Atty. Agnes VST Devanadera
Chairperson and CEO, ERC
22 December 2017
RODRIGO ROA DUTERTE
President of the Republic of the Philippines
Malacanang, Manila 1005
THRU: Executive Secretary Salvador C. Medialdea
Dear President Duterte:
Allow me again to convey my sincere gratitude for entrusting me to be the Chairperson of the Energy Regulatory Commission (ERC) vice Jose Vicente B. Salazar. I accepted the position as my humble contribution to your stewardship as the President of the Republic of the Philippines.
Unfortunately, barely two (2) weeks upon assumption into office, I have been informed by three Commissioners (Non, Yap-Taruc, and Magpaje-Asirit) of their receipt on 21 December 2017, of the following orders issued by the Office of the Ombudsman – Deputy Ombudsman for Luzon.
For: Section 3(e) of Republic Act 3019, as amended (Criminal Case)
Findings: With Probable Cause, Recommended for Filing of Criminal Information.
For: Conduct Prejudicial to the Best Interest of the Service, Grave Abuse of Authority, Grave Misconduct, and Gross Neglect of Duty (Administrative Case)
Findings: Administratively Liable for Conduct Prejudicial to the Best Interest of the Service, aggravated by Simple Misconduct and Simple Neglect of Duty, Penalty of One (1) Year Suspension Without Pay.
The aforementioned Ombudsman cases stemmed from the issuance by the ERC of Resolution No. 1 series of 2016 restating the effectivity of the Competitive Section Process (CSP). The same complainant, Alyansa Para SaBagongPilipinasInc (ABP) etc, filed a Petition for Certiorari under Rule 65 with prayer for issuance of TRO before the Supreme Court questioning the validity of the ERC Resolution. To this date, however, no TRO has been issued by the Supreme Court and neither has there been any finding of grave abuse of discretion on the part of the Commissioners who issued the assailed Resolution. Hence, it was unfounded for the Ombudsman to hold the Commissioners liable administratively and criminally.
The debilitating impact of the Ombudsman decision to suspend the four (4) incumbent ERC Commissioners cannot be downplayed. Section 38 of R.A. No. 9136, otherwise known as Electric Power Industry Reform Act of 2001 (EPIRA) provides that “the presence of at least three (3) members of the commission shall constitute a quorum and the majority vote of two (2) members in a meeting where a quorum is present shall be necessary for the adoption of any rule, ruling, order, resolution, decision or other act of the Commission in the exercise of its quasi-judicial functions. Thus, decisions and official actions of the ERC can only be made through the collective action of the members of the Commission. With the penalty of suspension imposed upon the four commissioners, the undersigned as Chairperson will be without authority to make decisions, orders, rules, resolutions, and any other act, resulting in a severe paralysis of the operations of the agency.
Significantly, in terms of monetary value assigned, the amounts involved in pending applications/petitions for approval before the Commission are as follows:
Capital Expenditures (CAPEX) PHP 384.5 Billion
Point-to-Point PHP 2.2 Billion
Sale of Subtransmission Assets cases PHP 0.9 Billion
PSA Applications PHP 1.2 Trillion
135 Pending cases
Accrued Interest of FIT ALL Fund PHP 526.7 Billion
TOTAL PHP 1.588 Trillion
At present, there are 18.4 million electrified households. If a regular household has four (4) members, then a total of 73.6 Million Filipinos that will be affected by any non-action on the part of the Commission.
Likewise, it is noteworthy to state that ERC remits to the national coffers from its actions on petitions and applications, no less than 450 million pesos annually.
Certainly, the Ombudsman’s decision presents a dangerous regulatory risk that will severely impact the economic and financial environment of the country. Needless to state, the Ombudsman’s decision will cause an economic disruption which is contrary to the President’s pro-poor policy.
In view of the foregoing, due to the imminent impact of the suspension of the four (4) Commissioners, I would like to seek your guidance regarding the implementation of the Ombudsman Decision considering that Section 7 of Administrative Case No. 07 (AO No. 7) provides that “A decision of the Office of the Ombudsman in administrative cases shall be executed as a matter of course”. Likewise, in relation thereto, Ombudsman’s Office Order No. 409, Series of 2013 states that:
In order to facilitate the implementation of Decisions and Orders issued in administrative cases and to effectively monitor compliance therewith, the Office finds it essential to address all indorsements of these Decisions or Orders to the head of any office or agency of the government. The Office considers the head of the office or agency, being the appointing authority, to be primarily responsible in implementing Ombudsman Decisions or Orders.
Given that the President is the appointing authority of the ERC Commissioners, the undersigned is respectfully submitting the matter to your sound discretion.
Very respectfully yours,
AGNES VST DEVANADERA
Chairperson and CEO
In the interest of transparency we are sharing with the public the letters of the ERC Chair and the Alyansa Para SaBagongPilipinas (ABP) to the Office of the President related to the unprecedented suspension of the four (4) ERC Commissioners by the Office of the Ombudsman. ABP was the complainant on the anomalous extension by the ERC Commissioners of the implementation of the CSP policy that enabled Meralco to avoid holding a bidding for 3,551mw of 20 year power supply and instead negotiated them with its sister company MeralcoPowerGen.