CA overturns permit revocation of Villar’s SIPCOR

INSPECTION. President Ferdinand Marcos Jr. inspects the Siquijor Diesel Power Plant in Candanay Sur to personally oversee measures to address the prolonged power disruptions in the island, on June 11, 2025.

Bongbong Marcos' Facebook page

The revocation of S.I. Power Corporation's permits stemmed from prolonged outages in Siquijor in 2025, which the Energy Regulatory Commission linked to operational failures by the Villar-linked generator

AT A GLANCE

• The Court of Appeals overturned the Energy Regulatory Commission's decision to revoke S.I. Power Corporation's operating permits, citing a lack of procedural due process.
• The ruling does not absolve SIPCOR of operational failures that contributed to power outages in Siquijor, and it does not automatically authorize the company to resume operations.

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MANILA, Philippines – The Court of Appeals (CA) has overturned the Energy Regulatory Commission’s (ERC) 2025 decision revoking the operating permits of Villar-linked S.I. Power Corporation (SIPCOR), ruling that the regulator denied the company procedural due process when it ordered the generator to halt its Siquijor operations.

But the appellate court did not rule or absolve SIPCOR of the operational failures that led to Siquijor’s power crisis, and its July 24 ruling does not itself authorize the company to restart its plants.

“Lest it be misunderstood, this Court does not absolve SIPCOR of any violations nor diminish the ERC’s power to revoke PAOs,” Associate Justice Bonifacio Pascua penned for the CA’s Special Seventh Division.

“The power situation in Siquijor demanded swift and decisive action from the ERC. Even so, due process cannot be sacrificed for mere expediency. All told, the ERC failed to afford due process in revoking the PAOs of SIPCOR’s generation units,” he added.

The court found that the ERC denied SIPCOR procedural due process by using what had been presented as a fact-finding investigation to revoke its operating authorities without formally notifying the company that its permits were at risk, while also relying on evidence SIPCOR was not given a chance to contest.

The case stemmed from prolonged outages in Siquijor in 2025, when residents and businesses endured hours-long brownouts that disrupted hospitals, schools, and the tourism-dependent island economy. Energy Secretary Sharon Garin said the island suffered 568 power interruptions, or an average of 31 outages a month.

The ERC opened an investigation in June 2025 after its inspectors found operational deficiencies and a consumer complained of daily outages. SIPCOR, the Province of Siquijor Electric Cooperative or PROSIELCO, and the National Power Corporation were called to a July 3, 2025, public hearing and ordered to submit documents on power supply, maintenance, fuel inventory, and other operational issues.

The CA, however, said those proceedings were consistently framed as fact-finding. The ERC never issued SIPCOR the show-cause order required by its own rules, which should have specified the alleged violations, their legal basis, and the possible penalty.

“An opportunity to participate does not automatically cure the lack of specific notice of the real issue at stake,” the CA said.

The court also found that the ERC relied on documents submitted after the July hearing — including an August 6, 2025, letter from the energy secretary, a University of the Philippines National Engineering Center audit report, and an ERC supplemental memorandum — without giving SIPCOR an opportunity to contest them.

The appellate court also questioned how the shutdown was implemented. The ERC had already issued provisional authorities to operate (PAOs) to replacement generator TOTALPower before its decision against SIPCOR was promulgated. After serving the decision to SIPCOR on August 29, 2025, the regulator ordered it to cease operations by 3 pm that same day, even though ERC rules generally give parties 15 days before a decision becomes final and unappealable.

For these reasons, the CA granted SIPCOR’s petition and “reversed and set aside” the ERC’s August 28, 2025, decision.

The CA decision in CA-G.R. SP No. 191696 was promulgated on July 24 but was disclosed to the public only on Tuesday, August 18, through Premiere Island Power REIT’s (PREIT) filing with the Philippine Stock Exchange (PSE).

Does this mean SIPCOR can continue operations?

Rappler has reached out to ERC Chairperson Francis Juan to clarify whether the CA decision means that SIPCOR can return to Siquijor’s grid. This story will be updated once a response is received.

The CA decision essentially voided the ERC’s revocation of SIPCOR’s license. But this may not necessarily mean SIPCOR can operate immediately. The ERC may still seek reconsideration before the CA or elevate the case to the Supreme Court through a petition for review.

SIPCOR itself has acknowledged the uncertainty. In a disclosure to the PSE on Tuesday, August 18, PREIT said SIPCOR was still awaiting these next steps before it could move to resume operations. Trading in PREIT shares was subsequently halted by the PSE following the disclosure.

“We shall continue to keep PREIT informed of material developments, particularly on the finality and
execution of the Decision and the restoration of SIPCOR’s authority to operate. Once these are achieved, we formally express our intention to proceed with the lifting of the suspension of the Lease Agreement dated 11 April 2022, as amended, and PREIT’s corresponding recognition of lease revenue,” SIPCOR wrote in a letter to PREIT dated August 18.

SIPCOR is wholly owned by Prime Asset Ventures Inc., the infrastructure group founded by Manny Villar, and is PREIT’s controlling stockholder and parent company. PREIT owns and leases land, buildings, and generation assets used by SIPCOR, which accounted for about 47% of PREIT’s rental income in 2025 before the lease was suspended following SIPCOR’s shutdown.