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    Surigao Del Norte Electric Cooperative Vs ERC 2010

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    Remuel Torres
    The Supreme Court denied SURNECO's petition challenging a Court of Appeals decision that affirmed ERC orders regarding SURNECO's implementation of a purchased power adjustment formula. The Court ruled that SURNECO could not insist on using a multiplier scheme to compute system losses after caps were imposed by law. The Court also found that the ERC properly ordered SURNECO to deduct discounts received from its supplier from power costs charged to consumers.

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    Surigao Del Norte Electric Cooperative Vs ERC 2010

    Uploaded by

    Remuel Torres
    27 views11 pages
    The Supreme Court denied SURNECO's petition challenging a Court of Appeals decision that affirmed ERC orders regarding SURNECO's implementation of a purchased power adjustment formula. The Court ruled that SURNECO could not insist on using a multiplier scheme to compute system losses after caps were imposed by law. The Court also found that the ERC properly ordered SURNECO to deduct discounts received from its supplier from power costs charged to consumers.

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    Case brief/digest for Surigao del Norte Electric Coop vs. ERC, GR No. 183626, 4 October 2010

    Original Title

    Surigao del Norte Electric Cooperative vs ERC 2010

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    The Supreme Court denied SURNECO's petition challenging a Court of Appeals decision that affirmed ERC orders regarding SURNECO's implementation of a purchased power adjustment formula. The Court ruled that SURNECO could not insist on using a multiplier scheme to compute system losses after caps were imposed by law. The Court also found that the ERC properly ordered SURNECO to deduct discounts received from its supplier from power costs charged to consumers.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    27 views11 pages

    Surigao Del Norte Electric Cooperative Vs ERC 2010

    Uploaded by

    Remuel Torres
    The Supreme Court denied SURNECO's petition challenging a Court of Appeals decision that affirmed ERC orders regarding SURNECO's implementation of a purchased power adjustment formula. The Court ruled that SURNECO could not insist on using a multiplier scheme to compute system losses after caps were imposed by law. The Court also found that the ERC properly ordered SURNECO to deduct discounts received from its supplier from power costs charged to consumers.

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    You are on page 1of 11

    Surigao del Norte

    Electric Cooperative
    vs. ERC
    GR No. 183626, 4 October 2010
    Justice Nachura
    FACTS
    • This case is a petition for review on certiorari challenging the CA resolution
    in 2008, when it affirmed the assailed Orders of ERC.
    • Petitioner Surigao Del Norte Electric Cooperative, Inc. (SURNECO) is a rural
    electric cooperative organized and existing by virtue of Presidential Decree
    No. 269.
    • The Association of Mindanao Rural Electric Cooperatives, as representative
    of SURNECO, along with other electric cooperatives in the region, filed a
    petition before the then Energy Regulatory Board (ERB) for the approval of
    the formula for automatic cost adjustment in compliance with RA 7832
    (“Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of
    1994”)
    FACTS
    • The ERB granted SURNECO and other rural electric cooperatives
    provisional authority to use and implement the Purchased Power
    Adjustment (PPA).
    • In 2001, RA 9136 was signed and created the Energy Regulatory
    Commission (ERC), replacing and the ERB.
    • All pending cases before the ERB were transferred to the ERC.
    Thereafter, the ERC continued its review, verification, and
    confirmation of the electric cooperative's implementation of the PPA
    formula based on the available data and information submitted by the
    latter.
    FACTS
    • The ERC issued its assailed Order, mandated that the discounts
    earned by SURNECO from its power supplier should be deducted from
    the computation of the power cost, or refunded to consumers the
    discounts it received from NAPOCOR.
    • SURNECO filed a motion for reconsideration, but it was denied. It then
    filed a petition for review to the CA but the same was denied.
    • Upon denial of the motion for reconsideration, SURNECO filed the
    instant petition.
    ISSUE
    Whether or not the Court of Appeals committed
    an error when it affirmed the ERC decision
    RULING
    Whether or not the Court of Appeals committed an error when it affirmed the ERC
    decision

    • NO. The Court denied the SURNECO’s petition and sustained the findings and
    resolution of CA and the decision of ERC.
    • The Court held that SURNECO cannot insist on using the multiplier scheme even
    after the imposition of the system loss caps under Section 10 of RA 7832.
    • The imposition of the caps was self-executory and did not require the issuance of
    any enabling set of rules or any action by the then ERB.
    • The caps should have been applied as of January 17, 1995, when R.A. No. 7832
    took effect.
    RULING
    • The multiplier scheme insisted by SURNECO was based on the
    National Electrification Administration (NEA) Memorandum in 1984
    which allowed the cooperatives charged their consumer-members
    “System Loss Levy” for system losses in excess of the 15% cap.
    • However, the Court ruled that between a mere administrative
    issuance (NEA Memo) and a legislative enactment (RA 7832), the
    latter must prevail.
    RULING
    • Additionally, the Court said that even assuming that SURNECO was
    right when it insisted that ERC’s orders are in violation of NEA-ADB
    agreement, the contract had to yield to the greater authority of the
    State’s exercise of police power.
    RULING
    It has long been settled that police power legislation, adopted by the
    State to promote the health, morals, peace, education, good order,
    safety, and general welfare of the people prevail not only over future
    contracts but even over those already in existence, for all private
    contracts must yield to the superior and legitimate measures taken by
    the State to promote public welfare.
    RULING
    • The Court reiterated its decision in the Republic of the Philippines v. Manila
    Electric Company (2002)—“The regulation of rates to be charged by public
    utilities is founded upon the police powers of the State and statutes
    prescribing rules for the control and regulation of public utilities are a valid
    exercise thereof. When private property is used for a public purpose and is
    affected with public interest, it ceases to be juris privati only and becomes
    subject to regulation.

    • The regulation is to promote the common good. Submission to regulation


    may be withdrawn by the owner by discontinuing use; but as long as use of
    the property is continued, the same is subject to public regulation.”
    • Since the petition was denied, SURNECO was
    ordered to deduct from the power cost or refund
    to its consumers the discounts extended to it by its
    FALLO power supplier, NPC (1), o refund alleged over-
    recoveries arrived at by the ERC (2) and disallowed
    from using the multiplier scheme to compute its
    system’s loss (3).

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