NGCP exempt from paying permit fees


Posted at Oct 03 2010 06:10 PM | Updated as of Oct 04 2010 06:54 AM

MANILA, Philippines - The National Grid Corporation of the Philippines (NGCP) is exempt from paying any permit fees, the Court of Appeals said.

In a 25-page decision penned by Associate Justice Hakim Abdulwahid, the 10th division of the appellate court consequently declared null and void several Energy Regulatory Commission (ERC) resolutions ordering the country’s power transmission grid to pay P29.35 million as permit fees for its projects.

The regulator said NGCP’s franchise, Republic Act 9511, did not expressly provide for the firm’s exemption from the permit fees.

The legislative franchise only pertained to its exemption from fees in the category of tax impositions, ERC said.

The law even mandates the firm to comply with provisions of Commonwealth Act 146 that were not repealed by the Electric Power Industry Reform Act of 2001 (EPIRA), it added.

ERC is referring to a provision that allows it to “to charge and collect from any public service or applicant fees as reimbursement of its expenses in the authorization, supervision and regulation of public services.”

As such, ERC ordered the firm to pay fees for the replacement of existing transformers of its San Jose substation; the procurement of a 300 MVA transformer for its Araneta substation; its Sta. Rita-Quinapundan 69 Transmission Line Project; and its Visayas 69 KV Transmission Line project-Sibalom-Culasi.

The appellate court believes otherwise.

Ruling for the power grid, it said “the payment of permit fees by petitioner is absent in the aforementioned provision. Such absence, taken together with the sweeping and all-embracing phrase used to describe the word ‘fees’ in the second sentence of Section 9, R.A. 9511, clearly show that petitioner is also exempt from payment of permit fees.”

It also questioned whether the imposition of permit fees was indeed purely regulatory in nature.

“This Court is inclined to share petitioner's view that given the substantial amounts of the permit fees imposed by the ERC upon petitioner and the fact that the ERC computed said fees based on the proposed project costs or values, such permit fees are not merely regulatory but also a revenue measure - or taxes - imposed by the ERC,” it said.

Thus, “such permit fees are necessarily among the fees which petitioner is exempt from paying, in consideration of its franchise tax under RA 9511,” it added.