Renewable Energy Act implementation
The Court upheld the validity of Sections 6 and 7, which provide for the Renewable Portfolio Standard and the Feed-In Tariff System, respectively.
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Daily TribuneThe Court upheld the validity of Sections 6 and 7, which provide for the Renewable Portfolio Standard and the Feed-In Tariff System, respectively.
The Philippines has long relied heavily on fossil fuels for its rising energy demands. With the enactment of the Renewable Energy Act of 2008 (Republic Act 9513), the Philippine government placed its imprimatur on the move towards a greener source of energy by developing and utilizing the country’s renewable energy sources — such as solar, wind, hydro and biomass — and reducing the nation’s dependence on fossil fuels.
As the country’s long-term energy strategy, the Renewable Energy Act promotes a cleaner and more sustainable energy future through various policy tools and fiscal incentives.
The Supreme Court En Banc, in its Decision dated 13 August 2024 in the cases of Foundation for Economic Freedom v. Energy Regulatory Commission and National Renewable Energy Board (G.R. 214042), Remigio Michael A. Ancheta II v. Energy Regulatory Commission, et al. (G.R. 215579), and Alyansa ng mga Grupong Haligi ng Agham at Teknolohiya Para sa Mamamayan (AGHAM) and Angelo B. Palmones v. Department of Energy et al. (G.R. 235624), has reaffirmed this policy direction by upholding the authority of the Department of Energy, Energy Regulatory Commission, and National Renewable Energy Board to take the lead roles in the implementation of the Renewable Energy Act.
The Court upheld the validity of Sections 6 and 7, which provide for the Renewable Portfolio Standard (RPS) and the Feed-In Tariff (FIT) System, respectively.
The RPS mandates power suppliers and distribution utilities to source a minimum percentage of their electricity from renewable sources, a figure determined by the NREB.
Meanwhile, the FIT System offers fixed tariff rates and grid priority to renewable energy developers, encouraging investment in clean energy infrastructure.
In implementing these policies, the respondent agencies issued guidelines, which included the approval of the FIT Allowance — a charge collected from electricity consumers to fund the incentives.
The legality of these issuances was questioned for being an unconstitutional delegation of legislative power by Congress. They claimed that the law was overly broad and lacked clear standards, giving administrative agencies unchecked authority.
The FIT Allowance was likewise questioned for violating due process, as it is considered an advance collection that allegedly lacked legal basis.
The Supreme Court, however, rejected these arguments, holding that the Renewable Energy Act is complete and provides sufficient standards for implementation. It ruled that Congress may delegate technical rule-making and rate-setting powers to specialized agencies, especially when dealing with complex and evolving fields like energy regulation.
The Court further clarified that the advance collection of the FIT Allowance is consistent with the law’s policy of establishing and institutionalizing necessary infrastructure for renewable energy development.
This ruling reinforces the legal foundation for the Philippines’ transition to sustainable energy and confirms the government’s authority to implement robust policies that promote environmental protection and energy security.
For more of Dean Nilo Divina’s legal tidbits, please visit www.divinalaw.com. For comments and questions, please send an email to cad@divinalaw.com.
