G.R. No.

159796 July 17, 2007

ROMEO P. GEROCHI, KATULONG NG BAYAN (KB) and ENVIRONMENTALIST
CONSUMERS NETWORK, INC. (ECN), petitioners
vs
DEPARTMENT OF ENERGY (DOE), ENERGY REGULATORY COMMISSION (ERC),
NATIONAL POWER CORPORATION (NPC), POWER SECTOR ASSETS AND
LIABILITIES MANAGEMENT GROUP (PSALM Corp.), STRATEGIC POWER
UTILITIES GROUP (SPUG), and PANAY ELECTRIC COMPANY INC. (PECO),
respondents.

FACTS:

On June 8, 2001 Congress enacted RA 9136 or the Electric Power Industry Act of 2001.
Petitioners Romeo P. Gerochi and company assail the validity of Section 34 of the EPIRA Law
for being an undue delegation of the power of taxation. Section 34 provides for the imposition of
a “Universal Charge” to all electricity end users after a period of (1) one year after the effectively
of the EPIRA Law. The universal charge to be collected would serve as payment for government
debts, missionary electrification, equalization of taxes and royalties applied to renewable energy
and imported energy, environmental charge and for a charge to account for all forms of cross
subsidies for a period not exceeding three years. The universal charge shall be collected by the
ERC on a monthly basis from all end users and will then be managed by the PSALM Corp.
through the creation of a special trust fund.

ISSUE:

Whether or not there is an undue delegation of the power to tax on the part of the ERC

HELD:

No, the universal charge as provided for in section 34 is not a tax but an exaction of the
regulatory power (police power) of the state. The universal charge under section 34 is incidental
to the regulatory duties of the ERC, hence the provision assailed is not for generation of revenue
and therefore it cannot be considered as tax, but an execution of the states police power thru
regulation.

Moreover, the amount collected is not made certain by the ERC, but by the legislative
parameters provided for in the law (RA 9136) itself, it therefore cannot be understood as a rule
solely coming from the ERC. The ERC in this case is only a specialized administrative agency
which is tasked of executing a subordinate legislation issued by congress; which before
execution must pass both the completeness test and the sufficiency of standard test. The court in
appreciating Section 34 of RA 9136 in its entirety finds the said law and the assailed portions
free from any constitutional defect and thus deemed complete and sufficient in form.