G.R. No. 75016 . January 13, 1989.
PERLA C. BAUTISTA and GREATER MANILA FEDERATION OF JEEPNEY OPERATORS & DRIVERS ASSOCIATION, petitioners, vs. BOARD OF ENERGY and MANILA ELECTRIC COMPANY, respondents.

FACTS

On May 30, 1986, respondent Manila Electric Company (MERALCO) filed with the Board of Energy (BOE) an application for an upward revision of its rates. MERALCO alleged it incurred substantial net losses in 1984 and 1985 due to peso devaluation, decreased sales, high financing costs, and increased system losses. It further claimed an expected cash deficit for 1986 operations, threatening its ability to service foreign loans and maintain its distribution system. Concurrently, MERALCO prayed for ex parte provisional approval of the proposed rates. Petitioners Perla C. Bautista and the Greater Manila Federation of Jeepney Operators and Drivers Association filed an opposition on June 9, 1986, arguing the increase was exorbitant and that no provisional approval should be granted without a hearing.
On June 11, 1986, the BOE issued an order provisionally approving MERALCO’s revised rate schedules, effective July 1, 1986, without conducting a prior hearing. The order stipulated that after a full hearing and audit, any excess amounts collected would be refunded or credited to customers. Petitioners moved for reconsideration, contending they were denied the opportunity to be heard. The BOE denied the motion on June 18, 1986, citing its statutory power to grant provisional relief and noting that a hearing on the main application was scheduled for June 26, 1986.

ISSUE

Whether the Board of Energy acted with grave abuse of discretion amounting to lack of jurisdiction when it provisionally approved MERALCO’s rate increase application without a prior hearing.

RULING

The Supreme Court dismissed the petition, ruling that the BOE did not commit grave abuse of discretion. The legal logic rests on the explicit statutory authority granted to the BOE under Section 16(c) of Commonwealth Act No. 146 , as amended, which empowers the Board to approve rates proposed by public services provisionally and without a hearing, provided it calls a hearing within thirty days thereafter. This provisional authority is further supported by Section 2 of Rule 12 of the BOE’s Rules of Practice. The Court emphasized that such provisional approvals are a recognized administrative mechanism to address urgent financial needs of public utilities, with the safeguard that a full hearing must subsequently be held to determine the final, permanent rates. The BOE’s order was based on substantial evidence, including MERALCO’s verified application, supporting affidavits, and certified financial documents, demonstrating prima facie justification for interim relief. The denial of due process was unfounded because the provisional order was interlocutory and did not preclude petitioners from participating in the subsequent full hearing on the merits, which was duly scheduled. The Court cited analogous precedents, including Citizens Alliance for Consumer Protection v. Energy Regulatory Board, upholding the validity of provisional rate adjustments without prior hearings, provided the procedural safeguard of a subsequent plenary hearing is satisfied.