Case Digest: Betoy v. National Power Corporation, G.R. Nos. 156556-57, October 4, 2011

 Taxation | Taxation Distinguished from Other Inherent Powers and Impositions

Facts: 
  • Electric Power Industry Reform Act of 2001 (EPIRA) was enacted by Congress with the goal of restructuring the electric power industry and privatization of the assets of the National Power Corporation (NPC).
  • EPIRA established a new National Power Board of Directors (NPB).
  • The NPB passed a resolution stating that all NPC personnel would be legally terminated and entitled to separation benefits.
  • Petitioner Enrique U. Betoy together with thousands of his co-employees from the NPC were terminated.
Issue: Whether Section 34 of RA 9136 (EPIRA) is unconstitutional for being exorbitant display of State Power and was not premised on the welfare of the FILIPINO PEOPLE or principle of salus populi est suprema lex. NO

Held:
The Constitutionality of Section 34 of the EPIRA has already been passed upon by this Court in Gerochi v. Department of Energy,  to wit:

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.

In Gerochi, this Court ruled that the Universal Charge is not a tax but an exaction in the exercise of the State's police power. The Universal Charge is imposed to ensure the viability of the country's electric power industry.

Petitioner argues that the imposition of a universal charge to address the stranded debts and contract made by the government through the NCC-IPP contracts or Power Utility-IPP contracts or simply the bilateral agreements or contracts is an added burden to the electricity-consuming public on their monthly power bills. It would mean that the electricity-consuming public will suffer in carrying this burden for the errors committed by those in power who runs the affairs of the State. This is an exorbitant display of State Power at the expense of its people. 

It is basic that the determination of whether or not a tax is excessive oppressive or confiscatory is an issue which essentially involves a question of fact and, thus, this Court is precluded from reviewing the same.

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