Gerochi v. Department of Energy, GR No. 159796, 17 July 2007

FACTS:

RA 9136,otherwise known as theElectricPowerIndustry Reform Act of2001(EPIRA), whichsoughttoimposea universal charge on all end-users of electricity for the purpose offundingNAPOCORsprojects, was enacted and took effect in 2001. Petitionerscontestthe constitutionality oftheEPIRA, stating that the imposition of the universal charge on all end-users isoppressive andconfiscatory and amounts to taxation without representation for not giving the consumers a chance to be heard and be represented.

ISSUE: Whether or not the universal charge is a tax.

HELD:

NO.Theassaileduniversal charge isnotatax,butan exaction inthe exercise ofthe States police power. That publicwelfareispromotedmaybe gleanedfromSec.2ofthe EPIRA,which enumeratesthepolicies ofthe Stateregarding electrification.Moreover,the Special Trust Fund feature of the universalchargereasonably serves and assures the attainment and perpetuity ofthe purposes for which the universal charge is imposed(e.g.toensurethe viability of the countrys electricpower industry), further boosting the position that the same is an exaction primarily in pursuit ofthe States police objectives.

DOCTRINE:If generation of revenue is theprimary purpose and regulation is merely incidental, the imposition is a tax; but if regulation is theprimarypurpose,thefactthatrevenueisincidentallyraiseddoes not make the imposition a tax. The taxing power may be used as an implement of police power. The theory behind the exercise ofthe power to tax emanates from necessity;withouttaxes, governmentcannotfulfillits mandateofpromotingthe general welfare and well-being ofthe people.