Case Digest (G.R. No. 218378) Core Legal Reasoning Model
Facts:
In National Power Corporation (NPC) petition versus Benguet Electric Cooperative, Inc. (BENECO) decided on June 14, 2021, NPC, a government-owned and controlled corporation under the 1987 Constitution, supplied electricity to BENECO pursuant to a Contract of Sale of Electricity dated January 1, 1998 and a subsequent Transition Contract for the Supply of Electricity. In 1999 NPC’s Metering Services Group installed the billing meter at Irisan Substation and, after tests, set the Current Transformer Ratio (CTR) at 75/5, fixing the billing multiplier at 5,196.31. From May 2000 to February 2004 NPC billed BENECO using this multiplier and granted a 3% Prompt Payment Discount (PPD) for timely payments. In February 2004, BENECO engineer Lawrence Umaming noticed unusually low system losses, prompting Transco tests that revealed the CTR should have been 150/5, meaning BENECO had been underbilled by PHP157,743,314.43. On May 13, 2004 NPC demanded payment of the underbilling; BENECO refuse
...
Case Digest (G.R. No. 218378) Expanded Legal Reasoning Model
Facts:
- Parties and Contract
- National Power Corporation (NPC), a government-owned utility, supplies electricity to Benguet Electric Cooperative, Inc. (BENECO) under a Contract of Sale of Electricity (1998) and a Transition Contract for the Supply of Electricity.
- NPC’s Metering Services Group installed the metering system at Irisan Substation in 2000, set the Current Transformer Ratio (CTR) at 75/5 (multiplier 5,196.31), and thereafter billed BENECO using that multiplier.
- Billing and Discovery of Underbilling
- From May 2000 to February 2004, NPC billed BENECO monthly and granted a 3% Prompt Payment Discount (PPD) for timely payments.
- In February 2004, BENECO’s engineer noted unusually low system losses; TRANSCO tests revealed the CTR was set at 75/5 instead of 150/5, resulting in half the correct billing.
- NPC’s Demand and BENECO’s Response
- By demand letter dated May 13, 2004, NPC sought payment of P157,743,314.43 for underbilling (May 2000–Feb 2004), revoked BENECO’s PPD (June 23, 2004), and threatened disconnection.
- BENECO refused payment, asserted waiver of claims under Section 25 of the Transition Contract (90-day correction period), and filed a complaint for injunction, damages, and reinstatement of PPD on September 30, 2004.
- Proceedings in the Lower Courts
- Regional Trial Court (Sept. 15, 2010) ruled in favor of BENECO: declared underbilling illegal, reinstated PPD from April 2004 onward, and awarded attorney’s fees.
- Court of Appeals (Aug. 29, 2014) affirmed RTC—NPC solely negligent in CTR setting, BENECO had no means to detect error, deleted attorney’s fees; denied reconsideration (May 22, 2015).
Issues:
- Does BENECO’s non-payment of the underbilling constitute unjust enrichment?
- Are the rulings in Panay Electric, Ridjo Tape, and Meralco applicable?
- Is BENECO entitled to a 3% Prompt Payment Discount despite the underbilling dispute?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)