1. Republic v. Manila Electric Co., G.R. Nos.

141314 & 141369,

[November 15, 2002], 440 PHIL 389-409)
Puno, J.:
FACTS:
MERALCO filed with petitioner Energy Regulatory Board (ERB) an
application for the revision of its rate schedules to reflect an average
increase in its distribution charge. ERB granted a provisional
increase subject to the condition that should the COA, through, its
audit report find MERALCO is entitled to a lesser increase, all
excess amounts collected from the latter’s customers shall either be
refunded to them or correspondingly credited in their favor. The
COA report found that MERALCO is entitled to a lesser increase,
thus ERB ordered the refund or crediting of the excess amounts.
On appeal, the CA set aside the ERB decision. MRs were denied.
Issue:
Whether or not the regulation of ERB as to the adjustment of rates
of MERALCO is valid.
Ruling:
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 juris privati 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 Submission to regulation may be withdrawn by the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