IN THE MATTER OF

THE APPLICATION FOR THE

APPROVAL AND
CONFIRMATION OF THE LOAD
FACTOR-BASED PRICING
SCHEME ON A MONTHLY
RECONCILIATION OF THE
UNACCEPTED CONTRACT
QUANTITY OF THE
SUPPLEMENTAL AGREEMENT.
BETWEEN KEPCO SPC POWER
CORPORATION (KSPC) AND
CENTRAL NEGROS ELECTRIC
COOPERATIVE, INC. (CENECO ),
WITH MOTION FOR THE
ISSUANCE OF PROVISIONAL
AUTHORITY

ERC CASE NO. 20~'3-141RC

KEPCO SPC POWER

CORPORATION . (KSPC) AND
CENTRAL NEGROS ELECTRIC
COOPERATIVE, INC. (CENECO ),
DOGKETEl)
.Applicants. • MAY 2 6 2016
)(- - - - - - - - - - - - - - - - - - - ~ - - - -)( Date. '.~:;f7"""""-"
By: tr..'::: __

.ORDER

Before this Commission for resolution are the Motion to

Dismiss the. instant Application filed by the Social Action Center
(SAC) of the Diocese of Bacolod City (hereinafter, "SAC") on 28
February 2014 grounded on forum shopping and the twin Motions
filed on 24 June 2014 by Applicants Central Negros Electric
Cooperative,. Inc. (CENECO) and KEPCO SPC Power Corporation
(KSPC) to (1) admit Applicants' Formal Offer of Evidence and (2) to
~.'• declare Intervenors to have waived their right to present evidence.

~
 ERC CASE NO. 2013-141 RC
Order/ 10 May 2016
Page 2of13

THE FACTS

On 03 July 2013, Central Negros Electric Cooperative, Inc.

(CENECO) and KEPCO SPC Power Corporation (KSPC) filed their
joint Application for approval and confirmation of the Load Factor-
Based Pricing Scheme on a Monthly Reconciliation of the Unaccepted
Contract Quantity of their Supplemental Agreement (SA), with
motion for the issuance of provisional authority.

On 09 September 2013, the Commission issued an Order

provisionally authorizing Applicants to implement the Load Factor-
Based Pricing Scheme on a Monthly Reconciliation of the Unaccepted
Contract Quantity of their SA effective next billing cycle upon receipt
ofthe said Order.

On 30 September 2013, the Commission issued an Order

setting this case for jurisdictional hearing, expository presentation,
pre-trial conference, and evidentiary hearing.

On 21 October the Commission received the Motion for

2013,
Intervention/Opposition against the approval of herein Application
filed by Mr. Romeo Lavilla, Sr. On even date, Applicants filed their
joint Pre-trial Brief

On 24 October 2013, this case was initially heard by the

Commission. Present during the said hearing were Attys. Russel
Alabado and Julius Christian Reyes counsels for Applicants, Mr.
Leomel Tambanillo, Chief of CENECO's Corporate Planning Division,
intervenor Mr. Lavilla, Sr., oppositors Ms. Leonor Cabanilla and the
Sangguniang Panlungsod (SP) of Bacolod City, represented by Atty.
Vicente Petierre III. In the course of the hearing, Atty. Alabado
offered documentary evidence as proof of compliance with the
Commission's jurisdictional requirements and the same were marked
accordingly. Atty. Petierre requested that he be given ample time to
file a formal intervention. On the other hand, Ms. Cabanilla opted to
act as an oppositor. Thereafter, the Commission ruled in favor of
Applicants' motion for the declaration of general default against all
interested parties to herein Application, except for Mr. Lavilla and the
SP of Bacolod City.

On 28February 2014, SAC through Atty. Petierre, filed a

Motion to Dismiss. In the said Motion, SAC alleged that CENECO's
Board President was not clothed with authority by its Board of
Directors to sign the verification and certification of non-forum
shopping, as required under Section 4, Rule 3 of the ERe's RUle~
 ERC CASE NO. 2013-141 RC
Order/ 10 May 2016
Page 3 of 13

Practice and Procedures (hereinafter, "Rules"). To prove its claim, it

attached a copy of CENECO's Board Resolution No. 10097 dated 14
November 20121 which showed that no statement thereat that
authorizes its Board President or any CENECO representative for that
matter, to sign the said certification.

Meanwhile, on 03 March 2014, both the SP of Bacolod City and

SAC, through the same counsel, filed a Petition for Intervention. In
the said Petition, Intervenors alleged among others that it has
substantial and material interest to intervene on behalf of its
constituents and member-consumers, respectively. On 05 March
2014, Intervenors filed a joint Pre-trial Brief

On 27 May 2014, Applicants filed its Comment/Opposition (to

Motion to Dismiss of the Social Action Center of the Diocese of
Bacolod City). Applicants argued that CENECO's Board President,
Atty. Arnel Lapore, was duly authorized to represent CENECO in the
instant Application and sign the certificate against forum shopping.
To prove the same, it submitted a copy of CENECO's Board
Resolution No. 10723, Series of 2014 dated 21 March 2014,2 giving
unto the said Board President the authority to sign the subject
certification.

On 03 June 2014, SAC filed its Opposition contending that

Board Resolution No. 10723 which authorizes CENECO's Board
President to sign the aforementioned certification was filed belatedly.
SAC further contends that when the instant Application was filed by
the Applicants, the said Board President has no authority to sign the
certification of non-forum shopping as evidenced by Board
Resolution No. 10097, Series of 2012. Allegedly, the subsequent
authority given to the Board President under Board Resolution No.
10723 will not cure the defect, as the questioned authority is a
condition precedent in filing herein Application.

On 24 June 2014, Applicants filed Motions; (1) to admit

Applicants' Formal Offer of Evidence, (2) to declare Intervenors to
have waived their right to present evidence, and (3) to resolve this
Application. In support of said Motions, Applicants alleged that it
already rested its case and that the Commission has directed
Intervenors to submit the judicial affidavit of their witnesses, but
failed.

1 Attached as Annex "1" to the Motion to Dismiss, marked as Exh. "0" to the Application.
2 Attached as Annex "A" to the Comment/Opposition.
 ERC CASE NO. 2013-141 RC
Order/ 10 May 2016
Page 4 of 13

Considering that the Commission is still in the process of

evaluating the instant Application, on 02 September 2014, it issued
an Order extending the provisional authority it granted to herein
Applicants until revoked or made permanent by it.

On 09 October 2015, Intervenors SP of Bacolod City and SAC

filed their joint Motion to Resolve the Motion to Dismiss.

On 01 December 2015, Mr. Lavilla filed his Manifestation

adopting the argument raised in SAC's Motion to Dismiss. In
addition, he questioned KSPC for not complying with the
requirements set forth in Rule 20-A of the Rules and the pre-filing
requirements set forth in Section 4(e), Rule 3 of the Implementing
Rules and Regulations (IRR) of R. A. 9136 or the Electric Power
Industry Reform Act of 2001 (hereinafter, "EPIRA").

On several occasions, Applicants submitted additional

documents necessary in evaluating this Application. Likewise, on
several occasions, Applicant KSPC moved to resolve the instant
Application and allow it to collect the unnominated contract quantity.

ISSUES

1. Whether or not the Motion to Dismiss filed by herein

Intervenors grounded on forum shopping merits the
Commission's consideration.

2. Whether or not Applicant KSPChas not complied with the

requirements set forth in Rule 20-A of the Rules and
Section 4(e), Rule 3 of the IRR of the EPIRA.

3. Whether or not Intervenors have waived their right to

present evidence.

DISCUSSION

SAC alleged that CENECO's Board President signed the

verification and certification of anti-forum shopping without any
showing that he had the authority to sign for and on behalf of the
Applicant CENECO pursuant to ERC's Rules of Practice and
Procedures. That Board Resolution No. 10723 which authorizes
 ERC CASE NO. 2013-141 RC
Order/ 10 May 2016
Page 5 of 13

CENECQ's Board President Atty. Lapore to sign the aforementioned

certification was filed belatedly, thus, cannot cure the defect.

On the other hand, Applicants averred that per Board

Resolution No. 10723, Atty. Lapore has been duly authorized by
CENECQ to sign the verification and certification against forum
shopping.

We find no merit on the Motion to Dismiss.

Intervenors anchored its position on Section 4, Rule 3 of the

Rules, to wit:

Section 4. Verification and Certification

against Forum Shopping. - All pleadings as specified
under Rule 5 of these rules filed with the Commission
shall be verified. The verification shall contain a sworn
statement that affiant has read the pleading and that the
allegations therein are true and correct of affiant's own
knowledge and belief. If such verification is executed by
the party's responsible officer, in cases where the party is
a juridical person, there shall be attached to the pleading
the corresponding board resolution or secretary's
certificate authorizing such officer to represent the party
in the proceedings and to execute such verification on its
behalf.

In addition, there shall be attached to an initiatory

pleading, i.e. an application, petition, or answer with
counter-complaint, a sworn certification against non-
forum shopping executed in accordance with the Rules of
Court. (Italics ours)

Records reveal that the Verification & Certification Against

Forum Shopping, signed by an Atty. Arnel L. Lapore, CENECQ's
Board President, has been attached to the Application. Also attached
to the Application is the assailed Board Resolution No. 10097 which
reads, thus:

xxx

RESOL VED FURTHERMORE, to authorize the

Board President, Atty. Arnel L. Lapore, and the General
Manager, Sulpicio C. Lagarde, Jr., to file the application
and to engage the services of a legal counsel in the filing
 ERC CASE NO. 2013-141 RC
Orderf 10 May 2016
Page 6 of 13

of the application with the authority granting the Board

President to sign the verification.

A perusal therefrom reveals that Atty. Lapore, the person who

had signed the Certification of Non-Forum Shopping, was duly
authorized to represent CENECO in this Application, only that the
aforementioned Board Resolution did not mention that he is
authorized to sign the said certification. Applicants, however,
submitted Board Resolution No. 10723, it stated as follows:

RESOLVED, as it is hereby RESOLVED, to

confirm, approve and ratify the authority of CENECO
and its Board President, Atty. Arnel L. Lapore, to sign the
Certificate of Non-Forum Shopping of the application,
entitled xxx docketed as ERC Case No. 2013-141 RC.

Verily, with Board Resolution No. 10723, there was sincere

intention on the part of CENECO to grant the questioned authority to
its Board President. To lend credence, the succeeding Section 5 of the
Rules provide, to wit:

Section 5. Construction. - All pleadings and

other filings shall be liberally construed and errors or
defects therein which do not mislead or affect the
substantial rights of the parties involved shall be
disregarded.

Same is true with Sections 3 and 4 of Rule 1thereof which state,

VIZ:

Section 3. General Powers of the

Commission under these Rules. - The Commission
may issue general or specific procedural directions at
any time, including before or during any proceeding.

The Commission may also exempt itself

from these rules in the broader interest of justice
and apply such suitable procedure that shall
secure the just and expeditious determination of
the matters in issue. (emphasis ours)

Section 4. Construction of these Rules. -

These rules shall be liberally construed to secure the most
expeditious and least expensive determination of every
proceeding before the Commission on its merits,
 ERC CASE NO. 2013-141 RC
Order/ 10 May 2016
Page 70f13

consistent, however, with the requirements ofjustice. (bJ.

supplied)

Culled therefrom, the defect or error assigned by herein

Intervenors is neither a fatal deficiency nor affects their substantial rights,
thus may be brushed aside to serve the ends of substantial justice.
Moreover, it bears stressing that administrative bodies exercising quasi-
judicial powers, such as this Commission, are not strictly bound by the
technical niceties of law and procedure and the rules obtaining in
courts of law. They are unfettered by the rigidity of certain procedural
requirements.3 Thus, there is nothing in the applicable laws or rules
that would prevent this Commission from taking a liberal treatment
for the Board President to act and sign in behalf of CENECO.

Besides, Section 6, Rule 3 of the Rules added that:

Section 6. Rejection of Pleadings and

Documents. - Filings which are not in substantial
compliance with these or other Commission rules, orders
of the Commission, or applicable statutes, except for
applications or petitions which were the subject
of pre-filing conference under Section 4 of Rule 6
and endorsedfor filing by the Commission's staff,
may be rejected xxx. (emphasis supplied)

Let it be stressed that the instant Application has passed

through the pre-filing conference with a Commission staff. The
purpose of which is to inquire the compliance with the pre-filing
requirements and the completeness of the supporting documents
attached to the Application before the Commission accepts an
application. The fact that the Commission accepted this Application
only buttressed the conclusion that Applicants have substantially
complied with the foregoing requirements or attachments.

Noteworthy is the emerging trend in the rulings of the Supreme

Court to afford every party-litigant the amplest opportunity for the
proper and just determination of his cause, free from constraints of
technicalities. This is in line with the time-honored principle that
cases should be decided only after giving all the parties the chance to
argue their positions. For it is far better to dispose of a case on the
merits which is a primordial end rather than on a technicality, if it be
the case that may result in injustice.4

3 SamaHo v. CA, G.R. No. 140079 (31 March 2005)

4 Gutierrez vs. Secretary of the Department of Labor and Employment, 447 SCRA 107 (2004)
 ERC CASE NO. 2013-141 RC
Order/ 10 May 2016
Page 8 Of13

In Landbank of the Philippines vs. Ascot Holdings and

Equities, Inc.5, the Supreme Court ruled that rules of procedure must
be faithfully followed except only when for persuasive reasons, they
may be relaxed to relieve a litigant of an injustice not commensurate
with its failure to comply with the prescribed procedure.

The Court, in Vicar International Construction, Inc. and

Carmelita v: Lim vs. FEB Leasing and Finance Corp.6 eloquently
ruled that while the requirement as to certificate of non-forum
shopping is mandatory, nonetheless the requirements must not be
interpreted too literally and thus defeat the objective of preventing
the undesirable practice offorum-shopping. The Court stresses once
more that technical rules of procedure should be used to promote,
not frustrate, justice. While the swift unclogging of court dockets is a
laudable objective, the granting of substantial justice is an even
more urgent ideal. Rules of procedure are but tools designed to
facilitate, not obstruct, the attainment ofjustice.

Similarly, in General Milling Corporation v. NLRC,7 the Court

of Appeals dismissed the Petition, which was not accompanied by any
board resolution or certification by the corporate secretary showing
that the person who had signed the Certification of Non-Forum
Shopping was duly authorized to represent the petitioner-corporation
in the case. In the Motion for Reconsideration, however, the
petitioner attached a Board Resolution stating that the signatory of
the Certification had been duly authorized to do so.

Under those circumstances, the Court held that there was at

least substantial compliance with, and that there was no attempt to
ignore, the prescribed procedural requirements, except that the
petition was not accompanied by a board resolution or a secretary's
certificate that the person who signed it was duly authorized by
petitioner to represent it in the case.

Applying then the afore-discussed test, the Commission is

hereby constrained to rule that Applicant CENECO has substantially
complied with and submitted the Certification of Non-Forum
Shopping as a requisite for the Commission to acquire jurisdiction
over the instant Application. Consequently, the instant Motion to
Dismiss has no leg to stand on.

5G.R. No. 175163, 19 October 2007, 537 SCRA 396

6G.R. No. 157195, 22 April 2005
7394 SCRA 207, 17 December 2002.
 ERC CASENO. 2013-141 RC
Order/ 10 May 2016
Page 9 of 13

II

Intervenor Lavilla questioned KSPC for not complying with the

requirements set forth in Rule 20-A of the Rules and the pre-filing
requirements set forth in Section 4(e), Rule 3 of the IRR of EPIRA.

Again, we find said manifestations not meritorious.

1. Rule 20-A ofthe Rules stated, thus:

A. Applications for a General Change in Rate

Schedules or Revision of Rates. - xxx
xxx

Section 2. Supporting Documents and

Information. - The application shall be accompanied by
the following documents and information xxx

The aforecited provisions only apply to electric distribution

utilities (DDs), particularly private DDs and not electric
cooperatives (ECs), moreso not with generation companies (GenCos)
like KSPC. In the case of ECs, what govern their application for rate
adjustment (ECs distribution portion, Le. distribution, supply, and
metering) is the Rules for Setting the Electric Cooperatives' Wheeling
Rates (RSEC-WR).

Nonetheless and most important, the above provisions do not

apply in this Application because the subject matter of this
Application is the approval of Applicants agreement of reconciling the
load factor-based pricing scheme of the un-accepted contract
quantity, on a monthly basis. Based from Applicants original
agreement, which the Commission has previously approved, the
reconciliation of the same shall be on a yearly basis. In short, the
instant Application only deals with the non-pricing provision of
their contract, thereby no rates thereof have been disturbed,
rendering Rule 20-A of the Rules inapplicable.

2. Moreover, Mr. Lavilla assailed Applicant KSPC's non-

compliance with the pre-filing requirements as required by the
EPIRA.

This Application is a joint endeavour by and between Applicants

KSPC and CENECO. In their joint Application, they submitted
Exhibits "H" to "I", inclusive, to prove compliance with the pre-filing
 ERC CASE NO. 2013-141 RC
Order / 10 May 2016
Page 10 of 13

requirements. Besides, to reiterate, this Application has passed

through the pre-filing conference with a Commission staff. The
purpose of which is to inquire the compliance with the pre-filing
requirements and the completeness of the supporting documents
attached to the Application before the Commission accepts an
application. The fact that the Commission accepted this Application
only buttressed the conclusion that Applicants have substantially
complied with the pre-filing requirements.

III

Applicants, on the other hand, moved to declare Intervenors to

have waived their right to present evidence due to failure of the latter
to submit the judicial affidavit of their witnesses.

Again, borrowing the language of the Court in Carmelita V. Lim

case, while the swift unclogging of court dockets is a laudable
objective, the granting of substantial justice is an even more urgent
ideal. For it is far better to dispose of a case on the merits which is a
primordial end rather than on a technicality, if it be the case that may
result in injustice.8

Thus, Applicants' motion to declare Intervenors to have waived

their right to present evidence lacks merit.

WHEREFORE, premises considered, the Commission, in the

interest of substantial justice, hereby rules, thus:

1. Finding Intervenors Motion to Dismiss filed on 28

February 2014 and the Manifestation filed 01 December
2015 not meritorious, thus, the same are DENIED;

2. Finding Applicants' Motions filed on 24 June 2014 for

failure of Intervenors to submit the judicial affidavit of
their witnesses not meritorious, the same is DENIED;
and

3. The Exhibits contained in the Motions; (1) to admit

Applicants' Formal Offer of Evidence filed by Applicants
KSPC and CENECO are hereby admitted for being
relevant and material in the evaluation of this case.

8 Supra note, 4.
 ERC CASENO. 2013-141 RC
Order/ 10 May 2016
Page 11 of13

Accordingly, another hearing is hereby set on 05 July 2016

(Tuesday) at ten o'clock in the morning (10:00 A.M.) at the
CENECO's Main Office, Mabini corner Gonzaga Streets,
Bacolod City, Negros Occidental for the presentation of
Intervenors' witnesses. .

Intervenors SP of Bacolod City, SAC, and Mr Lavilla are hereby

directed, for the last time, to submit the judicial affidavit of their
witnesses within ten (10) days from receipt hereof, copy furnish
Applicants KSPC and CENECO, otherwise, the Commission shall
declare them to have waived their right to present evidence and this
case shall be submitted for resolution. They are likewise directed to
attend and ensure the presence of their witnesses on the
aforementioned date of hearing, otherwise, they are considered to
have abandoned their right to present the same.

Applicants are likewise directed to appear at the said hearing

for the cross-examination of Intervenors' witnesses with a warning
that their failure to attend thereat deems a waiver of their right to do
so.

SO ORDERED.

Pasig City, 10 May 2016.

FOR AND BYAUTHORITY

OF THE COMMISSION:

- < •...•••..
JOSE VICENTE B. S
- •• ,. -.

Chairman and CEO

'~ifRC~_..------~.~
Lu."
~kI !apV.2013-141 RC CENECO and KSPC.doc I Office of the Chairm~n

I /1 ~11I~111111~1~~
~~:
i E-20i1.6"006-0C-03513
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 ERC CASE NO. 2013-141 RC
Order/ 10 May 2016
Page 12 of 13

Copy furnished:

1. Atty. Russel Alabado

Counsel for KSPC and CENECO
3/F, Builder's Center Building
170 Salcedo St., Legaspi Village, Makati

2. KEPCO Salcon Power Corp.

7IF, Cebu Holdings Center
Cebu Business Park, Cebu City

3. Office of the Solicitor General

134 Amorsolo Street, Legaspi Village, Makati City

4. Commission on Audit
Commonwealth Ave., Quezon City

5. The Senate Committee on Energy

GSIS Building, Roxas Boulevard, Pasay City

6. The Committee on Energy

House of Representatives
Batasan Hills, Quezon City

7. The City Mayor

Bacolod City, Negros Occidental

8. The City Mayor

Bago City, Negros Occidental

9. The City Mayor

Silay, Negros Occidental

10. The City Mayor

Talisay City, Negros Occidental

11. The Municipal Mayor

Murcia, Negros Occidental

12. The Municipal Mayor

Don Salvador, N egros Occidental

13. Mr. Romeo Lavilla, Sr.

c/oCENECO
Mabini cor. Gonzaga Sts., Bacolod City
Negros Occidental

14. The Sangguniang Panlunsod of Bacolod

Attys. Archie Baribar & Vicente Petierre III
Sangguniang Panlunsod, Bacolod City,
N egros Occidental

15. Ms. Eleonore Cabanilla

c/oCENECO
Mabini cor. Gonzaga Sts., Bacolod City
ERC CASE NO. 2013-141 RC
Order / 10 May 2016
Page 13 of 13

Negros Occidental

16. Mr. Troy Colmenares

Mr. Neil Honeyman
Ms. Josephine Abueg
Concerned Citizens
c/oCENECO
Mabini cor. Gonzaga Sts., Bacolod City
Negros Occidental

17. CENECO
Mabini cor. Gonzaga Sts., Bacolod City
Negros Occidental

18. The Governor

Province ofNegros Occidental