THE Energy Regulatory Commission (ERC) and the National Grid Corp. of the Philippines (NGCP) on Thursday signed a compromise agreement to end years of litigation over permit and regulatory fees.
ERC Chairman Francis Saturnino Juan, NGCP President Anthony Almeda and Chairman Henry Sy Jr., as well as officials, attended the signing at the ERC office in Pasig City.
Republic Act (RA) 9136, or the Electric Power Industry Reform Act, mandated the ERC to regulate the power industry, including the approval of transmission projects proposed by NGCP, the country’s sole power grid operator.
While the ERC imposed permit fees for individual projects as well as annual supervision and regulation fees, NGCP paid the charges under protest while challenging them before the Court of Appeals and the Supreme Court.
NGCP argued that Section 9 of its franchise law, RA 9511, exempted it from the fees. However, the ERC maintained that the charges were regulatory and administrative — not taxes — and therefore were not covered by NGCP’s franchise tax exemption.
Under the compromise agreement, NGCP recognizes the charges as regulatory fees imposed under the ERC’s mandate and will no longer contest them in the cases covered by the settlement. Fees already remitted, including those paid under protest, will be considered settled.
Past and future collections from permit, supervision and regulation fees will be remitted to the National Treasury to help fund government programs and basic social services.
“This compromise agreement finally puts that question to rest,” Juan said, adding that the settlement respects the ERC’s mandate, gives NGCP regulatory certainty and ensures that the collections benefit the public.
The ERC and NGCP will submit the agreement to the Supreme Court and the Court of Appeals for approval within 30 days of its signing.
Juan said the settlement removes a long-standing source of friction and helps create a more stable and predictable regulatory environment for the power industry.
