August 20, 2020
Energy Regulatory Commission
Pacific Center Building
Attn.: Atty. Agnes VST Devanadera
Chairperson and CEO
Subject: The Commission’s letter dated 7 August 2020
We acknowledge receipt of the email and attachments sent on August 17, 2020 on the same day, and we are submitting respectfully our reply on the Comment of the public respondents within the 15 day period from receipt of the said email.
THE MURANG KURYENTE ACT: THE CONSUMERS CONUNDRUM
Republic Act No. 11371 was signed by President Rodrigo Duterte on August 8, 2019, and became effective fifteen (15) days after its publication in the Official Gazette on August 14, 2019. The law was primarily authored and sponsored by Senator Win Gatchalian and Congressman Lord Allan Velasco.
The hype and nucleus of the law is that the consumers will no longer shoulder paying for the stranded debts and stranded contract costs of the then National Power Corporation , which has since been transferred to another government corporation called the Power Sector Assets and Liability Management Corporation or PSALM .
In 2019, consumers paid a total of Php 0.0971 /kWh. As of date the stranded debts amounts to Php 0.0428 /kWh. It was estimated during the Congressional hearing, that for the rest of the corporate life of PSALM, the consumers will pay an additional amount of Php 0.86 /kWh.
As of date the consumers continue to pay the stranded debts. And looking ahead, consumers do not see receiving a reprieve and enjoying the benefits of the law. If at all, and maybe until year 2022 at the earliest, if the intricate budgeting and appropriations rules and regulations are complied with , by the same government agencies who crafted the Implementing Rules and regulations and are tasked to implement the law.
Taking the cudgels on behalf of electricity consumers considering the stranded costs continue to be shouldered by the consumers, at the beginning of the year, on January 2, 2020, the Laban Konsyumer Inc. filed a Petition before the Energy Regulatory Commission to stop PSALM from collecting stranded contract costs and debts from all consumers.
Our arguments simply stated that consumers should immediately benefit from the law, and that the protocols and procedures in the implementation of the law are solely internal amongst the implementing agencies.
Section 4 of the law said that the Malampaya Funds shall be utilized for the payment of the stranded contract costs and stranded debts. The reduction of the electricity rates was made possible by allocating a portion of the net national share from the Malampaya Natural Gas project for the payment of the NPC stranded contract costs and stranded debts. The issuance of the Implementing Rules and Regulations should not be a condition precedent to the entitlement of all end users to an immediate reprieve granted by the Murang Kuryente Act. Consumer should not wait for the issuance of the IRR. The consumers have nothing to do with the proper disposition of the Malampaya Funds, which are essentially, the responsibility of the implementing agencies.
After receiving the Comment from the Solicitor General on June 11, 2020, as Counsel of PSALM, DOE, DOF, DBM and Bureau of Treasury, the Murang Kuryente Act became increasingly of no value to the consumers and confusing,
As a matter of statement of general principles, the Commission should be guided by Article 3 of the Consumer Act of the Philippines, or Republic Act No. 7394 of April 13, 1992.
Article 3. Construction. The best interest of the consumer shall be considered in the interpretation and implementation of the provisions of the Act, including its implementing rules and regulations.
In Paragraph 21 of the Comment of the Solicitor General, it said indeed, consumers need not be flustered or bothered by the intricacies and rigors of government protocols concerning this law. However, the establishment of the procedures and requirements of the allocation and appropriation of the funds under the Murang Kuryente Act, through the issuance of the IRR, is essential for the orderly, systematic, effective and efficient implementation of the Act.
In addition, paragraph 24 of the Solicitor General’s Comment, added to the confusion in the implementation of the Act. The paragraph said that the use of the Malampaya Funds for payment of the universal charges is merely permissible, not mandatory , as clearly provided for in the last paragraph of Section 4- the universal charge for stranded contract costs and stranded debts currently being collected may be covered by the allocated amount from the Malampaya fund subject to the implementing rules and regulations . It cited Belgica vs. Ochoa, Jr. that the word may should not be construed to mean shall or must.
And cementing the consumers conundrum, in paragraph 30 of the Solicitor General’s Comment, it stated that the Murang Kuryente Act likewise provides that no universal charges for stranded costs and stranded debts shall be collected upon the effectivity of the IRR. Relatedly, pursuant to Section 4 above, the universal charges currently being collected may be covered by the allocated amount from the Malampaya Fund, subject to the IRR.
We reiterate our position that the Murang Kuryente Act became effective after its publication. , and its effectivity is not subject to the issuance of the Implementing Rules and Regulations.
More recent statements on effectivity of a law even without an IRR from the Solicitor General, we believe, is correct.
The Philippine News Agency, a government agency in its July 23, 2020 news portal published a news item, “Anti –Terror law in force sans IRR: Solgen “.
The news item is partly quoted and copied as are relevant in the Laban Konsyumer Inc. petition.
“ Solicitor General Jose Calida on Thursday said the Anti-Terrorism Act of 2020 (ATA) is already in effect even if the government has yet to craft its implementing rules and regulations.
In a statement, Calida, citing precedent cases previously decided on by the Supreme Court, such as SEC v. IRC decided in 2008, said laws are not contingent on the implementing rules.
“To claim that the law is ineffective until implementing rules are promulgated creates an absurd situation where an agency can delay the effectivity of the law by delaying promulgation of its rules. To argue that a law is less than the law because it is made to depend on a future event or act is to rob Congress of its plenary power to act wisely for the public welfare,” Calida said.
Even while the IRR is still underway, the ATA is already in force, Calida said.
“First, the promulgation of the IRR is not a condition precedent for the effectivity of the ATA. The pending issuance of an IRR cannot defer the law coming into force. A law is presumed to be valid when there exists an interpretation favorable to its effectivity. Unless there are clear and unmistakable showing of the law’s constitutional and statutory infirmity, the presumption of validity subsists, and the law is binding and effective,” he added.
Calida also noted the law has already complied with the requirement of publication having been published in both the online and print copy of the Official Gazette as required by law.
The ATA was not only posted on the Official Gazette’s website on July 3 but also subsequently published on the print Official Gazette on July 6.
“All these things considered, the ATA shall take effect after the lapse of fifteen (15) days from (6 July 2020) the complete publication on the Official Gazette, that is 22 July 2020,” he said.
He added that the law is “self-executing”, except for provisions in the law delegating functions to the Anti-Terrorism Council and the Bureau of Jail Management and Penology and Bureau of Corrections to craft purely administrative rules for the effective implementation of policies.”
In addition, the Solicitor General Comment that the Murang Kuryente Act is permissive and not mandatory is an insult to the Members of Congress who crafted the law and had the law signed by the President.
We emphasize that the Declaration of Policy in section 2 was worded in favor of the consumers. And that a general law, the Consumer Act, had laid the basis that favors interpretation that the MURANG KURYENTE ACT should be implemented now , for the benefit of the consumers.
Hopefully, the Commission decides the case in favor of the consumers. On the other hand, granting that the regulator, agrees with the Solicitor General, there is no firm timeline when the consumers shall enjoy the benefits of the Murang Kuryente Act.
IN CONCLUSION, A GOOD LAW TURNS INTO BAD LAW?
Very truly yours,
Atty. Victorio Mario A. Dimagiba, AB, LLB, LLM
The Solicitor General
Counsel of the Public Respondents