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.

In the context of filing criminal charges, grave abuse of discretion exists in cases where the determination of probable cause is exercised in an arbitrary and despotic manner. There is probable cause "when the facts are sufficient to engender a well-founded belief that a crime has been committed and that the respondent is probably guilty thereof."1 "In order to engender a well-founded belief that a crime has been committed, and to determine if the suspect is probably guilty of the same, the elements of the crime charged should, in all reasonable likelihood, be present. This is based on the principle that every crime is defined by its elements, without which there should be, at the most, no criminal offense."2

One of the essential elements3 to hold a person criminally liable under Section 3 (e) of Republic Act No. (RA) 3019 is the presence of manifest partiality, evident bad faith, or inexcusable negligence. There is "manifest partiality" when there is a clear, notorious, or plain inclination or predilection to favor one side or person rather than another.4 On the other hand, "evident bad faith" connotes not only bad judgment but also palpably and patently fraudulent and dishonest purpose to do moral obliquity or conscious wrongdoing for some perverse motive or ill will. It contemplates a state of mind affirmatively operating with furtive design or with some motive or self-interest or ill will or for ulterior purposes.5 Meanwhile, "gross negligence" is negligence characterized by the want of even slight care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally with a conscious indifference to consequences in so far as other persons may be affected. It is the omission of that care which even inattentive and thoughtless men never fail to take on their own property.6

In this case, the Office of the Ombudsman's finding of probable case rests on the sweeping supposition that petitioners committed the crime of violation of RA 3019 by suspending, through the issuance of Energy Regulatory Commission (ERC) Resolution No. 1, Series of 2016 (Resolution No. 1, s. 2016), the implementation of the Competitive Selection Process requirement (CSP). By the solitary fact of suspending the implementation of the CSP, without anything more, the Ombudsman already jumped to the conclusion that petitioners acted with manifest partiality, evident bad faith, or gross inexcusable negligence to accommodate the Power Supply Agreements (PSAs)/Power Supply Contracts (PSCs) of distribution utilities and generation companies, particularly, MERALCO, viz.:

[R]espondents acted with manifest partiality, evident bad faith or gross inexcusable negligence when they suspended the implementation of the required CSP, to accommodate the PSAs/PSCs of [distribution utilities] and [generation companies], particularly Meralco, thereby exempting them from the CSP mandated requirement.

The manifest partiality, evident bad faith or gross inexcusable negligence of respondents can be gleaned from the following documented chronological events:

1. On 20 October 2015, the ERC issued Resolution No. 13, Series of 2015 [(Resolution No. 13, s. 2015)] with the provision that all PSAs and PSCs not filed with the ERC as of 06 November 2015 should already be covered by CSP as their Mandatory Selection Process;

2. Thus, by 07 November 2015, the requirement that PSAs not filed with ERC as of said date should already be covered by CSP, already took effect effect (sic);

3. In a Letter dated 26 November 2015, Meralco sought the permission of ERC to exempt their PSCs from the CSP requirement;

4. On 10 December 2015, the ERC, through Salazar's letter, denied Meralco's request;

5. On 15 March 2016, ERC, through respondents, issued Resolution No. 1, Series of 2016, modifying the effectivity date of the Resolution from 07 November 2015 to 30 April 2016, thus, giving a window period for PSAs without CSPs to be filed from 15 March 2016 to 30 April 2016;

6. On 29 April 2016, a day before the extended deadline of 30 April 2016, Meralco filed seven PSAs that did not undergo the CSP requirement.

x x x Their non-implementation of the requirement of CSP cannot hide under the cloak of presumption of regularity in the performance of their official duties. There is sufficient evidence that respondents gave unwarranted benefits to Meralco and other companies by exempting them from the coverage of the CSP requirement which was already in effect after 06 November 2015. The 45-day period gave Meralco and other companies the opportunity to dispense with CSP. Their gross inexcusable negligence led to the circumvention of the government policy requiring CSP, and denied the consumers the opportunities to elicit the best price offers and other PSA terms and conditions from suppliers.7

Notably, the Ombudsman mentions that there is "sufficient evidence" that petitioners gave unwarranted benefits to MERALCO and other companies. However, after carefully scrutinizing its resolution, as well as poring over the records, there is not a single shred of evidence on record which would buttress this claim.

Instead, what the records show is that the ERC temporarily deferred the implementation of the CSP in order to ensure that there were suitable guidelines for its execution in light of the concerns raised by the power industry's various stakeholders. In fact, the ERC was actually forthright in mentioning these concerns in the whereas clauses of Resolution No. 1, s. 2016:

WHEREAS, since the publication of the CSP [Guidelines] on 06 November 2015, the [ERC] has received several letters from stakeholders which raised issues on the constitutionality of the effectivity of the CSP [Guidelines], sought clarification on the implementation of the CSP and its applicability to the renewal and extension of PSAs, requested a determination of the accepted forms of CSP, and submitted grounds for exemption from its applicability, among others.

WHEREAS, after judicious study and due consideration of the different perspectives raised in the aforementioned letters, with the end in view of ensuring the successful implementation of the CSP for the benefit of consumers, DUs, and GenCos, the [ERC] has resolved to allow a period of transition for the full implementation of the CSP [Guidelines] and, as such, restates the effectivity date of the CSP [Guidelines] to a later date[.]8

(a) Request of SMC Global Power that they be allowed to file their PSCs because the requirements imposed pursuant to the CSP implementation were non-existent when their PSCs were evaluated and signed, viz.:

Upon filing with the ERC, however, our counter-part counsel for the DUs and ECs (Dechavez & Evangelista Law Offices) informed us that even at the pre-filing stage, the ERC rejects applications which do not include the following: DUs/ECs Invitation to Participate and Submit Proposal, DUs/ECs' Terms of Reference, Proposals Received by the DU/EC, tender offers, DU/ECs Special Bids and Awards Committees (SBAC) Evaluation Report, DU Board Resolution confirming the approval of the SBAC Evaluation report and Notice of Award issued by the DU/EC.

It is significant to note that all of these requirements, even the creation of the SBAC, were non-existent when our PSCs were evaluated and signed. x x x

To this end, we respectfully request the consideration of the Honorable Commission to allow us to file, and for the Commission to accept, the applications for approval of the subject PSCs. In our case, mere filing is critical for us to achieve financial close for purposes of funding our power plant project.

The filing of the application will enable us to continue financing the Limay Phase 1 Project, Malita Project and proceed with Limay Phase 2 Project to augment the capacity in the Luzon and Mindanao Grids and prevent the projected shortage in 2017.9

(b) Request of Philippine Rural Electric Cooperative Association, Inc. for exemption from coverage of Department Circular No. DC2015-06-0008;10

(c) Request for confirmation of Agusan del Norte Electric Cooperative, Inc. that any extension of PSAs or Energy Supply Agreements previously approved is outside the scope of ERC Resolution No. 13, s. 2015, viz.:

The ESA, as amended and supplemented, will expire on 25 June 2016. Given the power shortage in Mindanao, the insufficiency of the NPC/PSALM supply, taken together with the continuing demand growth of our end-users, we wish to exercise the option provided under the Amendment to the ESA to extend the Term of our Amended and Supplemented ESA with TMI x x x.

Relating this provision to Reso 13, we are of the impression that Reso 13 may not be strictly applied to ESA extensions, especially considering that the Honorable Commission has already meticulously scrutinized and approved TMI's Fixed O&M, Energy and Fuel Fees, as well as its asset base in determining the Capital Recovery Fee.

Since Section 4 of the Resolution states that the CSP requirement shall not apply to PSAs (or ESAs) already filed with the ERC, we are of the understanding that an extension of an existing ESA, which is part of the provisions submitted to and has been approved by the ERC, albeit provisionally, is outside the coverage of the present Resolution. Hence, we intend to enter into an extension of our existing ESA with TMI, applying the same methodology and asset base as approved by the Honorable Commission in arriving at the rates. x x x11

(d) Reiteration by SMC Global Power of its request to the ERC to accept and allow the filing of their PSCs already signed prior to the issuance of ERC Resolution No. 13, s. 2015:

Further to our letter dated November 25, 2015, we would like to reiterate our request to the Honorable Commission En Banc to accept and allow the filing of Power Supply Contracts (PSC) already signed prior to its issuance Resolution No. 13, Series of 2015 "A Resolution Directing All Distribution Utilities (DUs) to Conduct Competitive Selection Process (CSP) in the Procurement of Their Supply to the Captive Market."

We wish to stress that in the event the subject PSCs cannot be filed, the Honorable Commission would effectively invalidate the same to the detriment of the contracting parties and the industry. It is significant to note that the Distribution Utilities (DU) and Electric Cooperatives (EC) have carefully evaluated and considered the most advantageous terms and conditions for its consumers prior to signing the subject PSCs.

Meanwhile, another round of CSP may likely alter the terms of the contract that could prove to be disadvantageous to the DU or EC.

Considering the execution of the PSCs and the stage of their application process prior to the issuance of the CSP requirement, we beg the indulgence of the Honorable Commission En Banc to accept the subject PSCs and allow the filing thereof to proceed.12

(e) Request of Astronergy Development for a meeting to discuss their peculiar situation following the issuance of Resolution No. 13, s. 2015 in that, it impairs the contracts that were entered into in good faith:

We respectfully request a meeting with you at your earliest convenience, so that we can discuss our peculiar situation following the issuance of the Resolution. Our meeting objective is to understand your views regarding the retroactive application of the Resolution and further, to understand how to harmonize Resolution in light of the third party legal opinion we have attached herein for your consideration. Lastly, we hope to be allowed a brief opportunity to present and discuss our views on why the Commission's staff should interpret the Resolution in a manner that is consistent with the Commission's past written responses on RE to the Senate Energy Committee; and the Commission's related Decision relevant to our particular circumstances.

Section 4 of the Resolution requires the DUs to conduct a CSP for PSAs that have not yet submitted its PSA with the ERC. We believe the result is a retroactive application of the Resolution that impairs our contracts that were entered into in good faith. This creates uncertainties, including the possible revision and rescission of existing binding agreements, which our group of companies, and their shareholders and creditors, are greatly concerned about. There are also specific considerations with each DU: for each PSA we have executed since the application of the Resolution would potentially lead to losses and additional project delay. Any further delay (such as revisiting CSP) would result in a breach of contract for not meeting deadlines.13

(f) Request of Camarines Sur IV Electric Cooperative, Inc. and Unified Leyte Geothermal Energy, Inc. for an extension to file their joint application for the approval of a power supply agreement:

On 03 August 2015, CASURECO IV and San Miguel Energy Corporation ("SMEC") entered into a mutual agreement before this Honorable Commission to pre-terminate the Power Supply Contract dated 23 August 2013 between CASURECO IV and SMEC ("SMEC PSC"). As a result of the pre-termination of SMEC PSC, beginning 00:00H of 26 August 2015, SMEC ceased to supply power to CASURECO IV.

x x x Because CASURECO IV received no proposals for its power supply requirements, it began direct negotiations with ULGEI.

Since CASURECO IV received such letter on 24 September 2015, CASURECO IV and ULGEI had until 23 November 2015 to file a joint application for the approval of a power supply agreement. Due, however, to the extensive negotiations conducted to provide the Franchise Area a competitive and reliable supply of power, and since it will take time to prepare and finalize a power supply agreement, CASURECO IV and ULGEI requested this Honorable Commission for an additional thirty (30) days within which to file a joint-application, or until 23 December 2015.14

We write to advance our queries pertaining to the Competitive Selection Process which is now part of the Power Supply Procurement requirements for all DUs. The related ERC Resolution No. 13 Series of 2015 was already in effect 15 days after its publication last October 20, 2015.

In the case of AKELCO where in previous years, two (2) Power Supply Contracts for base load requirements were already signed by both parties but were not filed with the ERC before the effectivity of the CSP. The queries are as follows:

1. If the Power Supply Contracts that were not filed due to noncompliance to CSP still binding?

2. What are the ERC's recommended modes of CSPs? Is the so-called "Price Challenge" or Swiss Challenge allowed? And,

3. Presuming that some of the stipulated provisions (i.e., date of initial delivery, base load demand requirements) in the said contracts cannot be met due to CSP requirement or already unacceptable to either of the party, can we still re-negotiate the provisions and at the same time introduce the ERC recommended terms of reference?15

To my mind, absent any other circumstance showing that some illicit interest was involved in the issuance of Resolution No. 1, s. 2016, the foregoing concerns of the various stakeholders of the power industry evince the good faith of petitioners and in turn, negate the existence of probable cause anent the element of manifest partiality or evident bad faith on their part.

Neither can it be said that the said resolution was issued with gross inexcusable negligence since, as may be seen from the varied opinions in G.R. No. 227670,16 captioned as Alyansa Para Sa Bagong Pilipinas, Inc. (ABP) v. ERC, the matter regarding the propriety of extending the CSP requirement did not involve simple questions of law; hence, their eventual mistake in extending the CSP may be said to have been done in good faith. Jurisprudence states that a "[m]istake upon a doubtful or difficult question of law may properly be the basis of good faith,"17 as in petitioners' mistaken extension of the CSP requirement, especially when considered with the fact that they were only prompted to suspend the implementation of the CSP in light of the pressing and legitimate queries coming from the various stakeholders in the power industry.

At this juncture, I find it apt to clarify that the eventual illegality of Resolution No. 1, s. 2016, as pronounced in the ponencia18 of retired Senior Associate Justice Antonio T. Carpio in G.R. No. 227670, does not - as it should not - automatically equate to a finding that there exists probable cause to hold those responsible for the void issuance criminally liable under Section 3 (e) of RA 3019. Clearly, a case to determine whether or not a particular government issuance is void for having been issued with grave abuse of discretion is different from a case to determine whether or not probable cause exists to prosecute a government official for violation of RA 3019. Not only are their purposes different, the legal parameters which the Court utilizes in these types of cases substantially vary. As earlier intimated, the determination of probable cause rises and falls on the ostensible presence of the imputed crime's elements. Thus, since the Ombudsman's finding of probable cause fails to adequately demonstrate the element of manifest partiality, evident bad faith, or gross inexcusable negligence which is integral to the charge of Section 3 (e), RA 3019 - the said finding was tainted with grave abuse of discretion. Accordingly, the present petition must be granted.