G.R. Nos. 78888-90, 79501-03, 79590-92 June 23, 1988
CITIZENS’ ALLIANCE FOR CONSUMER PROTECTION, RICARDO C. VALMONTE, and KILUSANG MAYO UNO LABOR CENTER, petitioners, vs. ENERGY REGULATORY BOARD, CALTEX PHILIPPINES, INC., PILIPINAS SHELL PETROLEUM CORPORATION, and PETROPHIL CORPORATION, respondents.

FACTS

In June 1987, three oil companies filed separate applications with the Energy Regulatory Board (ERB) for provisional increases in the prices of petroleum products. The ERB scheduled hearings and required publication of notice. Petitioners, including consumer and labor groups, appeared as oppositors. They moved for additional time to file formal oppositions, which the ERB partially granted, resetting the hearing to July 6, 1987. Dissatisfied, petitioner Citizens’ Alliance for Consumer Protection (CACP) filed a petition for certiorari with the Supreme Court (G.R. Nos. 78888-90), alleging denial of due process. They contended the ERB acted with indecent haste, failed to provide sufficient copies of applications, and denied requests for deferment. The Supreme Court, without giving due course, required comments from respondents and enjoined the ERB to give petitioners full opportunity to substantiate their opposition before final action.
Subsequently, the ERB issued its Order on August 14, 1987, granting a provisional price increase. Following this, two more petitions (G.R. Nos. 79501-03 and 79590-92) were filed by Ricardo Valmonte and KMU, respectively, challenging the ERB’s order and the constitutionality of its enabling law, Executive Order No. 172. They argued the law conferred legislative power to fix prices on an administrative body without sufficient standards, constituting an undue delegation of legislative authority.

ISSUE

The primary issue is whether Executive Order No. 172, creating the ERB and authorizing it to fix prices of petroleum products, constitutes an invalid delegation of legislative power.

RULING

The Supreme Court dismissed the petitions, upholding the constitutionality of Executive Order No. 172. The legal logic rests on the settled doctrine that legislative power may be validly delegated to administrative bodies provided the law establishes a sufficient standard to confine the delegate’s authority. The Court found that E.O. No. 172 adequately supplies such standards. Section 5 of the Order explicitly mandates the ERB to ensure “reasonable prices” of petroleum products. Furthermore, the law requires the ERB to consider specific factors, including the inherent limitations of the market, the need to ensure a “fair return” on investments, and the objective of maintaining a “viable and progressive” energy industry. These criteria are not vague; they provide an “intelligible principle” to guide the ERB’s exercise of its rate-fixing power. The Court emphasized that the complexity of regulating the oil industry necessitates a degree of flexibility in administration, which the standards in the law appropriately allow. The delegation was therefore not excessive. The Court also noted that the ERB’s actions in the provisional increase proceedings, including the grant of time for opposition as directed by the Supreme Court’s injunction, did not amount to a denial of due process warranting the nullification of its order.