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  • GEROCHI VS DOE - Inherent

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    Agatha Granado
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    The Supreme Court ruled that Section 34 of the Electric Power Industry Reform Act, which authorizes the collection of a universal charge from electricity end users, does not constitute an undue delegation of the taxing power. The universal charge is considered an exaction under the state's police power for regulation rather than a tax for revenue generation. While the Energy Regulatory Commission collects the charge, the amount is determined by legislative parameters in the Act itself rather than solely by the Commission. The Court held that Section 34 passes the tests for completeness and sufficient standards and is therefore constitutional.

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    GEROCHI VS DOE_inherent

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    The Supreme Court ruled that Section 34 of the Electric Power Industry Reform Act, which authorizes the collection of a universal charge from electricity end users, does not constitute an undue delegation of the taxing power. The universal charge is considered an exaction under the state's police power for regulation rather than a tax for revenue generation. While the Energy Regulatory Commission collects the charge, the amount is determined by legislative parameters in the Act itself rather than solely by the Commission. The Court held that Section 34 passes the tests for completeness and sufficient standards and is therefore constitutional.

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    51 views1 page

    GEROCHI VS DOE - Inherent

    Uploaded by

    Agatha Granado
    The Supreme Court ruled that Section 34 of the Electric Power Industry Reform Act, which authorizes the collection of a universal charge from electricity end users, does not constitute an undue delegation of the taxing power. The universal charge is considered an exaction under the state's police power for regulation rather than a tax for revenue generation. While the Energy Regulatory Commission collects the charge, the amount is determined by legislative parameters in the Act itself rather than solely by the Commission. The Court held that Section 34 passes the tests for completeness and sufficient standards and is therefore constitutional.

    Copyright:

    © All Rights Reserved
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    GEROCHI VS DOE

    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.

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