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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Republic Act No. 11659 or An Act Amending Commonwealth Act No. 146, otherwise known as the Public Service Act, as amended, was signed into law on March 21, 2022. One of the notable features of this law is the inclusion of a definition for “Public Utility”, a term that was undefined in both the 1987 Constitution and the old Public Service Act.
Under Section 4 of R.A. No. 11659, Public Utility refers to a public service that operates, manages or controls for public use any of the following:
- Distribution of Electricity;
- Transmission of Electricity;
- Petroleum and Petroleum Products Pipeline Transmission Systems;
- Water Pipeline Distribution Systems and Wastewater Pipeline Systems, including sewerage pipeline systems;
- Seaports; and
- Public Utility Vehicles.
All concessionaires, joint ventures and other similar entities that wholly operate, manage or control for public use the sectors above are public utilities.
Nothing in this Act shall be interpreted as a requirement for legislative franchise where the law does not require any. No other person shall be deemed a public utility unless otherwise subsequently provided by law.
Upon the recommendation of the National Economic and Development Authority (NEDA), the President may recommend to Congress the classification of a public service as a public utility on the basis of the following criteria:
- The person or juridical entity regularly supplies and transmits and distributes to the public through a network a commodity or service of public consequence;
- The commodity or service is a natural monopoly that needs to be regulated when the common good so requires. For this purpose, natural monopoly exists when the market demand for commodity or service can be supplied by a single entity at a lower cost that by two or more entities;
- The commodity or service is necessary for the maintenance of life and occupation of the public; and
- The commodity or service is obligated to provide adequate service to the public on demand.
All public services, including those classified as public utilities under this Act, shall continue to be regulated and supervised by the relevant Administrative Agencies under existing laws.
A public service which is not classified as a public utility under this Act shall not be imposed by the relevant Administrative Agencies on any public service not as a public utility.
Notwithstanding any law to the contrary, nationality requirements shall not be imposed by the relevant Administrative Agencies on any public service not classified as a public utility.
The NEDA shall provide periodic advice to Administrative Agencies on the proper application of the constitutional and other legal restrictions to local and foreign-owned subcontractors, without putting operational resiliency at risk.
Related Articles:
- Unlawful Arrangements under the Public Service Act: Boundary System and Kabit System
- Key Takeaways from the Implementing Rules of the Public-Private Partnership Code
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.
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