CA: NGCP is exempt from paying permit fee

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MANILA — The Court of Appeals (CA) has rejected a ruling of the Energy Regulatory Commission (ERC) imposing payment of a permit fee on the National Grid Corporation of the Philippines (NGCP).

In a 10-page ruling written by Associate Justice Leoncia Real-Dimagiba, the CA’s Special Ninth Division granted the petition for review filed by the NGCP.

The CA reversed and set aside the portions of ruling dated Aug. 15, 2011 and order dated Nov. 14, 2011 of the ERC ordering the agency to pay a total permit fee worth PhP 685,656.56.

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

The project was aimed towards expanding and improving the existing nationwide transmission facilities.

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

It denied the NGCP’s motion for reconsideration (MR).

This prompted the NGCP to take the case to the CA.

In its June 4, 2015 decision, the CA said that the NGCP is exempt from the payment of permit fee under Section 9 of Republic Act No. 9511 granting its franchise.

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.

However, the CA said that “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 R.A. No. 9511…such permit fees are necessarily among the fees which NGCP is exempt from paying,” the CA said.

Concurring in the ruling were Associate Justices Ramon Garcia and Ramon Cruz.