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Republic Act No. 7638Department of Energy Act of 1992
REPUBLIC
ACT NO. 7638
AN
ACT CREATING THE DEPARTMENT OF ENERGY, RATIONALIZING THE ORGANIZATION
AND
FUNCTIONS OF GOVERNMENT AGENCIES RELATED TO ENERGY, AND FOR OTHER
PURPOSES
CHAPTER
I
General Provisions
Section
1. Short Title. This Act shall be known as the "Department
of
Energy Act of 1992."
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:
(a)
Formulate policies for the planning and implementation of a
comprehensive
program for the efficient supply and economical use of energy
consistent
with the approved national economic plan and with the policies on
environmental
protection and conservation and maintenance of ecological balance, and
provide a mechanism for the integration, rationalization, and
coordination
of the various energy programs of the Government;
(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.
CHAPTER
II
The Department Proper
Sec. 6. Composition. The Department Proper
shall be composed of the
Office
of the Secretary and the Offices of the Undersecretaries and Assistant
Secretaries, and the bureaus and services of the Department.
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:
(a)
Establish policies and standards for the effective, efficient and
economical
operation of the Department in accordance with the programs of the
Government;
(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 be an ex officio member of the Board of the National
Economic
and Development Authority (NEDA). He shall also be a member of the
NEDA's
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.
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
(1)
Assist in the formulation and implementation of policies to develop and
increase the domestic supply of local energy resources like fossil
fuels,
nuclear fuels, and geothermal resources;
(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.
(b)
Energy Utilization Management Bureau
(1)
Assist in the formulation and implementation of policies for the
efficient
and economical transformation, conversion, processing, refining,
marketing,
distribution, transportation, and storage of petroleum, coal, natural
gas,
geothermal, and other nonconventional energy resources such as wind,
solar,
biomass, and others; and ensure their efficient and judicious
utilization;
(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.
(c)
Energy Industry Administration Bureau.
(1)
Assist in the formulation of regulatory policies to encourage and guide
the operations of both government and private entities involved in
energy
resource supply activities such as independent power production,
electricity
distribution, as well as the importation, exportation, stockpiling,
storage,
shipping, transportation, refinement, processing, marketing, and
distribution
of all forms of energy and energy products, whether conventional or
nonconventional;
(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.
(d)
Energy Planning and Monitoring Bureau
(1)
Assist in the development and updating of an integrated energy plan for
the short-, medium-, and long-term periods to provide a comprehensive
assessment
on the demand scenarios and supply options as well as the impacts of
energy
policies on the economy, poverty, and environment;
(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.
(e)
Administrative Support Services. The Administrative Support
Services
shall be composed of the Office of the Legal Counsel and the Financial
and Management Services.
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.
CHAPTER
III
Attached Agencies and Corporations
Sec. 13. Attached Agencies and Corporations.
The Philippine National
Oil Company (PNOC), the National Power Corporation (NPC), and the
National
Electrification Administration (NEA) are hereby placed under the
supervision
of the Department, but shall continue to perform their respective
functions
insofar as they are not inconsistent with the provisions of this Act.
Their
annual budget shall be submitted to Congress for approval. The
Secretary
shall, in a concurrent capacity, be the ex officio chairman of the
respective
boards of the PNOC, NPC, and NEA, unless otherwise directed by the
President:
Provided, That in no case shall the Secretary be the chief executive
officer
or chief operating officer of the said agencies or their subsidiaries,
any law to the contrary notwithstanding.
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.
CHAPTER
IV
Transitory Provisions
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
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:
(a)
To finance energy conservation projects of industrial and commercial
establishments;
(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. 17. Transfer of Rights,
Assets, and Liabilities. The Department
shall, by virtue of this Act, be subrogated to all the rights and
assume
all the liabilities of the Office of Energy Affairs, the Energy
Coordinating
Council, and all other agencies, or government units whose functions
and
powers have been transferred to the Department, and all their funds,
records,
property, assets, equipment, and such personnel as necessary, including
the unexpended appropriations and/or allocations. All contracts and
liabilities
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
regulations:
Provided, That the officers and employees of said offices,
agencies,
and government units shall continue in a holdover capacity until such
time
as the new officers and employees of the Department shall have been
duly
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
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.
CHAPTER
V
Appropriations
Sec. 21. Appropriations. Such sums as may be
necessary for the
implementation
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
amounts
as the President of the Philippines may allocate from other resources
in
accordance with law: Provided, That the total amount shall not exceed
Three
hundred million pesos (P300,000,000). Thereafter, the amount needed for
the operation and maintenance of the Department shall be included in
the
annual General Appropriations Act.
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.
CHAPTER
VI
Miscellaneous Provisions
Sec. 22. Disclosure and Divestment of Financial
Interest. Before
assumption
of office, the Secretary of the Department, the Undersecretaries, and
the
Assistant Secretaries shall submit to the Civil Service Commission a
list
of all companies, partnerships, or business enterprises, including
nonprofit
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.
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.
Sec. 28. Effectivity Clause. This
Act shall take effect after its
complete
publication in at least two (2) national newspapers of general
circulation.
Approved:
December 9, 1992
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