energy regulatory commission rolando f.alzate,

Republic of the PhilippinesENERGY REGULATORY COMMISSION

San Miguel Avenue, Pasig City

ROLANDO F. ALZATE,. Complainant,

- versus -

ORDER

ERC CASE NO. 2013-014CC .

For resolution is the Motion to Dismiss on the ground of lack of jurisdiction raisedby Respondent Manila Electric Company (MERALCO) during the 29 August 2013 pre-trial hearing of this case.

In moving for the dismissal of this case for lack of jurisdiction, Respondentinvokes the recent rulings of the Court of Appeals in the cases of Manila ElectricCompany v. Lim and Ocampo Law Offices1 and Regaldo S. Torres v. Manila ElectricCompany. 2 In the former, the Court of Appeals ruled that the Commission had nojurisdiction over the complaint of the respondent therein, which essentially disputedMERALCO's charge of differential billing against it, while in the latter case, the appellatecourt held that the Commission had no jurisdiction over the complaint because itinvolved the marketing and distribution of electricity, jurisdiction over which pertains tothe Department of Energy and not this Commission as ruled by the Supreme Court inthe case of Mactan Electric Company, Inc. (MECO) v. National power Corp. (NPCP andother cases cited in the Court of Appeals decision.

For a better appreciation of the cited CA rulings and their applicability inconsumer complaints filed before this Commission, a brief discussion of both is in order.

The factual backdrop surrounding the case of MERALCO v. Lim and OcampoLaw Offices4 are as follows: .

the fourth (4th) floor of ACT Tower, which was occupied by Lim and OcampoLaw Offices ("Lim Law Offices" for brevity), had three (3) service accounts for electricservice. Two (2) service accounts with Service Identification Numbers (SIN) 436777202-3 and 436778502-7 were being used by Lim Law Offices, while a thJrdaccount with SIN436781101 servicing Meter No. 94WSI00448 in the name of TNC Philippines, Inc., hadbeen disconnected since 01 November 2001 for nonpayment of electric bills. It was.subsequently discovered that despite having been disconnected;, electric Meter No.94WSI00448 for SIN 436781101 was continued to be used and registered actualelectric consumption. It turned out that Lim Law Offices had an air conditioning unit thatwas connected to the terminated meter.

Subsequently, .MERALCO sent a letter to Lim Law Offices demanding paymentof Php411, 100.00 representing unbilled electric consumption for SIN 436781101. Lim

1 CA-G.R. SP No. 111316 (03 February 2012)2 CA-G.R. SP No. 117323 (21 May 2013)3 G.R. No. 172960 (26 March 2010)4 Supra note 1

,.'". ".'

ALZATE v. MERALCOERC Case No. 2013-014 of 18

Law Offices denied liability therefor and filed a complaint before the Commission, whichruled that MERALCO failed to prove its claim that Lim Law Offices benefited from theterminated service account and meter. MERALCO was ordered to desist from furtherdemanding payment of unbilled electric consumption from Lim Law Offices. Upon denialof MERALCO's motion for reconsideration, it elevated the case to the Court of Appeals(CA).

The issue that was put forth before the CA for resolution was whether or not theCommission erred in ordering MERALCO to desist from demanding from Lim LawOffices the payment of the unbilled electric consumption.

In resolving the issue, the CA ruled that the Commission had no jurisdiction to acton the case. The pertinent portion of the decision reads:

It must be stressed at the outset that being an administrativeagency, public respondent ERC has only limited jurisdiction and can onlywield such powers as are specifically granted to it by its enabling statute. Itis basic that jurisdiction over the subject matter of a case is conferred bylaw and determined by the allegations in the complaint which mustcomprise a concise statement of the ultimate facts constituting theplaintiff's cause of action. The allegations in the complaint and thecharacter of the relief sought are the ones to be consulted. Jurisdictionmay not be conferred on the court or quasi-judicial agency by consent orwaiver of the parties where the court or quasi-judicial agency otherwisewould have no jurisdiction over the subject matter of the action.

Private respondent's complaint before public respondent ERC ispremised on the allegation that "respondent failed to conduct the properinspection and verification in order to conclusively determine who shouldbe made responsible for the alleged registered but unbilled electricconsumption, instead of issuing baseless demand letters against anyconsumer who may even appear to be innocent and without knowledge ofthe same, like complainant in the instant case."

xxx

Public respondent ERC erred in so ruling. It should not haveexercised jurisdiction over the case in the first place. Republic Act (RA)No. 9136, otherwise known as the "Electric Power Industry Reform Act of2001" provides for the functions and jurisdiction of public respondent ERCas follows:

"SECTION 43. Functions of the ERC. - The ERCshall promote competition, encourage market development,ensure customer choice and penalize abuse of marketpower in the restructured electricity industry. In appropriatecases, the ERC is authorized to issue cease and desistorder after due notice and hearing. Towards this end, it shallbe responsible for the following key functions in therestructured industry:

xxx xxx xxx

(e) Amend or revoke, after due notice and hearing,the authority to operate of any person or entity which fails tocomply with the provisions hereof, the IRR or any order or


resolution ofthe ERG. In the event a divestment is required,the ERG shall allow the affected party sufficient time toremedy the infraction or for an orderly disposal, but shall inno case exceed twelve (12) months from the issuance of theorder;

xxx xxx xxx

(k) Monitor and take measures in accordance with thisAct to penalize abuse of market power, cartelization, andanticompetitive or discriminatory behavior by any electricpower industry participant;

(I) Impose fines or penalties for any non-compliancewith or breach of this Act, the IRR of this Act and the rulesand regulations which it promulgates or administers;

xxx xxx xxx

(r) In the exercise of its investigative and quasi-judicialpowers, act against any participant or player in the energysector for violations of any law, rule and regulation governingthe same, including the rules on cross-ownership, anti-competitive practices, abuse of market positions and similaror related acts by any participant in the energy sector or byany person, as may be provided by law, and require anyperson or entity to submit any report or data relative to anyinvestigation or hearing conducted pursuant to this Act;

(s) Inspect, on its own or through duly authorizedrepresentatives, the premises, books of accounts andrecords of any person or entity at any time, in the exercise ofits quasi-judicial power for purposes of determining theexistence of any anti-competitive behavior and/or marketpower abuse and any violation of rules and regulationsissued by the ERG;

xxx xxx xxx

(u) the ERG shall have the original and exclusivejurisdiction over all cases contesting rates, fees, fines andpenalties imposed by the ERG in the exercise of theabovementioned powers, functions and responsibilities andover all cases involving disputes between and amongparticipants or players in the energy sector. (Underliningsupplied.)

xxx xxx xxx"

Based on the foregoing considerations, it is clear that publicrespondent ERG had no jurisdiction over private respondent's complaint,for the original and exclusive jurisdiction of public respondent ERG areover cases contesting power rates and fees or involving intra-industrydisputes'relating to its powers and functions.


Apropos is Mactan Electric Company, Inc. VS. National PowerCorporation, et al., wherein the Supreme Court held that publicrespondent ERC's jurisdiction was only over cases contesting rates, fees,fines and penalties imposed by ERC in the exercise of its powers,functions and responsibilities under Section 43 (a) through (u) and casesinvolving disputes between and among participants or players in theenergy sector relating to the foregoing powers, functions andresponsibilities. Thus:

"The question of law before the Court is: was it theRTC or the ERC which had jurisdiction over the disputeinvolving MECa, on one hand, and MCIAA, NPC andTRANSCa, on the other? The issue is not hypothetical evenas MCIAA has filed a petition with ERC for direct electricalconnection with NPC and TRANSCa. Jurisdiction is notconferred on ERC by the mere filing of a petition with it. Itsjurisdiction is bestowed by law, specifically RA 9136.

There is, however, nothing in either RA 9136 or itsimplementing rules which grants ERC jurisdiction over thedispute.

Section 43 (v) confers on ERC original and exclusivejurisdiction over two kinds of cases:

1) all cases contesting rates, fees, fines and penaltiesimposedby ERC in the exercise of its powers, functions andresponsibilities under Section 43 (a) through (u); and

2) all cases involving disputes between and amongparticipants or players in the energy sector.

Section 4 (n), Rule 3 of the Rules and Regulations toImplement RA 9136 (implementing rules) provides anadministrative interpretation of the scope of Section 43 (v) ofRA 9136, to wit:

Section 4. Responsibilities of the ERC.

xx xx xx

(n) The ERC shall have the original and exclusivejurisdiction over all cases contesting rates, fees, fines andpenalties imposed in the exercise of its powers, functionsand responsibilities and over all cases involving disputesbetween and among participants or players in the energysector relating to the foregoing powers, functions andresponsibilities. (emphasis supplied)

Disputes between and among participants or playersin the energy sector which may possibly be related to thepowers, functions and responsibilities of ERC are thosearising from cross-ownership, abuse of market power,cartelization and anticompetitive or discriminatory behaviorby any electric power industry participant as defined andpenalized under Section 45 of RA 9136 and Sections 3, 4, 5


and 8, Rule 11 of the implementing rules. It is ERC which isauthorized to monitor and penalize these prohibited acts andto stop and redress the same through such remedialmeasures as the issuance of injunction.

The subject matter of the dispute between the partiesis neither cross-ownership, nor abuse of market power, norcartelization, nor anti-competitive or discriminatory behavior.

Based on the allegations of MECO in its complaintand the essence of the relief it sought, the subject matter ofits dispute with MCIAA, NPC and TRANSCO involved thedistribution of energy resource, specifically the direct supplyof electricity by NPC through TRANSCO to MCIAA, withoutpassing through the distribution system of MECO as thefranchise holder in the area. Therefore, their dispute was notwithin the authority of ERC to resolve."

Ineluctably, since public respondent ERC had no jurisdiction overprivate respondent's complaint, the proceedings before it could not haveproduced any effect. For it is well-settled that all proceedings before atribunal or quasi-judicial agency bereft of jurisdiction over the subjectmatter of the action are null and void.

WHEREFORE, the Decision dated August 17, 2009 and Orderdated October 22, 2009 of public respondent ERC are reversed and setaside and the complaint filed by private respondent is dismissed.

On the other hand, the case of Regalado S. Torres, Jr. v. MERALC05 issummarized hereinbelow as follows:

Petitioner therein Regalado S. Torres (Regalado) is the actual user ofMERALCO's electric service registered in the name of one Ricardo Torres under SIN505672001 and Meter No. 33ESN74930 installed at No. 42 Natib Street, Kaunlaran,Cubao, Quezon City (Natib Property). Regalado resides in one of the dwelling units inthe Natib Property which was registered under the name of Daniela M. Santiago Vda.Del Rosario, mother of Regalado and his half-brother Ruben Del Rosario, Jr. (Ruben)Subsequently, the property was transferred in the name of Delro Enterprises, Inc. (DEI)of which Ruben is the president.

Later on, Ruben requested MERALCO to disconnect the electric service to theregistered accounts at the Natib Property, including SIN 505672001 on the ground thatthe holders of the accounts were either dead or no longer residing at the Natib Propertyand that the said property has already been transferred from Daniela Vda. Del Rosarioto DEI. Ricardo Torres also sent a letter to MERALCO, informing the latter that he nolonger resides in the Natib Property and also requested for the disconnection of theelectric service therein.

Regalado sent a letter to MERALCO to oppose the request for disconnection,alleging that the Natib Property belonged to the estate of his mother and that thetransfer thereof in the name of DEI was fraudulently effected through a falsified Deed ofConveyance. He further requested that the electric service be transferred in his name.

5 Supra note 2


In view of his request for the transfer of the electric service, MERALCO requiredhim to submit certain documents. Regalado failed to submit them, hence MERALCOsent him a notice of disconnection.

Thus, Regalado filed a complaint before the Commission against MERALCO forthreatening to disconnect his electric service. He sought to compel MERLACO totransfer the electric service from Ricardo Torres' name to his name instead ofdisconnecting it. He reasoned out that he failed to submit the required documents,particularly an undertaking from DEI to be jointly and severally liable for any unpaidmonthly bills, because DEI refused to issue the same. He further contended that heresided in the Natib Property during the lifetime of his mother and that, as the onlyoccupant of the property, he paid for all the utilities even if the service contracts were allin the names of his mother's other children.

For its part, MERALCO interposed two defenses, i.e., that the Commission hadno jurisidiction to rule on the issue of rightful possession and ownership of the NatibProperty, and that Regalado failed to state a cause of action.

The Commission rendered a decision, dismissing Regalado's complaint for lackof merit. It ratiocinated that MERALCO was correct in denying the application for thetransfer of electric service because while Regalado has a right to electric service, hehas the corresponding obligation to submit the required documents to MERALCO asprovided under Article 6 of the Magna Carta for Residential Electricity Consumers(Magna Carta); that evidence shows that DEI is the owner of the Natib property andhence the undertaking from DEI was necessary; and that to compel MERALCO to enterinto a service contract with Regalado or to transfer the electric service in his name willbe violative of Article 6 of the Magna Carta.

Aggrieved, Regalado appealed the decision before the CA.

The main issue that the CA was confronted to resolve was whether or not theCommission was correct in ruling that Respondent MERALCO cannot be compelled totransfer the service contract from DEI to Regalado.

In its decision, the CA dismissed Regalado's petition and held that theCommission had no jurisdiction over his complaint. The CA ratiocinated as follows:

Over and above the other issues raised by the parties before theERC and in this petition is the overarching issue of jurisdiction of the ERCover the subject matter of the complaint.

Jurisdiction over the subject matter is the power of a court ortribunal to hear and determine cases of the general class to which theproceedings in question belong: the power to deal with the general subjectinvolved in the action. Jurisdiction over the subject matter is conferred bylaw.

The jurisdiction of the ERC is spelled out in R.A. 9136 thus:

Sec. 43. Functions of the ERG. - The ERC shallpromote competition, encourage market development,ensure customer choice and discourage/penalize abuse ofmarket power in the restructured electricity industry.Towards this end, it shall be responsible for the following keyfunctions in the restructured industry:


xxxxxxxxx

(u) The ERG shall have the original and exclusivejurisdiction over all cases contesting rates, fees, fines andpenalties imposed by the ERC in the exercise of theabovementioned powers, functions and responsibilities andover all cases involving disputes between and amongparticipants or players in the energy sector. All notices ofhearings to be conducted by the ERG for the purpose offixing rates or fees shall be published at least twice for twosuccessive weeks in two (2) newspapers of nationwidecirculation. (underscoring supplied)

In the 2010 case of Mactan Electric Company, Inc. v. NationalPower Corporation, et al., it was held that the foregoing provision conferson ERC original and exclusive jurisdiction over two kinds of cases: 1) allcases contesting rates, fees, fines and penalties imposed by ERG in theexercise of its powers, functions and responsibilities under Section 43 (a)through (u); and 2) all cases involving disputes between and amongparticipants or players in the energy sector.

Obviously, petitioner's cause of action, which concerns his right toelectric service connection, does not involve the price or rate-fixing powerof the ERC. Neither does it allege a dispute between and amongparticipants or players in the energy sector. Disputes of this nature arethose arising from cross-ownership, abuse of market power, cartelization,and anti-competitive or discriminatory behavior by any electric powerindustry participant as defined and penalized under Section 45 of RA.9136, and Sections 3, 4, 5 and 8, Rule 11 of the implementing rules.32Rather, petitioner's cause of action involves the distribution of energyresource or the supply of electricity. Unfortunately, there is nothing in RA.No. 9136 that vests jurisdiction over such subject matter in the ERG. It isthe Department of Energy that exercises that jurisdiction.

In the earlier case of Energy Regulatory Board and /ligan Light &Power, Inc. v. Court of Appeals, et al. (1999), which litigated electric powerconnection and disconnection issues and decided under the aegis ofExecutive Order No. 172 (Creating the Energy Regulatory Board), it wassettled that the non-price regulatory jurisdiction of the ERB under Section3 of E.O. No. 172, including the distribution of energy source, has beentransferred to the Department of Energy (DOE) with the enactment of R.A.No. 7638, otherwise known as the "Department of Energy Act of 1992", asexpressly provided under Section 18 thereof thus:

SEC. 18. Rationalization or Transfer of Functions ofAttached or Related Agencies. -- The non-price regulatoryjurisdiction, powers, and functions of the Energy RegulatoryBoard as provided for in Section 3 of Executive Order No.172 are hereby transferred to the Department. x x x.

In the aforesaid case, it was emphasized that by virtue of RA. No.7638 it is now the DOE that is vested with jurisdiction over the regulationof the marketing and distribution of energy resources. The Supreme Courtclarified that electric power or electricity is included in the term "energyresource", hence, the regulation of its distribution is among those functions


formerly belonging to the ERB which have been transferred to the DOE asexpressly mandated in Section 18 of RA. 7638.

Applications for the supply or disconnection of electric poweressentially involve the distribution of energy resources, not by any incidentthe determination of power rates, hence, the jurisdiction to resolve suchmatters is vested not in the ERB but the DOE.

The subsequent enactment of R.A. No. 9136, which created theERC and transferred to it the jurisdiction, powers, and functions of theERB, did not divest the DOE of its regulatory authority over mattersinvolving the marketing and distribution of energy resources. Thus, inMactan Electric, it was ruled:

In Batelec /I Electric Cooperative Inc. v. EnergyIndustry Administration Bureau, the Court further reiteratedthat the DOE had regulatory authority over matters involvingthe marketing and distribution of energy resources. DOE hasretained such regulatory authority even with the enactmentof RA. 9136. Section 80 of RA. No. 9136 thereof providesthat "[t]he applicable provisions of x x x Republic Act 7638,otherwise known as the 'Department of Energy Act of 1992'x x x shall continue to have full force and effect except in sofar as inconsistent" with RA 9136. Corollary to Section 80,Section 37 assigned to DOE certain powers and functions inthe supervision of the restructuring of the electricity industry,but these are "in addition to its existing powers andfunctions." Among the existing powers and functions of DOEis the regulation of the marketing and distribution of energyresource as provided in Section 18 of RA. No. 7638,amending Section 3 of E.O. No. 172. (underscoringsupplied)

It is true that Section 41 of RA. 9136 provides that ERC shallhandle consumer complaints and ensure the adequate promotion ofconsumer interests. However, we do not think that this provision grantsjurisdiction to ERC over complaints involving the marketing anddistribution of electricity.

Section 41 must be construed in light of Section 43 (u) whichprovides for the original and exclusive jurisdiction of the ERC, as well asthe ruling in Mactan Electric and subsequent jurisprudence. It is basic instatutory construction that the provisions of a law must be interpreted insuch a way as to harmonize them. Simply put, the complaints which ERCmay handle under Section 41 should be limited to those that fall within itsoriginal and exclusive jurisdiction as provided in Section 43 (u).

In fine, the ERC had no jurisdiction over the subject matter ofpetitioner's complaint. It should have refused to entertain the complaintand dismissed the case outright for lack of jurisdiction.

WHEREFORE, the petition for review is DENIED. However, theDecision of the Energy Regulation Commission in ERC Case No. 2008-102CC is ANNULLED and SET ASIDE for having been rendered withoutjurisdiction over the subject matter.


After a careful scrutiny of the Court of Appeals decision invoked by MERALCO tosupport its argument that the Commission has no jurisdiction over consumercomplaints, this Commission is of the position that it has jurisdiction over consumercomplaints including the present complaint. Therefore, Respondent MERALCO's Motionto Dismiss on the ground of lack of jurisdiction is hereby DENIED for the followingreasons.

The Commission has jurisdictionover consumer complaints under.Section 41 of the EPIRA.Section 21j)also declares it a policy of the Stateto establish a regulatory body, i.e. theCommission, with the mandate ofensuring consumer protection.

Respondent MERALCO asseverates that by virtue of the CA decisions discussedabove, the Commission can no longer exercise jurisdiction over consumer complaintsand over complaints arising from RA. 7832 or the Anti-Pilferage Act of 1994. This isbecause, in the CA decisions, the appellate court held that the jurisdiction of theCommission is limited to 1) all cases contesting rates, fees, fines and penalties imposedby ERC in the exercise of its powers, functions and responsibilities under Section 43 (a)through (u); and 2) all cases involving disputes between and among participants orplayers in the energy sector, citing Mactan Electric Company, Inc. v. National PowerCorporation, et a/.6

A careful study of the pertinent provisions of the EPIRA on consumer protectionas well as pertinent well-rooted jurisprudence on the role of the ERC and itspredecessors in protecting the interests of the consumers and in complaints arising fromRA. 7832 entirely negates the position that MERALCO would like to impress upon thisCommission, i.e. that the Commission has no jurisdiction over consumer complaints aswell as complaints involving alleged violation of RA. 7832, on the basis only of the CAdecisions.

In a catena of cases, the Supreme Court has defined jurisdiction over a subjectmatter as follows:

Jurisdiction is the authority to hear and determine a cause - theright to act in a case. Jurisdiction over the subject matter is the power tohear and determine the general class to which the proceedings in questionbelong. Jurisdiction over the subject matter is conferred by law and not bythe consent or acquiescence of any or all of the parties or by erroneousbelief of the court that it exists.?

Set against the above definition of the scope of jurisdiction over a particularsubject matter, Section 41 of the EPIRA, on the other hand, provides:

Section 41. Promotion of Consumer Interests. - The ERC shallhandle consumer complaints and ensure the adequate promotion ofconsumer interests.

It can be immediately gleaned from the above-quoted provision that it does notstate that the ERC shall have "the authority to hear and decide" or shall have the "right

6 Supra note 37 Insular Savings Bank v. Far East Bank and Trust Company, G.R. No. 141818 (22 June 2006); BPI v.Hong, G.R. No. 161771 (15 February 2012); Asia International Auctioneers, Inc. v. Parayno, Jr., G.R. No.163445 (18 December 2007);and Sevilleno v. Carilo, G.R. No. 146454 (14 September 2007)


to act" on consumer complaints as how jurisdiction over a subject matter has beenjurisprudentially defined but instead directs the ERC to "handle consumer complaints."But does that necessarily mean that the Commission is bereft of the power andauthority to hear and resolve or the right to act on consumer complaints filed before it?

To answer this query and for purposes of clarity, it is significant to look into themeaning of the operative words-"handle" and "consumer complaints"-used in theprovision.

The word "handle" means "to have overall responsibility for supervising ordirecting" or "to act on or perform a required function with regard to."eWith respect tothe term "consumer complaint," while the EPIRA has not defined the same or its scope,the concept has been generally defined to mean as "an expression of dissatisfactionon a consumer's behalf to a responsible party."g

With these definitions in mind, when Section 41 of the EPIRA expresses that theERC shall "handle consumer complaints," it means that the ERC is being directed underthis legal provision to "act on or perform the required function" over consumercomplaints or complaints expressing dissatisfaction over the products or services of aresponsible party, which, in this context, pertains to distribution utilities.

The next set of questions that must be answered in this regard is-specifically,how will the ERC act on consumer complaints? What specific function is required of it toperform over consumer complaints?

The answer can be found under Section 3, Rule 34 of the Implementing Rulesand Regulations of the EPIRA, which fleshes out the provisions of Section 41 of theEPIRA. It reads:

SECTION 3. Consumer Protection. -

The ERC shall ensure consumer choice and promote consumer interests. Itshall issue the appropriate guidelines and mechanisms to handle the following:

(a) Speedy resolution of consumer complaints;

(b) Creation of a permanent consumer complaint desk at ERC and inall electric utilities and other providers of electric power to overseethe promotion of consumer interests; and

(c) Dissemination of rate-related resolutions, including posting in theERC website and the publication of all notices of hearings to beconducted by the ERC for the purpose of fixing rates or fees atleast twice for two (2) successive weeks in two (2) newspapers ofnationwide circulation. (Emphasis supplied)

It can be clearly gathered from the above provision that the Commission, incompliance with its mandate under Section 41 of the EPIRA, is tasked to create apermanent consumer complaint desk for purposes of receiving and addressingconsumer complaints against electric utilities and other providers of electric power.Not only that, the Commission is also authorized and directed to speedily resolveconsumer complaints.

6 Merriam-Webster Dictionary, 11th Ed.9 E. Laird Landon, Jr. (1980) ,"The Direction of Consumer Complaint Research", in NA - Advances inConsumer Research, Volume 07


The word "resolve" means "to make a formal decision about something usuallyby a vote or to declare" or "to decide by a formal resolution and vote.,,10Evidently, byvirtue of the foregoing legal provisions, the Commission is legally mandated todecide consumer complaints filed before it. It goes without saying that theCommission cannot decide or render decisions on consumer complaints without firstconducting the requisite hearing for otherwise, it would highly offend the basicconstitutionally guaranteed right to due process.

With the foregoing discussion taken altogether, it is now beyond cavil that theCommission has jurisdiction to receive, take cognizance of, hear and decide consumercomplaints under Section 41 of the EPIRA and Section 3, Rule 34 of the EPIRA IRR

Additionally, it must not be forgotten that the EPIRA has made it a policy of theState to establish a strong and purely independent regulatory body and system, i.e. theERC, to ensure consumer protection and enhance the competitive operation of theelectricity market under Section 2, paragraph m thereof.

The ERe has jurisdiction overcomplaints arising from violation ofR.A.7832.

Respondent MERALCO further asserts that, in view of the CA decisions,particularly the Lim Offices case which dismissed the complaint of Lim Offices disputingMERALCO's charge of differential billing, the Commission also no longer hasjurisdiction to take cognizance of and rule on complaints involving allegedtransgressions of RA. 7832. Respondent, however, loses sight of the fact that this issuehas long been settled by no less than the Supreme Court in the case of MERALCO v.Energy Regulatory Board (ERB) and Edgar L. Ti.11

At the onset, it is imperative to point out that, while the latter Supreme Court casewas decided much earlier-in the year 2006-than the Lim Offices appellate courtdecision, it nevertheless remains as the binding and controlling jurisprudence pursuantto the well-entrenched doctrine that only decisions of the Supreme Court constitute asbinding jurisprudential authority in this country's legal system and no decision of a lowercourt, including the Court of Appeals, can reverse the rulings of the Highest Tribunal ofthe land. Only the Supreme Court itself can set aside and overturn its previousdecisions and the doctrines enunciated therein.

In the aforementioned case of MERALCO V. ERB,12 MERALCO argued that theERS, the predecessor of this Commission, had no jurisdiction to order thereconnection of electric service in cases arising from alleged violation of R.A.7832. In dismissing MERALCO's contention, the Supreme Court traced the legislativehistory of the regulatory bodies that preceded the ERB from which its jurisdiction overcomplaints involving RA. 7832 was rooted and held:

The pivotal issue before the Court turns on whether or not publicrespondent ERB has jurisdiction to order the reconnection of electricservice in cases arising from alleged violation of R A. No. 7832.

Petitioner MERALCO urges the resolution of the issue in thenegative on the rationale that there is no provision in Executive Order(E.O.) No. 172, series of 1987, the ERB charter, granting that agencyadjudicative jurisdiction over violations of R A. No. 7832, let alone order

10 Supra note 811 G.R. No. 145399 (17 March 2006)121d.


the restoration of a disconnected electric service. Such jurisdiction, aspetitioner insisted all along, is vested with the regular courts.

The Court disagrees.

Jurisdiction is conferred by law. Corollary to this basic postulate isthe general rule that the jurisdiction of a court or tribunal over the subjectmatter is determined by the allegations in the complaint or petition and notin those of the defendant's answer or similar responsive pleading.

To determine the ERB's jurisdiction, a look at the legislative historyof the regulatory agencies preceding it is apropos. These agencies andthe corresponding statute or issuance creating each are as indicatedbelow:

1. The first regulatory body, the Board of RateRegulation (BRR), was created by virtue of Act No. 1779. Itsregulatory mandate under Section 5 of the law was limited tofixing or regulating rates of every public service corporation.

2. In 1913, Act No. 2307 created the Board of PublicUtility Commissioners (BPUC) to take over the functions ofthe BRR. By express provision of Act No. 2307, the BPUCwas vested with jurisdiction, supervision and control over allpublic utilities and their properties and franchises.

3. On November 7, 1936, Commonwealth Act (C.A.)No. 146, or the Public Service Act (PSA), was passedcreating the Public Service Commission (PSC) to replace theBPUC. Like the BPUC, the PSC was expressly grantedjurisdiction, supervision and control over public services, withthe concomitant authority of calling on the public force toexercise its power, to wit:

SEC. 13. Except as otherwise providedherein, the Commission shall have generalsupervision and regulation of, jurisdiction andcontrol over, all public utilities, and also overtheir property, property rights, equipment,facilities and franchises so far as may benecessary for the purpose of carrying out theprovisions of this Act, and in the exercise of itsauthority it shall have the necessary powersand the aid of the public force xxx xxx xxx.(Emphasis supplied)

Section 14 of C.A. No. 146 defines the term "public service" or"public utility" as including "every individual, copartnership, association,corporation or joint-stock company, ... that now or hereafter may own,operate, manage or control within the Philippines, for hire orcompensation, any common carrier, xxx xxx, electric light, heat, power,xxx xxx, when owned, operated and managed for public use or servicewithin the Philippines xxx xxx." Under the succeeding Section 17(a), thePSC has the power even without prior hearing -


(a) To investigate, upon its own initiative, or upon complaintin writing, any matter concerning any public service asregards matters under its jurisdiction; to require any publicservice to furnish safe, adequate and proper service as thepublic interest may require and warrant, to enforcecompliance with any standard, rule, regulation, order or otherrequirement of this Act or of the Commission, xxx.

4. Then came Presidential Decree (P.O.) NO.1, reorganizing thenational government and implementing the. Integrated ReorganizationPlan. Under the reorganization plan, jurisdiction, supervision and controlover public services related to electric light, and power heretofore vestedin the PSC were transferred to the Board of Power and Waterworks(BOPW).

Later, p.o. No. 1206 abolished the BOPW. Its powers and functionrelative to power utilities, including its authority to grant provisional relief,were transferred to the newly-created Board of Energy (BOE).

5. On May 8, 1987, then President Corazon C. Aquino issued E.O.No. 172 reconstituting the BOE into the ERB, transferring the former'sfunctions and powers under P.O. No. 1206 to the latter and consolidatingin and entrusting on the ERB "all the regulatory and adjudicatory functionscovering the energy sector." Section 14 of E.O. No. 172 states that "(T)heapplicable provisions of [C.A.] No. 146, as amended, otherwise known asthe 'Public Service Act'; xxx and [P.O.] No. 1206, as amended, creatingthe Department of Energy, shall continue to have full force and effect,except insofar as inconsistent with this Order."

Given the foregoing consideration, it is valid to say that certainprovisions of the PSA (C.A. No. 146, as amended) have been carriedover in the executive order, i.e., E.O. No. 172, creating the ERB.Foremost of these relate to the transfer to the ERB of the jurisdictionand control heretofore pertaining to and exercised by the PSC overelectric, light and power corporations owned, operated and/ormanaged for public use or service. And as Section 17(a) of C.A. No.146, as amended, supra, provides, this jurisdiction and controlincludes the power to investigate any matter concerning any publicservice and to require any public utility or public service corporationto furnish adequate and proper service. Any suggestion that thetransfer of PSC's functions and powers to the ERB is inconsistentwith E.O. No. 172 must be rejected, the principal objective of the saidissuance being precisely to reinforce the powers of the ERB as the soleregulatory body over the energy sector.

Needless to stress, petitioner MERALCO, being an electricservice provider, is under the regulatory jurisdiction and supervisionof the ERB.

xxxThere can be no quibbling that the ERB may investigate and

ascertain the propriety of the disconnection due to an allegedviolation of R. A. No. 7832. Necessarily, in the course of suchinvestigation, the ERB may, if factually and legally justified, order theelectric service provider, petitioner MERALCO in this instance, toreconnect the consumer's, private respondent's in this case, power


supply and resume service. Compelling the complaining consumerto still go to court to secure, if proper, a reconnection order, aspetitioner's line of argument urges, would be reading into R. A. No.7832 something not written therein.

In any event, Section 9 of R. A. No. 7832 speaks of restrainingorders or writs of injunction against the exercise by an electric provider ofits right and authority "to disconnect" electric service. Here, the provisionalrelief granted by the ERB in its challenged Order of October 22, 1999 isfor reconnection precisely because petitioner MERALCO had alreadydisconnected the power supply to Ti's premises.

In this connection, it is significant to note that under Section 6 itselfof R. A. No. 7832, the right and authority of a private electric utility toimmediately disconnect an electric service upon written notice or warningto a customer may be done "without the need of a court or administrativeorder." We quote the pertinent provision of Section 6:

SEC. 6. Disconnection of Electric Service. - The private electric utility orrural electric cooperative concerned shall have the right and authority todisconnect immediately the electric service after serving a written notice orwarning to that effect, without the need of a court or administrative order,and deny restoration of the same, when the owner of the house orestablishment concerned or someone acting in his behalf shall have beencaught in flagrante delicto doing any of the acts enumerated in Section4(a) hereof, or when any of the circumstances so enumerated shall havebeen discovered for the second time: xxx (Emphasis supplied).

Inferentially, the express mention of an "administrative order"under the aforequoted provision negates MERALCO's principalsubmission that only the regular courts may issue orders in mattersinvolving violations of R. A. No. 7832. And more specifically in thesubject of disconnection, the legislature thereby implicitlyrecognized the participation of an administrative body although apublic utility need not secure a prior order, whether from the court or fromthe former, in order to effect a disconnection. Had the intention ofCongress been to vest exclusively on the regular courts casesinvolving violation of R. A. No. 7832, there is simply no sense for it toinclude the term "administrative order" in Section 6.

The above conclusion is no more than being faithful to the rule thatevery part of a statute should be given effect, a statute being enacted asan integrated measure and not as a hodgepodge of conflicting provisions.In line with this rule, it behooves courts to adopt a construction that willgive effect to every part of the statute, its every word, if at all possible.

The criminal aspect of the alleged violation of R. A. No. 7832 is ofcourse a different matter. A circumspect look at E.O. No. 172 yields noindication that the ERB's jurisdiction extends to adjudication of criminalcomplaints for infringement of R. A. No. 7832.

While a complaint for reconnection of a customer's electric serviceis inter-related to the criminal action for violation of R. A. No. 7832, thedetermination of the propriety of the reconnection remains distinct andindependent from the criminal action. The dominant and primordialobjective of a criminal prosecution is the punishment of the offender,


while a complaint for reconnection is intended merely to address aconsumer's grievance against an electric service provider withrespect to the generation, transmission and supply of electricservice. In fact, any determination or ruling in the reconnection caseis without prejudice to the criminal liability which may be imposed inthe criminal action. There is absolutely no conflict between theexercise by the ERB of its power to entertain a complaint forreconnection of electric service and the regular court's jurisdictionto entertain and act on a criminal action against private respondentTi for violation of R. A. No. 7832. The reason therefor is not hard todiscern: a criminal action affects the social order while an action forreconnection of electric service pertains to the public utility's obligation toprovide public service which partakes of the nature of a civil action andaffects private rights.

It is pristine clear from the foregoing ruling of the Supreme Court that the ERB,the regulatory agency that immediately preceded the Commission, had jurisdiction overcomplaints stemming from alleged violations of RA. 7832. This particular jurisdiction,which it inherited from its predecessor, the PSC, was rooted in its general jurisdictionand control over electric, light and power utilities owned, operated and/or managed forpublic use or service. As the Supreme Court confirmed, this jurisdiction embraces thepower to investigate any matter concerning any public service and to require any publicutility or public service corporation to furnish adequate and proper service. Moreover, byusing the use of the term "administrative order" under Section 6 of RA. 7832, thelegislature has recognized the participation of an administrative body, specifically theERB, in carrying out the provisions of the said law.

While the affirmation of the jurisdiction over complaints in relation to RA. 7832 inMERALCO v. ERB pertains to the ERB, this, however, does not mean that thisjurisdiction ceased to exist upon the abolishment of the ERB thereby depriving itssuccessor, the ERC, authority and jurisdiction over this particular subject matter. Itbodes well to emphasize at this juncture that the powers and functions of the ERB,which are not inconsistent with the EPIRA, have been expressly bequeathed to theCommission under Sections 44 and 80 of the EPIRA. These provisions read:

Sec. 44. Transfer of Powers and Functions. - The powers andfunctions of the Energy Regulatory Board not inconsistent with theprovisions of this Act are hereby transferred to the ERC. Theforegoing transfer of powers and functions shall include all applicablefunds and appropriations, records, equipment, property and personnel asmay be necessary.

Sec. 80. Applicability and Repealing Clause. - The applicabilityprovisions of Commonwealth Act No. 146, as amended, otherwiseknown as the "Public Service Act." Republic Act 6395, as amended,revising the charter of NPC; Presidential Decree 269, as amended,referred to as the National Electrification Decree; Republic Act 7638,otherwise known as the "Department of Energy Act of 1992"; ExecutiveOrder 172, as amended, creating the ERB; Republic Act 7832otherwise known as the "Anti-Electricity and Electric TransmissionLines/Materials Pilferage Act of 1994"; shall continue to have full


force and effect except insofar as they are inconsistent with thisACt,13 (Emphasis supplied)

Relevantly, there is nothing in the provIsions of the EPIRA which states,expressly or implicitly, that the Commission is precluded from exercising jurisdictionover complaints involving alleged violations of RA. 7832. On the contrary, theprovisions of the EPIRA even solidly bolster and affirm that the Commission isempowered to exercise jurisdiction over complaints pertaining to RA. 7832, mostparticularly Sections 2 0) and 41 thereof which has mandated the Commission to handleconsumer complaints and ensure consumer protection. Verily, complaints fromconsumers or customers disputing a distribution utility's allegations of violation of RA.7832 and imposition of differential billing are but a form of consumer complaints-expression of dissatisfaction and grievance against the services of a distribution utility-which the Commission, as earlier pointed out, has been tasked by law to handle.

In conclusion, the legal provisions as well as jurisprudence exhaustivelydiscussed above compellingly confirm and sustain that the Commission has jurisdictionover consumer complaints, in general, and complaints concerning violations of RA.7832, in particular. To concede to the suggestion that the Commission has nojurisdiction over these subject matters and that its consumer protection mandate is onlylimited to the issuance and promulgation of rules protecting the rights of the consumerssuch as the Magna Carta for Residential Electricity Consumers (Magna Carta) withoutthe correlative authority to take cognizance of, hear, and decide cases involvingviolations of consumer rights as MERALCO posited before the CA in the RegaladoTorres decision would render Sections 2 0) and 41 of the EPIRA to naught and theCommission a toothless vanguard of consumer rights and interests. Moreover, the rulesto be issued and promulgated by the Commission for the protection of consumer rightswould be rendered illusory if it is to be accepted that the Commission has no jurisdictionto handle consumer complaints and complaints arising from RA. 7832 because, verily,the Commission would have no way to ascertain that the said rules are being observedand complied with.

Decisions of the Court of Appealsmerely have persuasive effect and donot form part of controlling andbinding jurisprudence.

At the outset, it must be noted that, while the Commission bears the highestregard for decisions of the CA and while the aforementioned decisions of the CA havebecome final and executory, the Commission cannot refuse to exercise its jurisdictionover complaints which are similar in nature as those involved in the Lim Law Offices andRegalado S. Torres decisions or what is collectively categorized as "consumercomplaints" on the basis of the said CA decisions in view of the well-establisheddoctrine that decisions of the CA merely have persuasive effect and cannot beconsidered as binding jurisprudence and part of the law of the land.14 In this regard, it isalso bears stressing that while Article 8 of the Civil Code provides that "judicialdecisions applying or interpreting the laws or the Constitution shall form a part of thelegal system of the Philippines", the Supreme Court has long ago settled that the

13 The transfer of the powers and functions of the ERB which are not inconsistent with the EPIRA hasbeen confirmed in the case of BF Homes Inc. and PWC v. MERALCO, G.R. No. 171624 (06 December2010)14 Commissioner of Internal Revenue v. San Roque Power Corp., G.R. No. 187475 (08 October 2013)and Virtucio v. Alegabres, G.R. No. 187451 (29 August 2012), citing Nepomuceno v. City of Surigao, G.R.No. 146091 (28 July 2008) and Land Bank v. Hon. Pagayatan, GR. No. 177190 (23 February 2011)


"judicial decisions" referred to in the provision pertains only to decisions of the SupremeCourt15 and not of the lower courts, including the appellate court.

For these reasons, the Commission is constrained to set aside the positionadvanced by Respondent that the Commission has no jurisdiction over consumercomplaints in view of the subject decisions of CA. As regards consumer complaints ingeneral, the Commission must adhere to its legal obligation imposed upon it underSection 2 0) and 41 of the EPIRA-to ensure consumer rights and interests andprotected and promoted, and to handle consumer complaints. For as long as thereexists no Supreme Court decision ruling with finality that "handling of consumercomplaints" does not include taking cognizance of, hearing and deciding consumercomplaints, it behooves upon this Commission to wield its authority and jurisdiction overconsumer complaints. With respect to complaints relating to alleged violation of RA.7832, it is incumbent upon this Commission to exercise its jurisdiction over these casespursuant to the prevailing, controlling, and binding jurisprudential doctrine enunciated inMERALGa v. ERB.16

The Supreme Court decisions citedby the CAare not inapplicable insofaras the determination of thejurisdiction of the Commission overconsumer complaints and complaintsrelative to violations of R.A. 7832 isconcerned because they pertain toissues on direct connection, anentirely different subject matter fromconsumer complaints.

MERALca further argues that, based on the CA decisions, it is the Departmentof Energy-and not the ERC-which has jurisdiction over consumer complaints andcomplaints involving RA. 7832. A reading of the CA decisions, however, willimmediately render conspicuous that the Supreme Court decisions cited by theappellate court therein, particularly the MEGa decision,17 Energy Regulatory Board and/ligan Li~ht & Power, Inc. v. GA,18and BA TELEG " v. Energy Industry AdministrationBureau, 9 are entirely irrelevant, inconclusive and inapplicable insofar as thedetermination of the jurisdiction of the Commission over consumer complaints isconcerned because the issue decided therein pertained to direct connection, whichrefers to that method of obtaining electricity in which a large-load consumer directlysources its electricity from a sub-transmission or transmission asset. Needless to state,the subject matter on direct connection, which, as the Supreme Court held in the MEGadecision, pertains to the distribution and marketing of energy resources, is an entirelydifferent issue from consumer complaints and complaints arising from RA. 7832.

Specifically in the MEGa case, what was involved therein was the interpretationof Section 43 (u) of the EPIRA.2o The main issue therein was whether or not, by virtue of

15 Floresca v. Philex Mining Corporation, G.R. No. L-30642 (30 April 1985)16 Supra note 1117 Supra note 318 G.R. No. 127373 (25 March 1999)19 G.R. No. 135925 (22 December 2004)20 The provision reads:

The ERC shall have the original and exclusive jurisdiction over all casescontesting rates, fees, fines and penalties imposed by the ERC in the exercise of theabovementioned powers, functions and responsibilities and over all cases involvingdisputes between and among participants or players in the energy sector. All notices ofhearings to be conducted by the ERC for the purpose of fixing rates or fees shall be


Section 43 (u) of the EPIRA, the ERC had jurisdictio"n over applications for directconnection. The Court traced the pertinent laws and jurisprudence concerning directconnection and concluded that it is the DOE-not the ERC-which has jurisdiction overapplications for direct connection as it concerns marketing and distribution of energysources. The Court never discussed and did not render any interpretation on thejurisdiction of the Commission over consumer complaints as provided under Sections 2(j) and 41 of the EPIRA in the MEGO decision. The Court also did not discuss and didnot make any ruling as to the jurisdiction of the Commission over complaints involvingviolations of RA 7832 in the said case.

This being the case, it is gravely erroneous to say that the Commission has nojurisdiction over consumer complaints and complaints relating to R.A. 7832 on the basisof the CA decisions invoked by Respondent MERALCO not only because decisions ofthe appellate court do not constitute binding and controlling jurisprudence but also forthe stronger reason that it erroneously applied the decision of the Supreme Court inMEGO v. NPG.

WHEREFORE, premises considered, Respondent MERALCO's Motion toDismiss on the ground of lack of jurisdiction is hereby DENIED.

Accordingly, this case is hereby set for hearing on 17 September 2014 at teno'clock in the morning (10:00 AM) at the ERC Conference Room, 10th Floor,Pacific Center Building, San Miguel Avenue, Ortigas Center, Pasig City.

SO ORDERED.

Pasig City, 29 August 2014.

FOR AND BY AUTHORITY OF THE(} C;:I~ONvGL~iC!ORI~ . YAP-TARUC

Commls 'Oner

Copy furnished:

1. Attys. Joseph B. Sagandoy, Jr., Marforth T. Fuaand Susana Grace L. OjedaCounsel for ComplainantPonce Enrile Reyes & Manalastas3rd Floor, Vernida IV BuildingL.P Leviste Street, Salcedo VillageCity of Makati

2. Manila Electric Company (MERALCO)Legal DepartmentOrtigas Avenue, Pasig City

published at least twice for two successive weeks in two (2) newspapers of nationwidecirculation.

energy regulatory commission rolando f.alzate,

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