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III. Regulation of Public Utilities; B. Rate-Fixing; iii. RATE REFUND a.

a. In those cases, the SC authorized Meralco to adopt a rate adjustment


G.R. No. 171624 – BF Homes, Inc. vs. Manila Electric Company in the amount of P0.017/kwh, effective on the billing cycles beginning
Leonardo-De Castro Feb. 1994.
b. Also, in accordance w/ ERB’s decision in 1998, Meralco was ordered to
Meralco cut the power off water pumps of BF Homes because of non-payment of refund its customers (the average excess of P0.167/kwh from the billing
electric bills amounting to 4 million. BF Homes requested Meralco to apply their 4 million cycles starting in Feb 1998 onwards) or correspondingly credit the refund
debt to the refund they were entitled to based on a decision promulgated by the SC the year in their future consumption.
before. In the decision, they were allegedly entitled to 11 Million pesos. Meralco refused to c. The MRs filed by Meralco in the Meralco Refund cases was DENIED w/
apply the refund money because the Energy Regulatory Commission has not yet approved FINALITY.
the schedule of refund payments. BF Homes then filed a writ of injunction with the RTC to * Pursuant to the Meralco Refund cases, the amount that Meralco was mandated to refund
inhibit Meralco from cutting off power from their water pumps. The RTC granted the writ. BF Homes and PWCC is P11, 834, 570.91.
The Court ruled that the RTC had no jurisdiction over the dispute, as following the
doctrine of primary jurisdiction, it was the ERC that had the authority to rule on the dispute. 2. THE CASE AT HAND (As stated in BF Homes and PWCC’s RTC Petition):
The offsetting of the debt of petitioner to their entitled refund credit falls squarely within the i. In 2003, Meralco disconnected electric supply to BF Homes and PWCC’s 16
jurisdiction of the ERC. [From: Transpo Finals Reviewer] water pumps located in BF Homes (Parañaque, Caloocan, QC) w/out notice.
DOCTRINE This, in effect, disrupted the water supply in those areas.
Administrative agencies, like the ERC are tribunals of limited jurisdiction and, as such, ii. Meralco demanded BF Homes and PWCC to pay electric bills amounting to
could wield only such as are specifically granted to them by the enabling statutes. In P4, 717, 768.15.
relation there to is the doctrine of primary jurisdiction involving matters that demand the iii. BF Homes and PWCC requested Meralco to just apply that bill against the
special competence of administrative agencies even if the question involved is also judicial amount of the refund granted to them pursuant to the Meralco Refund cases.
in nature. Courts will not resolve a controversy involving a question w/in the jurisdiction of (In other words there will be an off-setting of debts—just get the P4.7M that
an administrative tribunal, especially when the question demands the sound exercise of we owe you from the P11.8M that you owe us).
administrative discretion requiring special knowledge, experience and services of the iv. Meralco DENIED their request. Meralco’s reason was that it has not yet
administrative tribunal to determine technical and intricate matters of fact. come up w/ the schedule for the refund of large amounts, such as theirs.
v. Meralco, again, w/out giving any notice, cut off power supply to BF Homes
IMPORTANT PEOPLE and PWCC’s (5) water pumps located in BF Homes Parañaque and BF
Meralco – a corporation engaged in the distribution and sale of electric power in Metro MNL. Resort Village, Las Piñas.
BF Homes, Inc. and PWCC1– owners and operators of waterworks systems delivering water vi. Meralco threatened to cut off electric power connections to all BF Homes’ and
to over 12k households and commercial buildings in BF Homes subdivisions (Parañaque, PWCC’s water pumps if they failed to pay their bills by June 20, 2003.
Las Piñas, Caloocan, and QC).
The water distributed in the waterworks systems they owned and operated 3. So BF Homes and PWCC filed before the RTC a Petition for the Issuance of a Writ of
by is drawn from deep wells using pumps run by electricity supplied by Meralco. Preliminary INJUNCTION against Meralco. So that it would stop cutting off their electric
power connections.
FACTS i. Meralco’s Answer stated that under BF Homes’ and PWCC’s service
1. BACKGROUND/CONTEXT: contracts, they agreed Meralco reserves the right to discontinue service in
i. Meralco overcharged its consumers so the latter had to ask for refund for the case customer failed to pay its bills.
amount they overpaid (an excess average of P0.167/kwh).  Cutting off service for non-payment by the customers of the regular
ii. In 1998, the ERB (Energy Regulatory Board) rendered a decision w/c stated monthly electric bills is the only practical way a public utility, such as
that the excess average amount of P0.167/kwh2 (from the billing cycles Meralco, can ensure and maintain efficient service in accordance w/ the
starting in Feb 1998 onwards) should be refunded to Meralco’s consumers terms and conditions of its legislative franchise and the law.
OR correspondingly credited in their favor for future consumption.  BF and PWCC knew that Meralco was already in the process of
 This means that they can get their refund “now” (as in at the time the implementing the decision of the SC as to the refund case. BUT this
refund was granted) OR they can just have their refund (the amount refund has to be implemented in accordance w/ the guidelines and
thereof) deducted from their future bill. schedule to be approved by the ERB. Thus, filing [this] instant petition
iii. In 2002, the SC decided on (2) cases3” w/c we shall call the “Meralco Refund is merely to evade payment.
cases”. ii. Meralco filed an MTD based on the following grounds:
a. The petition preempts the power of the ERC (formerly ERB) to implement
the decision of the SC.

1 Phil. Waterworks and Construction Corp. 3 1) Rep. vs. MERALCO and 2) LAMP vs. MERALCO
2 It wasn’t discussed why there was an excess of P0.167/kwh, it can only be presumed that Meralco
overcharged for some time starting in Feb 1998 that’s why it was ordered to refund its customers
1
b. Meralco is a utility company whose business activity is wholly regulated
by the ERC. It’s the one tasked to approve the guidelines, schedules 2. The task to approve the guidelines, schedules, and details of the refund by Meralco
and details of the refund. to its consumers falls upon the ERC.
c. The SC’s decision is in accordance w/ ERB’s decision, hence Meralco - By filing their Petition before the RTC, BF and PWCC intend to collect their refund
has to wait for the schedule and details of the refund to be approved w/out submitting to the approved schedule of the ERC, and in effect, enjoy
by the ERC before it can comply w/ the SC decision. preferential right over the other equally situated Meralco consumers.
d. It has a right to disconnect because as a public utility, it is its legal duty
to furnish services to the general public w/out arbitrary discrimination. So 3. Sec. 8, EO 172 vested on the ERB the authority to grant provisional relief4. This
they must disconnect electric services of petitioners for failure to pay. provision is still applicable to the ERC as it succeeded ERB (per Sec. 80, EPIRA)
4. RTC issued an Order granting the application for a writ of preliminary INJUNCTION DISPOSITIVE PORTION
 Reason: All the requisites for its issuance are complied with. There is an Petition is DENIED. RTC is ordered to dismiss BF Homes’ and PWCC’s petition for the
urgent need to issue prelim. injunction in order to prevent social unrest issuance of a preliminary injunction.
in the community for having been deprived of the use and enjoyment of
waters through petitioners’ water pumps.
5. Upon appeal, CA reversed the RTC ruling that it had no jurisdiction over the subject
DIGESTER: Viveka
matter. ERC has original and exclusive jurisdiction over all cases contesting rates, fees,
fines and penalties imposed by itself (Sec. 43(u), RA 9136 or EPIRA).
6. Hence, this case before the SC.

ISSUE with HOLDING: Whether jurisdiction over the subject matter lies with the RTC
or the ERC (Energy Regulatory Board). – ERC

BF Homes’ and PWCC’s main arguments:


1. Due to the threat of Meralco to disconnect electric services, they had no other
recourse but to seek an injunctive remedy form the RTC under its gen. jurisdiction
2. Even granting that he RTC has no jurisdiction, the ERC has no injunctive power
to prevent the disconnection by Meralco of electric services to BF and PWCC

SC: Petition has no merit.


1. Settled is the rule that jurisdiction is conferred only by the Constitution or the law.

A. RA 9136 (Electric Power Industry Reform Act “EPIRA”) was enacted in 2001. Sec. 44 and
80 thereof transferred the powers & functions of the ERB to the ERC. It also conferred new
powers to the ERC (Sec. 43). Sec. 43(u) says:
(u) The ERC shall have the original and exclusive jurisdiction over all cases contesting rates, fees,
fines and penalties imposed by the ERC in the exercise of the abovementioned powers, functions
and responsibilities and over all cases involving disputes between and among participants or
players in the energy sector.

B. Administrative agencies, like the ERC are tribunals of limited jurisdiction and, as
such, could wield only such as are specifically granted to them by the enabling
statutes. In relation there to is the doctrine of primary jurisdiction involving
matters that demand the special competence of administrative agencies even if
the question involved is also judicial in nature. Courts will not resolve a
controversy involving a question w/in the jurisdiction of an administrative
tribunal, especially when the question demands the sound exercise of
administrative discretion requiring special knowledge, experience and services
of the administrative tribunal to determine technical and intricate matters of fact.
C. It bears to stress that in the Meralco Refund Cases, SC only affirmed the ERB
decision fixing just and reasonable rate for the electric services of Meralco and granting
refund to Meralco consumers of the amount they overpaid.

4 w/c is what BF Homes and PWCC is asking for anyway—preliminary injunction

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