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This page features the full text of
Republic Act No. 7638
Department of Energy Act of 1992.
ACT NO. 7638
ACT CREATING THE DEPARTMENT OF ENERGY, RATIONALIZING THE ORGANIZATION
FUNCTIONS OF GOVERNMENT AGENCIES RELATED TO ENERGY, AND FOR OTHER
1. Short Title. This Act shall be known as the "Department
Energy Act of 1992."
Sec. 2. Declaration of Policy. It
is hereby declared the policy of the
(a) to ensure a continuous, adequate, and economic supply of energy
the end in view of ultimately achieving self-reliance in the country's
energy requirements through the integrated and intensive exploration,
management, and development of the country's indigenous energy
and through the judicious conservation, renewal, and efficient
of energy to keep pace with the country's growth and economic
and taking into consideration the active participation of the private
in the various areas on energy resource development; and (b) to
integrate, and coordinate the various programs of the Government
self-sufficiency and enhanced productivity in power energy without
Sec. 3. Definition of Terms.
(a) "Energy projects" shall
activities or projects relative to the exploration, extraction,
importation-exportation, processing, transportation, marketing,
utilization, conservation, stockpiling, or storage of all forms of
products and resources.
"Board" shall mean the Energy Regulatory Board.
Sec. 4. Department of Energy.
To carry out the above-declared
there is hereby created the Department of Energy, hereinafter referred
to as the Department, which shall prepare, integrate, coordinate,
and control all plans, programs, projects, and activities of the
relative to energy exploration, development, utilization, distribution,
Sec. 5. Powers and Functions.
The Department shall have the
powers and functions:
Formulate policies for the planning and implementation of a
program for the efficient supply and economical use of energy
with the approved national economic plan and with the policies on
protection and conservation and maintenance of ecological balance, and
provide a mechanism for the integration, rationalization, and
of the various energy programs of the Government;
Develop and update the existing Philippine energy program which shall
for an integrated and comprehensive exploration, development,
distribution, and conservation of energy resources, with preferential
for environment-friendly, indigenous, and low-cost sources of energy.
program shall include a policy direction towards the privatization of
agencies related to energy, deregulation of the power and energy
and reduction of dependency on oil-fired plants. Said program shall be
updated within nine (9) months from the effectivity of this Act and
to Congress within ten (10) days from its completion and not later than
the fifteenth day of September every year thereafter;
Establish and administer programs for the exploration, transportation,
marketing, distribution, utilization, conservation, stockpiling, and
of energy resources of all forms, whether conventional or
Exercise supervision and control over all government activities
to energy projects in order to attain the goals embodied in Sec. 2
Regulate private sector activities relative to energy projects as
for under existing laws: Provided, That the Department shall
to provide for an environment conducive to free and active private
participation and investment in all energy activities.
the end of four (4) years from the effectivity of this Act, the
shall, upon approval of the President, institute the programs and
of deregulation of appropriate energy projects and activities of the
Assess the requirements of, determine priorities for, provide direction
to, and disseminate information resulting from energy research and
programs for the optimal development of various forms of energy
and utilization technologies;
Formulate and implement programs, including a system of providing
and penalties, for the judicious and efficient use of energy in all
sectors of the economy;
Formulate and implement a program for the accelerated development of
energy systems and the promotion and commercialization of its
Devise ways and means of giving direct benefit to the province, city,
municipality, especially the community and people affected, and
preferential benefit to the region that hosts the energy resource
the energy-generating facility: Provided, however, That the
provinces, cities, municipalities, or regions shall not be deprived of
their energy requirements;
Encourage private enterprises engaged in energy projects, including
cooperatives, and similar collective organizations, to broaden the base
of their ownership and thereby encourage the widest public ownership of
Formulate such rules and regulations as may be necessary to implement
objectives of this Act; and
Exercise such other powers as may be necessary or incidental to attain
the objectives of this Act.
Sec. 6. Composition. The Department Proper
shall be composed of the
of the Secretary and the Offices of the Undersecretaries and Assistant
Secretaries, and the bureaus and services of the Department.
The Department Proper
Sec. 7. Office of the
Secretary. The Office of the Secretary shall
of the Secretary and his immediate staff.
Sec. 8. The Secretary. The
Secretary shall be appointed by the
subject to confirmation by the Commission on Appointments.
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
resignation, or separation therefrom.
Secretary shall have the following functions:
Establish policies and standards for the effective, efficient and
operation of the Department in accordance with the programs of the
Exercise direct supervision and control over all functions and
of the Department, as well as all its officers and personnel;
Devise a program of international information on the geological and
conditions obtaining in the Philippines for oil and gas exploration in
order to advance the industry;
Create regional offices and such other service units and divisions as
Create regional or separate grids as may be necessary or beneficial; and
Perform such other functions as may be necessary or proper to attain
objectives of this Act.
Secretary shall be an ex officio member of the Board of the National
and Development Authority (NEDA). He shall also be a member of the
Committee on Infrastructure (INFRACOM) and the Investment Coordinating
Council (ICC). For this purpose, the provisions of Executive
Order No. 292, otherwise known as the Administrative
Code of 1987, relative to the creation and organization of the NEDA
and its component agencies and offices are hereby modified accordingly.
Secretary shall also be a member of the body authorized to formulate,
or amend the necessary guidelines for the financing, construction,
and maintenance of infrastructure projects by the private sector, under
Act No. 6957, otherwise known as the Build-Operate-Transfer
Sec. 9. The Undersecretaries.
The Secretary shall be assisted by
(3) Undersecretaries who shall be appointed by the President upon the
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.
Offices of the Undersecretaries shall consist of the Undersecretaries
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
Secretaries shall be appointed by the President upon the recommendation
of the Secretary.
Sec. 11. Qualifications.
No person shall be appointed Secretary,
or Assistant Secretary of the Department unless he is a citizen and
of the Philippines, of good moral character, and of proven competence
any of the following fields: (a) energy or utility economics; (b)
administration; (c) physical or engineering sciences; (d) management;
Sec. 12. Bureaus and Services.
Subject to the power of the
with the approval of the President, to reorganize, restructure, and
the functions of the bureaus and services for the effective discharge
the powers and functions of the Department under this Act, the
shall have the following bureaus and services: Energy Resource
Bureau; Energy Utilization Management Bureau; Energy Industry
Bureau; Energy Planning and Monitoring Bureau; and Administrative
bureaus and services shall have the following powers and functions:
Energy Resource Development Bureau
Assist in the formulation and implementation of policies to develop and
increase the domestic supply of local energy resources like fossil
nuclear fuels, and geothermal resources;
Assist in the formulation of sectoral programs and plans relative to
exploration, development, and extraction of local energy resources and
implement, monitor, and regularly review said programs;
Conduct energy research and studies in support of the aforementioned
Provide consultative training and advisory services to practitioners
institutions in the areas of regulated activities; and
Assist in the formulation of financial and fiscal policies, rules,
and requirements relative to the operations of service contractors and
implement and enforce said policies.
Energy Utilization Management Bureau
Assist in the formulation and implementation of policies for the
and economical transformation, conversion, processing, refining,
distribution, transportation, and storage of petroleum, coal, natural
geothermal, and other nonconventional energy resources such as wind,
biomass, and others; and ensure their efficient and judicious
Monitor sectoral energy consumption and conduct energy audits,
training, energy management advisory services, and technology
projects on efficient energy utilization;
Develop, promote, and commercialize applications of biomass, solar,
hydro, wind, wood, and charcoal and other nonconventional energy
including new and more efficient and economical transformation,
processing, refining, marketing, distribution, transportation, and
technologies for conventional energy resources;
Assist in the formulation of an integrated rural energy program to
address the needs of rural development and environmental programs and
monitor, and regularly review said program;
Assist in the formulation of an operational plan for the allocation of
oil, fuel, and energy sources in the event of the declaration of
low-energy supply provided for in Sec. 25 of this Act;
Provide information on energy technology and develop middle-and
energy technology development strategies in cooperation with the
of Science and Technology;
Monitor the implementation of energy projects in coordination with the
Department of Environment and Natural Resources to ensure compliance
prescribed environmental standards;
Recommend appropriate courses of action to resolve major issues which
impede energy project siting or result in adverse environmental impact;
Require industrial, commercial, and transport establishments to collect
or cause the collection of waste oil for recycling as fuel or
Develop and implement a continuing energy conservation program designed
to optimize energy utilization, including a nationwide information
on energy conservation.
Energy Industry Administration Bureau.
Assist in the formulation of regulatory policies to encourage and guide
the operations of both government and private entities involved in
resource supply activities such as independent power production,
distribution, as well as the importation, exportation, stockpiling,
shipping, transportation, refinement, processing, marketing, and
of all forms of energy and energy products, whether conventional or
Draw up plans to cope with contingencies of energy supply
Assist in the formulation of financial and fiscal policies, rules,
and requirements relative to the operations of entities involved in the
supply of energy resources such as oil companies, petroleum product
coal importing and distributing companies, natural gas distributing
independent power producers, and all other entities involved in
energy supply activities and implement and enforce said policies.
Energy Planning and Monitoring Bureau
Assist in the development and updating of an integrated energy plan for
the short-, medium-, and long-term periods to provide a comprehensive
on the demand scenarios and supply options as well as the impacts of
policies on the economy, poverty, and environment;
Develop and maintain a centralized, comprehensive, and unified data and
information program to ensure the efficient collection, evaluation,
and dissemination of data and information on reserves of various energy
resources, production, demand, development technology, and related
and statistical information which are required for policy formulation,
program planning, and implementation;
Supervise, coordinate, and integrate the formulation, monitoring, and
of programs and plans for energy supply development such as power
local energy resource development and production, and energy
Regularly review and analyze past and current patterns of energy
vis-a-vis growth and development performance of the country's various
sectors to evaluate current and foreseeable trends in energy demand;
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
Assure the incorporation of national environmental goals in the
and implementation of energy programs, and to advance the goals of
protecting, and enhancing environmental quality; and assuring public
and safety; and
Conduct studies on international energy issues that have a direct
on supply and utilization of energy and provide technical advice on
negotiations involving energy resources and technologies.
Administrative Support Services. The Administrative Support
shall be composed of the Office of the Legal Counsel and the Financial
and Management Services.
Office of the Legal Counsel shall be responsible for providing legal
and services on all policies, programs, and operational matters of the
Department. It shall provide legal counseling services in cases where
Department is a party and shall also handle administrative cases
any personnel of the Department and submit recommendations pertaining
Financial and Management Services, which shall consist of the Human
Management Division, General Services Divisions, and the Financial
Division, shall be responsible for providing the Department with
relative to personnel information, records, supplies, equipment,
and disbursements, security and custodial works. It shall also be
for providing the Department with staff advice and assistance on
financial, and management improvement matters.
Sec. 13. Attached Agencies and Corporations.
The Philippine National
Oil Company (PNOC), the National Power Corporation (NPC), and the
Electrification Administration (NEA) are hereby placed under the
of the Department, but shall continue to perform their respective
insofar as they are not inconsistent with the provisions of this Act.
annual budget shall be submitted to Congress for approval. The
shall, in a concurrent capacity, be the ex officio chairman of the
boards of the PNOC, NPC, and NEA, unless otherwise directed by the
Provided, That in no case shall the Secretary be the chief executive
or chief operating officer of the said agencies or their subsidiaries,
any law to the contrary notwithstanding.
Attached Agencies and Corporations
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
shall also be the president and chief executive officer thereof, are
Secretary may recommend to the President the reorganization of the
of directors of the PNOC, NPC, and NEA.
Sec. 14. Council of Advisers
on Energy Affairs. A council of
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
President shall convene the council within thirty (30) days upon
of this Act.
Sec. 15. Abolition of Agencies. The Office of
Energy Affairs and the
Energy Coordinating Council are hereby abolished subject to Sec. 17
of this Act.
Sec. 16. Transfer of Powers
and Functions. The powers and functions
the Energy Coordinating Council and the Office of Energy Affairs are
transferred to the Department.
foregoing transfer of powers and functions shall include all applicable
funds and appropriations, records, equipment, property, and personnel
may be necessary.
same shall apply to agencies and government units which have not been
but whose functions have been transferred to the Department.
the successor-in-office of the Office of Energy Affairs, the Department
shall administer the activities of the Technology Transfer for Energy
(TTEM) project. For this purpose, the Department shall continue the
of all funds, monies, interests, reflows, and properties outstanding
accruing from the TTEM project upon its termination for the following
To finance energy conservation projects of industrial and commercial
To monitor implemented sub-projects and document the actual energy
To disseminate information on implemented sub-projects through case
and seminars/workshops so as to encourage replication by other
and commercial establishments.
Sec. 17. Transfer of Rights,
Assets, and Liabilities. The Department
shall, by virtue of this Act, be subrogated to all the rights and
all the liabilities of the Office of Energy Affairs, the Energy
Council, and all other agencies, or government units whose functions
powers have been transferred to the Department, and all their funds,
property, assets, equipment, and such personnel as necessary, including
the unexpended appropriations and/or allocations. All contracts and
of said offices, agencies, and government units are hereby transferred
to and assumed by the Department and shall be acted upon in accordance
with the Auditing Code and other pertinent laws, rules, and
Provided, That the officers and employees of said offices,
and government units shall continue in a holdover capacity until such
as the new officers and employees of the Department shall have been
appointed pursuant to the provisions of this Act.
Sec. 18. Rationalization or
Transfer of Functions of Attached or Related
Agencies. The non-price regulatory jurisdiction, powers and
of the Energy Regulatory Board as provided for in Sec. 3 of
Order No. 172 are hereby transferred to the Department.
foregoing transfer of powers and functions shall include all applicable
funds and appropriations, records, equipment, property, and such
as may be necessary: Provided, That only such amount of funds and
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
powers and functions shall be affected by such transfer.
power of the NPC to determine, fix, and prescribe the rates being
to its customers under Sec. 4 of the Republic Act No. 6395, as
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
transferred to the Energy Regulatory Board. The Board shall exercise
new powers only after due notice and hearing and under the same
provided for in Executive Order No. 172.
Sec. 19. Structure and
Staffing Pattern. The organizational
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:
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
Commission for the positions that they shall be appointed to: Provided,
finally, That, if such individuals possess the same qualifications,
shall be given priority.
Sec. 20. Separation from
Service. Employees separated from the
as a result of this reorganization shall, within six (6) months from
separation from the service, receive the retirement benefits to which
may be entitled under existing laws, rules, and regulations.
Sec. 21. Appropriations. Such sums as may be
necessary for the
of this Act shall be taken from the current fiscal year appropriations
of the Office of Energy Affairs, the Office of Energy Affairs' special
fund created under Sec. 8 of Presidential Decree No. 910, and such
as the President of the Philippines may allocate from other resources
accordance with law: Provided, That the total amount shall not exceed
hundred million pesos (P300,000,000). Thereafter, the amount needed for
the operation and maintenance of the Department shall be included in
annual General Appropriations Act.
to existing rules and regulations, the funds and monies collected or
otherwise come into the possession of the Department and its bureaus
fees, surcharges, fines, and penalties which the Department and its
may impose and collect under this Act, as well as an amount to be
at the beginning of every calendar year representing twenty percent
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
for expenses necessary for the effective discharge of the powers and
of the Department under this Act.
Sec. 22. Disclosure and Divestment of Financial
of office, the Secretary of the Department, the Undersecretaries, and
Assistant Secretaries shall submit to the Civil Service Commission a
of all companies, partnerships, or business enterprises, including
organizations, in which they or any immediate member of their families
within the second degree of consanguinity or affinity have any form of
financial interest or employment relationship, including consultancy:
Provided, however, That all other forms of employment relationship
held by the heads of the offices of the Department shall be immediately
terminated upon assumption of office.
thirty (30) days thereafter, complete divestment of financial interests
in any institution, firm, or company which fall under the supervisory
regulatory jurisdiction of the Department shall be made: Provided,
That, in cases where confirmation of appointments by the Commission on
Appointments is required, the divestment mandated herein shall be
with within thirty (30) days after such confirmation.
divestment provided in the preceding paragraph shall likewise apply to
the members of the immediate family within the second degree of
having interest in any institution or activity which falls under the
jurisdiction or supervision of the Department and the attached agencies.
Sec. 23. Relationship with
Other Government Departments. The
and its priority projects shall enjoy preferential attention from the
of Environment and Natural Resources relative to the exploration,
exploitation, and extraction of petroleum, coal, and geothermal
and in the matter of providing technical support necessary for the
of power-generating plants.
request of the Department or any of its bureaus, all government
with functions relative to the approval of the projects of the
or its duly authorized and endorsed entities, whether government or
shall act upon and resolve the matter within ten (10) calendar days.
this end, the Secretary, with the approval of the President, may
an interagency secretariat for the purpose of expediting the approval
Sec. 24. Visitorial Powers. The
Secretary of the Department or his
shall have visitorial and examining authority over nongovernment
with contracts for the exploration, development, or utilization of the
natural resources for energy purposes in order to determine the share
the Government in the revenue or product thereof, and to ascertain all
funds collectible and products due the Government, and that all such
collectible and products due the Government, have actually been
such examination, the nongovernment entity concerned shall produce all
the reports, records, books of accounts, and other papers that may be
refusal by any such nongovernment entity to allow an examination of its
books of accounts and pertinent records or its concealment of any
information concerning its financial status shall be a breach of its
with the Government and shall constitute a legal ground for the
Sec. 25. Contingency Powers.
In time of critically low-energy supply
or imminent danger thereof, the President may, upon the determination
recommendation of the Secretary, issue a declaration of the same.
the Secretary is hereby authorized to implement the fuel and energy
plan provided for in Sec. 12 (b)(5) of this Act, and to formulate
implement other measures for the conservation of energy including, but
not limited to, power or fuel rationing, load curtailment, and
on the use of government vehicles and resources.
Sec. 26. Repealing Clause. All
laws, presidential decrees,
orders, and rules and regulations, or parts thereof, inconsistent with
the provisions of this Act are hereby repealed or modified accordingly.
in no case are the provisions of Republic Act No. 6969 repealed,
or modified by the provisions of this Act.
Sec. 27. Separability Clause.
If, for any reason, any Sec. or
of this Act is held unconstitutional or invalid, the other Sec.s or
provisions hereof shall not be affected thereby.
Sec. 28. Effectivity Clause. This
Act shall take effect after its
publication in at least two (2) national newspapers of general
December 9, 1992
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