MANILA, Philippines — The Supreme Court has upheld the authority of key energy agencies to implement the Feed-In Tariff (FIT) System under Republic Act 9513, or the Renewable Energy Act of 2008, dismissing multiple petitions challenging its legality in a landmark 118-page decision promulgated on August 13, 2024.
In a consolidated ruling on cases G.R. Nos. 214042, 215579, and 235624, the high court affirmed the constitutionality of Sections 6 and 7 of RA 9513, which mandate the Renewable Portfolio Standard (RPS) and establish the FIT System. These provisions empower the Department of Energy (DOE), Energy Regulatory Commission (ERC), National Renewable Energy Board (NREB), and National Transmission Corporation (TransCo) to regulate renewable energy development and set tariffs to incentivize its production.
The decision upheld several ERC resolutions, including the FIT Rules, FIT Guidelines, and specific FIT rates for renewable energy sources such as solar (PHP 8.69/kWh), wind (PHP 7.40/kWh), biomass (PHP 6.63/kWh), and hydropower (PHP 5.90/kWh). It also validated the advance collection of the FIT Allowance—a charge on consumers’ electricity bills to fund renewable energy projects—starting at PHP 0.0406/kWh in 2015 and rising to PHP 0.1830/kWh by 2017.
The Petitions
The ruling addressed challenges from various petitioners, including the Foundation for Economic Freedom (FEF), Remigio Michael Ancheta II, and Alyansa ng mga Grupong Haligi ng Agham at Teknolohiya para sa Mamamayan (AGHAM), alongside intervenors like Citizenwatch, Inc. They sought to nullify the FIT System and related issuances, raising concerns over procedural irregularities, unconstitutional delegation of legislative power, and due process violations.
FEF argued that the NREB’s Petition to Initiate rule-making for FIT rates lacked proper publication and that the FIT System’s implementation was premature without finalized RPS rules or penetration limit studies. Ancheta contested the advance FIT Allowance collection, claiming it expanded RA 9513’s scope and deprived consumers of property without due process. AGHAM challenged the DOE’s certifications increasing solar and wind installation targets (from 50 MW to 500 MW for solar and 200 MW to 400 MW for wind), alleging they escalated consumer costs without legislative safeguards.
Petitioners also sought temporary restraining orders or injunctions, asserting that rising electricity costs from the FIT Allowance caused irreparable harm.
The Ruling
Authored by Associate Justice Leonen, the Supreme Court rejected these claims, affirming a prior Court of Appeals decision in CA-G.R. SP No. 122371. The court ruled that RA 9513 provides clear standards, making the delegation of rule-making and rate-setting powers to the ERC and DOE constitutionally valid. It emphasized that Congress may delegate such authority in technical areas requiring specialized expertise, as with renewable energy policy.
On procedural concerns, the court found that the NREB and ERC complied with publication and hearing requirements. The NREB’s Petition to Initiate was published twice in newspapers of general circulation in August 2011, meeting legal standards for rule-making, not rate-fixing, as FEF claimed. Public consultations, hearings, and comment periods further satisfied due process, the court noted.
The court also upheld the advance FIT Allowance collection, ruling it lawful and necessary to ensure the financial viability of renewable energy projects. While petitioners argued it burdened consumers before energy was generated, the court countered that this mechanism aligns with RA 9513’s goal to accelerate renewable energy development. “The policy establishes the necessary infrastructure to promote renewable energy resources,” the decision stated, affirming the ERC’s authority to implement it.
Addressing due process and police power challenges, the court found no violation of consumers’ rights, noting that FIT charges are quantifiable and refundable if later deemed unjust. It also dismissed calls for injunctive relief, stating petitioners failed to prove a clear right or urgent need, especially since the FIT System has been operational for years.
Implications
The ruling reinforces the government’s framework for renewable energy adoption, balancing consumer costs with the need for sustainable power sources. It affirms the ERC’s provisional approvals of FIT Allowances (e.g., PHP 0.1240/kWh for 2016 and PHP 0.1830/kWh for 2017) and adjustments to FIT rates reflecting cheaper renewable technologies, such as solar’s decline from PHP 9.68/kWh to PHP 8.69/kWh.
For consumers, the decision means continued FIT Allowance charges, though the court highlighted their role in supporting a greener energy mix. For renewable energy developers, it secures financial incentives, encouraging further investment.
The petitions were denied, and the Court of Appeals’ 2013 decision and 2014 resolution were affirmed, marking a significant victory for the government’s renewable energy agenda.
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