The Court of Appeals (CA) has ruled that Energy Regulatory Commission (ERC) Chairperson Monalisa C. Dimalanta should have inhibited herself from the proceedings on the rate application of the National Grid Corporation of the Philippines (NGCP).

In a decision issued last April 30, the CA said that Dimalanta “gravely abused her discretion when she refused to inhibit from the proceedings a quo (4th Regulatory Period Reset Application or RPRA for 2016 to 2022) despite her evident bias and partiality against petitioner” (NGCP).

The decision was written by Associate Justice Maria Elisa Sempio Diy with the concurrence of Associate Justices Wilhelmina B. Jorge-Wagan and Raymond Joseph G. Javier.

In its CA petition, the NGCP manifested that Dimalanta had prejudged the firm’s rate application by making public statements, which were published in various media outlets, on its expected outcome even before the application was filed.

The NGCP also told the CA that Dimalanta prejudged the outcome of the application and conditioned the mind of the public that the ERC would order the reduction of the firm’s transmission charges.

Despite several motions for inhibition, the NGCP said that Dimalanta refused to recuse herself from proceedings.

Granting the NGCP’s petition, the CA said: “The foregoing circumstances, taken together, leads Us to conclude that respondent's (Dimalanta) actions are indeed manifestations of bias and partiality against petitioner.”

The appellate court also said: “Respondent could not be expected to render a fair judgment when she already has an outcome in mind, waiting only to be formalized after petitioner undergoes the charade of formal hearing. By issuing premature public statements, respondent somehow deprived petitioner of its right to a fair and impartial administrative process.”

Case records showed that on Sept. 28, 2022, the ERC issued a resolution amending certain provisions of the Rules for Setting Transmission Wheeling rates.

The NGCP was required to file its RPRA from 2016 to 2022. The RPRA is a regular rate-reset process, a forward-looking exercise that requires the regulated entity to submit forecast expenditures and proposed projects over a five-year regulatory period.

On Oct. 3, 2022, Dimalanta held a press briefing on the expected result of the reset process. 

On Dec. 22, 2022, the NGCP filed its 4th RPRA. A day after the filing or on Dec. 23, 2022, Dimalanta again commented on the expected reduction in transmission charges.

With Dimalanta’s renewed comments, the NGCP filed a motion for her inhibition.

In her explanation dated March 3, 2023, Dimalanta said that the ERC acts as a collegial body and the commission’s resolution or decision is not determined by a single member of the commission.

Dimalanta also said her public statements did not exhibit bias and prejudgment against the NGCP.

Dissatisfied with Dimalanta’s explanation, the NGCP pursued its motion for inhibition and when several pleadings were not acted upon, it elevated the issue before the CA.

It also asked the CA for a temporary restraining order (TRO) that would stop Dimalanta’s participation in its RPRA.

In resolving the issue, the CA said:

“In the instant case, the evaluation of petitioner’s 4th RP Reset Application entails specific factual inquiries that necessitate the conduct of hearings and the presentation of evidence.

“The ERC has to draw conclusions from such facts before it could determine petitioner’s maximum allowable revenue and set the maximum transmission wheeling rates for the relevant period. Such power vested in the ERC involves the use of discretion and, therefore, partakes of a quasi-judicial character.

“It is the ‘cardinal primary right’ of parties in an administrative proceeding that the decision be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected.

“Only by confining the administrative tribunal to the evidence disclosed to the parties, can the latter be protected in their right to know and meet the case against them.

“Here, it is apparent that respondent had already prejudged the result of the reset application proceedings well before petitioner filed the same and presented any evidence.

“Respondent could not be expected to render a fair judgment when she already has an outcome in mind, waiting only to be formalized after petitioner undergoes the charade of a formal hearing.

“By issuing such premature public statements, respondent somehow deprived petitioner of its right to a fair and impartial administrative process.

“Truly, respondent must maintain and preserve the trust and faith of the parties, especially herein petitioner. Respondent must hold herself above reproach and suspicion.

“At the very first sign of lack of faith and trust in her actions, whether well-grounded or not, respondent has no other alternative but to inhibit herself from the case.

“When circumstances appear that will induce doubt as to her honest actuations and probity in favor of either party, or incite such state of mind, respondent should conduct a careful self-examination.

“The better course for respondent under such circumstances is to disqualify herself. That way, she avoids being misunderstood, and her reputation for probity and objectivity is preserved. What is more important, the ideal of impartial administration of justice is lived up to.”

The dispositive portion of the CA’s decision:

“Wherefore, premises considered, the instant petition for certiorari is granted. The Explanation dated March 3, 2023 issued by respondents, Hon. Monalisa C. Dimalanta, in her capacity as Chairperson of the Energy Regulatory Commission, is set aside and declared null and void.

“In its stead, issuance is rendered granting the motion for inhibition filed by petitioner National Grid Corporation of the Philippines.

“Respondent Monalisa C. Dimalanta should have recused herself from further participating in ERC Case No. 2022-089 RC.

“Consequently, the prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction is rendered moot and academic.”