reinforcing the State’s commitment to regulating monopolies and ensuring fair competition in the energy sector.

    Safeguarding Affordable Electricity: Did the ERC Overstep Its Authority in Postponing Competitive Bidding?

    In Alyansa Para sa Bagong Pilipinas, Inc. (ABP) v. Energy Regulatory Commission, the Supreme Court addressed the critical issue of transparency and fairness in the procurement of power supply agreements (PSAs). The case stemmed from a petition filed by ABP challenging the Energy Regulatory Commission’s (ERC) decision to postpone the mandatory implementation of the Competitive Selection Process (CSP) for PSAs, a move ABP argued undermined the public’s right to affordable and reasonably priced electricity.

    At the heart of the controversy was ERC Resolution No. 1, Series of 2016 (ERC Clarificatory Resolution), which effectively delayed the effectivity of the CSP, a mechanism designed to ensure that Distribution Utilities (DUs) purchase power at the most competitive rates through public bidding. ABP contended that this postponement, orchestrated by the ERC, was a grave abuse of discretion, violating the Electric Power Industry Reform Act of 2001 (EPIRA) and the Department of Energy (DOE) Circular No. DC2015-06-0008 (2015 DOE Circular), which mandated the CSP. The Supreme Court was asked to determine whether the ERC had the authority to unilaterally postpone the CSP’s effectivity, thus potentially compromising transparency and fairness in the energy sector.

    The facts leading up to the case are significant. The DOE, in its efforts to promote transparency and reasonable electricity prices, issued the 2015 DOE Circular mandating all DUs to undergo CSP in securing PSAs. Section 3 of the 2015 DOE Circular mandated CSP whenever DUs secure PSAs and took effect on June 30, 2015, upon its publication in two newspapers of general circulation. Subsequently, the ERC issued the CSP Guidelines, fixing a new date of effectivity for compliance with CSP, effectively postponing the date of effectivity of CSP from June 30, 2015, to November 7, 2015. Later, the ERC issued the ERC Clarificatory Resolution, which restated the date of effectivity of the CSP Guidelines from November 7, 2015, to April 30, 2016.

    The ERC’s decision to postpone the CSP implementation allowed several PSAs between Manila Electric Company (Meralco) and its power suppliers to be executed and submitted to the ERC within ten days before the restated April 30, 2016 deadline. These PSAs, according to the ERC Clarificatory Resolution, were not required to comply with CSP. Meralco admitted that no actual bidding is conducted. According to the petitioner, non-implementation of CSP affects various areas of the country, and the postponement resulted in the exemption from CSP of a total of ninety (90) PSAs covering various areas of the country.

    In its analysis, the Supreme Court emphasized the constitutional mandate for the State to regulate monopolies when the public interest requires, as enshrined in Section 19, Article XII of the 1987 Constitution. Since electricity distribution utilities operate as regulated monopolies, competitive public bidding becomes essential to prevent price gouging and ensure fair rates for consumers. The Court underscored that competitive bidding is the most efficient, transparent, and effective guarantee against price gouging, aligning with practices adopted in numerous countries worldwide.

    The Court found that the ERC’s actions in postponing the CSP’s implementation were a grave abuse of discretion, particularly due to the absence of coordination or approval from the DOE, thus violating Section 4 of the 2015 DOE Circular mandating CSP. According to the Supreme Court, the ERC’s delegated authority is limited to implementing or executing CSP in accordance with the 2015 DOE Circular, not postponing CSP so as to freeze CSP for at least 20 years, effectively suspending CSP for one entire generation of Filipinos. To further strengthen its argument, the Supreme Court quotes the Section 43 of the EPIRA, prescribing the functions of the ERC, and there is absolutely nothing whatsoever in this complete enumeration of the ERC’s functions that grants the ERC rule-making power to supplant or change the policies, rules, regulations, or circulars prescribed by the DOE.

    The Supreme Court also noted that the postponements effectively allowed Distribution Utilities (DUs) nationwide to avoid the mandatory CSP, freezing for at least 20 years the DOE-mandated CSP to the great prejudice of the public. The high court explained that without CSP, there is no transparency in the purchase by DUs of electric power, and thus there is no assurance of the reasonableness of the power rates charged to consumers. As a consequence, all PSA applications submitted to the ERC on or after June 30, 2015, should be deemed not submitted and should be made to comply with CSP.

    In resolving the case, the Supreme Court ultimately granted ABP’s petition, holding that the ERC does not have the statutory authority to postpone the date of effectivity of CSP, and thereby cannot amend the 2015 DOE Circular. As a result, the 90 PSAs submitted to the ERC after the effectivity of CSP on or after June 30, 2015, cannot serve as a basis to pass on the power cost to consumers. The ERC was mandated to require CSP on all PSA applications submitted on or after June 30, 2015.

    The implications of the Supreme Court’s decision are far-reaching, particularly for electricity consumers across the Philippines. By nullifying the ERC’s postponements, the Court reinforced the mandatory nature of CSP, requiring all Distribution Utilities (DUs) to adhere to competitive public bidding in securing Power Supply Agreements (PSAs) after June 30, 2015. This ensures a more transparent and competitive procurement process, fostering fair and reasonable electricity rates for consumers. Moreover, it underscores the crucial balance between regulatory independence and adherence to statutory mandates within the energy sector, promoting accountability and public interest.

    FAQs

    What was the key issue in this case? The key issue was whether the ERC had the authority to postpone the mandatory implementation of the Competitive Selection Process (CSP) for Power Supply Agreements (PSAs).
    What is the Competitive Selection Process (CSP)? The CSP is a mechanism that requires Distribution Utilities (DUs) to undergo competitive public bidding when securing Power Supply Agreements (PSAs) to ensure transparency and reasonable electricity prices.
    Why is CSP important for consumers? CSP is vital for consumers as it helps prevent price gouging by distribution utilities and ensures they purchase electricity at the most competitive rates.
    What did the Supreme Court rule in this case? The Supreme Court ruled that the ERC did not have the authority to postpone the implementation of CSP and that all PSAs submitted after June 30, 2015, must comply with the CSP.
    What was the effect of the ERC’s postponements of the CSP? The ERC’s postponements allowed several PSAs to be executed without complying with CSP, potentially leading to non-transparent and less competitive electricity prices.
    What happens to PSAs that did not comply with CSP due to the postponement? The Supreme Court ruled that power purchase costs from PSAs that did not comply with CSP cannot be passed on to consumers.
    Did the Supreme Court question the ERC’s regulatory authority? No, the Supreme Court affirmed the ERC’s regulatory authority but emphasized that it must operate within the bounds of its statutory mandate and in coordination with the DOE.
    What is the role of the Department of Energy (DOE) in this process? The DOE formulates policies and issues rules and regulations for the energy sector, while the ERC enforces these policies and ensures fair competition and reasonable prices.
    What is the significance of this ruling for the energy sector? The ruling reinforces the importance of transparency and competitive bidding in the energy sector and holds regulatory bodies accountable for upholding the public interest.
    What is the current regulation regarding Competitive Selection Process (CSP)? On February 1, 2018, the DOE issued Circular No. DC2018-02-0003 entitled “Adopting and Prescribing the Policy for the Competitive Selection Process in the Procurement by the Distribution Utilities of Power Supply Agreements for the Captive Market”.

    In conclusion, the Supreme Court’s decision in Alyansa Para sa Bagong Pilipinas, Inc. v. Energy Regulatory Commission serves as a landmark ruling, underscoring the vital role of transparency and competitive bidding in the Philippine energy sector. By reaffirming the State’s commitment to regulating monopolies and ensuring fair competition, the Court has fortified protections for electricity consumers and promoted a more equitable distribution of power and responsibilities within the industry.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Alyansa Para sa Bagong Pilipinas, Inc. v. Energy Regulatory Commission, G.R. No. 227670, May 03, 2019

  • VAT Zero-Rating: Proving Tax-Exempt Status for Power Generation Services

    The Supreme Court affirmed that a power generation company can claim a tax refund for zero-rated sales to the National Power Corporation (NPC) without needing a Certificate of Compliance (COC) under the Electric Power Industry Reform Act (EPIRA). The ruling clarifies that when a company’s claim is based on the tax-exempt status of the purchaser (NPC) under its charter, rather than the company’s compliance with EPIRA, the COC is not a prerequisite. This decision ensures that tax exemptions granted to entities like NPC effectively translate to reduced costs, promoting development in related industries by relieving them from indirect tax burdens.

    Powering Through Red Tape: Can a Taxpayer Claim VAT Zero-Rating Without EPIRA Compliance?

    The case of Commissioner of Internal Revenue v. Team Energy Corporation revolves around Team Energy’s claim for a refund of unutilized input Value-Added Tax (VAT) arising from its sales of electricity to the NPC. The Commissioner of Internal Revenue (CIR) denied the refund, arguing that Team Energy needed to present a Certificate of Compliance (COC) from the Energy Regulatory Commission (ERC) to qualify as a generation company under the Electric Power Industry Reform Act (EPIRA). Without this COC, the CIR contended, Team Energy’s sales could not be considered zero-rated, thus disqualifying it from claiming a refund. This raised a crucial question: Is compliance with EPIRA, specifically possessing a COC, essential for a power generation company to avail of VAT zero-rating on sales to a tax-exempt entity like NPC, or can the exemption be claimed based solely on the purchaser’s tax-exempt status?

    Team Energy anchored its claim on Section 108(B)(3) of the National Internal Revenue Code (NIRC), which allows zero-rating for services rendered to entities whose exemptions under special laws effectively subject the supply of such services to a zero percent rate. The NPC, under its charter, enjoys exemption from all forms of taxes. Team Energy argued that because NPC is tax-exempt, its sales to NPC should be zero-rated, regardless of whether Team Energy itself complied with EPIRA’s requirements for generation companies.

    The Court of Tax Appeals (CTA) ruled in favor of Team Energy, and the Supreme Court affirmed this decision. The Supreme Court differentiated between claiming zero-rating under EPIRA and claiming it under Section 108(B)(3) of the NIRC. The Court emphasized that when the basis for the zero-rating is the purchaser’s tax exemption, the supplier does not need to comply with EPIRA requirements. This means that Team Energy’s failure to present a COC was not fatal to its claim. The crucial factor was NPC’s tax-exempt status, not Team Energy’s regulatory compliance as a generation company.

    The Supreme Court underscored the purpose of effective zero-rating, stating that:

    effective zero-rating is not intended as benefit to the person legally liable to .pay the tax, such as the [respondent,] but to relieve certain exempt entities, such as the NPC, from the burden of indirect tax so as to encourage the development of particular industries.

    The Court also addressed the CIR’s argument that Team Energy prematurely filed its judicial claim because it had not exhausted administrative remedies by submitting complete documents. Citing Pilipinas Total Gas, Inc. v. Commissioner of Internal Revenue, the Court reiterated that the CIR must inform the taxpayer if documents are incomplete and give them an opportunity to submit additional information. Since the CIR did not notify Team Energy of any missing documents, it could not argue that the judicial claim was premature.

    A notable aspect of the decision is its alignment with previous rulings, particularly Commissioner of Internal Revenue v. Toledo Power Company. While the CIR cited Toledo Power Company to support its argument that a COC is necessary, the Supreme Court pointed out that Toledo Power Company actually differentiated between claims under EPIRA and claims under Section 108(B)(3) of the NIRC. Toledo Power Company, like Team Energy Corporation, allowed a refund based on the latter provision, underscoring that EPIRA compliance is not a universal requirement for VAT zero-rating. Thus, the Supreme Court made it clear that the requirements of the EPIRA must be complied with only if the claim for refund is based on EPIRA.

    This ruling has significant implications for businesses engaged in supplying goods or services to tax-exempt entities. It clarifies that the tax-exempt status of the purchaser is the primary consideration for VAT zero-rating under Section 108(B)(3) of the NIRC. Suppliers do not necessarily need to comply with industry-specific regulations, such as EPIRA, if their claim is based on the purchaser’s exemption. This simplifies the process for claiming VAT refunds and reduces the burden of compliance for suppliers.

    In practical terms, this means that companies selling to entities like the NPC can focus on establishing the purchaser’s tax-exempt status rather than navigating complex regulatory requirements unrelated to the tax exemption itself. This promotes efficiency and reduces the risk of legitimate refund claims being denied due to technicalities. Furthermore, this decision reinforces the intent of tax exemptions, ensuring that the benefits reach the intended beneficiaries by relieving them of indirect tax burdens.

    FAQs

    What was the key issue in this case? The key issue was whether Team Energy needed a Certificate of Compliance (COC) under the EPIRA to claim a VAT refund on sales to the tax-exempt National Power Corporation (NPC). The court ruled that the COC was not necessary because the claim was based on NPC’s tax-exempt status, not Team Energy’s compliance with EPIRA.
    What is VAT zero-rating? VAT zero-rating means that a sale is subject to a VAT rate of 0%. This allows the seller to claim a refund of input taxes (VAT paid on purchases) attributable to those zero-rated sales.
    What is Section 108(B)(3) of the Tax Code? Section 108(B)(3) of the National Internal Revenue Code (NIRC) allows VAT zero-rating for services rendered to entities whose exemptions under special laws effectively subject the supply of such services to a zero percent rate. This provision was central to the court’s decision in this case.
    Why was NPC’s tax-exempt status important? NPC’s tax-exempt status, granted under its charter, was crucial because it formed the basis for Team Energy’s claim under Section 108(B)(3). The court held that since NPC was tax-exempt, sales to NPC should be zero-rated, regardless of Team Energy’s compliance with EPIRA.
    What is a Certificate of Compliance (COC) under EPIRA? A Certificate of Compliance (COC) is a document issued by the Energy Regulatory Commission (ERC) authorizing an entity to operate as a generation company under the Electric Power Industry Reform Act (EPIRA). The CIR argued it was essential for VAT zero-rating claims.
    Did Team Energy need to comply with EPIRA to get the refund? The court held that Team Energy did not need to comply with EPIRA to claim the refund because its claim was based on NPC’s tax-exempt status, not its own compliance with EPIRA requirements for generation companies.
    What happens if the CIR believes the documents are incomplete? If the CIR believes the supporting documents for a tax refund claim are incomplete, it must notify the taxpayer and give them an opportunity to submit additional information. Failure to do so prevents the CIR from later arguing that the judicial claim was premature.
    What was the basis for the BIR’s argument against the tax refund? The CIR argued that Team Energy needed to present a Certificate of Compliance (COC) from the Energy Regulatory Commission (ERC) to qualify as a generation company under the Electric Power Industry Reform Act (EPIRA), which it did not do. Therefore, it should not get a tax refund.

    In conclusion, the Supreme Court’s decision in Commissioner of Internal Revenue v. Team Energy Corporation offers valuable clarity on the requirements for claiming VAT zero-rating on sales to tax-exempt entities. It reinforces the principle that the purchaser’s tax status is paramount when applying Section 108(B)(3) of the NIRC, and that suppliers need not always comply with industry-specific regulations if their claim rests on the purchaser’s exemption. This ruling promotes efficiency and ensures that tax exemptions achieve their intended purpose.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: COMMISSIONER OF INTERNAL REVENUE, PETITIONER, V. TEAM ENERGY CORPORATION (FORMERLY MIRANT PAGBILAO CORPORATION), RESPONDENT., G.R. No. 230412, March 27, 2019

  • Injunctions: When Can a Non-Party Be Bound?

    The Supreme Court ruled that a writ of injunction cannot be enforced against an entity that was not a party to the original case. This decision clarifies that only parties involved in a lawsuit, or their direct successors-in-interest, can be bound by an injunctive writ. This ensures that entities cannot be subjected to court orders without having had the opportunity to participate in the legal proceedings, upholding their right to due process. This ruling is a reaffirmation of the principle that court orders should only affect those who have had their day in court.

    Extending the Arm of the Law: Can Injunctions Ensnare Non-Parties?

    This case arose from a dispute involving the San Miguel Protective Security Agency (SMPSA) and the National Power Corporation (NPC) regarding a security package bidding. After SMPSA was disqualified, its general manager, Francisco Labao, filed a petition against NPC. The Regional Trial Court (RTC) initially issued a temporary restraining order (TRO) and later a writ of preliminary injunction against NPC, which was eventually made permanent. Subsequently, NPC and Power Sector Assets and Liabilities Management Corporation (PSALM) entered into an operation and maintenance agreement (OMA), transferring the obligation to provide security to PSALM. The central legal question is whether PSALM, a non-party to the original suit between SMPSA and NPC, could be bound by the injunction issued against NPC.

    The Court of Appeals (CA) had initially ruled that the injunction was enforceable not only against NPC but also against its agents, representatives, and anyone acting on its behalf, including PSALM. The CA reasoned that PSALM was acting on behalf of NPC and was essentially an assignee of NPC’s responsibilities. PSALM challenged this ruling, arguing that it was a separate entity from NPC and should not be bound by the injunction. The Supreme Court sided with PSALM, emphasizing its distinct legal personality under Republic Act No. 9136, also known as the Electric Power Industry Reform Act of 2001 (EPIRA).

    The Supreme Court underscored that Section 49 of EPIRA explicitly created PSALM as a corporate entity separate and distinct from NPC, stating:

    Section 49. Creation of Power Sector Assets and Liabilities Management Corporation. – There is hereby created a government owned and controlled corporation to be known as the “Power Sector Assets and Liabilities Management Corporation”, hereinafter referred to as the “PSALM Corp.”, which shall take ownership of all existing NPC generation assets, liabilities, IPP contracts, real estate and all other disposable assets. All outstanding obligations of the National Power Corporation arising from loans, issuances of bonds, securities and other instruments of indebtedness shall be transferred to and assumed by the PSALM Corp. within ninety (90) days from the approval of this Act.

    Building on this principle, the Court found that the CA erred in subjecting PSALM to the injunction without PSALM being a party to the case. This was a clear misapplication of the law, as PSALM and NPC have distinct legal identities. The Court also highlighted that Labao was aware that PSALM had become the owner of NPC’s assets and facilities as early as mid-2001. As such, PSALM was an indispensable party whose absence in the original proceedings meant that a final determination could not be justly made.

    Furthermore, the Court examined the nature of the Operation and Maintenance Agreement (OMA) between NPC and PSALM. The OMA was designed to delineate the functions of each entity to avoid confusion in the management of assets and facilities. Under the OMA, PSALM, as the owner, was responsible for providing security for all plants and facilities. When PSALM conducted its own public bidding for security services, it was acting in its own interest as the owner, not as an agent of NPC. The Court cited Article 1868 of the Civil Code, defining an agent as:

    “A person who binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter.”

    This definition clarifies that PSALM’s actions were not representative of NPC but were based on its own rights and obligations as the asset owner. The Supreme Court also clarified that PSALM was not a transferee pendente lite or a successor-in-interest of the parties. The transfer of NPC’s assets to PSALM occurred in 2001, while SMPSA’s action was commenced in 2009. Therefore, the action between SMPSA and NPC could not bind PSALM.

    Moreover, the security contract between NPC and SMPSA, which ran from 2004 to 2006, had already expired and was being renewed on a monthly basis. This meant there was no existing legal tie binding NPC and SMPSA when the dispute arose. The Court reiterated the principle of relativity of contracts, as embodied in Article 1311 of the Civil Code, which states that contracts take effect only between the parties, their assigns, and heirs. Since there was no privity of contract between SMPSA and PSALM, the latter had no obligation to continue the security contract entered into between NPC and SMPSA.

    Finally, the Court addressed SMPSA’s claim that it was entitled to an injunction because it was prejudiced by being deprived of the opportunity to bid for the contract. The Court found that even if SMPSA had not been disqualified, there was no guarantee it would have won the bidding. The income SMPSA sought to protect was merely an expectancy based on the speculative possibility of the contract being awarded to it. The right SMPSA sought to protect by injunction was not in esse, meaning it was not a present and existing right.

    In conclusion, the Supreme Court held that the CA exceeded its jurisdiction by including PSALM within the coverage of the TRO and the writ of injunction issued against NPC. Injunctive relief can only bind parties to the action, their privies, or successors-in-interest. A person who is not a party to the action and has not been served with summons cannot be adversely affected by the outcome. This principle conforms to the constitutional guarantee of due process of law. The decision reinforces the fundamental principle that a court order should only affect those who have had the opportunity to be heard and defend their interests in court.

    FAQs

    What was the key issue in this case? The key issue was whether a non-party to a suit, specifically PSALM, could be subjected to an injunctive writ issued against one of the parties, NPC. The Court addressed whether PSALM, not initially part of the legal proceedings, could be bound by an order against NPC.
    Why did the Court of Appeals include PSALM in the injunction? The Court of Appeals believed that PSALM was acting on behalf of NPC and was essentially an assignee of NPC’s responsibilities. This led them to conclude that the injunction against NPC should also apply to PSALM.
    What was the basis for the Supreme Court’s decision to exclude PSALM? The Supreme Court emphasized that PSALM is a separate legal entity from NPC, created by the Electric Power Industry Reform Act of 2001 (EPIRA). Since PSALM was not a party to the original suit, it could not be bound by the injunction.
    What is the significance of the Operation and Maintenance Agreement (OMA) in this case? The OMA clarified that PSALM, as the owner of the assets, had its own responsibilities, including providing security. This meant that when PSALM conducted its own bidding for security services, it was acting in its own interest, not as an agent of NPC.
    What does “relativity of contracts” mean, and how does it apply here? “Relativity of contracts” means that contracts only affect the parties involved, their assigns, and heirs. Because there was no contractual relationship between SMPSA and PSALM, PSALM was not obligated to continue the security contract between SMPSA and NPC.
    What is a transferee pendente lite, and why was PSALM not considered one? A transferee pendente lite is someone who acquires an interest in a property or right while a lawsuit is ongoing. PSALM was not a transferee pendente lite because the transfer of assets from NPC to PSALM occurred before SMPSA filed its action.
    What was the Court’s view on SMPSA’s claim that it was entitled to an injunction? The Court found that SMPSA’s claim was based on a mere expectancy because there was no guarantee that SMPSA would have won the bidding even if it had not been disqualified. The right SMPSA sought to protect was not a present and existing right.
    What is the key takeaway regarding who can be bound by an injunction? The key takeaway is that an injunction can only bind parties to the action, their privies, or successors-in-interest. A person who is not a party to the action and has not been served with summons cannot be adversely affected by the outcome, ensuring due process.

    This ruling underscores the importance of due process and the principle that court orders should only affect those who have had an opportunity to be heard. It serves as a reminder that extending the reach of an injunction to non-parties can be a violation of their rights.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION (PSALM) VS. COURT OF APPEALS (21ST DIVISION), AND FRANCISCO LABAO, AS GENERAL MANAGER OF SAN MIGUEL PROTECTIVE SECURITY AGENCY (SMPSA), G.R. No. 194226, February 15, 2017

  • Energy Contracts: Defining the Limits of Power Supply Obligations

    This Supreme Court decision clarifies the scope of power supply obligations under contracts involving privatized energy assets. The Court affirmed that SEM-Calaca Power Corporation (SCPC) is only required to supply 10.841% of MERALCO’s energy needs, capped at 169,000 kW at any given hour, based on the Asset Purchase Agreement (APA). This ruling confirms that the privatization of the power sector did not automatically transfer unlimited supply obligations to the new owners, and it respected the negotiated terms of the APA, providing clarity and stability in the energy market.

    Calaca’s Capacity: Was the Power Plant’s Output Capped After Privatization?

    The privatization of the National Power Corporation (NPC) assets aimed to reform the electric power industry, as envisioned in the Electric Power Industry Reform Act of 2001 (EPIRA). As part of this initiative, the Power Sector Assets and Liabilities Management Corporation (PSALM) was created to manage the sale of NPC’s assets. Among these assets was the 600-MW Batangas Coal-Fired Thermal Power Plant in Calaca, Batangas (Calaca Power Plant), which was eventually acquired by DMCI Holdings, Inc. (DMCI) and later transferred to SEM-Calaca Power Corporation (SCPC). The dispute arose from differing interpretations of Schedule W of the Asset Purchase Agreement (APA) between PSALM and SCPC regarding the latter’s obligation to supply electricity to MERALCO, a major power distributor.

    PSALM argued that SCPC was obligated to supply the entire 10.841% of MERALCO’s energy requirements without any cap, effectively stepping into the shoes of NPC and PSALM. SCPC, on the other hand, contended that its obligation was limited to 169,000 kW at any given hour. The Energy Regulatory Commission (ERC) sided with SCPC, ruling that its obligation was indeed capped at 169,000 kW. The Court of Appeals (CA) affirmed the ERC’s decision, leading PSALM to elevate the case to the Supreme Court.

    The Supreme Court’s analysis centered on interpreting the terms of the APA, particularly Schedule W, which outlined SCPC’s power supply contracts. Article 1370 of the Civil Code states that “[i]f the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control.” However, when the terms are ambiguous, courts must look beyond the literal meaning to ascertain the parties’ true intent. In this case, the Court found that the figures 10.841% and 169,000 kW in Schedule W were indeed ambiguous, necessitating further interpretation.

    The ERC, as affirmed by the Supreme Court, correctly interpreted the contract to harmonize its various stipulations. Article 1374 of the Civil Code mandates that “[t]he various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that sense which may result from all of them taken jointly.” Here, the ERC reconciled the 10.841% requirement with the 169,000 kW figure to give effect to both provisions. By doing so, the ERC avoided an interpretation that would render either figure insignificant or lead to an absurd outcome.

    Moreover, the Supreme Court considered the circumstances surrounding the execution of the APA. At the time of the sale, the Calaca Power Plant had a limited dependable capacity. It would be unreasonable to require SCPC to supply an unlimited amount of power to MERALCO when the plant’s capacity was constrained. “The reasonableness of the result obtained, after analysis and construction of the contract, must also be carefully considered.”

    PSALM also argued that other stipulations in the contract, such as SCPC’s option to enter into back-to-back supply contracts, indicated that there was no cap on SCPC’s supply obligations. The Supreme Court rejected this argument, agreeing with the ERC’s explanation that SCPC’s responsibility to cover shortfalls only applied up to the 169,000 kW limit. Any additional shortfalls were the responsibility of NPC under its Transition Supply Contract (TSC) with MERALCO. The Supreme Court emphasized that “NPC and PSALM’s obligation to supply the entire energy contract to MERALCO, including the obligation to replace any curtailed energy, was not passed on or assigned to SCPC.”

    The Court also acknowledged the ERC’s expertise in interpreting contracts within the energy sector. It is general practice among the courts that the rulings of administrative agencies like the ERC are accorded great respect, owing to a traditional deference given to such administrative agencies equipped with the special knowledge, experience and capability to hear and determine promptly disputes on technical matters. Factual findings of administrative agencies that are affirmed by the Court of Appeals are generally conclusive on the parties and not reviewable by this Court.

    The decision underscores the importance of clear and unambiguous contract drafting, especially in complex transactions like the privatization of energy assets. It also highlights the role of regulatory bodies like the ERC in resolving disputes and ensuring a stable and reliable energy supply. Finally, it reinforces the principle that contracts must be interpreted in a way that gives effect to all their provisions and avoids unreasonable or absurd outcomes.

    FAQs

    What was the key issue in this case? The central issue was whether SEM-Calaca Power Corporation’s (SCPC) obligation to supply electricity to MERALCO was capped at 169,000 kW or required it to supply 10.841% of MERALCO’s total energy requirements without limit.
    What did Schedule W of the APA specify? Schedule W of the Asset Purchase Agreement (APA) outlined the power supply contracts assumed by SCPC, including the contract with MERALCO, listing both a percentage (10.841%) and a capacity (169,000 kW).
    How did the ERC interpret Schedule W? The Energy Regulatory Commission (ERC) interpreted Schedule W to mean that SCPC was obligated to deliver 10.841% of MERALCO’s energy requirements, but not exceeding a 169,000 kW capacity allocation at any given hour.
    Why did the Supreme Court uphold the ERC’s interpretation? The Supreme Court upheld the ERC’s interpretation because it harmonized all the provisions of the contract, avoided an absurd result given the Calaca Power Plant’s capacity, and respected the ERC’s expertise in energy matters.
    What is the significance of Article 1374 of the Civil Code? Article 1374 of the Civil Code states that contracts should be interpreted by considering all stipulations together, attributing doubtful ones with a sense resulting from the whole, which guided the ERC’s decision.
    What was PSALM’s main argument? PSALM argued that SCPC stepped into the shoes of NPC and PSALM, assuming the obligation to supply 10.841% of MERALCO’s energy needs without any capacity limit.
    What was SCPC’s main argument? SCPC argued that its obligation was capped at 169,000 kW, as indicated in Schedule W of the APA, and that PSALM’s interpretation would lead to an unreasonable outcome.
    What responsibility did NPC have in supplying MERALCO? Under the Transition Supply Contract (TSC), NPC was responsible for covering any shortfall in MERALCO’s energy supply beyond the 169,000 kW limit assigned to SCPC.
    How does the dependable capacity of Calaca Power Plant factor into the decision? The limited dependable capacity of Calaca Power Plant (330 MW) supported the interpretation that SCPC’s obligation was capped because it would be unreasonable to require SCPC to supply beyond the plant’s capacity.

    This decision provides crucial guidance on interpreting power supply contracts in the context of privatized energy assets. By affirming the ERC’s interpretation, the Supreme Court ensures that the obligations of power suppliers are clearly defined and aligned with the practical realities of power plant capacity and contractual agreements. The ruling emphasizes the need for clarity in contract drafting and reinforces the authority of regulatory bodies in resolving disputes within the energy sector.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION v. SEM-CALACA POWER CORPORATION, G.R. No. 204719, December 05, 2016