LAW ON PUBLIC UTILITIES

Hi! In this video we will talk about:

 What is Public Utility
 What are the governing laws on Public utility
 The difference between public utility and public service
 Civil Code, Section 4 -Common Carriers

What is Public Utilities

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 public Utilities are govern by

Article 12, Section 11 of the 1987 Constitution;

COMMONWEALTH ACT NO. 146 – THE PUBLIC SERVICE LAW

(As amended, and as modified particularly
by PD No. 1, Integrated Reorganization Plan and EO 546)

- the Article 12, Section 11 of the 1987 Constitution states that, No franchise, certificate, or any
other form of authorization for the operation of a public utility shall be granted except to citizens of
the Philippines or to corporations or associations organized under the laws of the Philippines, at
least sixty per centum of whose capital is owned by such citizens; nor shall such franchise,
certificate, or authorization be exclusive in character or for a longer period than fifty years.

- it means that a corporation or associations organized under the laws of the philippines must be
fully owened by filipino citizen or such is 60% owned by the filipino citizen and 40% of foreigners.
And the authorzation to operate must not be longer than 50 years.

- the aformention provision protects the country from the posibilty of invasion of foriegners not
just in the economy but also the culture traditions of the country, however we cannot deny that the
the law or the constitution are not copping up in the present situation, we are in need of foriegn
investors more than ever but im not saying that we will let the foriegners or foriegn investors to
control public utilities or the country, we can set limitations.

The next governing law is the COMMONWEALTH ACT NO. 146 – THE PUBLIC SERVICE LAW
(As amended, and as modified particularly
by PD No. 1, Integrated Reorganization Plan and EO 546)

Section 13 (B) of the COMMONWEALTH ACT NO. 146 defined public service as every person who
may own, operate, manage, or control in the Philippines for hire or compensation, with general or
limited clientele, whether permanent, occasional, or accidental and done for general business
purposes, any common carrier, railroad, street railway, traction railway, subway motor vehicle,
steamboat, or steamship line, ferries, and watercraft, shipyard, ice-plant, electric light, heat and
power or any other public utility.

Now the question difference between public utility and public service comes in, most of the time the
public utility and public service are commonly mistaken has the same meaning, but with what I have
discussed, public utilty is the what being operated and the public serice is the what that operates.
Clearly they are different and public utilty have ambigous meaning but it can be easily now
differenciated with the law.

Now,
Ofcurse in operating a business there’s always need for a certifiacate, in this case of Public service it
is the CERTIFICATES OF PUBLIC CONVENIENCE. the section 15 of Commonwealth Act. No, 146
provides that: Unless otherwise exempt, no public service shall operate without having been issued
a CERTIFICATE OF PUBLIC CONVENIENCE (no franchise is required by law) or a certificate of public
convenience and necessity (a prior franchise is required by law).
The term franhise was mentioned ealier, so what is Nature of Legislative Franchise? In Telecom &
Broadcast Attys. Of the Phil., Inc. v. COMELEC (352 PHIL. 153), the court held that a FRANCHISE IS A
MERE PRIVILEGE WHICH MAY BE REASONABLY BURDENED WITH SOME FORM OF PUBLIC SERVICE.