Case Digest: SURIGAO ELECTRIC CO., INC. vs. MUNICIPALITY OF SURIGAO

SURIGAO ELECTRIC CO., INC. and ARTURO LUMANLAN, SR. vs. MUNICIPALITY OF SURIGAO and PUBLIC SERVICE COMMISSION

No. L-22766        30 August 1968

Fernando, J.

FACTS:

On June 1960, Congress amended the Public Service Act, one of the changes introduced doing away with the requirement of a certificate of public convenience and necessity from the Public Service Commission for public services owned and operated by government entities or government-owned or controlled corporations, but at the same time affirming its power of regulation for the fixing of rates.  The petitioners challenged the validity of the said order.

ISSUE:

Whether or not a municipal government can directly maintain and operate an electric plant without obtaining a specific franchise for the purpose and without a certificate of public convenience and necessity duly issued by the Public Service Commission.

HELD:

No.

The Supreme Court held in a previous case that governmental affairs do not lose their government character by being delegated to the municipal governments.  Whatever privilege may be claimed by the petitioners cannot override the specific constitutional restriction that no franchise or right shall be granted to any individual or corporation except under a condition that it shall be subject to amendment, alteration or repeal of the Congress.