GEROCHI Vs DOE Et Al

GEROCHI vs DOE et al.
levied on electricity end-users, unlike a tax

which is imposed based on the individual
(taxation as an implement of police power; taxpayer's ability to pay. Moreover,
valid delegation) respondents deny that there is undue
Facts: delegation of legislative power to the ERC
since the EPIRA sets forth sufDcient
Respondent National Power Corporation- determinable standards which would guide
Strategic Power Utilities Group (NPC- the ERC in the exercise of the powers
SPUG) filed with respondent Energy granted to it.
Regulatory Commission (ERC) a petition to
avail from the Universal Charge of its share Issues:
for Missionary Electrification. ERC 1. WON the Universal Charge imposed
rendered its decision approving that an under Sec. 34 of the EPIRA is a tax
additional amount of P0.0373 per kilowatt-
hour shall be withdrawn from the Special 2. WON there is undue delegation of
Trust Fund as its share from the Universal legislative power to tax on the part of
Charge for Missionary Electrification, which the ERC.
shall be billed form its end-users on a
monthly basis. Held:
On the basis of the said ERC decisions, 1. The Universal Charge is not a tax.
respondent Panay Electric Company, Inc. The conservative and pivotal distinction
(PECO) charged petitioner Romeo P. between these two powers rests in the
Gerochi and all other end-users with the purpose for which the charge is made.
Universal Charge as reflected in their If generation of revenue is the
respective electric bills starting from the primary purpose and regulation is
month of July 2003. merely incidental, the imposition is a
Petitioners now contends that the Universal tax; but if regulation is the primary
Charge (UC) has the characteristics of a tax purpose, the fact that revenue is
and is collected to fund the operations of the incidentally raised does not make the
NPC. They argue that the UC is imposed not imposition a tax.
for a regulatory purpose. Respondents In exacting the assailed Universal
argued that the assailed UC is levied for a Charge through Sec. 34 of the EPIRA,
specific regulatory purpose, which is to the State's police power, particularly its
ensure the viability of the countrys electric regulatory dimension, is invoked. Such
power industry; thus exacted by the state in can be deduced from Sec. 34 which
the exercise of its inherent police power. enumerates the purposes for which the
Further, its imposition would redound to the Universal Charge is imposed and which
benefit of the electric power industry and can be amply discerned as regulatory in
not to the public and its rate is uniformly character.
- it can be gleaned that the assailed The second test mandates adequate
Universal Charge is not a tax, but an guidelines or limitations in the law to
exaction in the exercise of the State's determine the boundaries of the delegate's
police power. Public welfare is surely authority and prevent the delegation from
promoted. running riot.
- Moreover, it is a well-established -The Court finds that the EPIRA, read and
doctrine that the taxing power may appreciated in its entirety, in relation to
be used as an implement of police Sec. 34 thereof, is complete in all its
power. essential terms and conditions, and that it
contains sufficient standards. Moreover,
2. There is no undue delegation of contrary to the petitioners' contention, the
legislative powers. ERC does not enjoy a wide latitude of
All that is required for the valid exercise discretion in the determination of the
of this power of subordinate legislation is Universal Charge.
that the regulation be germane to the -As to the second test the provisions of the
objects and purposes of the law and that EPIRA such as, among others, "to ensure
the regulation be not in contradiction to, the total electrification of the country
but in conformity with, the standards and the quality, reliability, security and
prescribed by the law. These requirements affordability of the supply of electric
are denominated as the completeness test power" and "watershed rehabilitation
and the sufficient standard test. and management" meet the requirements
Under the first test, the law must be for valid delegation, as they provide the
complete in all its terms and conditions limitations on the ERC's power to
when it leaves the legislature such that formulate the IRR. These are sufficient
when it reaches the delegate, the only standards.
thing he will have to do is to enforce it.

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GEROCHI vs DOE et al.

levied on electricity end-users, unlike a tax

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