[9] Teresa Electric Power Co. v.

PSC ○ that it is the duly authorized operator of an electric light, heat and
G.R. No. L-21804| September 25, 1967 | Dizon, J. power service in Teresa, Rizal; that Filipinas is not authorized by its
articles of incorporation to operate an electric plant;
TOPIC: Not a Public Utility ○ that the Municipal Council of Teresa had not authorized it either to
operate the proposed service;
SUMMARY: Petitioner Teresa Electric is opposing the Respondent PSC’s issuance of ○ that it is willing to supply Filipinas' need for electricity; and that
a Certificate of Public Convenience for Filipinas (domestic corporation engaged in the Filipinas' principal business does not come within the jurisdiction of
manufacture and sale of cement). Filipinas intends to use the Certificate of Public the respondent Commission.
Convenicen to build their own electric power plant exclusively for their cement ● Filipinas’ answer: under paragraph 7 of its articles of incorporation, it is
factory. Petitioner Teresa Electric is opposing this grant because it is the duly authorized to operate the proposed electric plant.
authorized operator of electric light, heat, and power service in the area and that the ○ It also alleged that there is no need for securing the approval of the
Municipal Council of Teresa had not authorized it either to operate the proposed Municipal Council before operating its electric plant as this is not a
service. The issue now is whether Filipinas should have secured either a municipal or necessary requisite for the issuance of a certificate of public
legislative franchise before it could be entitled to a certificate of public convenience convenience inasmuch as it already possesses the 3 basic
and necessity to operate and maintain an electric plant. The court held in the negative requirements of law namely:
and said that under Act No. 667 of the Philippine Commission, a municipal or ■ Filipino citizenship, financial capacity and the need for the
legislative franchise is a condition precedent to the granting a certificate of public service in the interest and convenience of the consuming
convenience and necessity to operate and maintain an electric plant for business public.
purposes. Does not apply to respondent who applied for a certificate of public ● After hearing, the Commission issued a certificate of public convenience to
convenience and service to operate and maintain an electric plant exclusively for its Filipinas on March 15, 1963, subject to the conditions set forth therein.
own use.
ISSUE w/ HOLDING & RATIO:
DOCTRINE: A municipal or legislative franchise is not a condition precedent to the 1. Whether Filipinas should have secured either a municipal or legislative franchise
granting of a certificate of public convenience and necessity to operate and maintain before it could be entitled to a certificate of public convenience and necessity to
an electric plant if such is exclusively for its own use. operate and maintain an electric plant – NO.

● Petitioner contends that under the provisions of Act No. 667 of the Philippine
FACTS:
Commission, a municipal or legislative franchise is a condition precedent to
● Petitioner Teresa Electric Light and Power Co. is a domestic corporation
the granting to Filipinas of a certificate of public convenience and necessity
operating an electric plant in Teresa, Rizal, under a subsisting certificate of
to operate and maintain an electric plant.
public convenience and necessity, while Respondent Filipinas is likewise a
● Sec 1. of Act 667 requires the filing of a formal application with the Council
domestic corporation engaged in the manufacture and sale of cement.
of the municipality in which or through which the petitioner desires to
● On May 24, 1962 Filipinas filed an application with the PSC for a certificate
construct or maintain its line, stating, among other things, the rate per month
of public convenience to install, maintain and operate an electric plant in
to be charged for electric light by lamp of specified standard candle-power,
sitio Kaysapon of barrio Pamanaan, municipality of Teresa, Rizal, for the
and by amount of electricity consumed where a meter is used, and the rate
purpose of supplying electric power and light to its cement factory and its
per centum of the gross receipts which petitioner is willing to pay into the
employees living within its compound.
provincial treasury for the franchise. Paragraphs 2 and 3, section 2 of the
● Petitioner filed its written opposition alleging:
same act also provide that not less than one-half of one per centum of the
gross earnings shall be paid into the provincial treasury, and that the rates to
 be charged shall always be subject to regulations by act of the Philippine ○ Petitioner could not supply the power needs of Filipinas, because
Commission or the legislative body of the Islands. its load capacity was only 200 kilowatts while Filipinas was in need
● Given these requirements, the act was intended to apply exclusively to any of 6,000 Kilowatts power to operate its cement factory.
person or corporation who desires a franchise to construct and maintain an
RULING: Petition DENIED
electric line or power plant and line for business purposes.
○ Does not apply to respondent who applied for a certificate of
public convenience and service to operate and maintain an electric
plant exclusively for its own use in connection with the operation of
its cement factory and for the use of its employees living within the
compound of the factory — the latter to receive service free of
charge.
● All that Filipinas needs for the purpose above mentioned is a certificate of
public convenience and necessity such as the one granted to it by the
respondent Public Service Commission.

2. Whether under its articles of incorporation Filipinas is authorized to operate and

maintain an electric plant – YES.

● The Articles of Incorporation of respondent provide for authority to secure

from any governmental, state, municipality, or provincial, city or other
authority, and to utilize and dispose of in any lawful manner, rights, powers,
privileges, franchises and concessions — obviously necessary or at least
related to the operation of its cement factory. They also provide that the
corporation may generally perform any and all acts connected with the
business of manufacturing portland cement or arising therefrom or
incidental thereto. The operation of an electric light, heat and power plant is
necessarily connected with the business of manufacturing cement.

3. Whether Filipinas could be granted a certificate of public convenience and

necessity to operate and maintain an electric plant notwithstanding the existence of
an electric plant operator in the same municipality – YES.

● While it is true that operators of public convenience and service deserve

some protection from unnecessary or unlawful competition, yet the rule is
that nobody has any exclusive right to secure a franchise or a certificate of
public convenience. Above any or all considerations, the grant of franchises
and certificates of public convenience and service should be guided by
public service and interest; the latter are the primordial considerations to be
taken into account.