ROMEO GEROCHI v.

DEPARTMENT OF ENERGY, 527 SCRA 696

CASE NO.: GR NO. 159796

DATE: JULY 17, 2007
PONENTE: JUSTICE NACHURA

DOCTRINE:
Police power is the power of the state to promote the public welfare by restraining and
regulating the use of liberty and property. It is the most pervasive, the least limitable, and the most
demanding of the three fundamental powers of the State. The justification is found in the Latin
maxims salus populi est suprema lex (the welfare of the people is the supreme law) and sic utere
tuo ut alienum non laedas (so use your property as not to injure the property of others).

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 constitutionality 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 effect 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 a charge to account for all forms of cross-subsidies
for a period not exceeding three years; which shall be passed on and collected from all end-users
on a monthly basis by the distribution utilities. The collection will be made by the Energy
Regulatory Commission, which then is managed by PSALM Corp. through the creation of a
special trust fund.
 The petitioner also prays that the Universal Charge imposed be refunded and that a
preliminary injunction and/or temporary restraining order be issued directing the Environmentalist
Consumers Network, Inc. to refrain from implementing the said charge.

Petitioners have a locus standi because they sustained a direct injury as a result of the imposition
of the Universal Charge as reflected in their electric bills.

ISSUE/S:
[1] Whether or not the Universal Charge imposed under Sec. 34 of the EPIRA is a tax.
[2] Whether or not there is an undue delegation of the power to tax on the part of the ERC.

RULING:
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.

In exacting the assailed Universal Charge through Sec. 34 of the EPIRA, the State's police
power, particularly its regulatory dimension, is invoked. Such can be deduced from Sec. 34 which
enumerates the purposes for which the Universal Charge is imposed and which can be amply
discerned as regulatory in character. The EPIRA resonates with such regulatory purposes.

Delegation of legislative power to various specialized administrative agencies is allowed

as an exception to this principle. Given the volume and variety of interactions in today's society,
it is doubtful if the legislature can promulgate laws that will deal adequately with and respond
promptly to the minutiae of everyday life. Hence, the need to delegate to administrative bodies -
the principal agencies tasked to execute laws in their specialized fields - the authority to
promulgate rules and regulations to implement a given statute and effectuate its policies.

It can be gleaned that the assailed Universal Charge is not a tax, but an exaction in the
exercise of the State's police power. Public welfare is surely promoted.

FALLO:
WHEREFORE, the instant case is hereby DISMISSED for lack of merit.