National Power Corporation v. PEPOA

FIRST DIVISION G.R. No. 159457 April 7, 2006 NATIONAL POWER CORPORATION, Petitioner, vs. PHILIPPINE ELECTRIC PLANT OWNERS ASSOCIATION (PEPOA), INC., Respondent. PANGANIBAN,CJ: The supply of electricity is a public service that affects national security, economic growth and public interest. To achieve coherent and effective policy formulation, coordination, implementation and monitoring within the energy sector, it became necessary to entrust in one body the regulatory functions covering the energy sector.

Thus, the Energy Regulatory Board1 (ERB) was created. The ERB was given the power to determine, fix and prescribe the rates -- including penalty charges -- of all energy providers, including the National Power Corporation (NPC). The Case Before us is a Petition for Review2 under Rule 45 of the Rules of Court, assailing the March 3, 2003 Decision3 and August 12, 2003 Resolution4 of the Court of Appeals (CA) in CA-GR SP No. 50782.

The challenged Decision disposed as follows: "WHEREFORE, the instant petition is DENIED and is accordingly DISMISSED for lack of merit."5 The assailed Resolution denied reconsideration. The Facts The NPC is a government-owned and -controlled corporation, existing by virtue of Commonwealth Act No. 120 and Republic Act No. 6395. Philippine Electric Plant Owners Association (PEPOA), Inc., is a non-stock corporation composed of private electric plant operators.6 Some members of PEPOA purchase electric power from petitioner to service power requirements in their respective franchise areas.7 On December 15, 1995, PEPOA filed before the ERB a Complaint8 against the NPC for alleged unauthorized collection of rates in the guise of penalty for 1) excess consumption, double or triple the existing rates; or 2) unused consumption, as if fully availed of.9 The penalties were being charged pursuant to the NPC's Rules on the Sale of Electricity, specifically Nos. 5 (Minimum Charges) and 6 (Penalty for Consumption in Excess of the Allowable Limit of the Contract Demand/Energy) of the Schedule of Charges.10 The provisions read: "5.

MINIMUM CHARGES "Whenever Customer's registered demand/ energy falls below the Contract Demand and/or Contract Energy, the difference shall be billed at applicable demand and/or Energy rates as if the Contract Demand and/or Energy [have] been fully availed of. Provided, that during Customer's yearly maintenance of its facilities not to exceed two (2) billing periods in a year, the basis of the minimum charge on energy shall be reduced to only fifty percent (50%) of the Contract Energy; provided further, that thirty (30) days advance written notice is given to Corporation, and that actual maintenance is subject to confirmation of Corporation. "6.

PENALTY FOR CONSUMPTION IN EXCESS OF THE ALLOWABLE LIMIT OF THE CONTRACT DEMAND/ ENERGY "Customer's consumption in excess of the maximum limits set forth in the Service Specifications x x x in the Contract, shall be penalized by billing the excess demand and/or energy at a Rate Equal to Twice the unit price of the highest priced block in the rate schedule."11 On December 20, 1995, the ERB issued an Order12 directing the NPC to cease and desist from collecting the penalties, pending resolution of the case. On May 12, 1998, the ERB rendered its Decision, the dispositive portion of which reads: "WHEREFORE , in view of the foregoing, the Board hereby directs respondent NPC to refund or correspondingly credit to the complainants (affected electric distribution utilities) the total amount of ~~P~~ 28,870,497.08 corresponding to the said charges as penalties for excess consumption over the maximum allowable demand energy and consumption below the contracted demand/energy, computed as follows: "A. Penalties Billed and Collected for Excess Consumption from: "1.

Angeles Electric Corp. (AEC) ~~P~~ 2,184,952.80 "2. Visayan Electric Co., Inc. (VECO) ~~P~~ 23,471,542.00 "3. Cagayan Electric Power and Light Co. (CEPALCO) ~~P~~ 590,515.20 "B.

Penalty Billed and Collected for Below Consumption from: "4. Tarlac Enterprises, Inc. (TEI) ~~P~~ 2,623,487.08 Total Penalties Billed and Collected