ERB CASE DIGESTS (OCT. 21)

TABLE OF CONTENTS:

Table of ContentsRATES:

“The regulation of rates to be charged by public utilities is founded upon the police powers of the State and statutes prescribing rules for the control and regulation of public utilities are a valid exercise thereof. When private property is used for a public purpose and is affected with public interest, it ceases to be jurisprivati only and becomes subject to regulation. The regulation is to promote the common good. Submission to regulation may be withdrawn by the owner by discontinuing use; but as long as use of the property is continued, the same is subject to public regulation.”.....4

“There is a legal presumption that the rates fixed by an administrative agency are reasonable, and it must be conceded that the fixing of rates by the Government, through its authorized agents, involves the exercise of reasonable discretion and, unless there is an abuse of that discretion, the courts will not interfere.” - Ynchausti S.S. Co. v. Public Utility Commissioner..........................................................................4

JURISDICTION OF ADMINISTRATIVE AGENCIES:

“Jurisdiction is conferred by law.”................................................................................6

“Administrative agencies, such as the ERB, are not considered courts; they are neither part of the judicial system nor are they deemed judicial tribunals. The prohibition against the issuance of restraining order or writs of injunction does not thus apply to ERB as the term "court" contemplated in the aforequoted provision refers to a regular court belonging to the judicial department.”................................................................6

The courts give much weight to the government agency or officials charged with the implementation of the law, their competence, expertness, experience and informed judgment, and the fact that they frequently are drafters of the law they interpret. - Nestle Philippines, Inc. vs. Court of Appeals..................................................................8

“… Exclusivity is given by law with the understanding that the company enjoying it is self-sufficient and capable of supplying the needed service or product at moderate or reasonable prices. It would be against public interest where the firm granted a

monopoly is merely an unnecessary conduit of electric power, jacking up prices as a superfluous middleman or an inefficient producer which cannot supply cheap electricity to power intensive industries. It is in the public interest when industries dependent on heavy use of electricity are given reliable and direct power at the lower costs thus enabling the sale of nationally marketed products at prices within the reach of the masses.”- NAPOCOR vs. Court of Appeals and Cagayan Electric Power and Light Co., Inc.......................................................................................................................10

“Hence, he who seeks a writ of certiorari must apply for it only in the manner and strictly in accordance with the provisions of the law and the Rules.”..........................10

In Bachrach Corcporation v. CA:

The rule indeed is, and has almost invariably been, that after a judgment has gained finality, it becomes the ministerial duty of the court to order its execution. No court, perforce, should interfere by injunction or otherwise to restrain such execution. The rule, however, concededly admits of exceptions […]..................................................13

“We believe that since the provision of Section 18 on the transfer of certain powers and functions from ERB to DOE is clear and unequivocal, and devoid of any ambiguity, in the sense that it categorically refers to "non-price jurisdiction, powers and functions" of ERB under Section 3 of E.O. No. 172, there is no room for interpretation, but only for application, of the law.”..........................................................................15

“In determining which body has jurisdiction over a case, the better policy is to consider not only the status or relationship of the parties but also the nature of the action that is the subject of their controversy.”..........................................................16

“The principle that the authority of a board or commission is construed in the light of the purposes for which it was created; and whatever is incidentally necessary to a full implementation of the legislative intent should be upheld as germane to the law”....18

“The ERB has the authority to determine, fix and prescribe the rates so long as it acts well within its powers.”..............................................................................................19

TAMPERING:

RULE 133; Section 1.Preponderance of evidence, how determined. — In civil cases, the party having burden of proof must establish his case by a preponderance of evidence. In determining where the preponderance or superior weight of evidence on the issues involved lies, the court may consider all the facts and circumstances of the case, the witnesses' manner of testifying, their intelligence, their means and opportunity of knowing the facts to which there are testifying, the nature of the facts to which they testify, the probability or improbability of their testimony, their interest or want of interest, and also their personal credibility so far as the same may legitimately appear

upon the trial. The court may also consider the number of witnesses, though the preponderance is not necessarily with the greater number. (1a).............................22

“Under the law, the Manila Electric Company (MERALCO) may immediately disconnect electric service on the ground of alleged meter tampering, but only if the discovery of the cause is personally witnessed and attested to by an officer of the law or by a duly authorized representative of the Energy Regulatory Board.”......................................24

“Electricity is a basic necessity the generation and distribution of which is imbued with public interest, and its provider a public utility subject to strict regulation by the State in the exercise of police power. Failure to comply with these regulations will give rise to the presumption of bad faith or abuse of right.”....................................................26

“The law states that, in order to constitute prima facie evidence of electric pilferage, the discovery thereof must be personally witnessed and attested to by at least a police officer or a representative of [the] Energy Regulatory Board (ERB).”..........................28

It is thus clear that for an allegation of tampering to be the basis of the disconnection of a customer’s electric supply, the discovery of such must be personally witnessed and attested to by an officer of the law or an ERB representative...............................31

INJUNCTION:

If, notwithstanding the provisions of this section, a court issues an injunction or restraining order, such injunction or restraining order shall be effective only upon the filing of a bond with the court which shall be in the form of cash or cashier's check equivalent to the "differential billing," penalties and other charges, or to the total value of the subject matter of the action: Provided, however, That such injunction or restraining order shall automatically be refused or, if granted, shall be dissolved upon filing by the public utility of a counterbond similar in form and amount as that above required: Provided, finally, That whenever such injunction is granted, the court issuing it shall, within ten (10) days from its issuance, submit a report to the Supreme Court setting forth in detail the grounds or reason for its order. 18 (Emphasis and underscoring supplied)

- Manila Electric Company v. Navarro-Domingo..........................................................32

RATES:

G.R. No. 141314

Republic of the Philippines, represented by the Energy Regulatory Board, petitioner, vs. Manila Electric Company, respondent; April 9, 2003

G.R. No. 141369

Lawyers Against Monopoly and Poverty (LAMP), petitioners, vs. Manila Electric Company (MERALCO), respondent

Resolution for motion for reconsideration filed by respondent MERALCO

DOCTRINE:

“The regulation of rates to be charged by public utilities is founded upon the police powers of the State and statutes prescribing rules for the control and regulation of public utilities are a valid exercise thereof. When private property is used for a public purpose and is affected with public interest, it ceases to be jurisprivati only and becomes subject to regulation. The regulation is to promote the common good. Submission to regulation may be withdrawn by the owner by discontinuing use; but as long as use of the property is continued, the same is subject to public regulation.”

“There is a legal presumption that the rates fixed by an administrative agency are reasonable, and it must be conceded that the fixing of rates by the Government, through its authorized agents, involves the exercise of reasonable discretion and, unless there is an abuse of that discretion, the courts will not interfere.” - Ynchausti S.S. Co. v. Public Utility Commissioner

FACTS:

MERALCO applied with the ERB an application for revised rates. The ERB granted a P0.184 per kWh increase subject to the condition that MERALCO would, upon the determination of the ERB, return the excess amounts collected which shall be refunded to their customers or credited accordingly.

However, the ERB adopted the recommendations of the Commission on Audit and authorized a rate adjustment of only P0.017 per kWh that consequently meant that MERALCO would have to credit the excess average amount of P0.167 back to their customers.

Because the ERB held that income tax should not be treated as an operating expense and thus not included in rate computation. They said that such must be borne by MERALCO’s stockholders, not its customers.

ERB & COA believes that the Net Average Investment Method, because only proportionate value of property (determined by the number of months such was actually used), should be included. MERALCO was using the Average Investment Method.

NAIM:

o Properties and equipment used in the operation of a public utility are entitled to a return only on the actual number of months they are in service during the period.

AIM:

o Computes the proportionate value of the property by adding the value of the property at the beginning and at the end of the test year with the resulting sum divided by two.

MERALCO then filed a Motion for Reconsideration.

ISSUES:

1. WoN the deduction of income tax from revenues allowed for rate determination of public utilities is part of MERALCO’s constitutional right to property.

2. WoN Income Tax should be allowed for rate-determination purposes.3. WoN use of Net Average Investment Method is reasonable.

HELD:

Petition is GRANTED

1. NO because MERALCO should be treated as a public servant.

In the 1923 case of Southwestern Bell Tel. Co. v. Public Service Commission, Mr. Justice Brandeis wrote:

The thing devoted by the investor to the public use is not specific property, tangible and intangible, but capital embarked in an enterprise. Upon the capital so invested, the Federal Constitution guarantees to the utility the opportunity to earn a fair return. The Constitution does not guarantee to the utility the opportunity to earn a return on the value of all items of property used by the utility, or of any of them.

The investor agrees, by embarking capital in a utility, that its charges to the public shall be reasonable. His company is the substitute for the State in the performance of the public service, thus becoming a public servant. The compensation that the Constitution guarantees an opportunity to earn is the reasonable cost of conducting the business.

2. Income tax as an operating expense CANNOT be allowed for rate-determination purposes because such is inconsistent with the nature of an operating expense. Operating expenses should be a requisite of or necessary in the operation of a utility, recurring, and that it redounds to the service or benefit of customers.

3. YES because it reflects the real status of the property. Such rate base reveals the value of equipment used by MERALCO in proportion to the period that the same were actually used during the period in question.

Using the MERALCO scheme, the public utility may easily manipulate the valuation of its property entitled to a return (rate base) by simply including a highly capitalized asset in the computation of the rate base even if the same was used for a limited period of time during the test year.

G.R. 145399

MERALCO, petitioner, vs. ENERGY REGULATORY COMMISSION, & EDGAR L. TI (ELT ENTERPRISE), petitioner

Petition for review on certiorari

DOCTRINE:

“Jurisdiction is conferred by law.”

“Administrative agencies, such as the ERB, are not considered courts; they are neither part of the judicial system nor are they deemed judicial tribunals. The prohibition against the issuance of restraining order or writs of injunction does not thus apply to ERB as the term "court" contemplated in the aforequoted provision refers to a regular court belonging to the judicial department.”

FACTS:

Edgar L. Ti (respondent) was doing a business under the name Little Bagio, in San Juan, Metro Manila when his electricity provider, MERALCO (petitioner) , cut his power. MERALCO committed such act on the speculation that Ti was tampering 3 electric meters installed in his business premises and such violated R.A. No. 7832.

He filed a case with the ERB and prayed, by provisional relief, for the reconnection of electric service in his establishment.

The ERB ordered for the reconnection of electrical service on December 27, 1999.

MERALCO then stated that such board has no jurisdiction over such matter (the restoration of the partial shutdown of electric service) and cannot be upheld because E.O No. 172 (the ERB Charter) does not indicate specifically a granting of adjudicative jurisdiction over violations of R.A. 7832, let alone restoration of a disconnected electric service . They also state that the law (R.A. 7832) gives public utilities a speedy and adequate remedy against grievances committed by consumers.

ISSUE:

WoN the ERB has jurisdiction to order the reconnection of electric service in cases arising from alleged violation of R.A. No. 7832

HELD:

Petition is DENIED

1. ERB HAS JURISDICTION because such is stated in E.O. No. 172 (the law creating the ERB). The law was taken from the ERB’s nucleus, the Board of Energy (BoE), which under (P.D. No. 1206) had “the power to regulate and fix power rates to be charged by electric companies and to issue certificates of public convenience for the operation of electric power utilities and services.” The BoE’s power was carried over to E.O. No. 172 as evident in Sec. 8 (Authority to Grant Provisional Relief), and Sec. 2, Rule 13 of the Rules of Practice and Procedure Governing Hearings Before the ERB. Also, Section 14 of R. A. No. 7832 authorizes the ERB to issue the necessary implementing rules and regulations to ensure the efficient and effective implementation of its provisions.

G.R. No. 113079

Energy Regulatory Board, petitioner, vs. Court of Appeals and Petroleum Distributors and services Corporation, respondents

April 20, 2001

DOCTRINE:

The courts give much weight to the government agency or officials charged with the implementation of the law, their competence, expertness, experience and informed judgment, and the fact that they frequently are drafters of the law they interpret. - Nestle Philippines, Inc. vs. Court of Appeals

FACTS:

Petitioner Shell filed with the BEU an application to relocate its service station from Tambo, Paranaque, Metro Manila to Imelda Marcos Avenue. PDSC, who owned a Caltex station nearby, opposed such application on the grounds that:

1. There are adequate service stations in the area2. Ruinous competition will result from such actions3. There is a decline in sales in the area

The BEU case was remanded to the ERB that rendered the decision allowing Shell to establish the service station. PDSC elevated its cause to the CA that reversed the judgment.

ISSUE:

1. WoN the CA’s reversing of the ERB will be followed.2. WoN the petitioner would post as ruinous competition

HELD:

Petition is GRANTED. Shell can relocate to Benigno Aquino, Jr., Avenue, Paranaque, Metro Manila

1. NO. The ERB’s decision (allowing Shell to setup) will be followed because the interpretation of administrative agencies are held with great respect and courts will not interfere in matters which are addressed to such bodies. Such was explained in Nestle Philippines, Inc. vs. Court of Appeals

*However, courts will not hesitate to set aside such executive interpretation when it is clearly erroneous, or when there is no ambiguity in the rule […]

The findings made by administrative agencies must be respected, even if they are just supported by substantial evidence.

2. NO. Rule V, Section 1, of the Rules and Regulations Governing the Establishment, Construction, Operation, Remodeling and/or Refurbishing of Petroleum Products Retail Outlets issued by the Oil Industry Commission, 36 and adopted by the ERB, enumerates the factors:

a. The operation of the proposed petroleum products retail outlet will promote public interest in a proper and suitable manner considering the need and convenience of the end-users.

b. Reasonable expectation of a commercially viable operation.c. The establishment and operation thereof will not result in a

monopoly, combination in restraint of trade and ruinous competition.d. The requirements of public safety and sanitation are properly

observed. e. Generally, the establishment and operation thereof will help promote

and achieve the purposes of Republic Act No. 6173.

While it is probable that the operation of the proposed Shell outlet may affect PDSC's business, private respondent nevertheless failed to show that its business would not have sufficient profit to have a fair return of its investment. The mere possibility of reduction in the earnings of a business is not sufficient to prove ruinous competition.

G.R. No. 135925; BATELEC II vs. EIAB and PSC; December 22, 2004

Petition for review of the Court of Appeals’ dismissal of the special civil action for certiorari filed before it by BATELEC II

DOCTRINE:

“… Exclusivity is given by law with the understanding that the company enjoying it is self-sufficient and capable of supplying the needed service or product at moderate or reasonable prices. It would be against public interest where the firm granted a monopoly is merely an unnecessary conduit of electric power, jacking up prices as a superfluous middleman or an inefficient producer which cannot supply cheap electricity to power intensive industries. It is in the public interest when industries dependent on heavy use of electricity are given reliable and direct power at the lower costs thus enabling the sale of nationally marketed products at prices within the reach of the masses.”- NAPOCOR vs. Court of Appeals and Cagayan Electric Power and Light Co., Inc.

“Hence, he who seeks a writ of certiorari must apply for it only in the manner and strictly in accordance with the provisions of the law and the Rules.”

FACTS:

On November 14, 1997, PSC commenced its negotiations for the supply of 69kv energy requirement with BATELEC II.

BATELEC II had no 69kv transmission lines at present, it entered into an agreement with PSC that they will handle the construction of the needed 69kv transmission lines.

In December 18, 1996, PSC accepted BATELEC II’s proposal where they gave a Bill of Materials to PSC amounting to P2,956,838.56 with a proviso that additional costs shall later be incurred for other items.

BATELEC II vouched to complete the installation needed by April 1997 which it was not able to do and was never completed even after several months.

A 69kv transmission lines owned by the NPC are located about 1.4 kilometers away from the PSC plant.

On November 17, 1997, PSC filed with the EIAB, under the umbrella of the Department of Energy, an application for direct connection with the NPC which was later on granted.

On a hearing on December 17, 1997, BATELEC II expressed that they had difficulties in acquiring the right of way for the 69kv transmission lines. On the other hand, PSC averred that it is precisely because of BATELEC II’s failure to accomplish its undertaking that prompted it to file its application with the Bureau to source its direct power supply from the NPC.

The Bureau concluded that BATELEC II is not technically and financially capable of serving the energy requirement of PSC and that PSC’s application for bulk power supply with National Power Corporation was thereby approved.

BATELEC II filed a petition for certiorari with a prayer for the issuance of a writ of preliminary injunction and temporary restraining order before the Court of Appeals. BATELEC II ascribed grave abuse of discretion to the Bureau. BATELEC II expresses that the Bureau didn’t take into consideration NPC’s disqualification from distributing electric power directly to consumers within the franchised area of BATELEC II.

This petition was later on dismissed by the Court of Appeals on October 13, 1998. The Court of Appeals argued that BATELEC II did not exhaust administrative remedies and that they failed to attach a certified true copy or duplicate original copy of the Bureau’s Resolution.

ISSUE:

Did BATELEC II failed to exhaust all administrative remedies by not filing with the Bureau a motion for reconsideration?

Did the Court of Appeals commit a reversible error in dismissing the case on purely technical grounds?

HELD:

This petition is DENIED.

An application of a writ of certiorari must be applied for in the manner and strictly in accordance with the provision of the law and the Rules.

The attached document is neither a “duplicate original copy” nor an authenticated original of such “certified true copy”. Supreme Court Administrative Circular No. 3-96 explains that the certified copy must “comply with all the regulations therefore of the issuing entity and it is the authenticated original of such certified true copy… (Emphasis supplied.)”

o It further provides that “Failure to do so shall result in the rejection of such annexes and the dismissal of the case. Subsequent compliance shall not warrant any reconsideration unless the court is fully satisfied that the non-compliance was not in any way attributable to the party…”

On the argument that NPC is disqualified in distributing electricity in BATELEC II’s franchise area, the Court expresses that P.D. No. 380 provides that if a franchise holder is given an opportunity to be heard on the application but is deliberated to be incapable or unwilling to match the reliability and rates a BOI-registered enterprise may require, NPC is statutorily empowered to directly service it.

o “It is an elementary rule,… that the courts will not interfere in matters which are addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under the special technical knowledge and training of such agencies.”

o The Court reiterates that BATELEC II had the opportunity first to service the power needs of PSC.

G.R. 127371;

Philippine Sinter Corporation and Phividec Industrial Authority, petitioners, vs Cagayan Electric Power and Light Co., Inc., respondent; April 25, 2002

DOCTRINE:

In Bachrach Corcporation v. CA:

The rule indeed is, and has almost invariably been, that after a judgment has gained finality, it becomes the ministerial duty of the court to order its execution. No court, perforce, should interfere by injunction or otherwise to restrain such execution. The rule, however, concededly admits of exceptions […]

FACTS: Cabinet Memo., Item No. 2 provides that industries authorized shall continue direct

connection with the NAPOCOR grid until the stepping up of capable distributors.

Now, petitioner, CEPALCO goes to the ERB and tells them that they are capable of distributing electricity in certain areas in Misamis Oriental. The ERB expressed that CEPALCO is indeed capable. NAPOCOR then files a motion for reconsideration, which the ERB then denies.

Now authorized, CEPALCO goes to the PSC (one industry authorized by CM, #2) telling them that they are now in charge of transmission of energy. PSC does not like this move because they still had existing contracts with NAPOCOR. So, they file an INJUNCTION with the RTC of Cagayan de Oro City.

They stated that the ERB decision has no legal basis that such is not binding to PSC because it was not impleaded in the case, and that they are under the area of PIA and not CEPALCO.

The RTC was in favor of the PSC and PIA- an injunction was issued. CEPALCO brought the case to the CA, who favored them.

ISSUE: WoN injunction lies against the final and executory judgment of the ERB

HELD:

NO because an injunction is unavailing except only after showing that facts and circumstances exist which would render execution unjust or inequitable or that a change in the situation of the parties occurred. In this case, no exception exists.

*This is not the first case involving CEPALCO and NAPOCOR’s direct power supply:

In National Power Corporation v. CA: it stated that CEPALCO had the authorization to distribute electric power to the Philippine Packing Corporation.

In CEPALCO vs. NPC: NAPOCOR must yield to CEPALCO in supplying electricity to Ferrochrome Philippines, Inc.

G.R. 127373

ENERGY REGULATORY BOARD and ILIGAN LIGHT & POWER, INC., petitioners, vs.COURT OF APPEALS and ASSOCIATION OF MINDANAO INDUSTRIES (AMI),representing among others the following member-companies: ALSON/ILIGAN CEMENT CORP., MABUHAY VINYL CORP., MCCI CORP., MINDANAO FERROALLOY CORP., and NATIONAL STEEL CORP., respondents.

Petition for Review

DOCTRINE:

“We believe that since the provision of Section 18 on the transfer of certain powers and functions from ERB to DOE is clear and unequivocal, and devoid of any ambiguity, in the sense that it categorically refers to "non-price jurisdiction, powers and functions" of ERB under Section 3 of E.O. No. 172, there is no room for interpretation, but only for application, of the law.”

FACTS:

NPC electric power is sold through private utility firms with franchise authorization within the area. The respondents by-passed the franchise and got electricity directly from the NPC. Petitioner wants a disconnection of the direct supply.

ISSUE:

WoN the ERB has jurisdiction to hear and decide cases involving the implementation of policy reforms (direct connection issues).

HELD:

Petition DENIED

Pursuant to Section 18 of RA 7638, which was subsequently enacted by Congress on December 9, 1992, the non-rate-fixing, jurisdiction, powers and functions of the ERB have been transferred to the Department of Energy.

G.R. No. 171624

BF Homes, Inc. (BF) and the Philippine Waterworks and Construction Corp. (PWCC), petitioners vs. Manila Electric Company, respondent

Petition for review on certiorari

DOCTRINE:

“In determining which body has jurisdiction over a case, the better policy is to consider not only the status or relationship of the parties but also the nature of the action that is the subject of their controversy.”

FACTS:

BF and PWCC asked the RTC for the right to refund. They claimed to have based such right on the SC ruling in Republic v. Manila Electric Company:

o “Further, in accordance with the decision of the ERB dated February 16, 1998, the excess average amount of P0.167 per kilowatt hour starting with the applicant’s billing cycles beginning February 1998 is ordered to be refunded to MERALCO’s customers or correspondingly credited in their favor for future consumption.”

MERALCO was mandated to refund to BF the amount of P11,834,570.91.

On May 20, 2003, without any notice whatsoever, MERALCO disconnected the electric supply to (BF and PWCC’s) 16 water pumps located in BF homes, in Paranaque, Caloocan, and Quezon City. MERALCO demanded the payment of the electric bills amounting to P4, 717,768.15.

The petitioners requested that such amount be offset by the P11, 834,570.91 that were to be refunded. MERALCO denied the request stating that they have not yet come up with the schedule for the refund of large amounts.

Again, without any notice, MERALCO cut of the power supply to 5 water pumps located in BF Homes Paranaque and BF Resort Village, in Las Pinas.

Consequently, BF Homes and PWCC goes to the RTC stating that what the respondent has done was oppressive and prayed for exemplary damages. They have also prayed for the issuance of a writ of preliminary injunction and restraining order stating that unless restrained, MERALCO will cut off electric power connections to all of the water pumps.

The RTC GRANTED the preliminary injunction and restrained MERALCO to cut-off power connection to BF’s and PWCC’s water pumps

ISSUE:

WoN jurisdiction over this case lies within the RTC or the Energy Regulatory Commission.

HELD:

Petition is DENIED.

RTC has NO jurisdiction because the power to reside over such case exclusively belongs to the ERC by virtue of Sec. 43 (u) of the EPIRA. The powers of the ERC were underlined when the courts traced the legislative history of the agency in Manila Electric Compoany v. Energy Regulatory Board.

G.R. No. 159457; National Power Corporation (NPC) v. Philippine Electric Plant Owners Association (PEPOA), INC; April 7, 2006

Petition for Review

DOCTRINE:

“The principle that the authority of a board or commission is construed in the light of the purposes for which it was created; and whatever is incidentally necessary to a full implementation of the legislative intent should be upheld as germane to the law”

FACTS:

NPC is a government-owned and –controlled corporation. PEPOA is a non-stock corporation consisting of private electric plant operators. Some members of the PEPOA purchase electricity from the NPC.

On December 15, 1995, PEOPA filed a complaint to the ERB against the NPC for its alleged unauthorized collection of rates in the guise of penalty. Such is evident in rules 5 (minimum charges) & 6 (Penalty for Consumption in Excess of the Allowable Limit of the Contract Demand/ Energy) of the NPC’s Rules on the Sale of Electricity.

On December 20, 1995, the ERB issued the NPC a cease and desist from collecting penalties. And on May 12, 1998, it has decided that the NPC refund/ credit all complaints.

The CA found no errors of fact or law and has agreed with the ERB.

ISSUE:

1. WoN the ERB has jurisdiction over the subject matter of this case2. WoN its Cease and Desist Order is justified

HELD:

1. YES. EO. No. 172 created the ERB to provide the policy guidelines and regulatory framework for the activities and operations of the power sector.

2. YES. The ERC may issue provisional relief (granted by E.O. 172):a. Upon motion or on its own initiativeb. Without notice and hearingc. After the filing of an application, a petition or complaint

G.R. No. 134437

National Steel Corporation (NSC), petitioner, vs. The Honorable Court of Appeals, The Energy Regulatory Board, The National Power Corporation and Iligan Light and Power, Inc., respondents

Instant appeal by certiorari

DOCTRINE:

“The ERB has the authority to determine, fix and prescribe the rates so long as it acts well within its powers.”

FACTS:

Antecedents:

NAPOCOR (on June 9, 19995) filed with the ERB an application to increase their average power rates for “non utilities” (direct users).

NAPOCOR’s rate proposal only showed a 2% rate difference between direct consumers & those who get electricity direct from service distributors.

After due notice and hearing, the ERB issued a new rate structure for the Mindanao Grid that widened the differential rates of large utilities and non-utilities (a 12% differential, much more than NAPOCOR expected).

The NSC did not like it; the rates to direct line were too high. (They still wanted the direct line.) They filed a petition for certiorari and a TRO, which were both eventually denied.

They said “public interest could be best served if it were given reliable and direct power at the lowest cost […]”

ISSUES:

WoN the ERB’s decision, in approving the modified power rates, would be vulnerable to jurisdictional challenge

HELD:

NO because such decision fixed the existing small rate difference between utilities and non-utilities (in the Mindanao Grid) which provided little incentive for consumers to purchase power from distribution utilities.

Moreover, NAPOCOR’s rate structure was made in the 1980’s and had a 10% differential- now because of all the rate changes; such has gone down to 2%.

If they (ERB) do not do this, the aid NPC was to give to DU’s would be meaningless. Aiding the DU’s is the intention of NAPOCOR, but apparently it is not seen in their proposals.

G.R. 171102

ATP Technologies International INC., petitioner vs. Micron Precision PHILS. INC., respondent, November 24, 2006

Petition for review of certiorari

DOCTRINE:

RULE 133; Section 1.Preponderance of evidence, how determined. — In civil cases, the party having burden of proof must establish his case by a preponderance of evidence. In determining where the preponderance or superior weight of evidence on the issues involved lies, the court may consider all the facts and circumstances of the case, the witnesses' manner of testifying, their intelligence, their means and opportunity of knowing the facts to which there are testifying, the nature of the facts to which they testify, the probability or improbability of their testimony, their interest or want of interest, and also their personal credibility so far as the same may legitimately appear upon the trial. The court may also consider the number of witnesses, though the preponderance is not necessarily with the greater number. (1a)

FACTS:

Petitioner was a lessee of a factory building owned by Ecozone Properties located at the Light Industry and Science Park in Cabuyao, Laguna. The petitioner sublet to the respondent the building with a contract that included a security deposit.

In June 2000, Ecozone Properties pre-terminated the lease contract and respondent had to pay rent directly to Ecozone Properties.

In August 2001, respondent vacated and demanded for refund of security deposit. Petitioner withheld deposit due to pending determination of unsettled liabilities. Petitioner alleged that respondent tampered with a meter and had a billing deficiency of P102, 827.85.

San Fernando Electric Light and Power Company (SFELPCO) conducted an investigation; it determined that the respondent’s meter could have easily been tampered because such was not secured properly.

On June 29, 2004 the trial court rendered judgment in favor of the petitioner deciding that a tampering had taken place.

In the assailed decision, the CA ordered ATP to refund Micron its security deposit amounting to P642, 006.00.

On October 24, 2005 the decision was reversed.

ISSUE:

1. WoN the Court of Appeals had erred in its decision2. WoN the CA has erred in granting the respondent’s claim for interest in the security

deposit and attorney’s fees.

HELD:

1. NO. The issue at hand is factual in nature, due to the conflicting findings in the preceding courts; the Supreme Court examined both records and determined that there was FAILURE TO ESTABLISH A PREPONDERANCE OF EVIDENCE that the respondent tampered with the meter.

The jurisdiction of this Court in cases brought before it from the Court of Appeals via Rule 45 of the Rules of Court is limited to reviewing errors of law. Findings of fact of the latter are conclusive, except in the following instances: (1) when the findings are grounded entirely on speculation, surmises, or conjectures; […]

2. NO. Because the petitioner failed to return the deposit within 30 days after the termination of the sublease contract, as stipulated in the contract. The attorney’s fees were fair and reasonable because the respondent was “compelled to litigate to protect its rights against the petitioner.”

G.R. No. 142943; Antonio and Lorna Quisumbing v. MERALCO; April 3, 2002

Petition for Review assailing the Decision of the Court of Appeals which ordered the spouses to pay MERALCO P193, 332 representing the used but unregistered electrical consumption.

DOTRINE:

“Under the law, the Manila Electric Company (MERALCO) may immediately disconnect electric service on the ground of alleged meter tampering, but only if the discovery of the cause is personally witnessed and attested to by an officer of the law or by a duly authorized representative of the Energy Regulatory Board.”

FACTS:

On May 3, 1995, MERALCO sent an inspection team to have an on-the-spot inspection of all single phase meters in Green Meadows Avenue. On their arrival in front of the spouses’ house, the inspectors asked for permission to inspect the meter. It was granted by the appellees whose approval was relayed through their secretary which also witnessed the inspection.

The inspectors discovered that the terminal seal of the meter was missing; the meter cover seal was deformed; the meter dials of the meter was misaligned and there were scratches on the meter base plate.

MERALCO expressed that they would need to detach the meter in order to inspect if there was meter tampering. The results found that there was indeed tampering. MERALCO then billed the spouses amounting to P178,875.01 which if left unpaid would mean the disconnection of the electricity on the spouses’ house.

The spouses then filed a complaint for damages with prayer for the issuance of a writ of preliminary mandatory injunction arguing that MERALCO’s procedure didn’t observe due process and without regard of their rights.

ISSUE:

Was there a violation of due process? Is the differential billing valid and binding?

HELD:

This petition is PARTLY GRANTED

There was violation of due process.o In order for an immediate disconnection to become valid, R.A. 7832

explains that there should first be prima facie evidence of its illegal use. To constitute prima facie evidence, the discovery of the illegal use must be "personally witnessed and attested to by an officer of the law or a duly authorized representative of the Energy Regulatory Board (ERB)."

o The law also states that the time frame for determining prima facie evidence of illegal use should be before the immediate disconnection. There is no merit on the argument that there was an ERB officer in the laboratory of MERALCO.

The spouses are still liable for the differential billingo MERALCO’s counterclaim for differential billing is still proper because it

has been properly examined and attested by MERALCO's Senior Billing Computer Enrique Katipunan. It was with documentary evidence that is respected by the Court.

o Even if there was a Contract to Sell and Assumption of Mortgage, there was no evidence presented that they did not live in the house before that contract. Without having a contract for electrical services with the previous owner, the Court expressly provides that the spouses effectively assumed the bills of the former occupants of the premises.

G.R. No. 144474; Samar II Electric Cooperative, Inc., and BaltazarDacula vs. EstrellaQuijano; April 27, 2007;

Petition for Review on Certiorari on Court of Appeals’ affirmation of the Decision of the Regional Trial Court and its denial of SAMELCO’s Motion for Reconsideration.

DOCTRINE:

“Electricity is a basic necessity the generation and distribution of which is imbued with public interest, and its provider a public utility subject to strict regulation by the State in the exercise of police power. Failure to comply with these regulations will give rise to the presumption of bad faith or abuse of right.”

FACTS:

SAMELCO observed an enormous reduction on electric consumption by the spouses Norberto and EstrellaQuijano.

On May 14, 1984, SAMELCO sent an inspection team, headed by BaltazarDacula, to the residence. During this time, the spouses were not there and only their 17-year-old daughter was home.

The investigation team found that the meter no longer has its three meter seals and that the meter’s rotating disc was adjusted upward causing it to stop intermittently. The investigation team then removed the device and disconnected the electricity from the house.

The spouses requested SAMELCO to restore their electricity but SAMELCO required them to pay penalty charges for allegedly tampering with the electric meter.

The spouses refused to pay the penalty and they insisted that they did not tamper with the electric meter. The spouses then filed a Complaint for Damages against SAMELCO and Dacula before the RTC.

The RTC and CA decided in favor of the spouses.

ISSUE:

Does the RTC have jurisdiction over the present case? Was the proper procedure followed by SAMELCO?

HELD:

This petition is DENIED

The Court recognizes that a number of cases regarding arbitrary disconnection of electrical services have been heard in RTCs. One of which is Sps. Quisimbing v. Meralco.

o The petitioners relied only on the first paragraph of Section 10 of P.D. No. 269 (as amended by P.D. No. 1645)

o “The fundamental rule in statutory construction that the clauses… should be read as a whole; never as disjointed or truncated parts”

NEA’s jurisdiction does not include adjudication of claims for damages against electric cooperatives arising from acts such as arbitrary disconnection.

o The jurisdiction given to NEA is over “all maters” relating to organization of electric cooperatives, rate fixing, loan agreements and fund management.

The proper procedure was not followed by SAMELCOo The inspection team should have notified the spouses that their meter

was disconnected due to suspicion of tampering and altogether require them to be present when the meter would be calibrated.

G.R. 170482

Manila Electric Company, petitioner, vs. Aguidavda. De Santiago, respondent; September 4, 2009.

Petition for review on certiorari

DOCTRINE:

“The law states that, in order to constitute prima facie evidence of electric pilferage, the discovery thereof must be personally witnessed and attested to by at least a police officer or a representative of [the] Energy Regulatory Board (ERB).”

FACTS:

Petitioner, MERALCO, conducted a routine inspection of the respondent’s meter. Upon which, they found a self-grounding wire connected to the meter. After further inspection, the petitioner demanded payment of a differential billing.

The respondent protested. She claimed that the meter was inspected without her knowledge or prior permission. She also denied seeing a policeman in uniform during the inspection.

MERALCO evoked R.A. 7832 to justify its right to effect immediate disconnection of the electric service.

ISSUE:

WoN there was a proper disconnection of electrical service pursuant to the provisions of RA 7832.

HELD:

Petition is DENIED.

NO because although there was an alleged PO2 Chavez who witnessed and attested to the conduct of the inspection, the inspection was conducted in Calumpit,Bulacan when the officer was assigned in Caloocan City. Moreover, the PO2 failed to present a written order from the Caloocan Police Station that allowed him to escort the MERALCO inspectors in Calumpit, Bulacan.

To add, the PO2 admitted that the inspection team did not coordinate with the Calumpit Police Station for assistance in the inspection.

o Thus the court was inclined to give credence to the testimony of the plaintiff-appellant that there was no policeman in uniform during the inspection.

G.R. No. 131723; Manila Electric Company (MERALCO) v. T.E.A.M. Electronics Corporation (TEC) , Technology Electronics Assembly and Management Pacific Corporation; and Ultra Electronics Instruments, Inc; December, 13, 2007

Petition for Review on Certiorari seeking a reversal of a decision

DOCTRINE:

“Basic is the rule that to recover actual damages, not only must the amount of loss be capable of proof; it must also be actually proven with a reasonable degree of certainty, premised upon competent proof or the best evidence obtainable.”

FACTS:

TEC is a utility company supplying electricity in Metro Manila. The TEC entered into a contract of lease with Ultra to use the latter’s DCIM building for a period of 5 years. On Sept2mber 28, 1987, a team of inspectors representing the petitioner found that the TEC allegedly tampered with two meters installed at the DCIM building and had not been registering the proper consumption.

MERALCO disconnected the electrical supply from the DCIM building due to the failure of the TEC to pay the differential billing of P 7,040,401.01. TEC demanded the reconnection of electrical service, claiming it had nothing to do with the alleged tampering.

MERALCO then sent out another investigative team in TEC’s NS building which revealed that the electric meters were also not registering the proper energy consumption. Petitioner then demanded P280, 813.72 as the differential billing- which TEC paid.

ISSUE:

1. WoN TEC tampered with the electric meters installed at its DCIM and NS buildings;

2. If so, WoN it is liable for the differential billing as computed by petitioner;3. WoN petitioner was justified in disconnecting the electric power supply

in TEC’s DCIM building

HELD:

1. Tampering in:a. DCIM: NO, because there is a “cloud of doubt over the petitioner’s claim of

meter-tampering”, due to the fact that there was no drastic difference between the consumption of the TEC before and after the petitioner’s inspection.

b. NS: NO, because such allegation was not proven. The meters were enclosed in a metal cabinet, the metal seal of which was unbroken, with the petitioner having sole access to the said meters.

2. NO. Because no tampering was committed.

3. NO. Although the petitioner sent a demand letter to the DEC for payment, it did not include any notice that electricity would be disconnected. Disconnection was subject to the prior requirement of a 48-hour written notice of disconnection under P.D. No. 401. The decree penalized unauthorized water, electrical or telephone connections and such acts as the use of tampered electrical meters.

G.R. No. 178913

MANILA ELECTRIC COMPANY, petitioner, v HSING NAN TANNERY PHILS, Inc., respondent; February 12, 2009

Petition assailing the decision of the CA

DOCTRINE:

It is thus clear that for an allegation of tampering to be the basis of the disconnection of a customer’s electric supply, the discovery of such must be personally witnessed and attested to by an officer of the law or an ERB representative.

FACTS:

Employees of MERALCO conducted an inspection of electric meters in the office premises of respondent; the latter’s representative witnessed the inspection. It was found that the active and reactive meters bore fake cover seals that caused an allegation of tampering.

MERALCO disconnected its electrical supply and removed its meters.

ISSUE:

WoN there was tampering (as described in sec. 4 of RA. 7832) involved

HELD:

Petition is DISMISSED.

NO. The law says that before immediate disconnection may be allowed, the discovery of the illegal use of electricity must have been personally witnessed and attested to by an officer of the law or by an authorized ERB representative.

In this case, the disconnection was effected immediately after the discovery of the alleged meter tampering, which was witnessed only by Meralco’s employees. That the ERB representative was allegedly present when the meter was examined in the Meralco laboratory will not cure the defect.

In the present case, it is admitted that no police officer or ERB representative was present during the inspection, removal and subsequent replacement of the electric meters alleged to have been tampered with, hence, the requirement of the law was not complied with – a lapse fatal to MERALCO’s cause.

G.R. No. 176909

February 18, 2008.; JEFFREY T. GO, petitioner, vs. LEYTE II ELECTRIC COOPERATIVE (LEYECO), INC., respondent.

Petition for review on certiorari

DOCTRINE:

If, notwithstanding the provisions of this section, a court issues an injunction or restraining order, such injunction or restraining order shall be effective only upon the filing of a bond with the court which shall be in the form of cash or cashier's check equivalent to the "differential billing," penalties and other charges, or to the total value of the subject matter of the action: Provided, however, That such injunction or restraining order shall automatically be refused or, if granted, shall be dissolved upon filing by the public utility of a counterbond similar in form and amount as that above required: Provided, finally, That whenever such injunction is granted, the court issuing it shall, within ten (10) days from its issuance, submit a report to the Supreme Court setting forth in detail the grounds or reason for its order. 18 (Emphasis and underscoring supplied)

- Manila Electric Company v. Navarro-Domingo

FACTS:

Petitioner is a customer of the electricity service provided by the respondent. LEYECO II visited the petitioner’s residence to inspect his meter. The respondent was out of town upon the request of LEYECO II as witness to their inspection. Hence the barangay chairman and one SPO3 Glen Trinidad were called to witness the same. Upon inspection, it was noted that the petitioner’s meters had a broken seal and had been allegedly tampered with via shunting wire.

Respondent sent a “Notice of Apprehension and Diconnection”.

Petitioner, as a result, filed a "Petition for Injunction and Damages with Preliminary Injunction with a Prayer for the Issuance of a Temporary Restraining Order".

ISSUES:

1) WoN the inspection of petitioner's electric meter was in accordance with R.A. No. 7832;

2) WoN petitioner was caught in flagrante delicto (caught in the act); and

3) WoN the writ of preliminary injunction was properly issued against respondent LEYECO II.

HELD:

Petition ha MERIT.

1. YES because sec. 4 of R.A. No. 7832 states:

SEC. 4. Prima Facie Evidence. — (a) The presence of any of the following circumstances shall constitute prima facie evidence of illegal use of electricity, as defined in this Act, by the person benefitted thereby, and shall be the basis for: (1) the immediate disconnection by the electric utility to such person after due notice, . . .xxxxxxxxx(iv) The presence of a tampered, broken, or fake seal on the meter, or mutilated, altered, or tampered meter recording chart or graph, or computerized chart, graph or log;(v) The presence in any part of the building or its premises which is subject to the control of the consumer or on the electric meter, of a current reversing

transformer, jumper, shorting and/or shunting wire, and/or loop connection or any other similar device;xxxxxxxxx(viii) . . . Provided, however, That the discovery of any of the foregoing circumstances, in order to constitute prima facie evidence, must be personally witnessed and attested to by an officer of the law or a duly authorized representative of the Energy Regulatory Board (ERB)(emphasis supplied)

Under sec. 1 of the Implementing Rules and Regulations of R.A. No. 7832, SPO3 Glen Trinidad is a public officer.

2. NO because it would have been impossible as the petitioner was out of town during the time of the inspection.

3. YES because the Petitioner has filed a bond. As the law stands there are 2 means of filing a petition for injunction:

a. When there is prima facie evidence that the disconnection was made with evident bad faith or grave abuse of authority;

b. When, even in the absence of bad faith or grave abuse of authority, the electric consumer deposits a bond with the court in the form of cash or a cashier's check equivalent to the differential billing.