Enrique U. Betoy vs.

The Board of Directors

G.R. Nos. 156556-57, PERALTA, 2011-10-04

Legal Keywords/Doctrine:
Government officials, specifically department secretaries, cannot delegate their
duties as members of the National Power Board of Directors, including their
power to vote and approve board resolutions. They must exercise their own sound
discretion in fulfilling their responsibilities. Additionally, cabinet officials cannot
receive additional compensation by way of per diems and allowances, and any
amount received by them in their capacity as board members should be
reimbursed to the government.

Dispo: WHEREFORE, premises considered and subject to the above disquisitions, the Petition
for Certiorari and the Supplemental Petition for Mandamus are Dismissed for lack of merit.

Contention:
The contentions of both parties are as follows: - Petitioner argues that certain
provisions of the Electric Power Industry Reform Act of 2001 (EPIRA) and
National Power Board Resolutions are unconstitutional for violating Section 13,
Article VII of the 1987 Constitution, which prohibits government officials from
holding other offices or employment during their tenure. - The court upholds the
reorganization and privatization of the National Power Corporation (NPC) and
affirms the constitutionality of the EPIRA provisions. It declares that separated,
displaced, retiring, and retired employees of NPC are legally entitled to retirement
benefits as guaranteed by the GSIS laws.

Facts:
A special civil action for certiorari and supplemental petition for mandamus filed
by Enrique U. Betoy against the Board of Directors of the National Power
Corporation (NPC). Betoy is challenging the validity of National Power Board
Resolutions No. 2002-124 and No. 2002-125, as well as certain provisions of
Republic Act (RA) No. 9136, also known as the Electric Power Industry Reform
Act of 2001 (EPIRA), and Rule 33 of the Implementing Rules and Regulations
(IRR) of the EPIRA.
On June 8, 2001, the EPIRA was enacted by Congress with the aim of
restructuring the electric power industry and privatizing the assets of the NPC.
Pursuant to Section 48 of the EPIRA, a new National Power Board of Directors
(NPB) was created. On February 27, 2002, the Secretary of the Department of
Energy promulgated the IRR of the EPIRA.

Section 63 of the EPIRA provides for separation benefits to officials and

employees affected by the restructuring and privatization of the electric power
industry. Rule 33 of the IRR outlines the coverage and guidelines for the
separation benefits.

Issue:
The main issues raised in the case are the constitutionality of certain provisions of
the EPIRA, including National Power Board Resolutions No. 2002-124 and No.
2002-125, and Rule 33 of the IRR.

Ruling:
The court ruled in favor of the respondents, upholding the validity of National
Power Board Resolutions No. 2002-124 and No. 2002-125, as well as the
provisions of the EPIRA and Rule 33 of the IRR.

Ratio:
The court held that the reorganization and privatization of the NPC was done in
good faith for the purpose of economy and efficiency. The court found no evidence
to support the petitioner's claim that the reorganization was done with the intention
of replacing current employees with less competent appointees. The court also
noted that the petitioner had no legal right to be reinstated, as the law only
provided for a preference in hiring for displaced employees.

Regarding the constitutionality of the EPIRA provisions, the court found that the
designation of Cabinet secretaries as ex-officio members of the NPB did not
violate the constitutional prohibition on holding other offices or employment
during their tenure. The court reasoned that these additional duties were closely
related to their primary functions and were required for the coordination and policy
determination of various government agencies involved in the privatization and
restructuring of the electric power industry. However, the court clarified that the
Cabinet secretaries should not receive any additional compensation for their roles
in the NPB, as this would be prohibited by the constitution.

The court also ruled that Section 34 of the EPIRA, which imposes a Universal
Charge on electricity consumers, is constitutional. The court held that this charge is
an exaction in the exercise of the State's police power and is necessary to ensure
the viability of the country's electric power industry.

Furthermore, the court ruled that Section 38 of the EPIRA, which abolishes the
Energy Regulatory Board (ERB) and creates the Energy Regulatory Commission
(ERC), is constitutional. The court reasoned that the power to create an office
carries with it the power to abolish.

Lastly, the court ruled that Section 63 of the EPIRA does not impair the vested
rights of NPC personnel to claim benefits under existing laws. The court clarified
that the receipt of retirement benefits does not bar the retiree from receiving
separation pay, as retirement benefits and separation pay are two separate
entitlements.