Case Digest: National Power Corp. vs. CA, 345 Phil 9, G.R. No. 112702

National Power Corp. vs. CA, 345 Phil 9, G.R. No. 112702, September 26, 1997

Subject: Transportation Law

FACTS

Cagayan Electric and Power Light Company (CEPALCO) was enfranchised by RA 3247 for 50 years to construct, maintain, and operate an electric light, heat, and power system for the purpose of generating and/or distributing power for sale within Cagayan de Oro City and its suburbs. The franchise was expanded to include municipalities of Tagoloan and Opol, Misamis Oriental, Villanueva, and Jasaan, Misamis Oriental, in 1969.

In 1973, PD 243 issued created Philippine Veterans Investment Development Corporation (PHIVIDEC), authorized to engage in commercial, industrial, mining, agricultural, and other enterprises to allow the full and continued employment of productive capabilities of and investment of veterans and retirees of the Armed Forces of the Philippines. In 1974, PD 538 created PHIVIDEC Industrial Authority (PIA) which shall promote the professional management of well-planned industrial areas.

PIA granted CEPALCO a temporary authority to retail electric power to the industries operating within PIE-MO, allowing CEPALCO to operate, administer, construct, and distribute electric power within the area for a period of 5 years, renewable for another 5 years. At the end of the period, PIA has the option to take over the operation of the electric service and acquire CEPALCO's assets within PIE-MO.

CEPALCO was unable to meet the demands of the industries in PIE-MO, leading most companies to close. PIA applied with the National Power Company (NPC) for direct power connection, which was approved. CEPALCO contended that FPI violated its right as the authorized operator of an electric light and power system in the area and the national electrification policy.

CEPALCO filed a petition with the ERB, praying that the ERB order the discontinuance of all existing direct supply of power by the NPC within the petitioner's franchise area. However, PIA contracted the NPC for the construction of a transmission line from Namutulan substation to the substation of PIA, which was dismissed on the ground of res judicata.

ISSUE

Whether or not transportation is a public utility.

RULING

Yes, the transportation is a public utility.

Under the law, a "public utility" is a business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph service. The term implies public use and service.

In this case, Sec. 4 of P.D. No. 538 grants the agency has the authority to construct, own, lease, operate, and maintain transportation networks, as necessary for the conduct of industry and commerce. This discuss transportation as a public utility since transportation is specifically used for public use and service in this Presidential Decree.