G.R. No. 268094 , October 30, 2024.
PEAKPOWER SAN FRANCISCO, INC., PETITIONER, VS. ENERGY REGULATORY COMMISSION, RESPONDENT.

FACTS

Peakpower San Francisco Inc. (PSFI) operates a power plant contracted exclusively to Agusan Del Sur Electric Cooperative, Inc. (ASELCO). On December 8, 2014, PSFI and ASELCO executed a Power Purchase and Transfer Agreement (Second PPTA) for an additional generating unit. They filed an application for its approval with the Energy Regulatory Commission (ERC) on April 28, 2016. The ERC granted provisional authority for the Second PPTA’s implementation on May 8, 2017, and extended this authority on April 18, 2018. Subsequently, the Supreme Court, in Alyansa Para Sa Bagong Pilipinas (ABP), Inc. v. ERC, et al., nullified ERC issuances that extended the deadline for compliance with the Competitive Selection Process (CSP) required by Department of Energy (DOE) Circulars. The Court ruled that all Power Supply Agreement applications filed on or after June 30, 2015, must comply with the CSP. Following this, the ERC issued its September 11, 2019 Order (First Order) directing ASELCO and PSFI to comply with CSP requirements and submit a DOE certification of compliance within 90 days, warning of dismissal for failure to comply. After PSFI and ASELCO filed a Joint Manifestation and Motion for Reconsideration, the ERC issued its March 1, 2023 Order (Second Order), finding that the procurement for the Second PPTA failed to adhere to the CSP principles of accountability, transparency, and competitiveness. Specifically, the ERC found that PSFI was the only offeror, the opportunity to supply was not extended to other eligible suppliers, and there was no documentation of a competitive process. The ERC dismissed the application with prejudice. PSFI then filed a Petition for Certiorari and Prohibition before the Supreme Court assailing these ERC orders.

ISSUE

Whether the Energy Regulatory Commission acted with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the assailed Orders dated September 11, 2019 and March 1, 2023, which dismissed the application for approval of the Power Purchase and Transfer Agreement for failure to comply with the Competitive Selection Process.

RULING

The Supreme Court DISMISSED the petition. The Court found no grave abuse of discretion on the part of the ERC. The ERC’s orders were issued in faithful compliance with the Court’s ruling in the Alyansa case, which mandated CSP compliance for PSA applications filed on or after June 30, 2015. The application for the Second PPTA was filed on April 28, 2016, which is clearly within the coverage of the Alyansa ruling. The ERC correctly applied the 2018 DOE Circular, which prescribes the policy for CSP. The Court held that the ERC’s factual finding—that the procurement process lacked competitiveness, transparency, and accountability as PSFI was the sole offeror and no opportunity was given to other suppliers—was supported by the record and was within its regulatory expertise. The provisional authority granted earlier did not exempt the application from the CSP requirement, as such authority was conditional and subject to the outcome of the main application. The ERC’s directive to comply with the CSP and its subsequent dismissal for non-compliance were a valid exercise of its quasi-judicial and regulatory powers under the Electric Power Industry Reform Act (EPIRA). The petition, being one for certiorari under Rule 65, could not correct errors of judgment but only those of jurisdiction, and no such jurisdictional error was committed by the ERC.