TITLE: GEROCHI VS.DOE GR.NO.159796 JULY 17, 2007

Facts:RA 9136, otherwise known as the ElectricPower Industry Reform Act of 2001 (EPIRA), which sought to impose a universal charge on all end-users ofelectricityfor the purpose of funding NAPOCORs projects, was enacted and took effect in 2001.

Petitionerscontesttheconstitutionalityof the EPIRA, stating that the impositionof the universal charge on all end-users is oppressive and confiscatory 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 atax.

Held:NO. The assailed universal charge is not a tax, but an exactionin the exercise of the States police power. Thatpublic welfare is promoted may be gleaned from Sec. 2 of the EPIRA, which enumerates the policies of the State regarding electrification. Moreover, the Special Trust Fund feature of the universal charge reasonably serves and assures the attainment and perpetuity of the purposes for which the universal charge is imposed (e.g. to ensure the viability of the countrys electricpower industry), further boosting thepositionthat the same is anexactionprimarily in pursuit of the States police objectives

If generation of revenue is the primary purpose and regulation is merely incidental, theimpositionis a tax; but if regulation is the primary purpose, the fact that revenue is incidentally raised does not make theimpositiona tax.

The taxing power may be used asan implement of police power.The theory behind the exercise of the power to tax emanates from necessity; withouttaxes, government cannot fulfill its mandate of promoting the general welfare and well-being of the people.