CA: Nat’l Grid exempt from paying ERC permit fee

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THE Court of Appeals (CA) has turned down an Energy Regulatory Commission (ERC) decision requiring the National Grid Corporation of the Philippines (NGCP) to pay a permit fee.

In the 10-page decision penned by Associate Justice Leoncia Real-Dimagiba and concurred in by Associate Justices Ramon Garcia and Ramon Cruz, the CA’s Special Ninth Division granted the petition for review filed by NGCP as it reversed and set aside the portions of ruling dated August 15, 2011 and order dated November 14, 2011 of the ERC directing the agency to pay a total permit fee worth P685,656.56.

On March 14, 2011, NGCP filed with ERC an application for approval of its Leyte-Mindanao Interconnection Project Phase I with prayer for issuance of provisional authority.

The project aims to expand and improve the existing nationwide transmission facilities.


The ERC approved NGCP’s application for the project but directed it to pay a permit fee.

The commission junked NGCP’s motion for reconsideration, prompting the firm to elevate the case to the appellate court.

In its June 4, 2015 ruling that was released to the media just recently, the tribunal pointed out that NGCP is exempt from the payment of permit fee under Section 9 of Republic Act (RA) 9511.

The ERC, in its memorandum, through the Office of the Solicitor General (OSG), claimed that the regulatory permit fee imposed on NGCP is merely reimbursement for the regulatory work undertaken by the ERC, which is not limited to hearing and evaluating applications, but includes all overhead costs of operations such as rentals, utilities, salaries, transportation, office supplies and equipment.

But according to the CA, “It must be remembered that the fees and charges which ERC is authorized to collect from any public service or applicant are limited to the reimbursement of its expenses in the authorization, supervision and/or regulation of public services.”

“Taking into consideration the provisions of Section 9 of RA 9511…such permit fees are necessarily among the fees which NGCP is exempt from paying.”

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