Gerochi vs.

Department of Energy

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, the Universal Charge imposed under Sec. 34 of the EPIRA is a tax

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.