Creation of Public Utility Commission

Creation and structure of the Commission

Section 1 abolishes the Board of Public Utility Commissioners as previously constituted.
Section 1 creates the office of a Public Utility Commissioner.
The Public Utility Commissioner is vested with the same powers and duties as the former Board, plus powers and duties specified in Act No. 2307 as amended.
Section 1 requires the Commissioner to be: a citizen of the United States or of the Philippine Islands, a resident of the Philippine Islands, and not less than thirty years of age.
Section 1 provides that the Commissioner is appointed by the Governor-General, with the advice and consent of the Philippine Senate.

Term, vacancies, temporary performance, removal

Section 2 grants the Commissioner (and successor) a term of six years.
Section 2 requires filling vacancies (except for expiration of term) for the unexpired term only.
Section 2 allows temporary performance when the Commissioner is absent, ill, incapacitated, or for any other cause.
Section 2 provides that the Secretary of Justice, subject to approval by the Governor-General, designates the officer to temporarily perform the Commissioner’s functions.
Section 2 provides that the Commissioner may be removed in the manner and for the reasons prescribed in Section 195, Article IX, Chapter X, Title IV, Book I of the Administrative Code.

Compensation and personnel privileges

Section 3 sets the Commissioner’s annual compensation at PHP 8,000, payable in equal monthly payments by the Insular Treasurer.
Section 4 grants the Commissioner and Commission secretary and employees privileges similar to those granted under the Revised Civil Service Act to officers and employees of the classified civil service.
Section 4 entitles them to necessary traveling expenses while traveling on Commission business, paid from contingent-expense funds through vouchers approved by the Secretary of Justice.
Section 5 authorizes the Commissioner, upon authorization by the Secretary of Justice, to appoint a secretary and other necessary employees authorized by law and to fix their duties and compensation.
Section 5 limits appointment authority to cases authorized by the Secretary of Justice.

Commission powers: supervision and jurisdiction

Section 9 requires that the Public Utility Commission or Commissioner exercises general supervision and regulation, jurisdiction and control over all public utilities and their property, property rights, equipment, facilities, and franchises insofar as necessary to carry out Act No. 2694.
Section 9 defines “public utility” broadly to include individuals, partnerships, associations, corporations, and joint stock companies (domestic or foreign), their lessees, trustees, or court-appointed receivers, and also municipalities, provinces, or other governmental departments of the Philippine Islands.
Section 9 includes as public utilities entities that own, operate, manage, or control within the Philippine Islands: common carriers, railroads, street railways, traction railways, steamboat/steamship lines, small water craft (including bancas, virais, lorehas and others) for passenger/cargo transportation, freight and passenger automobiles, shipyard, marine railway, marine repair shop, ferry, freight or any other car service, public warehouse, public wharf or dock not under the jurisdiction of the Insular Collector of Customs, ice, refrigeration, cold storage, canal, irrigation, express, subway, and telephone and wire or wireless telegraph system, and plants or equipment for public use.
Section 9 removes Commission jurisdiction over ice plants, cold storage plants, or other similar public utilities operated by the Federal Government exclusively for its own use and not for public use.
Section 9 prevents the Commissioner from exercising control or supervision over the Manila Railroad so long as it is controlled by the Government of the Philippine Islands, except regarding its rates.

Filing, regulation, reporting, rate-change procedure

Section 10 authorizes the Commission to require every public utility to file complete schedules of every classification and of every individual or joint rate, toll, fare, or charge for products supplied or services rendered within the Philippine Islands.
Section 10 requires public carriers to file statements showing itineraries or routes served as specified by the Commission.
Section 10 requires that for new public utilities, itineraries and schedules must be filed with the Commission before the public utility begins operation.
Section 11 requires the Commission’s regulation to include ensuring safe, adequate, and proper service and maintenance of necessary material and equipment.
Section 11 assigns sanitation and safety inspection/regulation of vessels operated within the Philippine Islands to the Insular Collector of Customs or duly authorized agents.
Section 12 authorizes the Commission to require specific answers to points where the Commission requires information and requires annual reports of finances and operations.
Section 12 requires annual reports to be sworn to by the officer or functionary of the public utility authorized therefor, covering a period of twelve months ending on December thirty-first of each year.
Section 12 requires annual financial/operations reports to set out detailed items including: capital stock issued and paid up; dividends; surplus and number of stockholders; consolidated and pending obligations and interest paid; cost and value of property, concessions or franchises, and equipment; number of employees and salaries by class; accidents and causes; annual improvement expenditures and investment; receipts and profits by branches and source; operating and other expenses; balance of profits and losses; annual financial operations including an annual balance sheet; and any Commission-required information concerning freight and passenger rates or agreements/compromises/contracts affecting them.
Section 13 requires a public utility proposing to increase or reduce any existing individual rates, joint rates, tolls, charges, schedules, commutation/mileage and other special rates, or change/alter classification to send written notice to the Commission thirty days prior to the effective date.
Section 13 allows the Commission, by order, to consent to a shorter notice period.
Section 13 provides that upon receipt of notice the Commission is authorized, upon written complaint or by virtue of its office, to determine whether the proposed change is just and reasonable.
Section 13 places the burden of proof on the public utility to show the proposed change is just and reasonable.
Section 13 empowers the Commission, pending the hearing and determination, to suspend the proposed change, not exceeding three months.

Pre-operation certificate requirement

Section 14 prohibits any public utility from operating in the Philippine Islands without first securing from the Commission a certificate that operation and authorization to do business will promote the public interest in a proper and suitable manner.
Section 14 exempts existing businesses “at present being operated by the public utilities subject to the provisions of this Act” from this certificate requirement.

Free tickets and pass privileges

Section 15 prohibits every public utility from directly or indirectly, without previous authority of the Commission, issuing, giving, or tendering any free ticket, free pass, or free or reduced rate transportation for passengers.
Section 15 allows free/reduced transportation without this prior authority for specific groups, including: officers, agents, employees, attorneys, physicians and surgeons, and members of their families; inmates of hospital or charity institutions and persons exclusively engaged in charitable work; indigent, destitute, and homeless persons and those transported by charitable societies or hospitals and the necessary agents; necessary caretakers going and returning with live-stock, poultry, fruit, and other freight under uniform and non-discriminatory regulation; employees of sleeping car corporations, express corporations, and telegraph and telephone corporations; railway and marine mail service employees in official duty; post-office inspectors; customs officers and inspectors; immigration inspectors engaged in inspection; witnesses attending legal investigations in which the carrier is an interested party; persons injured in accidents or wrecks; physicians and nurses attending such persons; peace officers; and officers and men of regularly constituted municipal fire departments.
Section 15 preserves the right for officers or employees of the Government of the Philippine Islands or political subdivisions to enter any public conveyance or property of a public utility in pursuit of their public duties.
Section 15 permits interchange between public utilities and common carriers of passes or franks for their employees, officers, agents, surgeons, physicians, attorneys-at-law and their families.
Section 15 requires all public utilities engaged in passenger carriage to furnish transportation free of charge to the Public Utility Commissioner and Commission employees when traveling on official business.
Section 15 clarifies that carriers by water, when furnishing such free passage, are not obliged to furnish subsistence free of charge unless the travel object makes the carrier directly interested.

Asset transfers, leases, and consolidations

Section 15 prohibits a public utility, without the Public Utility Commission’s prior approval, from selling, alienating, mortgaging, encumbering, or leasing its property, franchises, privileges or rights (or any part thereof).
Section 15 prohibits a public utility, without prior approval, from merging or consolidating its property, franchises, privileges or rights (or any part thereof) with those of another public utility.
Section 15 provides that approval is granted only after notice to the public and a hearing of interested persons at a public hearing, upon a showing of just and reasonable grounds.
Section 15 requires findings that approval is warranted for liabilities with more than one year maturity, or for leases, mergers, or consolidations, and that the transaction is not detrimental to the public interest.
Section 15 requires that if approval is granted for a sale, the order of approval must fix the date when the sale is to be consummated.
Section 15 exempts from the approval requirement sales, alienations, mortgages or encumbrances, and leases of property that the Commission judges to be of little importance to the public interest, while still requiring notice of these transactions to the Commission in every case.
Section 15 declares any sale, alienation, mortgage or encumbrance, lease, fusion, or consolidation made without required approval null and void.
Section 15 preserves the ability of a public utility to sell, alienate, or lease property in the ordinary course of its business.

Abandonment, ticketing cessation, timetable changes

Section 16 prohibits any railroad company from abandoning any railroad station or stopping the sale of passenger tickets without first obtaining Commission approval.
Section 16 prohibits any railroad company from ceasing to maintain an agent to receive and discharge freight at any station where passenger tickets are regularly sold or where such agent is regularly maintained.
Section 16 prohibits any public carrier by land or water within the Philippine Islands, or any public utility, from making any permanent change in time tables and sailing schedules, changing service, or failing to continue to call at regular points or ports of call without first obtaining Commission approval.

Franchises and privileges from local government

Section 17 requires that any privilege or franchise thereafter granted to a public utility by any political subdivision of the Philippine Islands is not valid until approved by the Commission.
Section 17 provides that Commission approval requires a hearing and a determination that the privilege or franchise is necessary and proper for the public convenience and properly conserves the public interests.
Section 17 authorizes the Commission to impose conditions on construction, equipment, maintenance, service, or operation as reasonably required by public convenience and interests.
Section 17 requires that any person seeking from the Philippine Legislature a privilege or franchise of the nature of a public utility must first secure from the Commission a certificate concerning public necessity and convenience.
Section 17 requires submission of that certificate to the Legislature together with the petition.

Rehearing and judicial review

Section 19 provides that upon petition of the person or corporation interested, the Commissioner must order a rehearing in any case decided by him.
Section 19 requires the rehearing to be held before a Board composed of: the Attorney-General (or a person from his office he designates), the Director of Public Works, and the Commissioner.
Section 19 makes the Commissioner the presiding officer, and the Board may extend, revoke, or modify any order made by the Commissioner.
Section 19 requires the petition for rehearing to be filed within fifteen days after the day the Public Utility Commissioner’s order becomes effective.
Section 20 allows review of every order made by the Board created in Section 30 by certiorari in appropriate cases or by petition to the Supreme Court.
Section 20 requires petitions to the Supreme Court to be filed within thirty days from the date the order becomes effective.
Section 20 requires filing the petition with the Clerk of the Supreme Court and serving a copy on the parties and the secretary of the Board in the city of Manila either personally or by leaving it at the Board’s office.
Section 20 authorizes the Supreme Court to set aside the Board’s order when it clearly appears there was no evidence before the Board to support reasonably such order, or when the order was without the Board’s jurisdiction.
Section 20 requires the evidence presented to the Board, the Board’s findings, and any order issued to be certified by the Board to the Supreme Court.
Section 20 directs that procedure for review (except as provided) follows rules of the Supreme Court.

Transitional approvals and repeal

Section 21 approves, ratifies, and confirms all action taken prior to March 9, 1917 (approval by the President) by the Board of Public Utility Commissioners without concurrence of other members in cases where concurrence was required under the law then existing.
Section 22 repeals all Acts or parts of Acts—general or special—that are inconsistent with Act No. 2694.
Section 7 repeals Section seven of Act No. 2307 as amended.
Section 8 repeals Section twelve of Act No. 2307 as amended.
Section 18 repeals Section twenty-four of Act No. 2307 as amended.