BY GEROME DALIPE IV
ILOILO City – The Supreme Court has upheld crucial provisions of the Electric Power Industry Reform Act (EPIRA), confirming that electricity generation and supply are not considered public utility operations but remain under the regulatory oversight of the Energy Regulatory Commission (ERC).
In a recent decision, the Court En Banc validated Sections 6 and 29 of Republic Act No. 9136, clarifying that electricity generation and supply do not qualify as public utilities due to their limited customer base.
Despite this classification, these sectors are still regulated under EPIRA’s safeguards, ensuring proper oversight and preventing abuses through the requirement for companies to secure ERC certificates of compliance.
The SC also upheld the ERC’s authority under Sections 34 and 43(b)(ii) of EPIRA, which empowers the commission to impose universal charges on electricity end-users and allow distribution utilities to recover operational costs.
Petition and arguments
The petition, filed by Fernando Hicap and others, challenged these provisions, arguing that the ERC’s role constituted an unconstitutional delegation of Congress’ taxing power and that the universal charge was effectively a tax requiring Congressional approval.
The SC rejected these claims, asserting that the universal charge is a regulatory measure to support the power industry and promote public welfare under the State’s police power.
Impact on the power industry
This decision reinforces the ERC’s regulatory role, ensuring efficiency and safeguarding consumer interests while maintaining the financial viability of the electric power industry.
The ruling also confirms that systems loss charges and other costs imposed by the ERC are within the bounds of law, providing distribution utilities the framework to recover costs effectively.
The tribunal’s decision reaffirms the role of the ERC in maintaining a well-regulated, efficient electric power industry while safeguarding consumer interests./PN
