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Transpo - Week 4 - Rate Fixing & Sale, lease & Encumbrance, • …

- - - - D. Provisional Rates - Must be with notice and hearing generally.
        
        E. Rate Refund - Under EPIRA, the ERC has the original and exclusive jurisdiction over all cases contesting rates, fees, fines and penalties imposed by the ERC.
        
        Read ease of doing business act - Provides judicial remedy in case regulatory agency is not acting in a timely or speedy manner.
        
        ANTI RED TAPE ACT OF 2007 - "Sec. 2. Declaration of Policy. – It is hereby declared the policy of the State to promote integrity, accountability, proper management of public affairs and public property as well as to establish effective practices, aimed at efficient turnaround of the delivery of government services and the prevention of graft and corruption in government. Towards this end, the State shall maintain honesty and responsibility among its public officials and employees, and shall take appropriate measures to promote transparency in each agency with regard to the manner of transacting with the public, which shall encompass a program for the adoption of simplified requirements and procedures that will reduce red tape and expedite business and nonbusiness related transactions in government."
        
        Main vs Dissenting Opinion
        
        ERC seems to really have the authority from ERB. But problem is the compliance with the publication requirements. But it can be argued that public was notified so its fine even if the whole application was not published.
        
        Imposition without Hearing - Must have the following requisites concur:
        
        SUFFICIENCY - A finding that the main petition is sufficient in form and substance;
        
        AFFIDAVIT - The submission of an affidavit showing that the increase in rates substantially conforms to the formula, if any is stipulated in the franchise or toll operation agreement, and that failure to immediately impose and collect the increase in rates would result in great irreparable injury to the petitioner; and
        
        BOND - The submission of a bond. (LOI No. 1334-A (1983)
        
        Provisional Rate with the Energy Regulation Commission (Freedom from Debt Coalition v. ERC) -
        
        The applicant must file with the ERC a verified application/petition for rate adjustment. It must indicate that a copy thereof was received by the legislative body of the LGU concerned. It must also include a certification of the notice of publication thereof in a newspaper of general circulation in the same locality.
        
        Within 30 days from receipt of the application/petition or the publication thereof, any consumer affected by the proposed rate adjustment or the LGU concerned may file its comment on the application/petition, as well as on the motion for provisional rate adjustment.
        
        If such comment is filed, the ERC must consider it in its action on the motion for provisional rate adjustment, together with the documents submitted by the applicant in support of its application/petition. If no such comment is filed within the 30- day period, then and only then may the ERC resolve the motion for provisional rate adjustment on the basis of the documents submitted by the applicant.
        
        However, the ERC need not conduct a hearing on the motion for provisional rate adjustment. It is sufficient that it considers the written comment, if there is any.
        
        The ERC must resolve the motion for provisional rate adjustment within 75 days from the filing of the application/petition.
        
        Thereafter, the ERC must conduct a full-blown hearing on the application/petition not later than 30 days from the date of issuance of the provisional order and must resolve the application/petition not later than 12 months from the issuance of the provisional order. Effectively, this provision limits the lifetime of the provisional order to only 12 months.
        
        Provisional Rate fixing for TRB - Depends on requirements by the specific law involved. Thus, no notice and hearing sometimes. This is because PSC may be supplanted by later laws that relax the requirements.
      - Procedure for Rate-Fixing -
        
        Application by the public utility
        
        Notice and hearing
        
        Approval/Denial by the regulatory body
        
        Delegation of Rate-Fixing - May be delegated to administrative bodies and originates from Congress. But, may not be delegated to the public utilities/operators.
        
        Standards for Delegation (Phil. Communications Statelite v. Alcuaz) - What is required is to prescribe for the guidance of the administrative authority is that the rate be reasonable and just. This need not be express and may be implied.
    - - Operating Expenses - added to the value of the property/capital to determine the rate base.
        
        Unitilized Properties - Properties not used for public service are not included in the rate base.
        
        Taxes - Income taxes are not included as an allowable deduction in arriving at the rate base, as taxes are imposed on the entity itself and not on the public. Do not redound to the benefit of the public.
        
        Determination of Value of Capital (RP v. MERALCO) - Present Cost or market Value, instead of historical cost.
        
        Least Cost Manner (NAERC v. ERC) - Rate base may be adjusted from FMV to historical cost so long as it is pursuant to the principle of least cost to its captive market.
  - - - Public-Service Equipment (PSC 16c) - In public service equipment of an operated used principally or secondarily for the promotion of a private business, the net profits of the private business shall be considered in relation to the public service of the operator for the purpose of rate fixing.
    - - How Approved (PSC 20A) - Commission shall approve only upon:
        
        Rates are just and reasonable and not any that are unjustly discriminatory or unduly preferential.
        
        Upon reasonable notice to the public services and other parties concerned, to give them opportunity to be heard
        2a. Burden of proof to show that the proposed rates or regulations are just and reasonable shall be upon public service proposing the same.
    - - [Substantive Due Process] Just and reasonable - to both the public utility and the public. the public utility must have a fair return on the reasonable value of the property as profit. As to the public, reasonableness requires entitlement to the service at an affordable cost
      - Nature of Power - Can be legislative or quasi-judicial in nature. If particularly targeting a specific individual, then quasi-judicial. Therefore, rate-fixing requires actual notice and hearing pursuant to administrative due process.
        
        Philcomsat v. Alcuaz - When is hearing essential? A: When administrative body is exercising judicial or QJ functions. The person whose property or rights may be affected should be entitled to notice and hearing.
        
        [Procedural Due Process] A temporary rate fixed by an administrative body is still subject to the twin requirements.
        
        NPC v. Pepoa, Can a penalty be considered a rate? - Yes. Definition of rate: Rate is defined as “a charge, payment, or price fixed according to a ratio, scale, or standard;” or “an amountt paid or charged for a good or service.
        
        penalties imposed for sale of energy
        
        KMU v. Garcia - rate unreasonable
- - - - Negotiation/Completion - The transaction may be negotiated or completed before its approval by the PSC. Similarly, there may be sale, alienation or lease in the ordinary course of business.
    - - Non-Compliance (20-I) - Transfer without Public Service Commission’s approval shall be:
        
        Void
        
        Not registered in the books of the public service corporation
      - Limitations on Franchise of the Mindanao Islamic Telephone Company, Inc (RA 8627, Sec. 15) - Grantee must obtain prior approval of the Philippine Congress. Otherwise, any of the following activities over the franchise or the rights and privileges acquired therefrom are prohibited.
        
        Sale
        
        Lease
        
        Transfer
        
        Grant of Usufruct
        
        Assign
        
        Merge with any corporation or entity
        
        Transfer of controlling interest of the grantee
        
        Effect of Transfer - Any person or entity to which this franchise is sold, transferred or assigned, shall be subject to the same conditions, terms, restrictions, and limitations of this Act.
        
        Section 15. Sale, Lease, Transfer, Usufruct, Etc. – The grantee shall not lease, transfer, grant the usufruct of, sell nor assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation or other commercial or legal entity, nor merge with any corporation or entity, nor shall the controlling interest of the grantee be transferred, whether as a whole or in parts and whether simultaneously or contemporaneously, to any such person, firm, company, corporation or entity without the prior approval of the Congress of the Philippines. Any person or entity to which this franchise is sold, transferred or assigned, shall be subject to the same conditions, terms, restrictions, and limitations of this Act.
      - PLDT v. NTC - The sale of shares of stock of a public utility is governed by another law, Section 20(h) of PSA. Pursuant to PSA, the PSC (now the NTC) is the government agency vested with the authority to approve the transfer of more than 40% of the subscribed capital stock of a telecommunications company to a single transferee. Transfers of shares of a public utility corporation need only NTC approval, not Congressional authorization.
        
        The approval of the NTC may be deemed to have been met when it authorized the issuance of the provisional authority to ETCI and there was full disclosure before the NTC of the transfers.
        
        Sale of Stock v Sale of Franchise -
        
        shares of stock, which are owned by stockholders, the sale of which requires only NTC approval,
        
        the franchise itself which is owned by the corporation as the grantee, the sale or transfer of which requires Congressional sanction