G.R. No. 239168 - Concurring Opinion

G.R. No. 239168, September 15, 2020,
♦ Decision, Reyes, Jr., [J]
♦ Concurring Opinion, Perlas-Bernabe, [J]
♦ Separate Opinion, Leonen, [J]
♦ Concurring Opinion, Caguioa, [J]
♦ Concurring Opinion, Lazaro-Javier, [J]
♦ Dissenting Opinion, Zalameda, [J]

ALFREDO J. NON, GLORIA VICTORIA C. YAP-TARUC, JOSEFINA PATRICIA A. MAGPALE-ASIRIT AND GERONIMO D. STA. ANA, PETITIONERS, VS. OFFICE OF THE OMBUDSMAN AND ALYANSA PARA SA BAGONG PILIPINAS, INC., RESPONDENTS.

Respondent Office of the Ombudsman (OMB) found probable cause to charge petitioners with violation of Section 3(e) of Republic Act No. 3019 (RA 3019). This offense involves "causing any undue injury to any party, including the Government, or giving any private party, any unwarranted benefits, advantage or preference in the discharge of his official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence...."

1. On October 20, 2015, Jose Vicente Salazar and petitioners, collectively as Chairperson and members of the Energy Regulatory Commission (ERC), issued Resolution No. 13, series of 2015 providing, among others, that all power supply agreements (PSAs) and power service contracts (PSCs) not filed with the ERC as of November 6, 2015 should already be covered by the mandatory competitive selection process (CSP).

3. By Letter dated November 26, 2015, Manila Electric Company (MERALCO) sought ERC's permission to exempt their PSCs from the CSP requirement.

5. On March 15, 2016, ERC Chairperson Salazar and petitioners collectively issued Resolution No. 1, series of 2016 modifying the effectivity date of the CSP from November 7, 2015 to April 3, 2016.

6. Resolution No. 1 resulted in giving an additional window period for PSAs without CSPs to be filed from March 15, 2016 to April 30, 2016.

7. On April 29, 2016, a day before the extended deadline, MERALCO filed seven (7) PSAs that did not undergo the CSP requirement.

Notably, in G.R. No. 227670 entitled Alyansa Para Sa Bagong Pilipinas Inc. v. Energy Regulatory Commission et al., the Court had nullified Resolution No. 1. The Court struck it down not because of the alleged shenanigans that motivated its issuance but because ERC did not have the power to issue Resolution No. 1 since it was bound to observe Department of Energy Circular No. 15 which fixed the effectivity date of the CSP on June 30, 2015 and not beyond.

The OMB asserted that the extension granted under Resolution No. 1 gave unwarranted benefits to MERALCO and other power distribution companies by exempting them from the coverage of the CSP requirement which if not for Resolution No. 1 would have already taken effect after November 6, 2015. The OMB concluded that the extension of the deadline for compliance with the CSP gave MERALCO and other companies precisely that opportunity to dispense with this requirement, and as a result, led to the circumvention of the government policy requiring the CSP, denying power consumers the opportunities to elicit the best price offers and other PSA terms and conditions from suppliers.

Petitioners vehemently deny that Resolution No. 1 was passed specifically to favor MERALCO. They assert that it was intended to provide a transition period to facilitate the full implementation of Resolution No. 13 so that all PSAs executed on or after the later date would be bound without exemption to abide by the CSP requirement. This was after several industry participants, MERALCO being just one of them, and electric cooperatives wrote ERC letters-inquiries about the impact of Resolution No. 13 to existing PSAs, PSAs for renewal, and negotiated PSAs, the specific mechanics of and exemptions from, CSP.

There is no debate that the determination of probable cause for the filing of a criminal information lies with our public prosecutors. But it is equally true that persons indicted for an offense have the present recourse to challenge the finding of probable cause against them.

The test is not the correctness of the prosecutor's determination but whether the determination was an exercise of grave abuse of discretion. The test for the review of a prosecutor's determination of probable cause is reasonableness, just as the test for the determination of probable cause itself is whether a reasonable person could conclude that a crime has been committed and the individual or individuals being held therefor is or are probably the perpetrators of the crime.

A standard of correctness requires correct answers - issues lend themselves to one specific, particular result. On the other hand, a standard of reasonableness gives rise to a number of possible, reasonable conclusions, and as a result, this standard affords a margin of appreciation to the decision maker within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and the outcomes or decisions themselves.

Reasonableness is to be assessed not only in terms of whether there exist justification, transparency, and intelligibility within the decision-making process, but also whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. Where there is more than one possible interpretation of the events or circumstances, a public prosecutor must be guided by the elements of the offense charged, the reasonableness of competing interpretations, and whether an interpretation will result in an anomaly or a contradiction.

The logical implication to be drawn from the assailed Resolution and Order is that the OMB pegged the gold standard of PSA and PSC terms and conditions upon the CSP requirement. Yet, ironically, those persons responsible for the institution of the CSP requirement, herein petitioners, are the ones being indicted for violation of Section 3(e) of RA 3019 when they merely postponed its effectivity and enforceability by a number of days.

Lest we forget, the ERC is expressly mandated in Section 43 (o) of the EPIRA of "ensuring that the x x x pass through of bulk purchase cost by distributors is transparent." The ERC's postponement of CSP twice, totalling 305 days and enabling 90 PSAs in various areas of the country to avoid CSP for at least 20 years, directly and glaringly violates this express mandate of the ERC, resulting in the non-transparent, secretive fixing of prices for bulk purchases of electricity, to the great prejudice of the 95 million Filipinos living in this country as well as the millions of business enterprises operating in this country. This ERC action is a most extreme instance of grave abuse of discretion, amounting to lack or excess of jurisdiction, warranting the strong condemnation by this Court and the annulment of the ERC's action.

In his Dissent, Justice Caguioa, however, emphasized that "[i]ndeed, the EPIRA was passed as far back as 2001, or 18 years ago, and the DOE and ERC only conceptualized the CSP in recent years." Hence, petitioners cannot only be the ones criminally responsible - if we are to apply fairly the Ombudsman's logic in the determination of probable cause.

To sustain the assailed Resolution and Order is to single out petitioners for criminal prosecution when there are definitely those others in the ERC who did not even care to consider imposing the CSP as a requirement. It is downright unfair and a misuse of the criminal apparatus to run after petitioners because they sought to postpone the CSP requirement, but let others formerly with the ERC off the hook when they did nothing about requiring and implementing the CSP. We should not treat differently those who are situated alike.

If we are to be consistent in following the reasons of the OMB in directing the petitioners' indictment, the ERC officers who had not done anything to impose and require the CSP for eighteen (18) or nineteen (19) years must also be charged for sitting idly on the CSP requirement, because having failed to do so they also benefitted the industry players and electric cooperatives by exempting them from this alleged gold standard.

To recall, there are seven (7) circumstances to support the charge against petitioners, of which at least four (4) form the foundation for the accusation against petitioners: (i) MERALCO's request for exemption from the CSP requirement; (ii) denial of the request for exemption; (iii) issuance of Resolution No. 1 extending the deferment of the CSP requirement; and (iv) MERALCO's filing of PSAs that took advantage of the deferral under Resolution No. 1.

But not even one (1) of these circumstances comes out as a smoking gun to reasonably support the inference that (i) petitioners acted with manifest partiality, evident bad faith or gross inexcusable negligence to favor MERALCO; (ii) petitioners caused any undue injury to the public in terms of electricity charges; and (iii) petitioners gave MERALCO any unwarranted benefits, advantage or preference. Indeed, based alone on these circumstances, without more, it is quite a leap in logic to conclude that petitioners favored MERALCO with unwarranted benefits, and in the process, harmed the public in terms of unfavourable electricity charges.

This determination of probable cause does not fall within a range of possible, acceptable outcomes defensible in respect of the facts and law. As stated, where there is more than one possible interpretation of the events or circumstances, a public prosecutor must be guided by the elements of the offense charged. The OMB's determination of probable cause was not guided by the elements of Section 3 (e) of RA 3019. The finding of probable cause was at best speculative; as it was not based on facts and law. Consider:

One. Resolution No. 1 is reasonable as it was issued to address pressing concerns affecting the impact of the CSP upon the power industry. It did not just extend the transition period to allow every stakeholder to speak to the various issues, but also resolved several other things impacting the stakeholders, for example, clarify certain compliance requirements on the forms of CSP and resolve how PSAs with provisions allowing automatic renewal or extension of their terms would be dealt with.

In his Dissent, Justice Caguioa aptly summarized the factual context that spurred the need for issuing Resolution No. 1. He said that the issuance of Resolution No. 1 was in the exercise of ERC's sound judgment as a regulator and pursuant to its mandate under the EPIRA to "protect the public interest as it is affected by the rates and services of electric utilities and other providers of electric power." In the exercise of its regulatory powers, the ERC's restatement of the effectivity date of the CSP implementation is clearly valid. The creation of the transition period was done in good faith and was neither whimsical nor capricious. It was prompted by the ERC's receipt of numerous letters from stakeholders posing various concerns. These concerns were recognized to be reasonable and legitimate by the DOE itself as shown by the act of the DOE of endorsing one of these letters to the ERC. On January 18, 2016, the DOE endorsed for the ERC's consideration to allow Abra Electric Cooperative (ABRECO) to directly negotiate with a power supplier, albeit without following the CSP requirement. According to the DOE, the request for endorsement was made in consideration of ABRECO's situation as an ailing electric cooperative and to prevent its vulnerability to volatile wholesale electricity spot market (WESM) prices given that its supply is sourced from it. This letter is a recognition by the DOE that the power of whether to exempt an entity from the CSP is lodged solely with the ERC.

Further, Justice Caguioa opined that the ERC reasonably deemed it necessary to restate the effectivity of the CSP implementation. Hence, the effectivity date of the CSP implementation was restated from November 7, 2015 to April 30, 2016, creating a transition period of five (5) months. This transition period was deemed by the ERC enough to allow the completion of the PSAs or those already executed but not yet filed and to prohibit PSAs which were still too early in the negotiation or so far from execution. The ERC granted a period of transition in order to avoid the risk of inconsistency in resolving the individual requests for exemptions sought by DUs, GenCos, and electric cooperatives, while, at the same time, ensuring a steady electric supply for the period covered by the different calls for the CSP exemption. Further, as regulator, ERC had full knowledge and complete sense of the difficulty of adding a new requirement to an application for the approval of a PSA when the DUs and the GenCos had already executed their PSAs. As a matter of fact, requiring a CSP would most likely have resulted in the undoing of heavily and lengthily negotiated and executed agreements over which many computations and projections had already been done.

Justice Caguioa, too, keenly noted that Resolution No. 1 did not only restate the effectivity date of the CSP implementation but it also addressed certain concerns raised by these stakeholders. The ERC clarified certain compliance requirements on the other forms of CSP as provided in Resolution No. 13 and resolved that the PSAs with provisions allowing automatic renewal or extension of their term, whether such renewal or extension requires the intervention of the parties, may have one (1) automatic renewal or extension for a period not exceeding one (1) year from the end of their respective terms, provided that these PSAs were approved by the ERC before the effectivity of Resolution No. 1.

Justice Caguioa, thus, concluded that the issuance of Resolution No. 1 cannot be classified as arbitrary, whimsical, or capricious. The establishment of a transition period, together with the clarifications provided in Resolution No. 1, constitutes a reasonable well thought-out response to the various concerns posed by DUs, GenCos, and electric cooperatives.

Another dissenter in G.R. No. 227670 was Associate Justice (now retired) Andres B. Reyes, Jr. who likewise cited the factual bases for the issuance of Resolution No. 1:

In this instance, the ERC has sufficiently established that "restating" the effectivity of ERC Resolution No. 13 at a later date is not exercised whimsically or capriciously. Neither is it an arbitrary exercise of power by reason of passion or hostility. Indeed, its issuance is clearly not without basis. In fact, the Court finds that the ratiocination put forth by the Office of the Solicitor General (OSG) is reasonable to justify ERC's action.

First, the implementation of ERC Resolution No. 13 caused an avalanche of concerns and confusion from the stakeholders of the industry regarding the actual implementation of the provisions of the resolution, so much so that a multitude of DUs, mostly electric cooperatives, sought for an exemption from the guidelines in the resolution. There was a real possibility that the implementation of ERC Resolution No. 13 would invariably render nugatory the already pending negotiations among the DUs and generation companies. This fact is proven from the letters sent by SMC Global Power dated November 25, 2015 and December 14, 2015, Philippine Rural Electric Cooperative Association, Inc. dated December 1, 2015, Agusan Del Norte Electric Cooperative, Inc. dated December 10, 2015, Camarines Sur IV Electric Cooperative, Inc. dated December 21, 2015, and Aldan Electric Cooperative, Inc. dated March 9, 2016.

A reading of these letters confronted the ERC with probabilities of discontinuance in the financing of projects during their implementation stage, aggravation of power shortages, confusion of ERC Resolution No. 13's applicability on PSAs already filed with the ERC, disenfranchisement of Power Supply Contracts (PSCs) which have already been signed but were still unfiled to the ERC prior to the effectivity of ERC Resolution No. 13, and the reality of the necessity of sufficient period within which to complete the applications which are still governed by the rules prior to ERC Resolution No. 13.

All these concerns were presented to the ERC, which then, by its mandate, acted accordingly. There is wisdom in the OSG's assertion that by granting a period of transition, the ERC would avoid the risk of inconsistency in resolving individual requests for exemptions sought by the DUs, generation companies, and electric cooperatives, while at the same time, it would secure the steady supply of electricity for the same period.

Justice Caguioa described Resolution No. 1 as a "reasonable well thought-out response to the various concerns posed by Distribution Utilities (DUs), Generation Companies (GenCos) and electric cooperatives which arose from the immediate implementation of the CSP," for creating a "transition period" for compliance with the CSP requirement. The original period of implementation was characterized as an "untimely and unrealistic immediate imposition of a requirement that could not be reasonably be complied with ...." Petitioners' exercise of discretion was described as having been done in "good faith, or on the basis of its interpretation of the powers granted to [petitioners as ERC members] by the EPIRA."

Note that the Dissents of both Justice Caguioa and Justice Reyes in G.R. No. 227670 are being cited here not for the purpose of overturning the already settled doctrine that the ERC did not have the power to amend the effectivity date of the CSP. Rather, the Dissents are brought to fore to buttress the claim that Resolution No. 1 was issued in good faith and as a reasonable and calibrated response to the legitimate concerns of industry players and electric cooperatives, not just of MERALCO as claimed by the OMB, and to make way for the efficient and smooth implementation of the CSP.

Two. The PSAs endorsed by MERALCO have not been approved, much less, implemented. ERC has yet to approve the PSAs through an expensive, tedious, and exhaustive process. Approval of the PSAs and PSCs is not automatic simply because the applicants have filed their respective applications with the ERC. Hence, it cannot be inferred that the public has been unduly harmed by the mere submission of the PSAs and PSCs to the ERC. The Ombudsman's claim of undue harm, again, is speculative. At any rate, Justice Caguioa explained the tedious process that PSAs go through before the same may be approved and enforced, beginning with the filing of the applicant's Articles of Incorporation and other supporting documents numbering sixteen (16) altogether to the pre-trial and public hearings which include the presentation of evidence subject to cross-examination, re-direct examination, and re-cross examination.

Justice Caguioa also pointed out that the CSP is merely a tool and only one of the mechanisms to ensure the low cost of electricity. I fully agree with Justice Caguioa's submission that:

It is therefore premature, if not outrightly erroneous, to claim that the executions of the PSAs during the transition period have placed the CSP into "deep freeze" for the duration of the PSAs, and that the public will be prejudiced. During the transition period provided by Resolution No. 1, and even before the implementation of the CSP, the ERC, in compliance with its mandate under the EPIRA, has the power - nay, the duty - to ensure that any bilateral power supply contracts entered into by the DUs will be consistent with their mandate that they supply electricity to their captive market in the least cost manner.

x x x Thus, with or without the CSP, the public is protected from practices that harm them or that would result in market increases arising from non-competitive practices. x x x

Three. Resolution No. 1 was available to all industry players and electric cooperatives alike. It was not limited to MERALCO. This is evident not only from the text of Resolution No. 1 but from the reasons that impelled petitioners to issue Resolution No. 1 - to provide a transition period for the facilitation of the full and encompassing implementation of Resolution No. 13, and to allow several industry participants, MERALCO being just one of them, and electric cooperatives to adjust to the impact of Resolution No. 13 to existing PSAs, PSAs for renewal, and negotiated PSAs, the specific mechanics of the CSP, and the ground rules for exemptions from the CSP, if any.

No evidence of any circumstance was referred to by the OMB to negate this specific intention in the issuance of Resolution No. 1. It was not shown that any or all of petitioners went out of his or her way to meet with any MERALCO representative. There was no letter, text, or communication of any kind to establish any contact, illicit or licit, prior to Resolution No. 1 or after, between petitioners or anyone of them and MERALCO.

The net effect of extending the waiting period prior to the implementation of the CSP was merely to revert to the protocols that have been established and used since 2001. From that year till today, no one in the power industry was ever indicted for using these protocols. Justice Caguioa clarified in his Dissent in G.R. No. 227670 how these prior-CSP protocols worked and we need not repeat it here.

In fine, it cannot be reasonably concluded that petitioners acted with manifest partiality, evident bad faith or gross inexcusable negligence, to favor MERALCO or any other industry player or electric cooperative, when Chairperson Salazar and petitioners issued Resolution No. 1 to extend the transition period prior to the CSP.

Four. Where there is more than one possible interpretation of the events or circumstances, a public prosecutor must be guided by the reasonableness of competing interpretations, and whether an interpretation will result in an anomaly or a contradiction.

In sum, what the OMB has against petitioners in terms of probable cause is only a jump in logic that neither the law nor the facts can support. Its determination of probable cause against petitioners is based on prejudice and speculation a conjecture that comes from the premise that just because MERALCO benefitted from Resolution No. 1, the latter was from the start meant only to give an undue and criminal benefit or advantage to MERALCO. This is an incomplete, nay unreasonable analysis of Resolution No. 1. To be able to reasonably conclude that petitioners violated Section 3 (e) of RA 3019 requires delving on several times more than seven circumstances that the OMB has utilized in its determination of probable cause. The complexity of the issues was not lost during the deliberations in G.R. No. 227670. Quoting again from Justice Caguioa's Dissent, viz.:

At the outset, it should be pointed out that the present case contains several factual matters that are not cognizable by the Court, and which should be threshed out before the appropriate forum. Whether the moving of the effective date of the CSP effectively puts the requirement into a "deep freeze," as maintained by the ponencia, is a factual matter that cannot intelligently be resolved by the Court. As to whether the restatement of the effectivity date of the CSP affected, or will continue to affect, the supply of electricity for the entire country is another matter that should be properly ventilated before a court equipped to receive evidence. As well, the problems that the DUs faced in the immediate effectivity of the requirement - which led them to seek exemption from the CSP requirement, and which later on prompted the ERC to issue Resolution No. 1 - are also better appreciated in the context of actual evidence. In addition, whether the restatement of the effectivity date of the CSP was reasonable, or effective in guaranteeing the steady supply of electricity for the entire country is a factual matter that demands the presentation of evidence. All these factual matters need to be addressed before the Court can even begin to determine whether the ERC's act of issuing Resolution No. 1 can be considered to have been tainted with grave abuse of discretion amounting to lack or excess of jurisdiction.

If probable cause were to be based on a premise such as the one used by the OMB, decision-makers (especially judges) would be in danger of being indicted for violation of Section 3(e) of RA 3019, because in general, the nature of their job is to rule for one party against another. The interpretation made by the OMB in determining probable cause has and will result in such an unfair outcome and is therefore unreasonable. Verily, therefore, the action of the OMB to initiate a criminal action against petitioners does not fall within the range of possible, acceptable outcomes defensible in respect of the facts and law.

ACCORDINGLY, I vote to grant the petition and order the dismissal of the Information against petitioners for lack of probable cause and to set aside all criminal processes, including the warrants of arrest issued on each of them.