Sec. 2. Declaration of Policy. It is hereby declared the policy of the State: (a) to ensure a continuous, adequate, and economic supply of energy with the end in view of ultimately achieving self-reliance in the country's energy requirements through the integrated and intensive exploration, production, management, and development of the country's indigenous energy resources, and through the judicious conservation, renewal, and efficient utilization of energy to keep pace with the country's growth and economic development and taking into consideration the active participation of the private sector in the various areas on energy resource development; and (b) to rationalize, integrate, and coordinate the various programs of the Government towards self-sufficiency and enhanced productivity in power energy without sacrificing ecological concerns.
Sec. 3. Definition of Terms. (a) "Energy projects" shall mean activities or projects relative to the exploration, extraction, production, importation-exportation, processing, transportation, marketing, distribution, utilization, conservation, stockpiling, or storage of all forms of energy products and resources.
(b) "Board" shall mean the Energy Regulatory Board.
Sec. 4. Department of Energy. To carry out the above-declared policy, there is hereby created the Department of Energy, hereinafter referred to as the Department, which shall prepare, integrate, coordinate, supervise, and control all plans, programs, projects, and activities of the Government relative to energy exploration, development, utilization, distribution, and conservation.
Sec. 5. Powers and Functions. The Department shall have the following powers and functions:
(b) Develop and update the existing Philippine energy program which shall provide for an integrated and comprehensive exploration, development, utilization, distribution, and conservation of energy resources, with preferential bias for environment-friendly, indigenous, and low-cost sources of energy. The program shall include a policy direction towards the privatization of government agencies related to energy, deregulation of the power and energy industry, and reduction of dependency on oil-fired plants. Said program shall be updated within nine (9) months from the effectivity of this Act and submitted to Congress within ten (10) days from its completion and not later than the fifteenth day of September every year thereafter;
(c) Establish and administer programs for the exploration, transportation, marketing, distribution, utilization, conservation, stockpiling, and storage of energy resources of all forms, whether conventional or nonconventional;
(d) Exercise supervision and control over all government activities relative to energy projects in order to attain the goals embodied in Sec. 2 of this Act;
(e) Regulate private sector activities relative to energy projects as provided for under existing laws: Provided, That the Department shall endeavor to provide for an environment conducive to free and active private sector participation and investment in all energy activities.
At the end of four (4) years from the effectivity of this Act, the Department shall, upon approval of the President, institute the programs and timetable of deregulation of appropriate energy projects and activities of the energy industry;
(f) Assess the requirements of, determine priorities for, provide direction to, and disseminate information resulting from energy research and development programs for the optimal development of various forms of energy production and utilization technologies;
(g) Formulate and implement programs, including a system of providing incentives and penalties, for the judicious and efficient use of energy in all energy-consisting sectors of the economy;
(h) Formulate and implement a program for the accelerated development of nonconventional energy systems and the promotion and commercialization of its applications;
(i) Devise ways and means of giving direct benefit to the province, city, or municipality, especially the community and people affected, and equitable preferential benefit to the region that hosts the energy resource and/or the energy-generating facility: Provided, however, That the other provinces, cities, municipalities, or regions shall not be deprived of their energy requirements;
(j) Encourage private enterprises engaged in energy projects, including corporations, cooperatives, and similar collective organizations, to broaden the base of their ownership and thereby encourage the widest public ownership of energy-oriented corporations;
(k) Formulate such rules and regulations as may be necessary to implement the objectives of this Act; and
(l) Exercise such other powers as may be necessary or incidental to attain the objectives of this Act.
Sec. 7. Office of the Secretary. The Office of the Secretary shall consist of the Secretary and his immediate staff.
Sec. 8. The Secretary. The Secretary shall be appointed by the President, subject to confirmation by the Commission on Appointments.
No officer, external auditor, accountant, or legal counsel of any private company or enterprise primarily engaged in the energy industry shall be eligible for appointment as Secretary within two (2) years from his retirement, resignation, or separation therefrom.
The Secretary shall have the following functions:
(b) Exercise direct supervision and control over all functions and activities of the Department, as well as all its officers and personnel;
(c) Devise a program of international information on the geological and contractual conditions obtaining in the Philippines for oil and gas exploration in order to advance the industry;
(d) Create regional offices and such other service units and divisions as may be necessary;
(e) Create regional or separate grids as may be necessary or beneficial; and
(f) Perform such other functions as may be necessary or proper to attain the objectives of this Act.
The Secretary shall also be a member of the body authorized to formulate, prescribe, or amend the necessary guidelines for the financing, construction, operation, and maintenance of infrastructure projects by the private sector, under Republic Act No. 6957, otherwise known as the Build-Operate-Transfer Law.
Sec. 9. The Undersecretaries. The Secretary shall be assisted by three (3) Undersecretaries who shall be appointed by the President upon the recommendation of the Secretary. They shall have the powers and functions as provided for in Sec. 10, Chapter 2, Book IV of the Administrative Code of 1987.
The Offices of the Undersecretaries shall consist of the Undersecretaries and their respective immediate staff.
Sec. 10. Assistant Secretaries. The Secretary shall also be assisted by three (3) Assistant Secretaries, one (1) for operations, one (1) for policy and programs, and another for administrative services. The Assistant Secretaries shall be appointed by the President upon the recommendation of the Secretary.
Sec. 11. Qualifications. No person shall be appointed Secretary, Undersecretary, or Assistant Secretary of the Department unless he is a citizen and resident of the Philippines, of good moral character, and of proven competence in any of the following fields: (a) energy or utility economics; (b) public administration; (c) physical or engineering sciences; (d) management; or (e) law.
Sec. 12. Bureaus and Services. Subject to the power of the Secretary, with the approval of the President, to reorganize, restructure, and redefine the functions of the bureaus and services for the effective discharge of the powers and functions of the Department under this Act, the Department shall have the following bureaus and services: Energy Resource Development Bureau; Energy Utilization Management Bureau; Energy Industry Administration Bureau; Energy Planning and Monitoring Bureau; and Administrative Support Services.
The bureaus and services shall have the following powers and functions:
(a) Energy Resource Development Bureau
(2) Assist in the formulation of sectoral programs and plans relative to the exploration, development, and extraction of local energy resources and implement, monitor, and regularly review said programs;
(3) Conduct energy research and studies in support of the aforementioned activities;
(4) Provide consultative training and advisory services to practitioners and institutions in the areas of regulated activities; and
(5) Assist in the formulation of financial and fiscal policies, rules, guidelines, and requirements relative to the operations of service contractors and implement and enforce said policies.
(2) Monitor sectoral energy consumption and conduct energy audits, technical training, energy management advisory services, and technology application projects on efficient energy utilization;
(3) Develop, promote, and commercialize applications of biomass, solar, small hydro, wind, wood, and charcoal and other nonconventional energy systems including new and more efficient and economical transformation, conversion, processing, refining, marketing, distribution, transportation, and storage technologies for conventional energy resources;
(4) Assist in the formulation of an integrated rural energy program to effectively address the needs of rural development and environmental programs and implement, monitor, and regularly review said program;
(5) Assist in the formulation of an operational plan for the allocation of oil, fuel, and energy sources in the event of the declaration of critically low-energy supply provided for in Sec. 25 of this Act;
(6) Provide information on energy technology and develop middle-and long-term energy technology development strategies in cooperation with the Department of Science and Technology;
(7) Monitor the implementation of energy projects in coordination with the Department of Environment and Natural Resources to ensure compliance with prescribed environmental standards;
(8) Recommend appropriate courses of action to resolve major issues which may impede energy project siting or result in adverse environmental impact;
(9) Require industrial, commercial, and transport establishments to collect or cause the collection of waste oil for recycling as fuel or lubricating oil; and
(10) Develop and implement a continuing energy conservation program designed to optimize energy utilization, including a nationwide information campaign on energy conservation.
(2) Draw up plans to cope with contingencies of energy supply interruptions; and
(3) Assist in the formulation of financial and fiscal policies, rules, guidelines, and requirements relative to the operations of entities involved in the supply of energy resources such as oil companies, petroleum product dealers, coal importing and distributing companies, natural gas distributing companies, independent power producers, and all other entities involved in conventional energy supply activities and implement and enforce said policies.
(2) Develop and maintain a centralized, comprehensive, and unified data and information program to ensure the efficient collection, evaluation, analysis, and dissemination of data and information on reserves of various energy resources, production, demand, development technology, and related economic and statistical information which are required for policy formulation, program planning, and implementation;
(3) Supervise, coordinate, and integrate the formulation, monitoring, and review of programs and plans for energy supply development such as power development, local energy resource development and production, and energy importation;
(4) Regularly review and analyze past and current patterns of energy consumption vis-a-vis growth and development performance of the country's various economic sectors to evaluate current and foreseeable trends in energy demand; and conduct energy supply demand balancing studies to define energy supply and utilization strategies, estimate the resources required, and assess the energy program's economic, environmental, social, and political impact;
(5) Assure the incorporation of national environmental goals in the formulation and implementation of energy programs, and to advance the goals of restoring, protecting, and enhancing environmental quality; and assuring public health and safety; and
(6) Conduct studies on international energy issues that have a direct impact on supply and utilization of energy and provide technical advice on international negotiations involving energy resources and technologies.
The Office of the Legal Counsel shall be responsible for providing legal advice and services on all policies, programs, and operational matters of the Department. It shall provide legal counseling services in cases where the Department is a party and shall also handle administrative cases against any personnel of the Department and submit recommendations pertaining to them.
The
Financial and Management Services, which shall consist of the Human
Resources
Management Division, General Services Divisions, and the Financial
Management
Division, shall be responsible for providing the Department with
services
relative to personnel information, records, supplies, equipment,
collection
and disbursements, security and custodial works. It shall also be
responsible
for providing the Department with staff advice and assistance on
budgetary,
financial, and management improvement matters.
To this end, Sec. 6, paragraph (3) of Presidential Decree No. 927 and Sec. 8 of Presidential Decree No. 334, providing that the Chairman of the PNOC shall also be the president and chief executive officer thereof, are accordingly repealed.
The Secretary may recommend to the President the reorganization of the boards of directors of the PNOC, NPC, and NEA.
Sec. 14. Council of Advisers on Energy Affairs. A council of advisers on energy affairs consisting of five (5) members and appointed from the industry, labor, and consumer sectors shall advise the President on the overall energy program, especially on private sector initiatives and proposals.
The
President shall convene the council within thirty (30) days upon
approval
of this Act.
Sec. 16. Transfer of Powers and Functions. The powers and functions of the Energy Coordinating Council and the Office of Energy Affairs are hereby transferred to the Department.
The foregoing transfer of powers and functions shall include all applicable funds and appropriations, records, equipment, property, and personnel as may be necessary.
The same shall apply to agencies and government units which have not been abolished but whose functions have been transferred to the Department.
As the successor-in-office of the Office of Energy Affairs, the Department shall administer the activities of the Technology Transfer for Energy Management (TTEM) project. For this purpose, the Department shall continue the utilization of all funds, monies, interests, reflows, and properties outstanding and accruing from the TTEM project upon its termination for the following purposes:
(b) To monitor implemented sub-projects and document the actual energy savings generated; and
(c) To disseminate information on implemented sub-projects through case studies and seminars/workshops so as to encourage replication by other industrial and commercial establishments.
Sec. 18. Rationalization or Transfer of Functions of Attached or Related Agencies. The non-price regulatory jurisdiction, powers and functions of the Energy Regulatory Board as provided for in Sec. 3 of Executive Order No. 172 are hereby transferred to the Department.
The foregoing transfer of powers and functions shall include all applicable funds and appropriations, records, equipment, property, and such personnel as may be necessary: Provided, That only such amount of funds and appropriations of the Board as well as only the personnel thereof which are completely or primarily involved in the exercise by said Board of its non-price regulatory powers and functions shall be affected by such transfer.
The power of the NPC to determine, fix, and prescribe the rates being charged to its customers under Sec. 4 of the Republic Act No. 6395, as amended, as well as the power of electric cooperatives to fix rates under Sec. 16(o), Chapter II of Presidential Decree No. 269, as amended, are hereby transferred to the Energy Regulatory Board. The Board shall exercise its new powers only after due notice and hearing and under the same procedure provided for in Executive Order No. 172.
Sec. 19. Structure and Staffing Pattern. The organizational framework and staffing pattern of the Department shall be prescribed and approved by the Secretary within sixty (60) days after the approval of this Act and the authorized positions created therein shall be filled by regular appointments by the President or the Secretary as the case may be: Provided, That, in the filling of positions created, preference shall be given to the personnel of the Office of Energy Affairs, the Energy Coordinating Council, and the Energy Regulatory Board: Provided, however, That such individuals comply with the qualification standards set by the Civil Service Commission for the positions that they shall be appointed to: Provided, finally, That, if such individuals possess the same qualifications, seniority shall be given priority.
Sec. 20. Separation from Service. Employees separated from the service as a result of this reorganization shall, within six (6) months from their separation from the service, receive the retirement benefits to which they may be entitled under existing laws, rules, and regulations.
Subject to existing rules and regulations, the funds and monies collected or which otherwise come into the possession of the Department and its bureaus from fees, surcharges, fines, and penalties which the Department and its bureaus may impose and collect under this Act, as well as an amount to be determined at the beginning of every calendar year representing twenty percent (20%) of the outstanding balance of the funds and monies forming part of the special fund under Sec. 8 of Presidential Decree No. 910, shall be disbursed for expenses necessary for the effective discharge of the powers and functions of the Department under this Act.
Within thirty (30) days thereafter, complete divestment of financial interests in any institution, firm, or company which fall under the supervisory or regulatory jurisdiction of the Department shall be made: Provided, however, That, in cases where confirmation of appointments by the Commission on Appointments is required, the divestment mandated herein shall be complied with within thirty (30) days after such confirmation.
The divestment provided in the preceding paragraph shall likewise apply to the members of the immediate family within the second degree of consanguinity having interest in any institution or activity which falls under the regulatory jurisdiction or supervision of the Department and the attached agencies.
Sec. 23. Relationship with Other Government Departments. The Department and its priority projects shall enjoy preferential attention from the Department of Environment and Natural Resources relative to the exploration, development, exploitation, and extraction of petroleum, coal, and geothermal resources, and in the matter of providing technical support necessary for the establishment of power-generating plants.
Upon request of the Department or any of its bureaus, all government agencies with functions relative to the approval of the projects of the Department or its duly authorized and endorsed entities, whether government or private, shall act upon and resolve the matter within ten (10) calendar days. Toward this end, the Secretary, with the approval of the President, may establish an interagency secretariat for the purpose of expediting the approval of said projects.
Sec. 24. Visitorial Powers. The Secretary of the Department or his representatives shall have visitorial and examining authority over nongovernment entities with contracts for the exploration, development, or utilization of the natural resources for energy purposes in order to determine the share of the Government in the revenue or product thereof, and to ascertain all funds collectible and products due the Government, and that all such funds collectible and products due the Government, have actually been collected or delivered.
During such examination, the nongovernment entity concerned shall produce all the reports, records, books of accounts, and other papers that may be required.
The refusal by any such nongovernment entity to allow an examination of its books of accounts and pertinent records or its concealment of any material information concerning its financial status shall be a breach of its contract with the Government and shall constitute a legal ground for the cancellation thereof.
Sec. 25. Contingency Powers. In time of critically low-energy supply or imminent danger thereof, the President may, upon the determination and recommendation of the Secretary, issue a declaration of the same. Thereafter, the Secretary is hereby authorized to implement the fuel and energy allocation plan provided for in Sec. 12 (b)(5) of this Act, and to formulate and implement other measures for the conservation of energy including, but not limited to, power or fuel rationing, load curtailment, and restrictions on the use of government vehicles and resources.
Sec. 26. Repealing Clause. All laws, presidential decrees, executive orders, and rules and regulations, or parts thereof, inconsistent with the provisions of this Act are hereby repealed or modified accordingly.
However, in no case are the provisions of Republic Act No. 6969 repealed, amended, or modified by the provisions of this Act.
Sec. 27. Separability Clause. If, for any reason, any Sec. or provision of this Act is held unconstitutional or invalid, the other Sec.s or provisions hereof shall not be affected thereby.
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