Complete in Itself

GR No. 159796 – Gerochi v. DOE

Nachura, J.

FACTS
Electric Power Industry Reform Act of 2011 (EPIRA) was enacted by congress on June 8, 2001 and took effect on
June 26, 2001.

April 5, 2002, National Power Corporation Strategic Power Utilities Group (NPC-SPUG) filed, with Energy Regulatory
Commission (ERC), a petition in order to avail of the Universal Charge (ERC Case No. 202-165).

May 7, 2002, NPC filed another petition with ERC, praying that the Universal Charge for the Environmental Charge of
Php. 0.0023 per kilowatt-hour (/K Wh) or Php 119,488,374.59 in total be approved for withdrawal from the Special Trust
Fund (STF) managed by the Power Sector Assets and Liabilities Management Group (PSALM) for the rehabilitation and
management of the watershed areas.

December 20, 2002, the ERC issued ERC Case No. 2002-165 approving the Php. 0.0168 /kWH as the NPC-SPUG’s
share of the Universal Charge for the Missionary Electrification and authorizing the National Transmission Corporation
(TRANSCO).

June 26, 2003, the ERC rendered its decision on ERC Case No. 2002 modifying its December 20, 2002 order,
adding the additional amount of Php. 0.0205 /kWh should be added to the Php. 0168 /kWh authorized by the commission
totaling to the amount of Php. 0.0373 /kWh, which was approved for withdrawal from the STF managed by PSALM as a
share from the Unicersal Charge for Missionary Electrification (UC-ME) effective on the following billing cycles:

(a) July 26-July 25, 2003 for TRANSCO

(b) July 2003 for Distribution Utilities (Dus)

TRANSCO and Dus are directed to collect the UC-ME in the amount of Php. 0.0373 /kWh and remit the amount to
PSALM on or before the 15th day of the succeeding month. In the meantime NPC-SPUG is directed to submit a detailed
report including an Audited Financial Statement and physical status (percentage of completion of the projects not later
than April 30, 2004.

August 13, 2003, NPC-SPUG filed a motion for reconsideration asking ERC to set aside the above-mentioned
decision, which the ERC granted in its order dated October 7, 2003, stating:

That NPC-SPUG is directed to submit a quarterly report on the following:

1. Projects for CY 2002 undertaken;

2. Location
3. Actual amount utilized to complete the project
4. Period of completion;
5. Start of operation and;
6. Explanation of the reallocation of UC-ME funds, if any.

April 2,2003, ERC decided on its Case No. 2002-194 authorizing NPC to draw up to Php. 70,000,000.00 from
PSALM for its 2003 Watershed Rehabilitation Budget subject to the availability of funds from the Environmental Fund
component of the Universal Charge.

On the basis of the ERC decisions , respondent Panay Electric Company Inc (PECO) Charged petitioner Romeo P.
Gerochi and all other end-users with the Universal Charge reflected in their July 2003 Bills.

ISSUE with HOLDING

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1. Whether or no there was undue delegation of power to tax that was given to ERC.
- The Principle of separation of power is that the three branches of government have their exclusive cognizance of and is
supreme in matters falling within its own constitutionally allocated sphere. Potestas Delegata non delegari potest (what
has been delegated cannot be delegated), the basis of this principle is that delegated powers are not only a right but a
duty to be performed by the delegate through his own judgement and not through the intervention of another. But in the
face of increasingly complexity of modern life the delegation of legislative power to various specialized administrative
agencies is allowed as an exception to this principle. All that is required therefore for a subordiante legislation to be validly
executed is for it to pass the completeness test and sufficient standard test.

Under the Completeness test the law must be complete in all of its terms and conditions when it leaves the
legislature. The court finds the EPIRA complete in all its essential terms and conditions, and that it contains sufficient
standards.

As for the second test the court, in the past, accepted as sufficient standards the following: “interst of law and order”;
“justice and equity”; “public convenience and welfare”; “simplicity, economy and efficiency”; “standardization and
regulation of medical education”; and “fair and equitable employment practices.” The court finds sufficient standards
noting that the law provides limits of ERC’s power to formulate the IRR.

DISPOSITIVE PORTION

Finally, every law has in its favor the presumption of constitutionality, and to justify its nullification, there must be a clear
and unequivocal breach of the Constitution and not one that is doubtful, speculative, or argumentative.Indubitably,
petitioners failed to overcome this presumption in favor of the EPIRA. We find no clear violation of the Constitution which
would warrant a pronouncement that Sec. 34 of the EPIRA and Rule 18 of its IRR are unconstitutional and void.

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

* 2. Whether or not the universal charge is a tax

- The assailed universal charge is not a tax, but an exaction in the exercise of the State’s police power. That public
welfare is promoted may be gleaned from Sec. 2 of the EPIRA, which enumerates the policies of the State regarding
electrification. Moreover, the Special Trust Fund feature of the universal charge reasonably serves and assures the
attainment and perpetuity of the purposes for which the universal charge is imposed (e.g. to ensure the viability of the
country’s electric power industry), further boosting the position that the same is an exaction primarily in pursuit of the
State’s police objectives. If generation of revenue is the primary purpose and regulation is merely incidental, the
imposition is a tax; but if regulation is the primary purpose, the fact that revenue is incidentally raised does not make the
imposition a tax. The taxing power may be used as an implement of police power. The theory behind the exercise of the
power to tax emanates from necessity; without taxes, government cannot fulfil its mandate of promoting the general
welfare and well-being of the people.