IDEALS V.
PSALM
FACTS:
PSALM is a GOCC > created by Electric Power Industry Reform Act (EPIRA)
 EPIRA is for, among others, the privatization of the assets of the
National Power Corporation (NPC)
o EPIRA mandates PSALM to manage the orderly sale,
disposition and privatization of NPC assets
Involved in the case: PRIVATIZATION OF THE AHEPP (HYDROELECTRIC
FACILITY)
 AHEEP forms part of ANGAT COMPLEX, which includes Angat dam,
Angat Reservoir, and watershed area
A BIDDING WAS HELD WHEREIN K-WATER AS THE HIGHEST BIDDER
 ARGUMENT OF IDEALS: as to the participation of K-WATER which is a
foreign corporation > THUS PSALM VIOLATED THE CONSTITUTIONAL
PROVISIONS ON THE APPROPRIATION AND UTILIZATION OF WATER
AS A NATURAL RESOURCE
o As implemented by the Water Code of the Philippines =
limiting the water rights to FILIPINO CITIZEN and
CORPORATIONS (at least 60% Filipino-owned)
o Considering that Angat Dam is the source 97% of Metro
Manila’s water supply + as well as in irrigation in Pampanga
and Bulacan> IDEALS asserts that PSALM should prioritize
such domestic use of water over that of power generation
IDEALS ARGUE THAT SUCH BIDDING BE DECLARED VOID > VIOLATION
THE CONSTITUTIONAL PROVIDED STATE DUTY TO ENSURE WATER
SECURITY FOR ITS PEOPLE, AT THE SAME TIME THE WATER CODE
 ANSWER OF PSALM
o On the alleged violation of PEOPLE’S RIGHT TO WATER>
PSALM CONTENDS THAT THE ASSUPMTION THAT ANAT
DAM WAS SOLD IS BASELESS
 Psalm stresses that only the hydroelectric facility
is being sold
 Angat Dam still remains to be owned by
PSALM
 NWRB still governs the water allocation
 NPC still retains exclusive control of oponing
the spillway gates
 THERE IS STIIL A CONTINUED COLLECTIVE CONTROL
BY GOVERNMENT AGENCIES OVER THE ANGAT DAM
o On the ISSUE OF NATIONALITY: PSALM cites the opinion of
DOJ
 DOJ: holds that the utilization of water by a
hydroelectric power plant = DOES NOT
CONSTITUTE AN APPROPRIATION WATER FROM
ITS NATURAL SOURCE
 Considering a dam, as a source of water =
ARTIFICIAL STRUCTURE
 And as a matter of fact > the water allocation is
continuously regulated by NWRB and the spillway
gates by NPC = effect: controlled by Filipinos
ISSUE: WON THERE IS A VIOLATION OF THE CONSTITUTION AND THE
WATER CODE, ON THE GRANT OF THE WATER RIGHTS
HELD: NO, there is no violation
CONSTITUTION PROVIDES: waters, among others, are owned by the state =
STATE SHALL DIRECTLY UNDERTAKE SUCH ACTIVITIES
 Such state policy is implemented through the regulation of water rights
 Water Code of PH> law governing, ulitization, of water resources
o Appropriation of water, as used in this Code, is the
acquisition of rights over the use of waters or the taking or
diverting of waters from a natural source in the manner and
for any purpose allowed by law.
 It is clear that the law limits the grant of water rights only to Filipino
citizens and juridical entities duly qualified by law to exploit and
develop water resources, including private corporations with sixty
percent of their capital owned by Filipinos. In the case of Angat
River, the NWRB has issued separate water permits to MWSS, NPC
and NIA
UNDER THE EPIRA> THE GENERATOPM OF ELECTRIC PROWER> WAS
OPENED TO PRIATE SECTOR > IN WHICH FOREIGN INVESTORS ARE
LIKEWISE ALLOWED ENTRY INTO THE ELECTRIC POWER INDUSTRY
In accordance with the IMPLEMENTING REGULATION and the ASSET
PURCHASE AGREEMENT
 PSALM that as the new owner only of the hydroelectric power plant,
K-Water will be a mere operator of the Angat Dam. In the power
 generation activity, K-Water will have to utilize the waters already
extracted from the river and impounded on the dam.
 This process of generating electric power from the dam water entering the
power plant thus does not constitute appropriation within the meaning of
natural resource utilization in the Constitution and the Water Code.