Electricity generation, supply still subject to ERC regulation — SC

MANILA, Philippines — The Supreme Court has upheld the constitutionality of key provisions of the Electric Power Industry Reform Act of 2001 (EPIRA), affirming the Energy Regulatory Commission's (ERC) authority to regulate the electricity sector.

In a 68-page decision penned on Aug. 1, 2023, the high court ruled that electricity generation and supply, while not considered public utilities, remain subject to ERC regulation.

“As the outcome of this case would have far-reaching effects and is of utmost significance to the public, this Court shall finally put to rest all questions and controversies concerning the prevailing law and existing regulations governing electric power,” the court’s ruling read.

The ruling stemmed from a petition filed by Fishers' group Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (PAMALAKAYA) chairperson Fernando Hicap and other individuals, assailing the constitutionality of several provisions of the EPIRA, particularly those related to the ERC's powers and the imposition of the universal charge.

The petitioners argued that electricity generation and supply are not public utilities and therefore beyond the ERC's jurisdiction. 

Hicap and others contend the universal charge is essentially a form of taxation. They argued that, as such, it should be imposed solely by Congress, which holds the exclusive authority to levy taxes under the Constitution.

Lastly, the petitioners assailed the commission’s power to impose systems loss charges on end-users for being an invalid delegation of Congress’ power. 

The Supreme Court has affirmed the constitutionality of key provisions of the EPIRA, reinforcing the framework that governs the electric power industry in the Philippines.

The high court explained that not all companies in the power industry are public utilities. For a business to qualify as a public utility, it must offer an essential service directly to the general public. 

Power generation and supply companies were deemed not to meet this standard as they cater to a limited customer base rather than the general public, according to the high court. 

“Therefore, it is the distribution sector, through its dealing with the general public,