G.R. No. 159796 ; July 17, 2007
ROMEO P. GEROCHI, KATULONG NG BAYAN (KB) and ENVIRONMENTALIST CONSUMERS NETWORK, INC. (ECN), Petitioners, vs. DEPARTMENT OF ENERGY (DOE), ENERGY REGULATORY COMMISSION (ERC), NATIONAL POWER CORPORATION (NPC), POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT GROUP (PSALM Corp.), STRATEGIC POWER UTILITIES GROUP (SPUG), and PANAY ELECTRIC COMPANY INC. (PECO), Respondents.

FACTS

Petitioners assail the constitutionality of Section 34 of the Electric Power Industry Reform Act (EPIRA) and its implementing rules, which impose a Universal Charge on all electricity end-users. The charge is earmarked for specific purposes: payment for stranded debts and contract costs, missionary electrification, equalization of taxes on energy sources, an environmental fund, and cross-subsidies. Following the EPIRA’s effectivity, the Energy Regulatory Commission (ERC) approved petitions from the National Power Corporation for the collection of specific amounts for the missionary electrification and environmental components. Based on these ERC decisions, respondent Panay Electric Company began collecting the charge from consumers, including petitioner Romeo P. Gerochi.

ISSUE

The primary issue is whether Section 34 of the EPIRA constitutes an undue delegation of legislative power to the ERC by allowing it to determine and fix the Universal Charge without sufficient standards.

RULING

The Supreme Court upheld the constitutionality of the EPIRA’s Universal Charge provision. The Court ruled that the law does not constitute an undue delegation of legislative power. While Congress cannot delegate its power to make laws, it may delegate the authority to implement and execute those laws to administrative bodies, provided the delegation is circumscribed by sufficient standards. The Court found that Section 34 of the EPIRA lays down a definite and clear legislative policy. It explicitly enumerates the five specific purposes for which the Universal Charge may be levied, thereby defining the limits of the charge’s application. Furthermore, the law provides intelligible principles to guide the ERC, such as the directive that the charge be “non-bypassable” and collected from all end-users, and that collections be remitted to a Special Trust Fund to be disbursed in an “open and transparent manner.” These specific purposes and procedural mandates constitute sufficient standards to channel the ERC’s discretion, preventing it from exercising unfettered legislative will. The delegation is therefore valid, as the ERC’s role is confined to the administrative implementation of the clearly stated legislative policy.