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Surigao Electric Co

1) Surigao Electric Co. challenged the validity of a Public Service Commission order approving rate schedules submitted by the Municipality of Surigao to directly operate an electric plant. 2) The court held that a municipal government is an instrumentality of the national government exempted from Public Service Commission jurisdiction, except for rate fixing. 3) As there was no taking of private property, the statute on government acquisition of public utilities was not applicable, and the municipality could directly operate the electric plant without a specific franchise or certificate of public convenience. The Public Service Commission order was affirmed.

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215 views1 page

Surigao Electric Co

1) Surigao Electric Co. challenged the validity of a Public Service Commission order approving rate schedules submitted by the Municipality of Surigao to directly operate an electric plant. 2) The court held that a municipal government is an instrumentality of the national government exempted from Public Service Commission jurisdiction, except for rate fixing. 3) As there was no taking of private property, the statute on government acquisition of public utilities was not applicable, and the municipality could directly operate the electric plant without a specific franchise or certificate of public convenience. The Public Service Commission order was affirmed.

Uploaded by

Keilah Arguelles
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1. Surigao Electric Co. Inc. vs Municipality of Surigao- 24 SCRA 898- G.R. No.

L-22766 August 30, 1968


Facts:

In this petition for review, a case of first impression, petitioner Surigao Electric Co., Inc., a legislative
franchise holder, and petitioner Arturo Lumanlan to whom, on February 16, 1962, the rights and
privileges of the former as well as its plant and facilities were transferred, challenge the validity of the
order of respondent Public Service Commission, dated July 11, 1963, wherein it held that it had "no
other alternative but to approve as [it did approve] the tentative schedule of rates submitted by the
applicant," the other respondent herein, the Municipality of Surigao.
Issue:
Whether a municipal government can directly maintain and operate an electric plant without
obtaining a specific franchise for the purpose and without a certificate of public convenience and
necessity duly issued by the Public Service Commission.
Held:

No. A municipal government or a municipal corporation such as the Municipality of Surigao is a


government entity recognized, supported and utilized by the National Government as a part of its
government machinery and functions; a municipal government actually functions as an extension of
the national government and, therefore, it is an instrumentality of the latter; and by express
provisions of Section 14(e) of Act 2677, an instrumentality of the national government is exempted
from the jurisdiction of the PSC except with respect to the fixing of rates. This exemption is even
clearer in Section 13(a). This Act provides for the procedure to be followed whenever the
Government or any political subdivision thereof decides to acquire and operate a public utility owned
and operated by any individual or private corporation." 15 What is to be regulated, therefore, by this
enactment is the exercise of eminent domain, which is a taking of private property for public use
upon the payment of just compensation. There is here no taking. There is here no appropriation.
What was owned before by petitioners continue to remain theirs. There is to be no transfer of
ownership.

Clearly, then, the relevancy of the statute providing for the taking or operation of the government of
public utilities, appears, to put it at its mildest, far from clear. Petitioners' contention as to this alleged
error being committed, therefore, far from being strengthened by such a reference, suffers from a
fate less auspicious.

No other alleged error committed need be considered.

WHEREFORE, the order of respondent Public Service Commission of July 11, 1963, as well as the
order of February 7, 1964, denying the motion for reconsideration, are affirmed. Costs against
petitioners.

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