LAWS & EXECUTIVE ISSUANCES (1900-2014) : ENERGY Part3

LAWS & EXECUTIVE ISSUANCES
(1900-2014)
ENERGY
ISBN: 978-621-8014-00-8
IMPLEMENTING RULES AND REGULATIONS
TABLE OF CONTENTS
LAWS AND EXECUTIVE ISSUANCES ON
ENERGY
Part III
PAGE
LIST OF ENERGY-RELATED FRANCHISE LAWS 1677
BATAS PAMBANSA BLG. 33 1791

AN ACT DEFINING AND PENALIZING CERTAIN PROHIBITED
ACTS INIMICAL TO THE PUBLIC INTEREST AND NATIONAL
SECURITY INVOLVING PETROLEUM AND/OR PETROLEUM
PRODUCTS, PRESCRIBING PENALTIES THEREFOR AND
FOR OTHER PURPOSES
PRESIDENTIAL DECREE NO. 1865 1794
AMENDING BATAS PAMBANSA BLG. 33, ENTITLED "AN
ACT DEFINING AND PENALIZING CERTAIN PROHIBITED
ACTS INIMICAL TO THE PUBLIC INTERESTS AND
NATIONAL SECURITY INVOLVING PETROLEUM AND/
OR PETROLEUM PRODUCTS, PRESCRIBING PENALTIES
THEREFOR AND FOR OTHER PURPOSES", BY INCLUDING
SHORT-SELLING AND ADULTERATION OF PETROLEUM
AND PETROLEUM PRODUCTS AND OTHER ACTS IN THE
DEFINITION OF PROHIBITED ACTS, INCREASING THE
PENALTIES THEREIN, AND FOR OTHER PURPOSES"
RULES AND REGULATIONS ON THE IMPLEMENTATION OF

BATAS PAMBANSA BLG. 33, AS AMENDED BY PRESIDENTIAL
DECREE NO. 1865, ISSUED ON MAY 25, 1983
i
LAWS AND EXECUTIVE ISSUANCES ON ENERGY
REPUBLIC ACTS PAGE
REPUBLIC ACT NO. 7156 1818

AN ACT GRANTING INCENTIVES TO MINI-HYDROELECTRIC
POWER DEVELOPERS AND FOR OTHER PURPOSES
RULE AND REGULATIONS GOVERNING THE FILING

PROCESSING OF APPLICATIONS FOR AUTHORITY TO
CONSTRUCT AND OPERATE MINI-HYDROELECTRIC POWER
PLANTS AND PROVIDING FOR THE TERMS AND CONDITIONS
OF THE OPERATING CONTRACTS CONCLUDED PURSUANT
THERETO

AN ACT PENALIZING THE PILFERAGE OF ELECTRICITY
AND THEFT OF ELECTRIC POWER TRANSMISSION
LINES/MATERIALS, RATIONALIZING SYSTEM LOSSES
BY PHASING OUT PILFERAGE LOSSES AS A COMPONENT
THEREOF, AND FOR OTHER PURPOSES
RULES AND REGULATIONS IMPLEMENTING REPUBLIC ACT
NO. 7832

AN ACT DEREGULATING THE DOWNSTREAM OIL
INDUSTRY, AND FOR OTHER PURPOSES
NO. 8180, “AN ACT DEREGULATING THE DOWNSTREAM OIL
INDUSTRY AND FOR OTHER PURPOSES”

AN ACT DEREGULATING THE DOWNSTREAM OIL
INDUSTRY, AND FOR OTHER PURPOSES
8479,“DOWNSTREAM OIL INDUSTRY DEREGULATION ACT OF
1998”
ii
REPUBLIC ACTS PAGE

AN ACT ORDAINING REFORMS IN THE ELECTRIC POWER
INDUSTRY, AMENDING FOR THE PURPOSE CERTAIN LAWS
AND FOR OTHER PURPOSES
RULES AND REGULATIONS TO IMPLEMENT REPUBLIC ACT
NO. 9136, ENTITLED "ELECTRIC POWER INDUSTRY REFORM
ACT OF 2001"

AN ACT TO DIRECT THE USE OF BIOFUELS, ESTABLISHING
FOR THIS PURPOSE THE BIOFUEL PROGRAM,
APPROPRIATING FUNDS THEREFOR, AND FOR OTHER
PURPOSES
RULES AND REGULATIONS TO IMPLEMENT REPUBLIC ACT
NO. 9367

AN ACT PROMOTING THE DEVELOPMENT, UTILIZATION
AND COMMERCIALIZATION OF RENEWABLE ENERGY
RESOURCES AND FOR OTHER PURPOSES
NO. 9513

A N A C T S T R E N G T H E N I N G T H E N AT I O N A L
ELECTRIFICATION ADMINISTRATION, FURTHER
AMENDING FOR THE PURPOSE PRESIDENTIAL DECREENO.
269, AS AMENDED, OTHERWISE KNOWN AS THE “NATIONAL
ELECTRIFICATION ADMINISTRATION DECREE”
PRESCRIBING THE IMPLEMENTING RULES AND REGULATIONS
OF REPUBLIC ACT NO. 10531, OTHERWISE KNOWN AS THE
“NATIONALELECTRIFICATION ADMINISTRATION REFORM
ACT OF 2013”
iii
PAGE
PRESIDENTIAL DECREE NO. 972 2307

PROMULGATING AN ACT TO PROMOTE AN ACCELERATED
EXPLORATION, DEVELOPMENT, EXPLOITATION,
PRODUCTION AND UTILIZATION OF COAL
RULES AND REGULATIONS IMPLEMENTING PRESIDENTIAL
DECREE NO. 972, OTHERWISE KNOWN AS THE “COAL
DEVELOPMENT ACT OF 1976”
EXECUTIVE ORDER NO. 215 2336

AMENDING PRESIDENTIAL DECREE NO. 40 AND ALLOWING
THE PRIVATE SECTOR TO GENERATE ELECTRICITY
RULES AND REGULATIONS IMPLEMENTING EXECUTIVE

ORDER NO. 215 ON PRIVATE SECTOR PARTICIPATION IN POWER
GENERATION
APPENDIX: LIST OF LAW AMENDMENTS 2387
INDEX 2409
iv
Laws and Executive Issuances on Energy – Part III
•List of Energy-Related Franchise Laws

•Implementing Rules and Regulations
•Appendix: List of Law Amendments
•Index
LIST OF ENERGY-RELATED
FRANCHISE LAWS
LIST OF ENERGY-RELATED FRANCHISE LAWS
LIST OF FRANCHISE LAWS

(ELECTRIC LIGHT, HEAT, POWER, GAS PIPES)
ACTS
ACT NO. 484
AN ACT PROVIDING FOR THE GRANTING OF A FRANCHISE TO

CONSTRUCT AN ELECTRIC STREET-RAILWAY ON THE STREETS
OF MANILA AND ITS SUBURBS AND A FRANCHISE TO CONSTRUCT,
MAINTAIN, AND OPERATE AN ELECTRIC LIGHT, HEAT, AND
POWER SYSTEM IN THE CITY OF MANILA AND ITS SUBURBS,
AFTER COMPETITIVE BIDDING
Approved October 20, 1902
ACT NO. 667
AN ACT PRESCRIBING THE METHOD OF APPLYING TO

GOVERNMENTS OF MUNICIPALITIES, EXCEPT THE CITY OF
MANILA, AND OF PROVINCES FOR FRANCHISES TO CONSTRUCT
AND OPERATE STREET RAILWAY, ELECTRIC LIGHT AND POWER
AND TELEPHONE LINES, THE CONDITIONS UPON WHICH THE
SAME MAY BE GRANTED, CERTAIN POWERS OF THE GRANTEES OF
SAID FRANCHISES AND OF GRANTEES OF SIMILAR FRANCHISES
UNDER SPECIAL ACT OF THE COMMISSION, AND FOR OTHER
PURPOSES
Approved March 06, 1903
ACT NO. 1112
AN ACT AUTHORIZING THE ASSIGNMENT, SALE, AND TRANSFER

TO THE MANILA ELECTRIC RAILROAD AND LIGHT COMPANY
OF ALL THE ASSETS OF THE COMPAIIIA DE LOS TRANVIAS DE
FILIPINAS, PROVIDING FOR THE SURRENDER BY THE MANILA
ELECTRIC RAILROAD AND LIGHT COMPANY OF THE FRANCHISES,
AND AMENDMENTS THERETO, OF THE SAID COMPAÑIA DE LOS
TRANVIAS DE FILIPINAS, AND FOR CERTAIN AMENDMENTS TO
ORDINANCE NUMBERED FORTY-FOUR OF THE MUNICIPAL BOARD
OF MANILA, ENACTED IN PURSUANCE OF ACT NUMBERED FOUR
HUNDRED AND EIGHTY-FOUR OF THE PHILIPPINE COMMISSION,
AND FOR THE OPENING OF CERTAIN NEW STREETS BY THE
MUNICIPAL BOARD OF MANILA, AND FOR A FRANCHISE TO
THE MANILA ELECTRIC RAILROAD AND LIGHT COMPANY TO
1681
CONSTRUCT, MAINTAIN, AND OPERATE AN ELECTRIC STREET

RAILWAY AND AN ELECTRIC LIGHT, HEAT, AND POWER SYSTEM
FROM THE LIMITS OF THE CITY OF MANILA TO MALABON
Approved April 11, 1904
ACT NO. 1303,
AN ACT GRANTING TO MARTIN M. LEVERING A FRANCHISE TO

INSTALL, OPERATE, AND MAINTAIN AN ELECTRIC LIGHT, HEAT,
AND POWER SUPPLY SYSTEM IN THE MUNICIPALITY OF CEBU,
PROVINCE OF CEBU.
Approved February 24, 1905
ACT NO. 1446
AN ACT GRANTING A FRANCHISE TO CHARLES M. SWIFT TO

CONSTRUCT, MAINTAIN, AND OPERATE AN ELECTRIC RAILWAY,
AND TO CONSTRUCT, MAINTAIN, AND OPERATE AN ELECTRIC
LIGHT, HEAT, AND POWER SYSTEM FROM A POINT IN THE CITY
OF MANILA IN AN EASTERLY DIRECTION TO THE TOWN OF PASIG,
IN THE PROVINCE OF RIZAL
Approved January 30, 1906
ACT NO. 1968
AN ACT TO PROVIDE FOR THE GRANTING OF A FRANCHISE TO

AND POWER SUPPLY SYSTEM IN THE CITY OF BAGUIO, PHILIPPINE
ISLANDS
Approved December 07, 1909
ACT NO. 1995
AN ACT AUTHORIZING THE GRANTEE OF THE FRANCHISE

TO INSTALL, OPERATE, AND MAINTAIN AN ELECTRIC LIGHT,
POWER, AND WATER SUPPLY SYSTEM IN THE MUNICIPALITY OF
ZAMBOANGA, MORO PROVINCE, PHILIPPINE ISLANDS
Approved July 23, 1910
1682
ACT NO. 2006
AN ACT TO PROVIDE FOR THE GRANTING OF A FRANCHISE FOR TFIE

USE OF THE WATERS OF THE AGNO RIVER IN THE SUBPROVINCE
OF BENGUET, MOUNTAIN PROVINCE, FOR THE GENERATION
OF POWER FOR THE MAINTENANCE OF AN ELECTRIC LIGHT,
HEAT, AND POWER SYSTEM AND THE SUPPLY OF SUCH LIGHT,
HEAT, AND POWER IN AND TO THE CITY OF BAGUIO AND IN THE
SUBPROVINCE OF BENGUET, MOUNTAIN PROVINCE
ACT NO. 2039
AN ACT TO PROVIDE FOR THE GRANTING OF A FRANCHISE TO

CONSTRUCT, MAINTAIN, AND OPERATE GAS SYSTEMS FOR THE
FURNISHING OF GAS FOR HEAT, LIGHTING, AND POWER IN THE
CITY OF MANILA AND THE PROVINCE OF RIZAL, PHILIPPINE
ISLANDS
ACT NO. 2167
AN ACT AUTHORIZING THE GRANTING OF A FRANCHISE TO

DIVERT AND UTILIZE CERTAIN WATERS FOR THE PURPOSE OF
GENERATING POWER FOR THE MAINTENANCE OF AN ELECTRIC
LIGHT, HEAT, AND POWER SYSTEM, AND TO INSTALL, OPERATE,
AND MAINTAIN AN ELECTRIC LIGHT, HEAT, AND POWER SUPPLY
SYSTEM IN THE MUNICIPALITY OF LUCBAN, PROVINCE OF
TAYABAS, AND FOR OTHER PURPOSES
ACT NO. 2179
AN ACT AUTHORIZING THE SALE OF THE BAGUIO ELECTRIC

LIGHT PLANT TO THE CITY OF BAGUIO.
1683
ACT NO. 2392
AN ACT GRANTING TO THE SOCIEDAD ANONIMA DENOMINATED

“POTOTAN ELECTRIC LIGHT AND POWER COMPANY, LIMITED,” A
FRANCHISE TO INSTALL, OPERATE, AND MAINTAIN AN ELECTRIC
LIGHT, HEAT, AND POWER SYSTEM IN THE MUNICIPALITY OF
POTOTAN, PROVINCE OF ILOILO, PHILIPPINE ISLANDS.
ACT NO. 2393
AN ACT GRANTING TO THE SOCIEDAD ANONIMA KNOWN AS

“SILAY ELECTRIC AND ICE PLANT COMPANY, INCORPORATED,” A
SILAY, OCCIDENTAL NEGROS. PHILIPPINE ISLANDS
ACT NO. 2446
AN ACT AMENDING ARTICLES SEVEN AND EIGHT OF SECTION

TWO OF ACT NUMBERED TWENTY-ONE HUNDRED AND SIXTY-
SEVEN, ENTITLED “AN ACT AUTHORIZING THE GRANTING OF A
FRANCHISE TO DIVERT AND UTILIZE CERTAIN WATERS FOR THE
PURPOSE OF GENERATING POWER FOR THE MAINTENANCE OF AN
ELECTRIC LIGHT, HEAT, AND POWER SYSTEM, AND TO INSTALL,
OPERATE, AND MAINTAIN AN ELECTRIC LIGHT, HEAT, AND POWER
SUPPLY SYSTEM IN THE MUNICIPALITY OF LUKBAN, PROVINCE
OF TAYABAS, AND FOR OTHER PURPOSES,” BY EXTENDING THE
TIME WITHIN WHICH THE CONSTRUCTION OF THE ELECTRIC
SYSTEM PROVIDED FOR IN THIS ACT SHALL BE COMPLETED,
AND EXTENDING THE TIME FOR THE REIMBURSEMENT TO
THE GRANTEE OF THE CASH, BONDS, OR OTHER SECURITIES
DEPOSITED IN THE INSULAR TREASURY AS A GUARANTEE FOR
THE PERFORMANCE OF THE CONDITIONS OF THE FRANCHISE.
ACT NO. 2474
AN ACT GRANTING TO THE SOCIEDAD ANONIMA KNOWN AS

“MALOLOS ELECTRIC LIGHT, POWER, AND ICE PLANT COMPANY,” A
1684

MALOLOS, PROVINCE OF BULACAN, PHILIPPINE ISLANDS.
ACT NO. 2475
AN ACT GRANTING TO JULIAN M. LOCSIN ANSON A FRANCHISE

HEAT, AND POWER SYSTEM IN THE MUNICIPALITY OF ALBAY,
INCLUDING ITS TWO DISTRICTS, DARAGA AND LEGASPI, IN THE
PROVINCE OF ALBAY, PHILIPPINE ISLANDS
ACT NO. 2620
AN ACT AMENDING ACT NUMBERED TWENTY-FOUR HUNDRED

AND SEVENTY-FIVE, ENTITLED “AN ACT GRANTING TO JULIAN
M. LOCSIN ANSON A FRANCHISE TO INSTALL, OPERATE, AND
MAINTAIN AN ELECTRIC LIGHT, HEAT, AND POWER SYSTEM IN
THE MUNICIPALITY OF ALBAY. INCLUDING ITS TWO DISTRICTS,
DARAGA AND LEGASPI, IN THE PROVINCE OF ALBAY, PHILIPPINE
ISLANDS,” BY EXTENDING THE TIME LIMITS SPECIFIED
THEREIN
ACT. NO. 2621
AN ACT TO AMEND ACT NUMBERED TWENTY-FOUR HUNDRED

AND SEVENTY-FOUR, GRANTING TO THE SOCIEDAD ANONIMA
KNOWN AS “MALOLOS ELECTRIC LIGHT, POWER, AND ICE
PLANT COMPANY,” A FRANCHISE TO INSTALL, OPERATE, AND
MAINTAIN AN ELECTRIC LIGHT, HEAT, AND POWER SYSTEM
IN THE MUNICIPALITY OF MALOLOS, PROVINCE OF BULACAN
PHILIPPINE ISLANDS; BY EXTENDING THE TIME FOR DEPOSITING
THE SECOND INSTALLMENT IN THE INSULAR TREASURY, AND
FOR OTHER PURPOSES
1685
ACT NO. 2644
AN ACT GRANTING TO EUSEBIO DIAZ CACITAS A FRANCHISE TO

INSTALL, OPERATE, AND MAINTAIN AN ELECTRIC LIGT, HEAT
AND POWER SYSTEM IN THE MUNICIPALITY OF TABACO, IN THE
ACT NO. 2647
AN ACT GRANTING TO MARIANO ABELLA E ISAAC A FRANCHISE TO

AND POWER SYSTEM IN IHE MUNICIPALITY OF NAGA, PROVINCE
OF AMBOS CAMARINES, PHILIPPINE ISLANDS.
ACT NO. 2654
AN ACT GRANTING TO ALFREDO PARDO DE TAVERA A FRANCHISE

TO INSTALL, OPERATE, AND MAINTAIN AN ELECTRIC LIGHT, HEAT,
AND POWER SYSTEM IN THE MUNICIPALITIES OF SAN FERNANDO
AND BACOLOR, PROVINCE OF PAMPANGPA, PHILIPPINE ISLANDS
ACT NO. 2690
AN ACT TO AMEND ACT NUMBERED TWENTY-SIX HUNDRED

AND FORTY-FOUR, ENTITLED “AN ACT GRANTING TO EUSEBIO
DIAZ CACITAS A FRANCHISE TO INSTALL, OPERATE, AND
THE MUNICIPALITY OF TABACO, IN THE PROVINCE OF ALBAY,
PHILIPPINE ISLANDS,” BY EXTENDING THE TIME LIMITS
SPECIFIED THEREIN.
ACT NO. 2700
AN ACT GRANTING TO J. V. HOUSE A FRANCHISE TO INSTALL,

OPERATE, AND MAINTAIN AN ELECTRIC LIGHT, HEAT, AND
POWER SYSTEM IN THE MUNICIPALITY OF TACLOBAN, PROVINCE
OF LEYTE, PHILIPPINE ISLANDS
1686
ACT NO. 2701
AN ACT GRANTING TO THE SOCIEDAD ANONIMA DENOMINATED

“LA ELECTRICA” A FRANCHISE TO INSTALL, OPERATE, AND
THE MUNICIPALITY OF DUMAGUETE, PROVINCE OF ORIENTAL
NEGROS, PHILIPPINE ISLANDS
ACT NO. 2767
AN ACT GRANTING TO BENJAMIN BLEIBEL A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF CALBAYOG,
PROVINCE OF SAMAR. PHILIPPINE ISLANDS
ACT NO. 2770
AN ACT GRANTING TO CANUTO OCTAVIO BORROMEO AND VICENTE

A. RACAZA A FRANCHISE TO INSTALL, OPERATE, AND MAINTAIN AN
ELECTRIC LIGHT, HEAT, AND POWER SYSTEM IN THE MUNICIPALITY
OF ORMOC, PROVINCE OF LEYTE, PHILIPPINE ISLANDS
ACT NO. 2821
AN ACT GRANTING TO THE ROMBLON LIGHT AND ICE PLANT

COMPANY, LIMITED, A FRANCHISE TO INSTALL, OPERATE, AND
THE MUNICIPALITY OF ROMBLON, IN THE PROVINCE OF THE
SAME NAME, PHILIPPINE ISLANDS
ACT NO. 2831
AN ACT TO CREATE A CORPORATION TO BE KNOWN AS THE BOHOL

ELECTRIC LIGHT COMPANY, AND TO GRANT TO THE SAME A
LIGHT, HEAT, AND POWER SYSTEM IN THE PROVINCE OF BOHOL,
AND FOR OTHER PURPOSES.
1687
ACT NO. 2839
AN ACT GRANTING TO EDUARDO GUTIERREZ REPIDE A FRANCHISE

HEAT, AND POWER SYSTEM IN THE MUNICIPALITY OF CAMILING.
IN THE PROVINCE OF TARLAC, PHILIPPINE ISLANDS
ACT NO. 2840
AN ACT GRANTING TO EDUARDO A. BARRETTO A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF CALAMBA, IN THE
PROVINCE OF LAGNNA, PHILIPPINE ISLANDS
ACT NO. 2841
AN ACT GRANTING TO THE FIRM OLEAGA HERMANOS Y CORRAL, A

APARRI, PROVINCE OF CAGAYAN, PHILIPPINE ISLANDS
ACT NO. 2842
AN ACT GRANTING TO JOSE HERNANDEZ A FRANCHISE TO

AND POWDER SYSTEM IN THE MUNICIPALITY OF CAPIZ, PROVINCE
OF CAPIZ, PHILIPPINE ISLANDS
ACT NO. 2843
AN ACT GRANTING TO ENGRACIO ORENSE A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF GUINOBATAN,
1688
ACT NO. 2844
AN ACT GRANTING TO THE SANTA CRUZ ELECTRIC LIGHT CO. INC.,

A FRANCHISE TO INSTALL, OPERATE, AND MAINTAIN AN ELECTRIC
SANTA CRUZ, PROVINCE OF LAGUNA, PHILIPPINE ISLANDS
ACT NO. 2845
AN ACT GRANTING TO FELIX M. ROXAS A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITIES OF SAN FERNANDO, BACOLOR,
GUAGUA, AND ANGELES, IN THE PROVINCE OF PAMPANGA,
PHILIPPINE ISLANDS
ACT NO. 2847
AN ACT GRANTING TO B. A. GREEN A FRANCHISE TO INSTALL,

POWER SYSTEM IN THE MUNICIPALITY OF ORION, PROVINCE OF
BATAAN, PHILIPPINE ISLANDS
ACT NO. 2882
AN ACT TO AMEND ACT NUMBERED TWENTY-SIX HUNDRED

AND FORTY-SEVEN, ENTITLED “AN ACT GRANTING TO MARIANO
ABELLA E ISAAC, A FRANCHISE TO INSTALL, OPERATE, AND
THE MUNICIPALITY OF NAGA, PROVINCE OF AMBOS CAMARINES,
PHILIPPINE ISLANDS,: EXTENDING THE TIMES THEREIN
SPECIFIED
ACT NO. 2883
AN ACT TO AMEND CERTAIN SECTIONS OF ACT NUMBERED

TWENTY-EIGHT HUNDRED AND THIRTY-ONE, ENTITLED “AN
1689
ACT TO CREATE A CORPORATION TO BE KNOWN AS THE BOHOL

ELECTRIC LIGHT COMPANY, AND TO GRANT TO THE SAME A
LIGHT, HEAT, AND POWER SYSTEM IN THE PROVINCE OF BOHOL.
AND FOR OTHER PURPOSES”
ACT NO. 2981
AN ACT GRANTING TO THE MUNICIPALITY OF JAPAN, PROVINCE

OF BOHOL, A FRANCHISE TO INSTALL, OPERATE, AND MAINTAIN
AN ELECTRIC LIGHT, HEAT, AND POWER SYSTEM IN THE
MUNICIPALITY OF JAGNA, PROVINCE OF BOHOL, PHILIPPINE
ISLANDS
ACT NO. 2982
AN ACT GRANTING TO EVARISTO FESTEJO A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF SANTA LUCIA,
PROVINCE OF ILOCOS SUR, PHILIPPINE ISLANDS
ACT NO. 2983
AN ACT GRANTING TO ESTEBAN DE LA RAMA A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITIES OF ILIILO, LA
PAZ, JARO, AND AREVALO, PROVINCE OF ILOILO, PHILIPPINE
ISLANDS
ACT NO. 2986
AN ACT GRANTING TO GERONIMO LASALA AND EMIGDIO BORJA

FRANCHISE TO INSTALL, OPERATE AND MAINTAIN AN ELECTRIC
SORSOGON, PROVINCE OF SORSOGON, PHILIPPINE ISLANDS
1690
ACT NO. 2987
AN ACT AUTHORIZING THE MUNICIPALITY OF NAGA, PROVINCE

OF CAMARINES SUR, TO ACQUIRE AND OPERATE AN ELECTRIC
PLANT WITHIN ITS TERRITORY AND FORM A CORPORATION, IF
NECESSARY, AND FOR OTHER PURPOSES
ACT NO. 3035
AN ACT AUTHORIZING ESTEBAN DE LA RAMA TO TRANSFER HIS

FRANCHISE TO INSTALL, MAINTAIN, AND OPERATE AN ELECTRIC
LIGHT, HEAT, AND POWER PLANT IN THE MUNICIPALITIES OF LA
PAZ, JARO, AND AREVALO, PROVINCE OF ILOILO
ACT NO. 3078
AN ACT GRANTING TO “THE LAOAG- ELECTRIC LIGHT AND

POWER COMPANY” A FRANCHISE TO INSTALL, OPERATE, AND
THE MUNICIPALITY OF LAOAG, PROVINCE OF ILOCOS ITORTE,
PHILIPPINE ISLANDS
ACT NO. 3132
AN ACT GRANTING TO JOSE DE LA ROSA AND MANUEL ANDRES A

LIGHT, HEAT,’ AND POWER SYSTEM IN THE MUNICIPALITY OF
MASBATE. PROVINCE OF MASBATE, PHILIPPINE ISLANDS
ACT NO. 3209
AN ACT GRANTING TO DEOGRACIAS CAMON A FRANCHISE TO

INSTALL. OPERATE, AND MAINTAIN AN ELECTRIC LIGHT, HEAT,
AND POWER SYSTEM IN THE MUNICIPALITY OF LA CARLOTA,
PROVINCE OF OCCIDENTAL NEGROS, PHILIPPINE ISLANDS
1691
ACT NO. 3419
AN ACT GRANTING TO THE SURIGAO ELECTRIC COMPANY A

SURIGAO, PROVINCE OF SURIGAO, PHILIPPINE ISLANDS
ACT NO. 3458
AN ACT GRANTING THE LAOAG ELECTRIC LIGHT AND POWER

COMPANY AN EXTENSION OF TIME WITHIN WHICH IT MAY FILE
ITS ACCEPTANCE OF THE FRANCHISE GRANTED UNDER ACT
NUMBERED THREE THOUSAND AND SEVENTY-EIGHT, AND FOR
OTHER PURPOSES
ACT NO. 3486
AN ACT GRANTING TO THE “PULUPANDAN POWER PLANT,”

A CORPORATION, A FRANCHISE TO INSTALL, OPERATE, AND
THE MUNICIPALITY OF PULUPANDAN, PROVINCE OF OCCIDENTAL
ACT NO. 3488
AN ACT GRANTING TO THE “SAN JOSE POWER HOUSE AND COMPANY”

LIGHT, HEAT, AND POWER SYSTEM IN THE MUNICIPALITY OF SAN
JOSE, PROVINCE OF ANTIQUE, PHILIPPINE ISLANDS
ACT NO. 3489
AN ACT GRANTING TO HONORIO ROJAS A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITIES OF BACOOR, IMUS, KAWIT,
NOVELETA, ROSARIO, TANZA, AND GENERAL TRIAS, PROVINCE
OF CAVITE, PHILIPPINE ISLANDS
1692
ACT NO. 3490
AN ACT GRANTING TO THE BALANGA POWER PLANT CO., INC., A

LIGHT, HEAT, AND POWER SYSTEM IN THE MUNICIPALITIES
OF ABUCAY, BALANGA, AND PILAR, PROVINCE OF BATAAN,
PHILIPPINE ISLANDS
ACT NO. 3491
AN ACT GRANTING TO THE MUNICIPALITY OF ISABELA, PROVINCE

OF OCCIDENTAL NEGROS, PHILIPPINE ISLANDS, A FRANCHISE TO
AND POWER SYSTEM
ACT NO. 3492
AN ACT GRANTING TO BANTAYAN ELECTRIC SERVICE COMPANY,

INCORPORATED, A FRANCHISE TO INSTALL, OPERATE, AND
MAINTAIN AN ELECTRIC LIGHT, HEAT, AND POWER SYSTEM
IN THE MUNICIPALITY OF BANTAYAN, PROVINCE OF CEBU,
PHILIPPINE ISLANDS
ACT NO. 3493
AN ACT GRANTING TO JOAQUIN M. JOSON A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF ORANI, PROVINCE
OF BATAAN, PHILIPPINE ISLANDS.
ACT NO. 3494
AN ACT GRANTING TO THE STOCK COMPANY KNOWN AS “ILAGAN

ELECTRIC AND ICE PLANT, INCORPORATED,” A FRANCHISE
HEAT, AND POWER SYSTEM IN THE MUNICIPALITY OF ILAGAN,
PROVINCE OF ISABELA, PHILIPPINE ISLANDS
1693
ACT NO. 3499
AN ACT GRANTING TO THE VISAYAN ELECTRIC COMPANY, S. A., A

LIGHT, HEAT, AND POWER SYSTEM IN THE MUNICIPALITIES
OF CEBU, TALISAY, MINGLANILLA, NAGA, SAN FERNANDO,
MANDAWE, CONSOLA-CION, LILOAN, AND COMPOSTELA, ALL IN
THE PROVINCE OF CEBU
ACT NO. 3502
AN ACT GRANTING TO JOSE DE LEON ELECTRIC LIGHT, SAN

MIGUEL, BULACAN, A FRANCHISE TO INSTALL, OPERATE, AND
THE MUNICIPALITY OF SAN MIGUEL, PROVINCE OF BULACAN,
PHILIPPINE ISLANDS
ACT NO. 3503
AN ACT GRANTING TO EVARISTO P. SANCHEZ A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITIES OF TAYUG AND
SAN MANUEL, PROVINCE OF PANGASINAN, PHILIPPINE ISLANDS
ACT NO. 3505
AN ACT GRANTING TO ARTEMIO LEJANO AND RAFAEL G. ABIERA A

CALIVO, PROVINCE OF CAPIZ, PHILIPPINE ISLANDS
ACT NO. 3506
AN ACT GRANTING TO JOSE VAÑO A FRANCHISE TO INSTALL,

POWER SYSTEM IN THE MUNICIPALITY OF DAUIS, PROVINCE OF
BOHPL, PHILIPPINE ISLANDS
1694
ACT NO. 3507
AN ACT GRANTING TO JOSE JUMAMOY A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITY OF LOON, PROVINCE OF BOHOL,
PHILIPPINE ISLANDS
ACT NO. 3508
AN ACT GRANTING TO FIDEL FORTICH A FRANCHISE TO INSTALL,

POWER SYSTEM IN THE MUNICIPALITY OF INABANGA, PROVINCE
OF BOHOL, PHILIPPINE ISLANDS
ACT NO. 3509
AN ACT GRANTING TO RAFAEL GARCES A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITY OF MARIBOJOC, PROVINCE OF
BOHOL, PHILIPPINE ISLANDS
ACT NO. 3510
AN ACT GRANTING TO JESUS VAÑO A FRANCHISE TO INSTALL,

POWER SYSTEM IN THE MUNICIPALITY OF CALAPE, PROVINCE OF
ACT NO. 3511
AN ACT GRANTING TO THE “TUBIGON ELECTRIC SERVICE CO.,” A

TUBIGON, PROVINCE OF BOHOL, PHILIPPINE ISLANDS
1695
ACT NO. 3512
AN ACT GRANTING TO CANUTO DAMASO A FRANCHISE TO INSTALL,

POWER SYSTEM IN THE MUNICIPALITY OF JANIUAY, PROVINCE
OF ILOILO, PHILIPPINE ISLANDS
ACT NO. 3551
AN ACT TO AMEND SECTION EIGHT OF ACT NUMBERED THIRTY-

FOUR HUNDRED AND NINETY-NINE, ENTITLED “AN ACT GRANTING
TO THE VISAYAN ELECTRIC COMPANY, S. A., A FRANCHISE TO
AND POWER SYSTEM IN THE MUNICIPALITIES OF CEFCU, TALISAY,
MINGLANILLA, NAGA, SAN FERNANDO, MANDAWE, CONSOLACION
LILOAN, AND COMPOSTELA, ALL IN THE PROVINCE OF CEBU”
Approved November 23, 1929
ACT NO. 3641
AN ACT GRANTING TO THE “GUIWAN ELECTRIC PLANT CO., INC.,” A

GUIWAN, PROVINCE OF SAMAR, PHILIPPINE ISLANDS
Approved December 7, 1929.
ACT NO. 3642
AN ACT GRANTING TO THE “LAOANG ELECTRIC COMPANY” A

LAOANG, PROVINCE OF SAMAR, PHILIPPINE ISLANDS
ACT NO. 3643
AN ACT GRANTING TO JOSE G. ZARRAGA A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF BACLAYON,
PROVINCE OF BOHOL, PHILIPPINE ISLANDS
1696
ACT NO. 3644
AN ACT GRANTING TO LEON BORROMEO A FRANCHISE TO

AND POWER SYSTEM IN ALL THE MUNICIPALITIES OF THE ISLAND
OF CAMIGUIN, PROVINCE OF MISAMIS, PHILIPPINE ISLANDS
ACT NO. 3645
AN ACT GRANTING TO NATALIO DIGAL A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITY OF OROQUIETA, PROVINCE OF
MISAMIS, PHILIPPINE ISLANDS
ACT NO. 3646
AN ACT GRANTING TO THE “RED ROVERS SOCIETY” A FRANCHISE

HEAT, AND POWER SYSTEM IN THE MUNICIPALITY OF ROMBLON,
PROVINCE OF ROMBLON, PHILIPPINE ISLANDS
ACT NO. 3647
AN ACT GRANTING TO MOISES ITURRALDE A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF PASSI, PROVINCE
ACT NO. 3648
AN ACT GRANTING TO THE ESCUDERO ELECTRIC SERVICE

COMPANY A FRANCHISE TO INSTALL, OPERATE, AND MAINTAIN
MUNICIPALITIES OF SAN PABLO AND ALAMINOS, PROVINCE OF
LAGUNA, AND IN THE MUNICIPALITIES OF DOLORES AND TIAONG,
PROVINCE OF TAYABAS, PHILIPPINE ISLANDS
1697
ACT NO. 3649
AN ACT GRANTING TO THE TAYABAS LIGHT AND POWER

COMPANY, INCORPORATED, A FRANCHISE TO INSTALL, OPERATE,
AND MAINTAIN AN ELECTRIC LIGHT, HEAT, AND POWER SYSTEM
IN THE MUNICIPALITY OF TAYABAS, PROVINCE OF TAYABAS,
PHILIPPINE ISLANDS
ACT NO. 3650
AN ACT GRANTING TO VICTORINO M. SALCEDO A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF SARA, PROVINCE
ACT NO. 3651
AN ACT GRANTING TO JULIANO INFANTE A FRANCHISE TO

INSTALL, OPERATE AND MAINTAIN AN ELECTRIC LIGHT, HEAT,
AND POWER SYSTEM IN THE MUNICIPALITY OF HINIGARAN,
ACT NO. 3652
AN ACT GRANTING TO PEDRO CHANGCO A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF LOBOC, PROVINCE
OF BOHOL, PHILIPPINE ISLANDS
ACT NO. 3653
AN ACT GRANTING TO PABLO SALAVERIA A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF ORANI, PROVINCE
OF BATAAN, PHILIPPINE ISLANDS
1698
ACT NO. 3654
AN ACT GRANTING TO RUFINO RAMIREZ A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF VALENCIA,
PROVINCE OF BOHOL, PHILIPPINE ISLANDS
ACT NO. 3655
AN ACT GRANTING TO THE “SAN CARLOS ELECTRIC LIGHT

COMPANY” A FRANCHISE TO INSTALL, OPERATE, AND MAINTAIN
MUNICIPALITY OF SAN CARLOS, PROVINCE OF OCCIDENTAL
NEGROS. PHILIPPINE ISLANDS
ACT NO. 3656
AN ACT GRANTING TO JOSE ALONSO A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITIES OF BALAMBAN AND ASTURIAS,
PROVINCE OF CEBU, PHILIPPINE ISLANDS
ACT NO. 3657
AN ACT GRANTING TO JOSE A. VELOSO A FRANCHISE TO INSTALL,

POWER SYSTEM IN THE MUNICIPALITY OF TUBURAN, PROVINCE
OF CEBU, PHILIPPINE ISLANDS
ACT NO. 3658
AN ACT GRANTING TO ANTONIO V. GARCES A FRANCHISE, TO

AND POWER SYSTEM IN THE MUNICIPALITY OF JIMALALUD,
PROVINCE OF ORIENTAL NEGROS, PHILIPPINE ISLANDS
1699
ACT NO. 3659
AN ACT GRANTING TO IGNACIO RAFOLS A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITY OF TOLEDO, PROVINCE OF CEBU,
PHILIPPINE ISLANDS
ACT NO. 3660
AN ACT GRANTING TO PEDRO YGAY A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITY OF PINAMUNGAJAN, PROVINCE
ACT NO. 3661
AN ACT GRANTING TO MARIANO R. LAMSON A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF SAN ANTONIO,
PROVINCE OF NUEVA ECIJA, PHILIPPINE ISLANDS
ACT NO. 3662
AN ACT GRANTING TO AQUILINO LUCERO A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF RONDA, PROVINCE
ACT NO. 3663
AN ACT GRANTING TO RAMON DEL CASTILLO A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF LA CASTELLANA,
1700
ACT NO. 3664
AN ACT GRANTING TO JOSE S. VALENCIANO A FRANCHISE, TO

AND POWER SYSTEM IN THE MUNICIPALITY OF CAMALIG,
ACT NO. 3665
AN ACT AMENDING ACT NUMBERED TWENTY-NINE HUNDRED

AND EIGHTY-THREE ENTITLED “AN ACT GRANTING TO ESTEBAN
DE LA RAMA A FRANCHISE TO INSTALL, OPERATE, AND MAINTAIN
MUNICIPALITIES OF ILOILO, LA PAZ, JARO, AREVALO, SANTA
BARBARA, AND PAVIA, PROVINCE OF ILOILO, PHILIPPINE ISLANDS”
ACT NO. 3666
AN ACT GRANTING TO RICARDO CARREON A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF OTON, PROVINCE
ACT NO. 3755
AN ACT GRANTING TO AMBROSIO ANDRES A FRANCHISE TO

INSTALL, OPERATE, AND MAINTAIN AN ELECTRIC LIGHT, HEAT
AND POWER PLANT IN THE MUNICIPALITIES OF NORZAGARAY
AND ANGAT, PROVINCE OF BULACAN, PHILIPPINE ISLANDS
ACT NO. 3758
AN ACT GRANTING TO “NORTH ELECTRIC COMPANY,” A FRANCHISE

TO INSTALL, OPERATE, AND MAINTAIN AN ELECTRIC LIGHT, HEAT
AND POWER PLANT IN THE MUNICIPALITIES OF GENERAL TRIAS
AND NOVELETA, PROVINCE OF CAVITE, PHILIPPINE ISLANDS
1701
ACT NO. 3759
AN ACT GRANTING TO LINO GOMEZ A FRANCHISE TO INSTALL,

OPERATE, AND MAINTAIN AN ELECTRIC LIGHT, HEAT AND POWER
PLANT IN THE MUNICIPALITY OF SILANG, PROVINCE OF CAVITE,
PHILIPPINE ISLANDS
ACT NO. 3760
AN ACT GRANTING TO “DAVAO LIGHT AND POWER COMPANY,

INCORPORATED,” A FRANCHISE TO INSTALL, OPERATE, AND
MAINTAIN AN ELECTRIC LIGHT, HEAT AND POWER PLANT IN THE
MUNICIPALITY OF DAVAO, PROVINCE OF DAVAO, PHILIPPINE
ISLANDS
ACT NO. 3762
AN ACT GRANTING TO JOSE A. RIGOTTI A FRANCHISE TO

AND POWER PLANT IN THE MUNICIPALITIES OF VIRAC AND
BATO, SUBPROVINCE OF CATANDUANES, PROVINCE OF ALBAY,
PHILIPPINE ISLANDS
ACT NO. 3770
AN ACT GRANTING TO “JOLO POWER COMPANY, INCORPORATED,”

LIGHT, HEAT AND POWER PLANT IN THE MUNICIPALITY OF JOLO,
PROVINCE OF SULU, PHILIPPINE ISLANDS
ACT NO. 3775
AN ACT GRANTING TO ADRIAN CAMPOS A FRANCHISE TO INSTALL,

PLANT IN THE MUNICIPALITY OF HINIGARAN, PROVINCE OF
OCCIDENTAL NEGROS, PHILIPPINE ISLANDS
1702
ACT NO. 3776
AN ACT GRANTING TO CACHO & HIDALGO A FRANCHISE TO

AND POWER PLANT IN THE MUNICIPALITIES OF PAGSANJAN AND
LUMBAN, PROVINCE OF LAGUNA, PHILIPPINE ISLANDS
ACT NO. 3778
AN ACT GRANTING TO FAUSTO GUILLEN A FRANCHISE TO

AND POWER PLANT IN THE MUNICIPALITY OF ESCALANTE,
ACT NO. 3780
AN ACT GRANTING TO THE ESTATE OF FLOYD ENGLE,

REPRESENTED BY THE ADMINISTRATOR F. J. FERGUSON, A
DULAG, PROVINCE OF LEYTE, PHILIPPINE ISLANDS
ACT NO. 3781
AN ACT GRANTING TO RICARDO GEMORA A FRANCHISE TO

INSTALL, OPERATE AND MAINTAIN AN ELECTRIC LIGHT, HEAT
AND POWER PLANT IN THE MUNICIPALITY OF ILOG, OCCIDENTAL
ACT NO. 3783
AN ACT GRANTING TO “MISAMIS LUMBER COMPANY,

INCORPORATED,” A FRANCHISE TO INSTALL, OPERATE, AND
MAINTAIN AN ELECTRIC LIGHT, HEAT AND POWER PLANT IN THE
MUNICIPALITIES OF MISAMIS, CLARIN, AND TUDELA, PROVINCE
OF OCCIDENTAL MISAMIS, PHILIPPINE ISLANDS
1703
ACT NO. 3789
AN ACT GRANTING TO LUCILA SAN JOSE A FRANCHISE TO

AND POWER PLANT IN THE MUNICIPALITY OF PANIQUI, PROVINCE
OF TARLAC, PHILIPPINE ISLANDS
ACT NO. 3791
AN ACT GRANTING TO BARTOLOME J. VENUS A FRANCHISE TO

AND POWER PLANT IN THE MUNICIPALITY OF NEW WASHINGTON,
PROVINCE OF CAPIZ, PHILIPPINE ISLANDS
ACT NO. 3792
AN ACT GRANTING TO MONTANO CABALES A FRANCHISE TO

AND POWER PLANT IN THE MUNICIPALITY OF IBAJAY, PROVINCE
ACT NO. 3795
AN ACT GRANTING TO PIADOSA DOMINADO DE BUENAFLOR A

LIGHT, HEAT AND POWER PLANT IN THE MUNICIPALITIES
OF BAROTAC NUEVO AND DUMANGAS, PROVINCE OF ILOILO,
PHILIPPINE ISLANDS
ACT NO. 3800
AN ACT GRANTING TO “BUTUAN SAW MILL, INC.,” A FRANCHISE

HEAT AND POWER PLANT IN THE MUNICIPALITIES OF JIMENEZ,
PROVINCE OF OCCIDENTAL MISAMIS, AND MAASIN, PROVINCE
OF LEYTE, PHILIPPINE ISLANDS
1704
ACT NO. 3801
AN ACT GRANTING TO “IMUS ELECTRIC COMPANY, INC.,” A

LIGHT, HEAT AND POWER PLANT IN THE MUNICIPALITY OF
BACOOR, PROVINCE OF CAVITE, PHILIPPINE ISLANDS
ACT NO. 3807
AN ACT GRANTING TO DONATO DE LOS REYES A FRANCHISE

HEAT AND POWER PLANT IN THE MUNICIPALITY OF TAGUDIN,
PROVINCE OF ILOCOS SUR, PHILIPPINE ISLANDS
ACT NO. 3810
AN ACT GRANTING TO CONSUELO D. BORJA A FRANCHISE TO

AND POWER PLANT IN THE MUNICIPALITY OF ILIGAN, PROVINCE
OF LANAO, PHILIPPINE ISLANDS
ACT NO. 3814
AN ACT GRANTING TO VICENTE A. RACAZA A FRANCHISE TO

AND POWER PLANT IN THE MUNICIPALITY OF BARILI, PROVINCE
ACT NO. 3853
AN ACT GRANTING TO TEOFILO M. PEREYRA A FRANCHISE TO

AND POWER PLANT IN THE MUNICIPALITY OF TANGUB, PROVINCE
OF OCCIDENTAL MISAMIS, PHILIPPINE ISLANDS
1705
ACT NO. 3880

AN ACT GRANTING TO ROMAN BALUYUT A FRANCHISE TO
INSTALL, OPERATE, AND MAINTAIN AN ELECTRIC LIGHT,
HEAT, AND POWER PLANT IN THE MUNICIPALITIES OF APALIT,
MACABEBE, MASANTOL, SAN SIMON, AND SAN LUIS, PROVINCE
OF PAMPANGA, PHILIPPINE ISLANDS
ACT NO. 3891
AN ACT TO AMEND ACT NUMBERED THIRTY-EIGHT HUNDRED

AND ONE, ENTITLED “AN ACT GRANTING TO THE IMUS ELECTRIC
COMPANY, INC., A FRANCHISE TO INSTALL, OPERATE, AND
MAINTAIN AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE
MUNICIPALITY OF BACOOR, PROVINCE OF CAVITE, PHILIPPINE
ISLANDS
ACT NO. 3906

AND POWER SYSTEM IN THE MUNICIPALITY OF RAMOS, PROVINCE
OF TARLAC, PHILIPPINE ISLANDS
ACT NO. 3907

AND POWER PLANT IN THE MUNICIPALITIES OF GERONA AND
PURA, PROVINCE OF TARLAC, PHILIPPINE ISLANDS
ACT NO. 3908
AN ACT GRANTING TO MIGUEL PEREZ A FRANCHISE TO INSTALL,

PLANT IN THE MUNICIPALITY OF PONTEVEDRA, PROVINCE OF
OCCIDENTAL NEGROS, PHILIPPINE ISLANDS
1706
ACT NO. 3951
AN ACT AUTHORIZING THE SALE, CONVEYANCE, AND TRANSFER

OF THE FRANCHISE GRANTED TO NATALIO DIGAL BY ACT
NUMBERED THIRTY-SIX HUNDRED AND FORTY-FIVE TO INSTALL,
SYSTEM IN THE MUNICIPALITY OF OROQUIETA, OCCIDENTAL
MISAMIS
ACT NO. 3966
AN ACT GRANTING TO THE TIGBAUAN ELECTRIC COMPANY,

REPRESENTED BY SALVADOR TALEON, A FRANCHISE TO INSTALL,
POWER SYSTEM IN THE MUNICIPALITY OF TIGBAUAN, PROVINCE
ACT NO. 3968
AN ACT GRANTING TO CIRIACO MAGLAYA A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF MARIVELES,
PROVINCE OF BATAAN, PHILIPPINE ISLANDS
ACT NO. 3970
AN ACT GRANTING TO ALEJANDRO RASALAN A FRANCHISE

TO INSTALL, OPERATE AND MAINTAIN AN ELECTRIC LIGHT,
HEAT, AND POWER SYSTEM IN THE MUNICIPALITY OF SARRAT,
PROVINCE OF ILOCOS NORTE, PHILIPPINE ISLANDS
ACT NO. 3974
AN ACT GRANTING TO THE OTON ELECTRIC COMPANY, INC., A

LIGHT, HEAT AND POWER PLANT IN THE MUNICIPALITY OF OTON,
PROVINCE OF ILOILO, PHILIPPINE ISLANDS
1707
ACT NO. 3981
AN ACT GRANTING TO ROBERTO AURELLANO A FRANCHISE TO

AND POWER SYSTEM IN HIE MUNICIPALITY OF CURRIMAO,
PROVINCE OF ILOCOS NORTE, PHILIPPINE ISLANDS
ACT NO. 3985

AND POWER SYSTEM IN THE MUNICIPALITY OF MONCADA,
PROVINCE OF TARLAC, PHILIPPINE ISLANDS
ACT NO. 3986
AN ACT TO AMEND ACT NUMBERED THIRTY-NINE HUNDRED AND

SEVEN, ENTITLED “AN ACT GRANTING TO LUCILA SAN JOSE A
LIGHT, HEAT AND POWER PLANT IN THE MUNICIPALITY OF
GERONA, PROVINCE OF TARLAC, PHILIPPINE ISLANDS
ACT NO. 3988
AN ACT GRANTING TO THE “SAN CARLOS ELECTRIC LIGHT

COMPANY” A FRANCHISE TO INSTALL, OPERATE AND MAINTAIN
AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE
MUNICIPALITY OF SAN CARLOS, PROVINCE OF OCCIDENTAL
ACT NO. 3990
AN ACT GRANTING TO JOSE DE BORJA A FRANCHISE TO INSTALL,

POWER SYSTEM IN THE MUNICIPALITY OF MORONG, PROVINCE
OF RIZAL, PHILIPPINE ISLANDS
1708
ACT NO. 3991
AN ACT GRANTING TO JOSE S. VALENCIANO THE RIGHT TO

SELL, CONVEY, ASSIGN OR TRANSFER HIS FRANCHISE AND ALL
PROPERTY AND RIGHTS ACQUIRED THEREUNDER TO INSTALL,
OPERATE AND MAINTAIN AN ELECTRIC CURRENT, HEAT AND
POWER SYSTEM IN THE MUNICIPALITY OF CAMALIG, PROVINCE
OF ALBAY IN FAVOR OF SATURNINO BENITO
ACT NO. 4020
AN ACT GRANTING TO THE “CALIVO ELECTRIC LIGHT AND

POWER COMPANY” A FRANCHISE TO INSTALL, OPERATE AND
MAINTAIN AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN
THE MUNICIPALITY OF CALIVO, PROVINCE OF CAPIZ, PHILIPPINE
ISLANDS
ACT NO. 4021
AN ACT GRANTING TO THE MUNICIPALITY OF PANDAN, PROVINCE

OF ANTIQUE, A FRANCHISE TO INSTALL, OPERATE AND MAINTAIN
AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM
ACT NO. 4024
AN ACT GRANTING TO THE “BACARRA ELECTRIC POWER COMPANY”

A FRANCHISE TO INSTALL, OPERATE AND MAINTAIN AN ELECTRIC
LIGHT, HEAT AND POWER SYSTEM IN THE MUNICIPALITY OF
BACARRA, PROVINCE OF ILOCOS NORTE, PHILIPPINE ISLANDS
ACT NO. 4025
AN ACT GRANTING TO THE MUNICIPALITY OF CASIGURAN,

SORSOGON, A FRANCHISE TO INSTALL, OPERATE AND MAINTAIN
AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM WITHIN ITS
TERRITORY
1709
ACT NO. 4026
AN ACT GRANTING TO THE MUNICIPALITY OF MAGALLANES,

PROVINCE OF SORSOGON, A FRANCHISE TO INSTALL, OPERATE
AND MAINTAIN AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM
WITHIN ITS TERRITORY
ACT NO. 4027
AN ACT GRANTING TO DEOGRACIAS CAMON A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF LA CARLOTA,
ACT NO. 4028
AN ACT GRANTING TO HECTOR A. TORRES A FRANCHISE TO

INSTALL, OPERATE AND MAINTAIN AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM IN THE BARRIO OF MAGALLON, MUNICIPALITY
OF ISABELA, PROVINCE OT OCCIDENTAL NEGROS, PHILIPPINE
ISLANDS
ACT NO. 4106
AN ACT GRANTING TO MARIANO R. LAMSON THE RIGHT TO

SELL, CONVEY, ASSIGN OR TRANSFER HIS FRANCHISE AND ALL
PROPERTY AND RIGHTS ACQUIRED THEREUNDER TO INSTALL,
OPERATE, AND MAINTAIN AN ELECTRIC CURRENT, HEAT AND
POWER SYSTEM IN THE MUNICIPALITY OF SAN ANTONIO,
PROVINCE OF NUEVA ECIJA, IN FAVOR OF THE SAN ANTONIO
ELECTRIC COMPANY, INC.
ACT NO. 4135
AN ACT AUTHORIZING LINO GOMEZ THE RIGHT TO SELL, CONVEY,

ASSIGN OR TRANSFER HIS FRANCHISE AND ALL PROPERTY AND
RIGHTS ACQUIRED THEREUNDER TO CONSTRUCT, MAINTAIN
1710
AND OPERATE AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN

THE MUNICIPALITY OF SILANG, PROVINCE OF CAVITE, IN FAVOR
OF MRS. ELENA NAVAL DE PAEZ
ACT NO. 4136
AN ACT GRANTING TO TOMAS ALONSO A FRANCHISE TO INSTALL,

MAINTAIN AND OPERATE AN ELECTRIC LIGHT, HEAT AND POWER
SYSTEM IN THE MUNICIPALITIES OF ASTURIAS AND BALAMBAN,
PROVINCE OF CEBU
ACT NO. 4137
AN ACT GRANTING TO MELECIO MARQUEZ A FRANCHISE

TO INSTALL, MAINTAIN AND OPERATE AN ELECTRIC LIGHT,
HEAT AND POWER SYSTEM IN THE MUNICIPALITY OF TOLEDO,
PROVINCE OF CEBU
ACT NO. 4167
AN ACT TO AMEND SECTIONS ONE, TWO, THREE, FOUR, FIVE,

SEVEN, AND NINE OF ACT NUMBERED THIRTY-SIX HUNDRED
AND FORTY-FOUR, ENTITLED “AN ACT GRANTING TO LEON
BORROMEO A FRANCHISE TO INSTALL, OPERATE, AND MAINTAIN
AN ELECTRIC LIGHT, HEAT, AND POWER SYSTEM IN ALL THE
MUNICIPALITIES OF THE ISLAND OF CAMIGUIN, PROVINCE OF
MISAMIS, PHILIPPINE ISLANDS,” BY LIMITING SAID FRANCHISE
TO THE MUNICIPALITY OF MAMBAJAO, IN SAID PROVINCE
ACT NO. 4171
AN ACT GRANTING TO JESUS VAÑO A FRANCHISE TO INSTALL,

OPERATE AND MAINTAIN AN ELECTRIC LIGHT, HEAT AND POWER
SYSTEM IN THE MUNICIPALITY OF CALAPE, PROVINCE OF BOHOL,
PHILIPPINE ISLANDS
Approved, December 4, 1934
1711
ACT NO. 4172
AN ACT GRANTING TO RAFAEL GARCES A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITY OF MARIBOJOC, PROVINCE OF
ACT NO. 4182
AN ACT TO AMEND SECTION FOUR OF ACT NUMBERED ELEVEN

HUNDRED AND TWELVE RELATIVE TO THE GRANTING OF
FRANCHISE TO THE MANILA ELECTRIC RAILROAD AND LIGHT
COMPANY TO CONSTRUCT, MAINTAIN, AND OPERATE AN
ELECTRIC STREET RAILWAY AND AN ELECTRIC LIGHT, HEAT,
AND POWER SYSTEM FROM THE LIMITS OF THE CITY OF MANILA
TO MALABON, MAKING IT APPLICABLE TO CERTAIN PROVISIONS
OF SAID LAW TO THE LINE FROM MANILA TO MALABON
ACT NO. 4262
AN ACT GRANTING TO BASILIO R. TANGCO A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF VICTORIAS,
ACT NO. 4263
AN ACT GRANTING TO JOSE C. TROTA A FRANCHISE TO INSTALL,

OPERATE AND MAINTAIN AN ELECTRIC LIGHT, HEAT, AND POWER
SYSTEM IN THE MUNICIPAL DISTRICT OF LAMITAN, ISLAND OF
BASILAN, PROVINCE OF ZAMBOANGA
ACT NO. 4264
AN ACT GRANTING TO MAGIN H. BAUTISTA A FRANCHISE TO

1712
AND POWER PLAN IN THE MUNICIPALITY OF DUMALAG, PROVINCE

ACT NO. 4265
AN ACT GRANTING TO THE BACLAYON ELECTRIC LIGHT AND

POWER CO. A FRANCHISE TO INSTALL, OPERATE, AND MAINTAIN
MUNICIPALITY OF BACLAYON, PROVINCE OF BOHOL
ACT NO. 4266
AN ACT GRANTING TO BASILIO R. TANGCO A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF CADIZ, PROVINCE
OF OCCIDENTAL NEGROS
COMMONWEALTH ACTS
COMMONWEALTH ACT NO. 218
AN ACT TO GRANT AN EXTENSION OF THIRTY DAYS TO THE

TAYABAS LIGHT AND POWER COMPANY, INCORPORATED, TO
COMPLY WITH THE REQUIREMENTS OF ACT NUMBERED THIRTY-
SIX HUNDRED AND FORTY-NINE GRANTING THE SAID COMPANY
A FRANCHISE FOR ELECTRIC LIGHT, HEAT AND POWER, IN
TAYABAS, PROVINCE OF TAYABAS
AN ACT TO GRANT THE ILAGAN ELECTRIC AND ICE PLANT,

INCORPORATED, AN EXTENSION OF THIRTY DAYS TO COMPLY
WITH CERTAIN CONDITIONS OF THE FRANCHISE AWARDED
UNDER ACT NUMBERED THIRTY-FOUR HUNDRED AND NINETY-
FOUR OF THE PHILIPPINE LEGISLATURE
1713
AN ACT TO GRANT AN EXTENSION OF THIRTY DAYS TO THE

OCMIS ELECTRIC SERVICE COMPANY TO COMPLY WITH THE
REQUIREMENTS OF ACTS NUMBERED THIRTY-SIX HUNDRED
AND FORTY-FIVE AND THIRTY-NINE HUNDRED AND FIFTY-ONE
IN CONNECTION WITH A FRANCHISE FOR ELECTRIC LIGHT, HEAT
AND POWER SERVICE, IN OROQUIETA, PROVINCE OF OCCIDENTAL
MISAMIS
Approved June 9, 1938
AN ACT TO GRANT ESPERANZA LUCERNA A FRANCHISE FOR

AN ELECTRIC LIGHT, HEAT, AND POWER SYSTEM IN ILOG,
OCCIDENTAL NEGROS
ACT TO GRANT THE COTABATO LIGHT AND POWER COMPANY,

INCORPORATED, A FRANCHISE FOR.AN ELECTRIC LIGHT, HEAT
AND POWER SYSTEM IN COTABATO, COTABATO
AN ACT AUTHORIZING ROMAN BALUYUT TO SELL, CONVEY. ASSIGN,

OR OTHERWISE TRANSFER HIS FRANCHISE AND ALL PROPERTY
AND RIGHTS ACQUIRED UNDER ACT NUMBERED THIRTY-EIGHT
HUNDRED AND EIGHTY, IN FAVOR OF THE RIVERSIDE ELECTRIC
COMPANY, INCORPORATED
AN ACT GRANTING THE “COTABATO LIGHT AND POWER COMPANY,

INC” AN EXTENSION OF THIRTY DAYS AFTER THE APPROVAL OF
THIS ACT TO ACCEPT THE FRANCHISE GRANTED THERETO BY
COMMONWEALTH ACT NUMBERED FOUR HUNDRED EIGHTY-
SEVEN
1714
AN ACT TO GRANT TO THE HAWAII-BOHOLANOS AGRICULTURAL

& COMMERCIAL CO., LTD., A FRANCHISE TO INSTALL, OPERATE
AND MAINTAIN AN ELECTRIC LIGHT, HEAT, AND POWER SYSTEM
IN THE MUNICIPALITY OF TUBIGON, PROVINCE OF BOHOL
AN ACT TO GRANT TO AURELLA S. DE INTENGAN A FRANCHISE

FOR AN ELECTRIC LIGHT, HEAT, AND POWER SYSTEM IN THE
MUNICIPALITY OF BALAMBAN, PROVINCE OF CEBU
AN ACT TO GRANT TO JESUSA VIUDA DE ARROYO A FRANCHISE FOR

AN ELECTRIC LIGHT, HEAT, AND POWER SYSTEM IN MIDSAYAP,
COTABATO
AN ACT TO GRANT TO RUPERTO A. VILLAREAL A FRANCHISE

MUNICIPALITY OF MAMBUSAO, PROVINCE OF CAPIZ
REPUBLIC ACTS
REPUBLIC ACT NO. 255
AN ACT EXTENDING THE TERM OF THE FRANCHISE IN PURSUANCE

TO THE AUTHORITY GRANTED UNDER LEGISLATIVE ACT
NUMBERED THREE THOUSAND TWO HUNDRED AND FIFTEEN TO
GABRIEL T. HERNANDEZ, AND LATER TAKEN OVER BY THE CACHO
AND HIDALGO COPARTNERSHIP TO CONSTRUCT, MAINTAIN, AND
1715
OPERATE AN ELECTRIC LIGHT, HEAT, AND POWER SYSTEM IN

THE MUNICIPALITY OF DAET, PROVINCE OF CAMARINES NORTE
AN ACT GRANTING FELIX MARONILLA, JR., A FRANCHISE FOR AN

ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN LIBON, ALBAY
AN ACT GRANTING DOMICIANO B. DE JESUS AND EMILIO OLORES A

FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM
IN THE MUNICIPALITY OF BANI, PROVINCE OF PANGASINAN
AN ACT TO REHABILITATE THE ORMOC ELECTRIC COMPANY

ORGANIZED UNDER ACT NUMBERED TWENTY-SEVEN HUNDRED
AND SEVENTY BY EXTENDING THE TERM OF ITS FRANCHISE TO
TWENTY-FIVE YEARS FROM THE DATE OF ITS EXPIRATION ON
MARCH FOUR, NINETEEN HUNDRED AND FIFTY-THREE
AN ACT TO GRANT TO VIGAN ELECTRIC LIGHT COMPANY A

FRANCHISE FOR AN ELECTRIC LIGHT, HEAT, AND POWER SYSTEM
IN THE MUNICIPALITIES OF VIGAN, CAOAYAN, BANTAY, SAN
VICENTE AND STA. CATALINA, PROVINCE OF ILOCOS SUR
AN ACT TO GRANT TO THE MUNICIPALITY OF DINGRAS, ILOCOS

NORTE, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT, AND
POWER SYSTEM WITHIN ITS TERRITORIAL JURISDICTION
1716
AN ACT GRANTING ROBERTO S. IÑIGO A FRANCHISE FOR AN

ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN CALALBON,
CATANDUANES
AN ACT TO GRANT TO THE INABANGA ELECTRIC SERVICE

COMPANY A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT, AND
POWER IN THE MUNICIPALITY OF INABANGA, PROVINCE OF
BOHOL
AN ACT GRANTING DOMINADOR S. IÑIGO A FRANCHISE FOR

MUNICIPALITY OF BATO, PROVINCE OF CATANDUANES
AN ACT GRANTING MARIA DE LA ROSA A FRANCHISE FOR

MUNICIPALITIES OF CATAINGAN AND PLACER, PROVINCE OF
MASBAT
AN ACT GRANTING NILDA E. MARTINEZ A FRANCHISE FOR AN

ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN MASBATE,
MASBATE
1717
AN ACT TO GRANT THE “OPON ELECTRIC SERVICE COMPANY” A

FRANCHISE TO OPERATE AN ELECTRIC LIGHT, HEAT, AND POWER
SYSTEM IN THE MUNICIPALITY OF OPON, PROVINCE OF CEBU
AN ACT GRANTING THE VISAYAN ELECTRIC COMPANY, S. A.

IN THE MUNICIPALITY OF DIPOLOG, PROVINCE OF ZAMBOANGA
AN ACT GRANTING THE VISAYAN ELECTRIC CO., S.A. A FRANCHISE

FOR AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE
MUNICIPALITY OF BOGO, PROVINCE OF CEBU
AN ACT GRANTING THE CARCAR ELECTRIC AND ICE PLANT CO.,

INC. A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND POWER
SYSTEM IN THE MUNICIPALITY OF CARCAR, PROVINCE OF CEBU
AN ACT GRANTING DOMICIANO B. DE JESUS A FRANCHISE

MUNICIPALITY OF AGNO, PROVINCE OF PANGASINAN
REPUBLIC ACT NO. 449,
AN ACT GRANTING JOSE MARIA SOLINAP A FRANCHISE FOR

MUNICIPALITY OF DINGLE, PROVINCE OF ILOILO
1718
AN ACT TO GRANT TO MINDA-LINANG-LALA A FRANCHISE TO

OPERATE AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN
THE MUNICIPALITY OF MALABANG, PROVINCE OF LANAO
AN ACT GRANTING THE BAGATAYAM ELECTRIC CO. A FRANCHISE

FOR AN ELECTRIC LIGHT, HEAT AND POWER PLANT IN THE
MUNICIPALITIES OF SOGOD AND CATMON, CEBU PROVINCE
AN ACT GRANTING JOSE CATOLICO A FRANCHISE FOR AN ELECTRIC

BUAYAN, PROVINCE OF COTABATO
AN ACT TO GRANT TO MRS. ARSENIO R. FRIAL, MRS. JOSE

FILLONES AND MRS. ANGELES L. VILLAREAL A FRANCHISE
FOR AN ELECTRIC LIGHT, HEAT AND POWER PLANT IN THE
MUNICIPALITY OF DUMALAG, PROVINCE OF CAPIZ
AN ACT GRANTING PEDRO CANTUBA A FRANCHISE FOR AN

ELECTRIC LIGHT, HEAT AND POWER PLANT IN THE MUNICIPALITY
OF SAN FERNANDO, ISLAND OF TICAO, PROVINCE OF MASBATE
AN ACT TO GRANT TO CLEOMENES V. PORTUGALEZA, JR., A

FRANCHISE TO OPERATE AN ELECTRIC LIGHT, HEAT, AND
1719
POWER SYSTEM IN THE MUNICIPALITY OF TOLONG, PROVINCE

OF ORIENTAL NEGROS
AN ACT GRANTING ELISEO BARBOSA A FRANCHISE FOR AN

ELECTRIC LIGHT, HEAT AND POWER PLANT IN THE MUNICIPALITY
OF AJUY, PROVINCE OF ILOILO
AN ACT GRANTING VICENTE CAÑETE A FRANCHISE FOR

MUNICIPALITY OF MEDELLIN, CEBU
AN ACT GRANTING THE BUTUAN SAWMILL, INCORPORATED, A

FRANCHISE FOR AN ELECTRIC LIGHT HEAT AND POWER SYSTEM
IN THE MUNICIPALITY OF NASIPIT, PROVINCE OF AGUSAN
REPUBLIC ACT NO.499
AN ACT GRANTING P. FAGUTAO A FRANCHISE FOR AN ELECTRIC

LIGHT, HEAT AND POWER SYSTEM IN THE MUNICIPALITIES OF
JIMENEZ AND SINACABAN, PROVINCE OF MISAMIS OCCIDENTAL
AN ACT GRANTING THE VISAYAN ELECTRIC COMPANY, S. A. A

IN THE MUNICIPALITY OF SIBULAN, PROVINCE OF ORIENTAL
NEGROS
1720
AN ACT GRANTING CONSUELO C. NAPANA A FRANCHISE

MUNICIPALITY OF BUENAVISTA, PROVINCE OF AGUSAN
AN ACT TO GRANT TO THE LUMANLAN BROTHERS COMPANY A

IN THE MUNICIPALITY OF TANABO, PROVINCE OF DAVAO
Approved May 15, 1951
AN ACT TO GRANT NICOLAS LIMCAOCO A FRANCHISE FOR AN

ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE BARRIOS OF
MARINIG, MAMATI.D, GULOD AND BANLIK OF THE MUNICIPALITY
OF CABUYAO, PROVINCE OF LAGUNA
AN ACT GRANTING THE ARGAO ELECTRIC, ICE AND WATER

COMPANY A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT, AND
POWER SYSTEM IN THE MUNICIPALITY OF ARGAO, PROVINCE OF
CEBU
AN ACT GRANTING SATURNINO MENDOZA A FRANCHISE

MUNICIPALITY OF MOLAVE, ZAMBOANGA
1721
AN ACT TO GRANT TO RIZALINA M. OBIDOS A FRANCHISE

MUNICIPALITY OF ALTAVAS, PROVINCE OF CAPIZ
AN ACT TO GRANT TO LUCAS VICENTE AND DEMETRIO FERNANDEZ

A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND POWER
SYSTEM IN THE MUNICIPALITY OF MARGOSATUBIG, PROVINCE
OF ZAMBOANGA
AN ACT GRANTING DIOSDADO EBARLE A FRANCHISE FOR

MUNICIPALITY OF MEDINA, ORIENTAL MISAMIS
AN ACT GRANTING THE ORMOC ELECTRIC C0MPANY A FRANCHISE

FOR AN ELECTRIC LIGHT HEAT AND POWER SYSTEM IN THE CITY
OF ORMOC
AN ACT TO GRANT TO GABRIEL CENTENERA A FRANCHISE TO

INSTALL, OPERATE, AND MAINTAIN A WATER SUPPLY SYSTEM IN
MUNICIPALITY OF GOA, PROVINCE OF CAMARINES SUR
AN ACT GRANTING ROMULO V. RAMOS A FRANCHISE FOR

1722
MUNICIPALITIES OF STA. CRUZ AND DIGOS, PROVINCE OF

DAVAO
AN ACT GRANTING MAURICIO PALAU, NARCISO FUERTES AND

JUAN JUAREZ A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM IN THE MUNICIPALITY OF BAROTAC NUEVO,
PROVINCE OF ILOILO
AN ACT GRANTING MRS. LUCIA D. ULANGKAYA A FRANCHISE

MUNICIPALITY OF DULAWAN, PROVINCE OF COTABATO
AN ACT GRANTING TO THE LEMERY ELECTRIC POWER COMPANY,

INC., A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND POWER
SYSTEM IN THE MUNICIPALITY OF LEMERY, PROVINCE OF
BATANGAS
AN ACT GRANTING DATU TANGURAC CAORONG A FRANCHISE

MUNICIPALITIES OF KAUSUAGAN AND KOLAMBUGAN, PROVINCE
OF LANAO
Approved June21, 1952
1723
AN ACT GRANTING FELIPE PICA A FRANCHISE FOR AN ELECTRIC

CAPALONGA, PROVINCE OF CAMARINES NORTE
AN ACT GRANTING LUCAS MARTINEZ A FRANCHISE FOR

MUNICIPALITY OF BUGASONG, PROVINCE OF ANTIQUE
AN ACT GRANTING DOMINGO CABALLERO A FRANCHISE

MUNICIPALITY OF NAUJAN, PROVINCE OF ORIENTAL MINDORO
AN ACT GRANTING MATEO AUAYAN A FRANCHISE FOR AN ELECTRIC

BUENAVISTA, PROVINCE OF ILOILO
AN ACT TO GRANT TO THE DUMARAO PIONEERING SERVICE A

FRANCHISE FOR AN ELECTRIC LIGHT, HEAT, AND POWER SYSTEM
IN THE MUNICIPALITY OF DUMARAO, PROVINCE OF CAPIZ
AN ACT GRANTING MANUEL PALACIOS A FRANCHISE FOR

MUNICIPALITY OF CULASI, PROVINCE OF ANTIQUE
1724
ACT GRANTING FAUSTINO NUYDA A FRANCHISE FOR AN ELECTRIC

CAMALIG, PROVINCE OF ALBAY.
AN ACT EXTENDING AND CONSOLIDATING THE TERMS OF THE

FRANCHISES GRANTED BY THE PHILIPPINE LEGISLATURE
AND THE MUNICIPAL COUNCILS OF CAMALIGAN, CANAMAN,
MAGAITAO, BONBON, AND CALABANGA IN THE PROVINCE OF
CAMARINES SUR; OF LIGAO, OAS, AND GUINOBATAN IN THE
PROVINCE OF ALBAY; AND OF GUBAT IN THE PROVINCE OF
SORSOGON, TO THE BICOL ELECTRIC COMPANY TO INSTALL,
OPERATE AND MAINTAIN ELECTRIC LIGHT, HEAT, AND POWER
SYSTEMS IN THE CITY OF NAGA AND IN THE MUNICIPALITIES
HEREINABOVE NAMED
AN ACT GRANTING THE KIAMBA LIGHT AND POWER COMPANY,

INCORPORATED, A FRANCHISE FOR AN ELECTRIC LIGHT,
HEAT AND POWER SYSTEM IN THE MUNICIPALITY OF KIAMBA,
PROVINCE OF COTABATO
AN ACT GRANTING MRS. RHODE E. YONZON A FRANCHISE TO

CONSTRUCT, MAINTAIN AND OPERATE AN ELECTRIC LIGHT,
HEAT AND POWER SYSTEM IN THE MUNICIPALITY OF CALATRAVA,
NEGROS OCCIDENTAL
AN ACT GRANTING TO RAFAEL CONSING A FRANCHISE TO

1725
AND POWER SYSTEM IN THE MUNICIPALITY OF SAN CARLOS,

PROVINCE OF NEGROS OCCIDENTAL
AN ACT GRANTING ANDRES CABALLERO A FRANCHISE FOR

MUNICIPALITY OF PANTUKAN, PROVINCE OF DAVAO
AN ACT GRANTING ALFREDO L. NOEL A FRANCHISE FOR

MUNICIPALITY OF COMPOSTELA, PROVINCE OF DAVAO
AN ACT GRANTING MARIANO NASSER A FRANCHISE FOR

MUNICIPALITY OF LUPON, PROVINCE OF DAVAO
AN ACT GRANTING SALVADOR T. SINGUILLO A FRANCHISE

MUNICIPALITY OF SINDANGAN, PROVINCE OF ZAMBOANGA DEL
NORTE
AN ACT GRANTING LEOPOLDO DE LA CRUZ A FRANCHISE FOR AN

ECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE MUNICIPALITY
OF PONTEVEDRA, PROVINCE OF CAPIZ
1726
AN ACT TO GRANT TO THE LA UNION ELECTRIC CO., INC., A

IN THE MUNICIPALITIES OP SAN FERNANDO, BAUANG AND SAN
JUAN, PROVINCE OF LA UNION
AN ACT TO GRANT TO DOMINGO FORTUNA A FRANCHISE

MUNICIPALITY OF CANDON, PROVINCE OF ILOCOS SUR
AN ACT GRANTING TERTULIANO G. PORTES A FRANCHISE

MUNICIPALITY OF PINAMUNGAHAN, PROVINCE OF CEBU
AN ACT GRANTING CECILIO CASTILLO A FRANCHISE FOR

MUNICIPALITY OF SOGOD, PROVINCE OF LEYTE.
AN ACT GRANTING THE MONKAYO ELECTRIC COMPANY A

IN THE MUNICIPALITY OF MONKAYO, PROVINCE OF DAVAO
AN ACT GRANTING DR. HERNANI J. JIMENEZ A FRANCHISE

FOR AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN
1727
THE MUNICIPALITY OF LA CARLOTA, PROVINCE OF NEGROS

OCCIDENTAL
AN ACT GRANTING PEDRO A. CASTRO A FRANCHISE FOR

AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM TN THE
MUNICIPALITY OF CATEEL, PROVINCE OF DAVAO
AN ACT GRANTING ADOLFO A. CAUBANG A FRANCHISE FOR

MUNICIPALITY OF BAGANGA, PROVINCE OF DAVAO
ACT GRANTING FRANCISCO BENEDICTO A FRANCHISE FOR

MUNICIPALITY OF ROMBLON, PROVINCE OF ROMBLON.
AN ACT TO GRANT TO FRANCISCO LUANSING A FRANCHISE

MUNICIPALITY OF TUDELA, PROVINCE OF MISAMIS OCCIDENTAL
AN ACT GRANTING AMADO ARSINAS A FRANCHISE FOR

MUNICIPALITY OF CAWAYAN, PROVINCE OF MASBATE.
1728
AN ACT GRANTING CESAR ALTAREJOS A FRANCHISE FOR

MUNICIPALITY OF SAN JACINTO, PROVINCE OF MASBATE
AN ACT GRANTING TO THE TALISAY ELECTRIC PLANT A

TALISAY, PROVINCE OF OCCIDENTAL NEGROS
AN ACT GRANTING JOSE BORRES A FRANCHISE FOR AN ELECTRIC

PRESIDENT ROXAS, PROVINCE OF CAPIZ
AN ACT GRANTING TO ROSIANO RODANO A FRANCHISE FOR

MUNICIPALITY OF MALAYBALAY, PROVINCE OF BUKIDNON
AN ACT GRANTING THE PROVINCE OF CATANDUANES FRANCHISE

FOR ELECTRIC LIGHT, HEAT AND POWER SYSTEMS IN ALL
MUNICIPALITIES IN THE PROVINCE OF CATANDUANES
1729
AN ACT GRANTING LEONCIO LIMPIADO A FRANCHISE FOR

MUNICIPALITY OF NAVAL, PROVINCE OF LEYTE
AN ACT GRANTING MESSRS. DEMETRIO P. CORREA AND

GUILLERMO CONFESOR A FRANCHISE FOR AN ELECTRIC LIGHT,
HEAT AND POWER SYSTEM IN THE MUNICIPALITY OF CABATUAN,
PROVINCE OF ILOILO
REPUBLIC ACT NO. 1444, JUNE 14, 1956 ]
AN ACT TO GRANT TO VENTURA P. MARILAO A FRANCHISE

MUNICIPALITY OF PALOMPON, PROVINCE OF LEYTE
AN ACT GRANTING A. S. DIAZ ELECTRIC SERVICE A FRANCHISE

HEAT, AND POWER SYSTEM IN THE CITY OF BACOLOD AND ITS
SUBURBS
AN ACT GRANTING THE NAIC ELECTRIC COMPANY A FRANCHISE

MUNICIPALITY OF NAIC, PROVINCE OF CAVITE
AN ACT TO GRANT TO LABASON ELECTRTC LIGHT COMPANY A

1730
IN THE MUNICIPALITY OF LABASON, PROVINCE OF ZAMBOANGA

DEL NORTE
AN ACT GRANTING THE NEGROS ELECTRIC POWER CORPORATION

A FRANCHISE TO DEVELOP, CONSTRUCT, MAINTAIN AND OPERATE
A HYDROELECTRIC POWER PLANT IN BAGO RIVER, PROVINCE OF
NEGROS OCCIDENTAL
Approved August 23, 1956
AN ACT TO GRANT TO FELICIANA S. BERMUDEZ A FRANCHISE

MUNICIPALITY OF TUPI, PROVINCE OF COTABATO
AN ACT GRANTING THE BUTUAN SAWMILL INC., A FRANCHISE

HEAT AND POWER SYSTEM IN THE MUNICIPALITY OF LIANGA,
PROVINCE OF SURIGAO
AN ACT GRANTING THE FACOMA OF CALINOG IN THE

MUNICIPALITY OF CALINOG, PROVINCE OF ILOILO, A FRANCHISE
FOR AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM
AN ACT GRANTING THE FACOMA OF LAMBUNAO IN THE

MUNICIPALITY OF LAMBUNAO, PROVINCE OF ILOILO, A FRANCHISE
1731
AN ACT GRANTING NANCY DE LUNA A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITY OF BABATÑGON, PROVINCE OF
LEYTE
AN ACT GRANTING THE BENGUET DEVELOPMENT COMPANY,

INC., A FRANCHISE TO DEVELOP, CONSTRUCT, MAINTAIN AND
OPERATE A HYDROELECTRIC POWER PLANT IN THE CHICO RIVER,
BONTOC, MOUNTAIN PROVINCE
AN ACT TO GRANT TO AMADOR DAYOLA AND R. MULET (PARTNERS)

A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM
IN THE MUNICIPALITY OF PANABO, PROVINCE OF DAVAO
AN ACT GRANTING THE MUNICIPALITIES OF TAYUG, SAN

NICOLAS, ASINGAN, UMINGAN, AND SAN QUINTIN, PROVINCE
OF PANGASINAN, A FRANCHISE EACH FOR AN ELECTRIC LIGHT,
HEAT AND POWER SYSTEM
AN ACT GRANTING CATMON ELECTRIC COMPANY A FRANCHISE

MUNICIPALITY OF CATMON, PROVINCE OF CEBU
1732
AN ACT GRANTING THE MUNICIPAL GOVERNMENT OF SAMAL,

PROVINCE OF DAVAO, A FRANCHISE TO CONSTRUCT, OPERATE
IN SAID MUNICIPALITY
AN ACT GRANTING THE MUNICIPALITY OF SAN MATEO, PROVINCE

OF RIZAL, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
ACT TO REPEAL REPUBLIC ACT NUMBERED SEVEN HUNDRED

EIGHTY-NINE, ENTITLED “AN ACT GRANTING MAURICIO
PALAU, NARCISO FUERTES AND JUAN SUAREZ A FRANCHISE
FOR AN ELECTRIC LIGHT, HEAT AND POWER. SYSTEM IN THE
MUNICIPALITY OF BAROTAC NUEVO, PROVINCE OF ILOILO”
AN ACT TO GRANT LORENZO P. VARRON A FRANCHISE FOR

MUNICIPALITY OF MADRID, PROVINCE OF SURIGAO
AN ACT EXTENDING THE FRANCHISE OF THE MANILA GAS

CORPORATION FOR ANOTHER FIFTY YEARS
1733
AN ACT GRANTING RUPERTO TAMULA, SR., A FRANCHISE

MUNICIPALITY OF KOLAMBUGAN, PROVINCE OF LANAO
AN ACT GRANTING THE MUNICIPALITY OF CASTILLEJOS,

PROVINCE OF ZAMBALES, A FRANCHISE FOR AN ELECTRIC LIGHT,
AN ACT TO GRANT THE MUNICIPALITY OF BUHI, PROVINCE OF

CAMARINES SUR, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT
AND POWER SYSTEM
AN ACT TO GRANT THE MUNICIPALITY OF SAGÑAY, PROVINCE OF

CAMARINES SUR, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT
AND POWER SYSTEM
AN ACT GRANTING LUIS RABAT A FRANCHISE FOR AN ELECTRIC

MATI, PROVINCE OF DAVAO
AN ACT GRANTING IRENEO LAMBATAN A FRANCHISE FOR

MUNICIPALITY OF DUMINGAG, PROVINCE OF ZAMBOANGA DEL
SUR
1734
AN ACT APPROVING THE SALE MADE IN FAVOR OF FELIX O.

HERNANDEZ BY THE SAN FERNANDO ELECTRIC LIGHT AND
POWER COMPANY, INC., OF ITS FRANCHISE TO INS OPERATE
AND MAINTAIN AN ELECT LIGHT, HEAT AND POWER SYSTEM IN
MUNICIPALITY OF MASANTOL, PROVINCE OF PAMPANGA
AN ACT GRANTING ISIDORA B. PADOR A FRANCHISE FOR

MUNICIPALITY OF BATAN, PROVINCE OF AKLAN
AN ACT GRANTING JULITA T. GRANA A FRANCHISE FOR AN

ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE BARRIOS
OF KITCHARAO IN THE MUNICIPALITY OF JABONGA, PROVINCE
OF AGUSAN AND ALEGRIA IN THE MUNICIPALITY OF MAINIT,
PROVINCE OF SURIGAO
AN ACT GRANTING THE CABATUAN ELECTRIC COMPANY A

IN THE MUNICIPALITY OF CABATUAN, PROVINCE OF ISABELA
AN ACT GRANTING THE MUNICIPALITY OF BALASAN, PROVINCE

OF ILOILO, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
1735
AN ACT GRANTING THE MUNICIPALITY OF URDANETA, PROVINCE

OF PANGAS1NAN, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT
AND POWER SYSTEM IN THE SAID MUNICIPALITY
AN ACT GRANTING THE MUNICIPALITY OF CALUBIAN, PROVINCE

OF LEYTE, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
AN ACT GRANTING THE UPI-NURO FARMERS’ COOPERATIVE

MARKETING ASSOCIATION, INC., IN THE MUNICIPALITY OF UPI,
PROVINCE OF COTABATO, A FRANCHISE FOR AN ELECTRIC LIGHT,
AN ACT GRANTING RUBEN D. NERI A FRANCHISE FOR AN ELECTRIC

INITAO, MISAMIS ORIENTAL
AN ACT GRANTING THE MUNICIPALITY OF MACARTHUR,

PROVINCE OF LEYTE, A FRANCHISE FOR AN ELECTRIC LIGHT,
1736
AN ACT GRANTING THE MUNICIPALITY OF MAYORGA, PROVINCE

POWER SYSTEM
AN ACT GRANTING THE MUNICIPALITY OF STA. FE, PROVINCE

POWER SYSTEM
AN ACT GRANTING THE MUNICIPALITY OF DULAG, PROVINCE

POWER SYSTEM
AN ACT GRANTING THE MUNICIPALITY OF ABUYOG, PROVINCE

POWER SYSTEM
AN ACT GRANTING THE MUNICIPALITY OF TOLOSA, PROVINCE

POWER SYSTEM
AN ACT GRANTING THE MUNICIPALITY OF VILLABA, PROVINCE

POWER SYSTEM
1737
AN ACT GRANTING THE MUNICIPALITY OF BABAC, PROVINCE

OF DAVAO, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
AN ACT GRANTING THE MUNICIPALITY OF BACOLOD, PROVINCE

OF LANAO, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
AN ACT GRANTING THE MUNICIPALITY OF BAROTAC VIEJO,

PROVINCE OF ILOILO, A FRANCHISE FOR AN ELECTRIC LIGHT,
AN ACT GRANTING THE MUNICIPALITY OF BORONGAN, PROVINCE

OF SAMAR, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
AN ACT GRANTING MARCELO SECUYA A FRANCHISE FOR

MUNICIPALITY OF NABUNTURAN, PROVINCE OF DAVAO
AN ACT GRANTING ROMEO FIRME A FRANCHISE FOR AN ELECTRIC

AURORA PROVINCE OF ISABELA
1738
AN ACT TO AMEND ACT NUMBERED TWENTY-THREE HUNDRED

AND NINETY-THREE, EN| TITLED “AN ACT GRANTING TO THE
SOCIEDAD ANONIMA KNOWN AS ‘SILAY ELECTRIC AND ICE
PLANT COMPANY, INCORPORATED,’ A FRANCHISE TO INSTALL,
POWER SYSTEM IN THE MUNICIPALITY OF SILAY, OCCIDENTAL
NEGROS, PHILIPPINE ISLANDS”
AN ACT GRANTING DUMLAO ENTERPRISES, INC., A FRANCHISE

MUNICIPALITY OF BATAC, PROVINCE OF ILOCOS NORTE
AN ACT GRANTING TO THE BALIUAG ELECTRIC LIGHT AND POWER

COMPANY A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM IN THE MUNICIPALITY OF BALIUAG, PROVINCE
OF BULACAN
AN ACT TO GRANT JOSE ARANETA A FRANCHISE FOR AN ELECTRIC

SIOCON, PROVINCE OF ZAMBOANGA DEL NORTE
AN ACT EXTENDING THE TERM OF THE ELECTRIC LIGHT, HEAT

AND POWER FRANCHISE OF THE TACLOBAN ELECTRIC LIGHT
AND ICE PLANTS CO., INC.
1739
AN ACT APPROVING THE TRANSFER OF THE FRANCHISE AND

ALL PROPERTY AND RIGHTS OF ESCUDERO ELECTRIC SERVICE
COMPANY TO MANILA ELECTRIC COMPANY, AND FOR OTHER
PURPOSES
AN ACT GRANTING THE ANGELES ELECTRIC CORPORATION A

IN THE MUNICIPALITY OF ANGELES, PROVINCE OF PAMPANGA
AN ACT GRANTING LEON ARCINAS A FRANCHISE FOR AN ELECTRIC

CUYO PROVINCE OF PALAWAN
AN ACT GRANTING PORFIRIO ROYO AND CLEMENTA FERNANDEZ

SYSTEM IN THE MUNICIPALITY OF KAPALONG, DAVAO
AN ACT GRANTING TO DANCAR ELECTRIC COMPANY A FRANCHISE

TO CONSTRUCT, OPERATE AND MAINTAIN ELECTRIC LIGHT,
HEAT AND POWER SYSTEMS IN THE MUNICIPALITIES OF DANAO,
CARMEN AND CATMON, ALL IN THE PROVINCE OF CEBU, AND AN
ICE PLANT IN THE MUNICIPALITY OF DANAO, PROVINCE OF CEBU,
AND TO DISTRIBUTE AND SELL LIGHT, HEAT AND/OR POWER IN
THE SAID MUNICIPALITIES AND TO DISTRIBUTE AND SELL ICE IN
THE WHOLE PROVINCE OF CEBU
1740
AN ACT REPEALING REPUBLIC ACT NUMBERED NINETEEN

HUNDRED SEVENTY-FIVE
AN ACT TO GRANT THE MUNICIPALITY OF PANABO, PROVINCE OF

DAVAO, A FRANCHISE OF FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
AN ACT TO GRANT MARIA D. TAN A FRANCHISE FOR AN ELECTRIC

TANGUB, PROVINCE OF MISAMIS OCCIDENTAL
AN ACT GRANTING GRACIANO BANOGON A FRANCHISE FOR

MUNICIPALITY OF TANJAY, PROVINCE OF NEGROS ORIENTAL.
AN ACT TO GRANT THE MUNICIPALITY OF CATEEL, PROVINCE

OF DAVAO, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
ACT GRANTING SURIGAO ELECTRIC COMPANY, INCORPORATED, A

BISLIG, PROVINCE OF SURIGAO
1741
AN ACT TO GRANT AUGUSTO S. GONZALEZ A FRANCHISE

MUNICIPALITY OF TACURONG, PROVINCE OF COTABATO
AN ACT GRANTING IMELDA CLARIN ZARRAGA A FRANCHISE

MUNICIPALITY OF LOAY, PROVINCE OF BOHOL
AN ACT GRANTING PEDRO BANGUG A FRANCHISE FOR AN ELECTRIC

CABAGAN, PROVINCE OF ISABELA
AN ACT GRANTING THE CABUGAO FARMERS’ COOPERATIVE

MARKETING ASSOCIATION, INC., (FACOMA) A FRANCHISE
MUNICIPALITY OF CABUGAO, PROVINCE OF ILOCOS SUR
AN ACT GRANTING THE MUNICIPALITY OF TORRIJOS, PROVINCE

OF MARINDUQUE, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT
AND POWER SYSTEM
1742
AN ACT GRANTING THE MUNICIPALITY OF HINUNDAYAN,

PROVINCE OF LEYTE, A FRANCHISE FOR AN ELECTRIC LIGHT,
HEAT AND POWER SYSTEM IN THE SAID MUNICIPALITY
AN ACT GRANTING THE MUNICIPALITY OF LIBAGON, PROVINCE

POWER SYSTEM IN THE SAID MUNICIPALITY
AN ACT GRANTING THE MUNICIPALITY OF ANAHAWAN, PROVINCE

POWER SYSTEM IN THE SAID MUNICIPALITY
AN ACT GRANTING JOSEFINA ARANDA A FRANCHISE FOR

MUNICIPALITY OF ROXAS, PROVINCE OF ISABELA
Approved June 18 , 1960
REFUBLIC ACT NO. 2981
AN ACT GRANTING THE GUAGUA ELECTRIC LIGHT PLANT

COMPANY, INCORPORATED, A FRANCHISE FOR AN ELECTRIC
GUAGUA AND SEXMOAN, PROVINCE OF PAMPANGA
AN ACT GRANTING THE MUNICIPALITY OF EL NIDO, PROVINCE

OF PALAWAN, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
1743
AN ACT GRANTING BERNARDO GIMENEZ SILVERIO A FRANCHISE

MUNICIPALITY OF OCAMPO, PROVINCE OF CAMARINES SUR
AN ACT GRANTING THE MUNICIPALITY OF SOLANA, PROVINCE

OF CAGAYAN, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
AN ACT GRANTING THE OLONGAPO ELECTRIC LIGHT AND

POWER CORPORATION A FRANCHISE TO INSTALL, OPERATE AND
MAINTAIN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE
MUNICIPALITY OF OLONGAPO, PROVINCE OF ZAMBALES
AN ACT TO GRANT THE TANAUAN ELECTRIC & DEVELOPMENT CO.,

INC., OF TANAUAN, BATANGAS, A FRANCHISE FOR AN ELECTRIC
LIGHT, HEAT AND POWER SYSTEM FOR THE TOWNS OF TANAUAN
AND MALVAR, BOTH OF THE PROVINCE OF BATANGAS
AN ACT EXTENDING THE TERM OF THE ELECTRIC LIGHT, HEAT

AND POWER FRANCHISE OF THE BACLAYON ELECTRIC LIGHT
AND POWER COMPANY, INCORPORATED, AMENDING FOR
THE PURPOSE SECTION ONE OF ACT NUMBERED FORTY-TWO
HUNDRED SIXTY-FIVE
1744
AN ACT GRANTING RAFAEL CONSING A FRANCHISE TO INSTALL,

OPERATE AND MAINTAIN AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM IN THE MUNICIPALITY OF TAGO, PROVINCE OF
SURIGAO
AN ACT GRANTING FRANCHISE FOR ELECTRIC LIGHT, HEAT AND

POWER SYSTEM TO EACH OF THE MUNICIPALITIES OF CALAMBA,
LOS BAÑOS, BAY, VICTORIA, PILA AND ALAMINOS, ALL IN THE
PROVINCE OF LAGUNA
AN ACT GRANTING THE GAPAN ELECTRIC CORPORATION A

IN THE MUNICIPALITIES OF GAPAN AND SAN ISIDRO, PROVINCE
OF NUEVA ECIJA
AN ACT RANTING ROMULO V. RAMOS A FRANCHISE FOR

MUNICIPALITIES OF STA. CRUZ, DIGOS, BANSALAN, PADADA,
MA-LALAG, HAGONOY AND LOWER MATANAO, ALL IN DAVAO
PROVINCE
AN ACT AMENDING CERTAIN SECTIONS OP REPUBLIC ACT

NUMBERED TWENTY-THREE HUNDRED EIGHTY-FOUR, ENTITLED
“AN ACT GRANTING TO DANCAR ELECTRIC COMPANY A
FRANCHISE TO CONSTRUCT, OPERATE AND MAINTAIN ELECTRIC
LIGHT, HEAT AND POWER SYSTEMS IN THE MUNICIPALITIES OF
1745
DANAO, CARMEN AND CATMON, ALL IN THE PROVINCE OF CEBU,

AND AN ICE PLANT IN THE MUNICIPALITY OF DANAO, PROVINCE
OF CEBU, AND TO DISTRIBUTE AND SELL LIGHT, HEAT AND/OR
POWER IN THE SAID MUNICIPALITIES AND TO DISTRIBUTE AND
SELL ICE IN THE WHOLE PROVINCE OF CEBU”
AN ACT GRANTING THE MUNICIPALITIES OF SILAGO, CABALIAN,

SOGOD, MALITBOG, SAN FRANCISCO, LILOAN, AND BONTOC, ALL
IN THE PROVINCE OF SOUTHERN LEYTE, A FRANCHISE EACH TO
AND POWER SYSTEM
AN ACT GRANTING THE MUNICIPALITY OF MABINI, PROVINCE OF

BATANGAS, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
AN ACT APPROVING ANY ASSIGNMENT, SALE AND TRANSFER

OF THE FRANCHISE GRANTED TO ROMAN BALUYUT UNDER ACT
NUMBERED THIRTY-EIGHT HUNDRED EIGHTY IN FAVOR OF JOSE
VALENCIA, JR
AN ACT GRANTING LEON BELEN A FRANCHISE FOR AN ELECTRIC

MARGOSA TUBIG, PROVINCE OF ZAMBOANGA DEL SUR
1746
AN ACT GRANTING THE MUNICIPALITY OF GUIUAN, PROVINCE

OF SAMAR, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
AN ACT GRANTING JUAN SIQUIAN A FRANCHISE FOR AN ELECTRIC

ANGADANAN, PROVINCE OF ISABELA.
AN ACT GRANTING THE BULAN ELECTRIC AND ICE PLANT, INC., A

IN THE MUNICIPALITY OF BULAN, PROVINCE OF SORSOGON
AN ACT GRANTING ROQUE PLASOS A FRANCHISE FOR AN ELECTRIC

LOON, PROVINCE OF BOHOL
AN ACT GRANTING THE MUNICIPALITY OF MALITBOG, PROVINCE

POWER SYSTEM
AN ACT GRANTING ANGEL R. CABATINGAN A FRANCHISE

MUNICIPALITY OF BANTAYAN, PROVINCE OF CEBU
1747
AN ACT GRANTING PEDRO LAMAN A FRANCHISE FOR AN ELECTRIC

TUMAUINI, PROVINCE OF ISABELA
AN ACT GRANTING JOAQUIN BOCANEGRA A FRANCHISE FOR AN

ELECTRIC LIGHT, HEAT AND POWER SYSTEM AND AN ICE PLANT
AND COLD STORAGE IN THE MUNICIPALITY OF AMLA, PROVINCE
OF NEGROS ORIENTAL, AND TO DISTRIBUTE AND SELL LIGHT,
HEAT AND/OR POWER AND ICE AND SUPPLY COLD STORAGE
THEREIN
AN ACT GRANTING CESAR GONZAGA A FRANCHISE TO INSTALL,

SYSTEM, IN THE MUNICIPALITY OF AURORA, PROVINCE OF
ZAMBOANGA DEL SUR
AN ACT GRANTING MR. JUAN A. TABLA A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITY OF VILLABA, PROVINCE OF LEYTE,
AND AS A CONSEQUENCE THEREOF, REVOKING THE FRANCHISE
GRANTED TO THE MUNICIPALITY OF VILLABA, PROVINCE OF
LEYTE
AN ACT GRANTING THE TALIBON BUSINESS ENTERPRISES IN THE

MUNICIPALITY OF TALIBON, PROVINCE OF BOHOL, A FRANCHISE
1748
AN ACT GRANTING THE MUNICIPALITY ‘OF CORTES, PROVINCE

OF SURIGAO, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
AN AGT GRANTING THE MUNICIPALITY OF CORTES, PROVINCE

OF BOHOL, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
AN ACT GRANTING THE SAN FERNANDO ELECTRIC LIGHT AND

POWER CO., INC., A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT
AND POWER SYSTEM IN THE MUNICIPALITY OF SAN FERNANDO,
PROVINCE OF PAMPANGA
AN ACT GRANTING THE MABINI ELECTRIC AND ICE PLANT

CO., INC., A FRANCHISE TO INSTALL, OPERATE AND MAINTAIN
MUNICIPALITY OF MABINI, PROVINCE OF DAVAO
AN ACT GRANTING MR. FORTUNATO BALMORIA A FRANCHISE

MUNICIPALITY OF SAN ISIDRO, PROVINCE OF LEYTE
1749
AN ACT GRANTING LE0P0LDO DIONES A FRANCHISE FOR

MUNICIPALITY OF SU-LOP, PROVINCE OF DAVAO
AN ACT GRANTING HADJI DATU ABUBAKAR PEN-DATUN A

FRANCHISE TO CONSTRUCT, OPERATE AND MAINTAIN AN
ELECTRIC LIGHT, HEAT AND POWER SYSTEM AND AN ICE PLANT
IN THE MUNICIPALITY OF SULTAN SA BARONGIS, PROVINCE OF
COTABATO, AND TO DISTRIBUTE AND SELL LIGHT, HEAT AND/OR
POWER AND ICE IN THE SAID MUNICIPALITY
AN ACT GRANTING JOSE BAGA A FRANCHISE FOR AN ELECTRIC

KABAGAN, PROVINCE OF COTABATO
AN ACT GRANTING THE SPOUSES JOSE S. RECTO AND BERNARDITA

DOMINGO A FRANCHISE TO ESTABLISH, OPERATE AND MAINTAIN
MUNICIPALITIES OF BAYAMBANG AND BAUTISTA, PROVINCE OF
PANGASINAN
AN ACT TO AMEND REPUBLIC ACT NUMBERED THIRTEEN

HUNDRED FIFTY-SIX, ENTITLED “AN ACT GRANTING FRANCISCO
BENEDICTO A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM IN THE MUNICIPALITY OF ROMBLON, PROVINCE
OF ROMBLON
1750
AN ACT EXTENDING THE FRANCHISE OF THE COTABATO LIGHT

AND POWER COMPANY, INCORPORATED, FOR ANOTHER TWENTY-
FIVE YEARS
AN ACT GRANTING THE BAMBANG ELECTRIC COMPANY A

FRANCHISE TO CONSTRUCT, OPERATE AND MAINTAIN ELECTRIC
LIGHT, HEAT AND POWER SYSTEM AND AN ICE PLANT IN THE
MUNICIPALITY OF BAMBANG, PROVINCE OF NUEVA VIZCAYA,
AND TO DISTRIBUTE AND SELL LIGHT, HEAT AND/OR POWER IN
THE SAID MUNICIPALITY AND SELL ICE IN THE WHOLE PROVINCE
OF NUEVA VIZCAYA
AN ACT GRANTING THE DAGUPAN ELECTRIC CORPORATION A

IN THE MUNICIPALITY OF CALASIAO, PROVINCE OF PANGASINAN,
AND IN DAGUPAN CITY
AN ACT GRANTING MR. SALVADOR E. VILLARROYA A FRANCHISE

FOE AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE
MUNICIPALITY OF MATNOG, PROVINCE OF SORSOGON
AN ACT GRANTING DIEGO YOUNG A FRANCHISE TO INSTALL,

POWER SYSTEM IN THE MUNICIPALITY OF DASOL, PROVINCE OF
PANGASINAN
1751
AN ACT GRANTING THE TUBIGON ELECTRIC LIGHT A FRANCHISE

FOR AN ELETRIC LIGHT, HEAT AND POWER SYSTEM IN THE
MUNICIPALITY OF TUBIGON, PROVINCE OF BOHOL
AN ACT GRANTING THE MUNICIPALITY OF BILAR, PROVINCE OF

BOHOL, A FRANCHISE TO INSTALL, OPERATE AND MAINTAIN AN
ELECTRIC LIGHT, HEAT AND POWER SYSTEM
AN ACT AUTHORIZING THE SALE, TRANSFER AND CONVEYANCE

TO THE VISAYAN ELECTRIC CO., INC., OF THE FRANCHISE AND
ALL THE PROPERTIES AND RIGHTS ACQUIRED THEREUNDER
OF THE VISAYAN ELECTRIC CO., S.A., GRANTED UNDER ACT
NUMBERED THIRTY-FOUR HUNDRED NINETY-NINE, TO OPERATE,
IN THE CITY OF CEBU AND IN THE MUNICIPALITIES OF TALISAY,
MINGLANILLA, NAGA, SAN FERNANDO, MANDAWE, CONSOLACION,
LILOAN AND COMPOSTELA, ALL IN THE PROVINCE OF CEBU
AN ACT GRANTING THE MUNICIPALITY OF HIMA-MAYLAN,

PROVINCE OF NEGROS OCCIDENTAL, A FRANCHISE FOR AN
ELECTRIC LIGHT, HEAT AND POWER SYSTEM
AN ACT GRANTING VICTORINO YENKO A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITIES OF GUMACA, LOPEZ, CALAUAG,
QUEZON, AND SIAIN, ALL IN THE PROVINCE OF QUEZON
1752
AN ACT GRANTING ANASTACIA ALARAS A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITY OF BALAYAN, PROVINCE OF
BATANGAS
AN ACT GRANTING MR. JOSE A. GARCIA A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITY OF MABINAY, PROVINCE OF
NEGROS ORIENTAL
AN ACT GRANTING THE MUNICIPALITY OF DALAGUETE, PROVINCE

OF CEBU, A FRANCHISE TO INSTALL, OPERATE AND MAINTAIN
AN ACT GRANTING THE MACTAN ELECTRIC LIGHT AND ICE

COMPANY, INCORPORATED, A FRANCHISE TO CONSTRUCT,
SYSTEM IN ALL THE MUNICIPALITIES IN THE ISLAND OF MACTAN,
PROVINCE OF CEBU
AN ACT GRANTING FEDERICO MAGDANGAL A FRANCHISE

MUNICIPALITY OF MACABEBE, PROVINCE OF PAMPANGA
1753
AN ACT GRANTING E. J. GUINOO ENTERPRISES A FRANCHISE

MUNICIPALITY OF KIDAPAWAN, PROVINCE OF COTABATO
AN ACT GRANTING THE CAGAYAN ELECTRIC POWER AND LIGHT

CO., INC., A FRANCHISE TO INSTALL, OPERATE, AND MAINTAIN
AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE CITY OF
CAGAYAN DE ORO AND ITS SUBURBS
AN ACT GRANTING MR. QUIRINO GONZALES A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF BUUG, PROVINCE
OF ZAMBOANGA DEL SUR
AN ACT GRANTING MR. ATANACIO ROMIRO A FRANCHISE

MUNICIPALITY OF SANCHEZ MIRA, PROVINCE OF CAGAYAN
AN ACT GRANTING MR. JAIME C. DACANAY A FRANCHISE FOR

AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM AND AN ICE
PLANT AND COLD STORAGE IN THE MUNICIPALITY OF CANLAON,
PROVINCE OF NEGROS ORIENTAL
1754
AN ACT APPROVING ANY ASSIGNMENT, SALE AND TRANSFER OF

THE FRANCHISE GRANTED TO THE BICOL ELECTRIC COMPANY
BY REPUBLIC ACT NUMBERED NINE HUNDRED THIRTY-FOUR
TO OPERATE IN THE MUNICIPALITY OF GUBAT, PROVINCE OF
SORSOGON, IN FAVOR OF THE GUBAT ELECTRIC COMPANY,
INCORPORATED
AN ACT GRANTING THE TUGUEGARAO ELECTRIC PLANT CO.,

INC., A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND POWER
SYSTEM IN THE MUNICIPALITY OF TUGUEGARAO, PROVINCE OF
CAGAYAN
AN ACT AMENDING COMMONWEALTH ACT NUMBERED FOUR

HUNDRED AND EIGHTY-SEVEN, ENTITLED “AN ACT TO GRANT
TO COTABATO LIGHT AND POWER COMPANY, INCORPORATED, A
FRANCHISE FOR AN ELECTRIC LIGHT, HEAT; AND POWER SYSTEM
IN COTABATO, COTABATO”
AN ACT GRANTING THE MUNICIPALITY OF BACOOR, PROVINCE

OF CAVITE, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
AN ACT GRANTING JOSE S. MAGALLANES A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF TAGUM, PROVINCE
OF DAVAO
1755
AN ACT EXTENDING TO THE MARIKINA ELECTRIC LIGHT,

INCORPORATED, A FRANCHISE TO INSTALL, OPERATE, AND
MAINTAIN AN ELECTRIC LIGHT, HEAT; AND POWER SYSTEM IN
THE MUNICIPALITY OF MARIKINA, PROVINCE OF RIZAL
AN ACT AUTHORIZING THE SALE, TRANSFER AND CONVEYANCE

TO THE ORMOC ELECTRIC COMPANY, INC., OF THE FRANCHISE,
AND ALL THE PROPERTIES AND RIGHTS ACQUIRED THEREUNDER,
OF THE ORMOC ELECTRIC COMPANY, GRANTED UNDER REPUBLIC
ACT NUMBERED SEVEN HUNDRED SIXTY-NINE, AND FIXING THE
FRANCHISE TAX TO BE PAID BY THE TRANSFEREE
AN ACT GRANTING THE MUNICIPALITY OF BASCO, PROVINCE OF

BATANES, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
AN ACT AMENDING REPUBLIC ACT NUMBERED THIRTY-TWO

HUNDRED FORTY-SEVEN, ENTITLED “AN ACT GRANTING THE
CAGAYAN ELECTRIC POWER AND LIGHT CO., INC., A FRANCHISE
TO INSTALL, OPERATE, AND MAINTAIN AN ELECTRIC LIGHT, HEAT
AND POWER SYSTEM IN THE CITY OF CAGAYAN DE ORO AND ITS
SUBURBS”
AN ACT GRANTING THE ILOCOS NORTE ELECTRIC COMPANY A

FRANCHISE TO INSTALL, MAINTAIN AND OPERATE AN ELECTRIC
1756
LAOAG AND SAN NICOLAS, BOTH IN THE PROVINCE OF ILOCOS

NORTE, AND TO SELL AND DISTRIBUTE LIGHT, HEAT AND POWER
THEREIN
AN ACT GRANTING THE DUMLAO ENTERPRISES CO, INC., A

IN THE MUNICIPALITIES OF BADOC, CURRIMAO, PINILI, DINGRAS,
SOLSONA AND NUEVA ERA, ALL IN THE PROVINCE OF ILOCOS
NORTE
AN ACT TO AMEND REPUBLIC ACT NUMBERED THIRTY-TWO

HUNDRED SEVEN, ENTITLED “AN ACT GRANTING THE SAN
FERNANDO ELECTRIC LIGHT AND POWER CO., INC, A FRANCHISE
MUNICIPALITY OF SAN FERNANDO, PROVINCE OF PAMPANGA”
AN ACT GRANTING THE BUGUEY ELECTRIC COMPANY INC., A

IN CERTAIN MUNICIPALITIES IN THE PROVINCE OF CAGAYAN
AN ACT GRANTING PEDRO V. SERRANZANA A FRANCHISE TO

INSTALL, MAINTAIN AND OPERATE ELECTRIC LIGHT, HEAT AND
POWER SYSTEM IN THE MUNICIPALITIES OF BAAO, IRIGA, NABUA,
BATO AND SIPOCOT, ALL IN THE PROVINCE OF CAMARINES SUR,
AND IN THE MUNICIPALITY OF LIBON, PROVINCE OF ALBAY, AND
TO SELL AND DISTRIBUTE ELECTRIC LIGHT, HEAT AND POWER
THEREIN; AND TO CONSTRUCT, MAINTAIN AND OPERATE AN
ICE PLANT IN THE MUNICIPALITY OF SIPOCOT, PROVINCE OF
1757
CAMARINES SUR, AND TO SELL AND DISTRIBUTE ICE IN THE

WHOLE PROVINCE OF CAMARINES SUR
AN ACT EXTENDING FOR A PERIOD OF FIFTY YEARS THE DURATION

OF THE FRANCHISE OF THE LEALDA ELECTRIC COMPANY,
INCORPORATED, SUCCESSOR OF THE GRANTEE UNDER ACT
NUMBERED TWENTY-FOUR HUNDRED SEVENTY-FIVE, ENTITLED
“AN ACT GRANTING TO JULIAN M. LOCSIN ANSON A FRANCHISE
HEAT AND POWER SYSTEM IN THE MUNICIPALITY OF ALBAY,
INCLUDING ITS TWO DISTRICTS, DARAGA AND LEGASPI, IN THE
PROVINCE OF ALBAY, PHILIPPINE ISLANDS”
AN ACT TO GRANT THE MELVIC AND COMPANY, INCORPORATED,

SYSTEM IN THE CITY OF TOLEDO AND THE MUNICIPALITIES OF
ALOGUINSAN AND PINAMUNGAJAN, PROVINCE OF CEBU
AN ACT GRANTING OLIMPIA DECOLOGON A FRANCHISE TO

INSTALL, MAINTAIN AND OPERATE AN ELECTRIC LIGHT, HEAT
AND POWER SYSTEM IN THE MUNICIPALITY OF DUMANGAS,
PROVINCE OF ILOILO
AN ACT GRANTING PEDRO R. BANZON A FRANCHISE TO INSTALL,

SYSTEM IN THE BARRIO OF LIMINANGCONG, MUNICIPALITY OF
TAYTAY, PROVINCE OF PALAWAN
1758
AN ACT GRANTING THE V. B. FLORES ELECTRIC LIGHT, INC., A

IN THE MUNICIPALITIES OF LUNA AND BALAOAN, BOTH IN THE
PROVINCE OF LA UNION
AN ACT GRANTING THE POSADAS ELECTRIC COMPANY, INC.,

SYSTEM IN CERTAIN MUNICIPALITIES IN THE PROVINCE OF
PANGASINAN
AN ACT GRANTING A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT

AND POWER SYSTEM TO THE HIDALGO ENTERPRISES, INC., IN
THE MUNICIPALITIES OF DAET, TALISAY, BASUD, PARACALE,
JOSE PANGANIBAN AND CAPALONGA, ALL IN THE PROVINCE OF
CAMARINES NORTE
AN ACT GRANTING TO THE MINDANAO ELECTRIC COMPANY,

INC., A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT, AND POWER
SYSTEM IN THE CITY OF MARAWI, IN THE MUNICIPALITIES OF
MALABANG, TAMPARAN, BALABAGAN, AND WAO, ALL IN THE
PROVINCE OF LANAO DEL SUR
AN ACT GRANTING THE ALGER ELECTRIC, INC., A FRANCHISE

MUNICIPALITIES OF STO. TOMAS, DAMORTIS AND ROSARIO,
PROVINCE OF LA UNION, AND SISON, PROVINCE OF PANGASINAN
1759
AN ACT TO AMEND REPUBLIC ACT NUMBERED THIRTY HUNDRED

AND FOURTEEN, ENTITLED “AN ACT GRANTING ROMULO V.
RAMOS A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND POWER
SYSTEM IN THE MUNICIPALITIES OF STA. CRUZ, DIGOS, BANSALAN,
PADADA, MALALAG, HAGONOY AND LOWER MONTANO, ALL IN
DAVAO PROVINCE
AN ACT GRANTING THE LINGAYEN GULF ELECTRIC POWER

COMPANY INC., A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT
AND POWER SYSTEM IN THE MUNICIPALITIES OF LINGAYEN AND
BINMALEY, PROVINCE OF PANGASINAN
AN ACT GRANTING JOSE B. JAUCIAN A FRANCHISE FOR

MUNICIPALITY OF LIBMANAN, PROVINCE OF CAMARINES SUR
AN ACT EXTENDING THE TERM OF THE ELECTRIC FRANCHISE

ORIGINALLY GRANTED TO NATALIO DIGAL BUT SUBSEQUENTLY
SOLD TO OCMIS ELECTRIC SERVICE CO., INC.
AN ACT APPROVING ANY ASSIGNMENT, SALE, TRANSFER OF THE

FRANCHISE GRANTED TO RAFAEL CONSING UNDER REPUBLIC
ACT NUMBERED THIRTY HUNDRED THREE IN FAVOR OF THE
MUNICIPAL GOVERNMENT OF TAGO, IN THE PROVINCE OF
SURIGAO DEL SUR
1760
REPUBLIC ACT NO 3958
AN ACT GRANTING JOSE DE LEON ELECTRIC PLANT A FRANCHISE

MUNICIPALITY OF SAN MIGUEL, PROVINCE OF BULACAN
AN ACT GRANTING ENRIQUE NAVARRO II A FRANCHISE TO

CONSTRUCT, OPERATE AND MAINTAIN AN ELECTRIC LIGHT,
HEAT AND POWER SYSTEM AND ICE PLANT IN THE ISLAND OF
SIARGAO, PROVINCE OF SURIGAO DEL NORTE
AN ACT GRANTING THE CALBAYOG ELECTRIC POWERS, INC., A

LIGHT, HEAT AND POWER SYSTEM IN THE CITY OF CALBAYOG
AND ITS SUBURBS
AN ACT GRANTING THE CABATUAN COMMUNITY COOPERATIVE

SERVICE ASSOCIATION A FRANCHISE TO INSTALL, MAINTAIN
AND OPERATE AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM
IN THE MUNICIPALITY OF CABATUAN, PROVINCE OF ILOILO
AN ACT GRANTING RENE T. HAMOY A FRANCHISE TO INSTALL,

POWER SYSTEM IN THE MUNICIPALITY OF PIÑAN, PROVINCE OF
ZAMBOANGA DEL NORTE
1761
AN ACT GRANTING CECILIO ARCINAS A FRANCHISE TO

CONSTRUCT, OPERATE AND MAINTAIN AN ELECTRIC LIGHT,
HEAT AND POWER SYSTEM, AND AN ICE PLANT AND COLD
STORAGE IN THE MUNICIPALITY OF BROOKE’S POINT, PROVINCE
OF PALAWAN, AND TO DISTRIBUTE AND SELL ELECTRIC LIGHT,
HEAT AND POWER, AND SUPPLY COLD STORAGE THEREIN AND
TO SELL ICE IN THE WHOLE PROVINCE OF PALAWAN
AN ACT GRANTING THE MUNICIPALITY OF CALINOG, PROVINCE

OF ILOILO, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
AN ACT GRANTING THE POTOTAN ELECTRIC LIGHT AND POWER

CORPORATION A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM IN THE MUNICIPALITY OF POTOTAN” PROVINCE
OF ILOILO

HEAT AND POWER SYSTEM IN THE MUNICIPALITIES OF STA.
BARBARA, SAN JACINTO AND SAN FABIAN, ALL IN THE PROVINCE
OF PANGASINAN
AN ACT GRANTING BENJAMIN CUARESMA A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF BAMBANG,
PROVINCE OF NUEVA VIZCAYA
1762

PERMIT TO CONSTRUCT, ESTABLISH, AND OPERATE A PRIVATE
FIXED LAND-BASED TO LAND-MOBILE RADIO STATIONS FOR THE
RECEPTION AND TRANSMISSION OF RADIO COMMUNICATIONS IN
DAGUPAN CITY
AN ACT GRANTING ANTONIA L. ALISANGCO A FRANCHISE

MUNICIPALITY OF BACNOTAN, PROVINCE OF LA UNION
AN ACT GRANTING EMILIO E. TEVES A FRANCHISE FOR

MUNICIPALITY OF BAIS, PROVINCE OF NEGROS ORIENTAL
AN ACT GRANTING A. LUMANLAN & SONS, INC., A FRANCHISE

FOE AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE
MUNICIPALITY OF SURIGAO, PROVINCE OF SURIGAO DEL NORTE
AN ACT AMENDING SECTION ONE OF REPUBLIC ACT NUMBERED

TWENTY-THREE HUNDRED THIRTY-NINE, AS AMENDED BY
REPUBLIC ACT NUMBERED TWENTY-NINE HUNDRED NINETY-
FIVE, AUTHORIZING THE TACLOBAN ELECTRIC LIGHT AND ICE
PLANTS CO., INC., TO EXTEND ITS ELECTRIC LIGHT, HEAT AND
POWER SYSTEM TO THE MUNICIPALITIES OF PALO AND TANAUAN,
BOTH IN THE PROVINCE OF LEYTE
1763
AN ACT GRANTING THE SOUTHERN FARMERS COOPERATIVE

ASSOCIATION A FRANCHISE TO CONSTRUCT, MAINTAIN AND
OPERATE AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN
THE MUNICIPALITY OF GLAN, PROVINCE OF COTABATO
AN ACT GRANTING A FRANCHISE FOR AN ELECTRIC LIGHT,

HEAT AND POWER SYSTEM IN CERTAIN MUNICIPALITIES IN THE
AN ACT GRANTING VICENTE M. FORTICH ZERDA A FRANCHISE TO

AND POWER SYSTEM AND AN ICE PLANT IN THE MUNICIPALITY OF
SISON, PROVINCE OF SURIGAO DEL NORTE, AND TO DISTRIBUTE
ELECTRIC LIGHT, HEAT, POWER AND ICE FOR SALE THEREIN
AN ACT TO AMEND REPUBLIC ACT NUMBERED TWELVE HUNDRED

TWENTY-FIVE, ENTITLED “AN ACT GRANTING THE LA UNION
ELECTRIC COMPANY, INC., A FRANCHISE FOR AN ELECTRIC
LIGHT, HEAT AND POWER SYSTEM IN THE MUNICIPALITIES
OF SAN FERNANDO BAUANG AND SAN JUAN, PROVINCE OF LA
UNION”
AN AC AMENDING CERTAIN SECTIONS OF REPUBLIC ACT

NUMBERED TWENTY-THREE HUNDRED AND FORTY-ONE
1764
AN ACT GRANTING CONCHITA A. LUALHATI A FRANCHISE TO

CONSTRUCT, MAINTAIN AND OPERATE AN ELECTRIC LIGHT, HEAT
MAB1NI, PROVINCE OF BATANGAS, AND TO SELL AND DISTRIBUTE
ELECTRIC LIGHT, HEAT, AND POWER AND ICE THEREIN
AN ACT GRANTING THE MUNICIPALITY OF AGOO, PROVINCE OF

LA UNION, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM
AN ACT GRANTING PABLO R. HAL1LI A FRANCHISE FOR

MUNICIPALITY OF CABIAO, PROVINCE OF NUEVA ECIJA
AN ACT GRANTING THE ARAYAT ELECTRIC PLANT A FRANCHISE

HEAT AND POWER SYSTEM IN THE MUNICIPALITY OF ARAYAT,
PROVINCE OF PAMPANGA
AN ACT GRANTING U. BAÑEZ ELECTRIC LIGHT COMPANY A

IN THE MUNICIPALITY OF BANGUED, PROVINCE OF ABRA
1765
AN ACT GRANTING THE TAGUM ELECTRIC COMPANY, INC. A

IN THE MUNICIPALITY OF TAGUM, PROVINCE OF DAVAO
AN ACT EXTENDING FURTHER UNDER CERTAIN CONDITIONS

THE TERM OF THE FRANCHISE GRANTED IN PURSUANCE OF THE
AUTHORITY UNDER ACTS NUMBERED FOUR HUNDRED EIGHTY-
FOUR AND ONE THOUSAND ONE HUNDRED TWELVE BY THE
MUNICIPAL BOARD OF THE CITY OF MANILA TO CHARLES M.
SWIFT AND LATER ASSUMED AND TAKEN OVER BY THE MANILA
ELECTRIC COMPANY, AS CONTAINED IN ORDINANCE NUMBERED
FORTY-FOUR, PARTS TWO AND THREE, AS AMENDED OF THE SAID
MUNICIPAL BOARD OF THE CITY OF MANILA, TO CONSTRUCT,
MAINTAIN, AND OPERATE AN ELECTRIC LIGHT, HEAT AND POWER
SYSTEM FOR THE PURPOSE OF GENERATING AND DISTRIBUTING
FOR SALE ELECTRIC LIGHT, HEAT AND POWER THROUGHOUT THE
CITY OF MANILA AND ITS SUBURBS AS EXTENDED BY REPUBLIC
ACT NUMBERED ONE HUNDRED FIFTY
AN ACT GRANTING CAMIGUIN ELECTRIC COMPANY, INC. A

IN THE SUBPROVINCE OF CAMIGUIN, PROVINCE OF MISAMIS
ORIENTAL
AN ACT GRANTING FRANCISCA R. JUSTINIANI A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF PLARIDEL,
PROVINCE OF BULACAN
1766
AN ACT GRANTING JUAN G. GALINATO A FRANCHISE TO INSTALL,

MAINTAIN AND OPERATE ELECTRIC LIGHT, HEAT AND POWER
SYSTEM IN THE MUNICIPALITY OF PAOAY, PROVINCE OF ILOCOS
NORTE
AN ACT GRANTING THE MUNICIPALITY OF LALLO, PROVINCE OF

CAGAYAN, A FRANCHISE TO INSTALL, MAINTAIN AND OPERATE
AN ACT GRANTING THE BANAAG ELECTRIC A FRANCHISE

MUNICIPALITY OF PINAMALAYAN, PROVINCE OF ORIENTAL
MINDORO
AN ACT GRANTING TAYUG ELECTRIC CORPORATION A FRANCHISE

MUNICIPALITY OF TAYUG, PROVINCE OF PANGASINAN
AN ACT GRANTING TERESA ELECTRIC AND POWER CO., INC., A

TERESA, PROVINCE OF RIZAL
1767
AN ACT GRANTING THE BOLBOK ELECTRIC AND ICE PLANT

CORPORATION A FRANCHISE TO CONSTRUCT, OPERATE AND
MAINTAIN AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM, AND
AN ICE PLANT IN THE MUNICIPALITY OF SAN JUAN, PROVINCE
OF BATANGAS, AND TO DISTRIBUTE AND SELL ELECTRIC HEAT
AND POWER THEREIN, AND ALSO SELL ICE IN THE AFORESAID
MUNICIPALITY AND NEIGHBORING MUNICIPALITIES
ACT GRANTING THE MUNICIPALITY OF CALATAGAN IN THE

PROVINCE OF BATANGAS, A FRANCHISE TO INSTALL, MAINTAIN
AN ACT GRANTING JOSE DYOGI A FRANCHISE TO INSTALL,

POWER SYSTEM, AND AN ICE PLANT IN THE MUNICIPALITY OF
KABASALAN, PROVINCE OF ZAMBOANGA DEL SUR
AN ACT GRANTING CASIMIRO E. SISON, SR. A FRANCHISE

MUNICIPALITY OF BINALONAN, PROVINCE OF PANGASINAN
AN ACT GRANTING CASIMIRO S. SISON, JR. A FRANCHISE

MUNICIPALITY OF POZORRUBIO, PROVINCE OF PANGASINAN
1768
AN ACT GRANTING VICENTE SAN PEDRO A FRANCHISE TO

INSTALL, OPERATE AND MAINTAIN AN ELECTRIC LIGHT SERVICE,
HEAT AND POWER SYSTEM IN THE MUNICIPALITY OF ASINGAN,
PROVINCE OF PANGASINAN

AND POWER SYSTEM IN THE MUNICIPALITY OF MAPANDAN,

INSTALL, OPERATE AND MAINTAIN AN ELECTRIC LIGHT SERVICE,
HEAT AND POWER SYSTEM IN THE MUNICIPALITY OF URDANETA,
AN ACT GRANTING THE MUNICIPALITY OF TUY, PROVINCE OF

BATANGAS, A FRANCHISE TO INSTALL, MAINTAIN AND OPERATE
AN ACT GRANTING MANAOAG UTILITY COMPANY, INC. A

FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND POWER
SYSTEM IN THE MUNICIPALITY OF MANAOAG, PROVINCE OF
PANGASINAN
1769
AN ACT GRANTING FRANCHISE FOR AN ELECTRIC LIGHT, HEAT

AND POWER SYSTEM TO THE HEIRS OF DR. GUILLERMO B. DE
VERA IN THE MUNICIPALITY OF MANGALDAN, PROVINCE OF
PANGASINAN
AN ACT GRANTING THE MUNICIPALITY OF SAN NICOLAS, PROVINCE

OF BATANGAS, A FRANCHISE TO CONSTRUCT, MAINTAIN AND
OPERATE AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM
AN ACT TO AMEND REPUBLIC ACT NUMBERED FORTY HUNDRED

TWELVE, ENTITLED “AN ACT GRANTING POTOTAN ELECTRIC
LIGHT AND POWER CORPORATION A FRANCHISE FOR AN ELECTRIC
POTOTAN, PROVINCE OF ILOILO”
AN ACT GRANTING JUAN R. ALCASID A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITY OF POLOMOLOK, PROVINCE OF
COTABATO
AN ACT GRANTING BENJAMIN P. LAZARO A FRANCHISE TO

INSTALL, MAINTAIN AND OPERATE ELECTRIC LIGHT, HEAT AND
POWER SYSTEM IN THE MUNICIPALITY OF GENERAL NATIVIDAD,
PROVINCE OF NUEVA ECIJA
1770
AN ACT GRANTING SAN MATEO ELECTRIC PLANT COMPANY,

INCORPORATED, A FRANCHISE TO INSTALL, OPERATE AND
MAINTAIN AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN
THE MUNICIPALITY OF SAN MATEO, PROVINCE OF R1ZAL
AN ACT GRANTING ANTONIO H. VITERBO, JR., GEORGE H.

VITERBO, HERNANDEZ H. VITERBO, VICTORIA H. VITERBO PEREZ
AND GABRIEL H. VITERBO, AS HEIRS OF MILAGROS HERNANDEZ
VITERBO, AND EVANGELINE A. HERNANDEZ, MILAGROS A.
HERNANDEZ, CRISTINA A. HERNANDEZ, JOSE A. HERNANDEZ AND
CORAZON ABALO VDA. DE HERNANDEZ, AS HEIRS OF GABRIEL K.
HERNANDEZ, A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM IN THE CITY OF ROXAS
AN ACT GRANTING A. VILLARAMA & SONS, INCORPORATED

SYSTEM IN THE MUNICIPALITY OF NORZAGARAY, PROVINCE OF
BULACAN
AN ACT GRANTING JOSE FONTANOZA A FRANCHISE FOR

MUNICIPALITY OF BAYOG, PROVINCE OF ZAMBOANGA DEL SUR
AN ACT APPROVING ANY ASSIGNMENT, SALE AND TRANSFER

OF THE FRANCHISE GRANTED TO FELICIANA S. BERMUDEZ BY
REPUBLIC ACT NUMBERED EIGHTEEN HUNDRED FORTY IN
FAVOR OF JUAN R. ALCASID

1771
AN ACT GRANTING LOUBER ENTERPRISES, INC., A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITIES OF SAN FERNANDO,
PAMPLONA, AND CABUSAO, AND SUCH OTHER MUNICIPALITIES
NOT PRESENTLY BEING SERVED IN THE PROVINCE OF CAMARINES
SUR, AND TO SELL AND DISTRIBUTE LIGHT, HEAT AND/OR POWER
THEREIN
AN ACT GRANTING THE MUNICIPALITY OF CLAVERIA IN THE

PROVINCE OF CAGAYAN A FRANCHISE FOR AN ELECTRIC LIGHT,
AN ACT GRANTING SORSOGON ELECTRIC PLANT A FRANCHISE

MUNICIPALITY OF SORSOGON, PROVINCE OF SORSOGON
AN ACT GRANTING THE V-M-C RURAL ELECTRIC SERVICE

COOPERATIVE, INC. A FRANCHISE FOR AN ELECTRIC LIGHT, HEAT
AND POWER SYSTEM IN THE, MUNICIPALITIES OF MANAPLA,
VICTORIAS AND CADIZ, ALL IN THE PROVINCE OF NEGROS
OCCIDENTAL
AN ACT TO AMEND SECTION ONE OF REPUBLIC ACT NUMBERED

SIXTEEN HUNDRED AND TEN, ENTITLED “AN ACT GRANTING
NEGROS ELECTRIC POWER CORPORATION A FRANCHISE
1772
TO DEVELOP, CONSTRUCT, MAINTAIN AND OPERATE A

HYDROELECTRIC POWER PLANT IN BAGO RIVER, PROVINCE OF
NEGROS OCCIDENTAL”
AN ACT GRANTING PABLO R. HALILI, INC., A FRANCHISE FOR

MUNICIPALITIES OF PAOMBONG AND HAGONOY, PROVINCE OF
BULACAN
AN ACT GRANTING MAGALANG ELECTRIC PLANT COMPANY A

IN THE MUNICIPALITY OF MAGALANG, PROVINCE OF PAMPANGA
AN ACT AUTHORIZING AND APPROVING THE TRANSFER OF THE

FRANCHISE GRANTED TO MELVIC AND COMPANY, INCORPORATED
BY REPUBLIC ACT NUMBERED THIRTY-SEVEN HUNDRED THIRTY-
EIGHT IN FAVOR OF JOSE S. MERCADO OF CEBU CITY
AN ACT GRANTING VISAYAN ELECTRIC COMPANY, INC., A

FRANCHISE FOR ELECTRIC LIGHT, HEAT AND POWER SYSTEM
IN THE CITY OF DUMAGUETE AND IN THE MUNICIPALITIES
OF BACONG, DAUIN AND VALENCIA, ALL IN THE PROVINCE OF
ORIENTAL NEGROS
AN ACT GRANTING FRANCHISE FOR AN ELECTRIC LIGHT,

HEAT AND POWER SYSTEM TO PEDRO S. LIMJOCO IN THE
1773
MUNICIPALITIES OF CANDABA, SAN LUIS AND SAN SIMON, ALL

IN THE PROVINCE OF PAMPANGA

AND POWER SYSTEM TO BALANGA POWER PLANT CO., INC., IN
THE MUNICIPALITIES OF BALANGA, ABUCAY, HERMOSA, ORANI,
ORION, PILAR AND SAMAL, ALL IN THE PROVINCE OF BATAAN
AN ACT GRANTING FIDEL F. REYES A FRANCHISE TO INSTALL,

SYSTEM, IN THE MUNICIPALITY OF CALUMPIT, PROVINCE OF
BULACAN
AN ACT GRANTING SAN GUILLERMO DEVELOPMENT CORPORATION

A FRANCHISE TO INSTALL, MAINTAIN AND OPERATE AN
ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE BARRIOS OF
SAN GUILLERMO AND BOMBONGAN, MUNICIPALITY OF MORONG,
PROVINCE OF RIZAL
AN ACT AMENDING REPUBLIC ACT NUMBERED FOUR THOUSAND

TWENTY-FIVE, ENTITLED “AN ACT GRANTING THE DAGUPAN
ELECTRIC CORPORATION A PERMIT TO CONSTRUCT, ESTABLISH,
AND OPERATE PRIVATE FIXED LAND-BASED TO LAND MOBILE
RADIO STATIONS FOR THE RECEPTION AND TRANSMISSION OF
RADIO COMMUNICATIONS IN DAGUPAN CITY”
1774
AN ACT GRANTING RUBEN A. SO A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITY OF MONREAL, PROVINCE OF
MASBATE
AN ACT GRANTING JESUS B. AREVALO A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITY OF SAN FERNANDO, PROVINCE
OF MASBATE
AN ACT GRANTING MRS. NATALIA AMPARADO A FRANCHISE TO

AND POWER SYSTEM IN THE MUNICIPALITY OF ALIMODIAN,
PROVINCE OF ILOILO
AN ACT GRANTING JOSE O. MARTINEZ A FRANCHISE TO INSTALL,

SYSTEM IN THE MUNICIPALITY OF MALANGAS, PROVINCE OF
ZAMBOANGA DEL SUR
AN ACT GRANTING THE MUNICIPALITY OF MABINAY, PROVINCE

OF NEGROS ORIENTAL, A FRANCHISE TO INSTALL, MAINTAIN
1775

AND POWER SYSTEM TO THE MUNICIPALITY OF VALLEHERMOSO,
AN ACT GRANTING RAFAEL C. AQUINO A FRANCHISE TO

INSTALL, MAINTAIN AND OPERATE AN ELECTRIC LIGHT, HEAT,
POWER SYSTEM, AN ICE PLANT AND COLD STORAGE IN THE
MUNICIPALITIES OF BAYUGAN AND PROSPERIDAD, PROVINCE OF
AGUSAN
AN ACT GRANTING TO THE MANILA ELECTRIC COMPANY A

FRANCHISE TO CONSTRUCT, MAINTAIN, AND OPERATE AN
ELECTRIC LIGHT, HEAT, AND POWER SYSTEM FOR THE PURPOSE
OF GENERATING AND DISTRIBUTING ELECTRIC LIGHT, HEAT, AND
POWER, FOR SALE WITHIN THE LIMITS OF THE MUNICIPALITIES
OF BACOOR AND IMUS, PROVINCE OF CAVITE, AND FOR OTHER
PURPOSES
Approved September 07, 1967
AN ACT GRANTING TABACO ELECTRIC CO., INC. A FRANCHISE

MUNICIPALITY OF TABACO, PROVINCE OF ALBAY
AN ACT GRANTING IPIL ELECTRIC LIGHT AND ICE PLANT, INC., A

LIGHT, HEAT AND POWER SYSTEM, AND AN ICE PLANT SERVICE
IN THE MUNICIPALITY OF IPIL, PROVINCE OF’ZAMBOANGA DEL
SUR
1776
AN ACT FURTHER AMENDING REPUBLIC ACT NUMBERED FORTY

HUNDRED TWELVE, ENTITLED “AN ACT GRANTING POTOTAN
ELECTRIC LIGHT AND POWER CORPORATION A FRANCHISE
MUNICIPALITY OF POTOTAN, PROVINCE OF ILOILO”
AN ACT GRANTING A FRANCHISE FOR AN ELECTRIC LIGHT,

HEAT AND POWER SYSTEM TO BARTOLOME C. LIGOT IN THE
MUNICIPALITY OF BAYOMBONG, PROVINCE OF NUEVA VIZCAYA
AN ACT GRANTING CARMEN ELECTRIC SERVICE COMPANY

SYSTEM IN THE MUNICIPALITY OF SANTO TOMAS, PROVINCE OF
PANGASINAN, AND IN CERTAIN BARRIOS OF THE MUNICIPALITY
OF ROSALES, SAME PROVINCE
AN ACT GRANTING THE JARO LIBERTY ELECTRIC COMPANY,

INC. A FRANCHISE TO INSTALL, MAINTAIN AND OPERATE
ELECTRIC LIGHT, HEAT, POWER SYSTEM AND ICE PLANT IN
THE MUNICIPALITY OF JARO, PROVINCE OF LEYTE, AND TO
EXTEND ITS ELECTRIC LIGHT, HEAT AND POWER SYSTEM AND
DISTRIBUTION OF ICE FOR SALE TO THE MUNICIPALITIES
OF TUÑGA, ALANGALANG, SANTA FE AND PASTRANA, THAT
PROVINCE
AN ACT EXTENDING THE FRANCHISES OF THE BICOL ELECTRIC

COMPANY, INC., FOR ANOTHER TWENTY-FIVE YEARS
1777

AND POWER SYSTEM TO PANAY ELECTRIC COMPANY, INC. IN
THE CITY OF ILOILO, AND IN THE MUNICIPALITIES OF SANTA
BARBARA AND PAVIA, BOTH IN THE PROVINCE OF ILOILO
AN ACT GRANTING ENGINEER VICENTE V1LLANUEVA Y FLORENDO

OF V1CAN, ILOCOS SUR, A FRANCHISE TO INSTALL. OPERATE AND
MAINTAIN AN ELECTRIC LIGHT, HEAT, POWER SYSTEM, AND ICE
PLANTS IN THE PROVINCE OF ILOCOS SUR AND TO SELL AND
DISTRIBUTE ELECTRIC LIGHT, HEAT. POWER, ICE AND SUPPLY
COLD STORAGE THEREIN
AN ACT GRANTING MISAMIS ORIENTAL RURAL ELECTRIC SERVICE

COOPERATIVE, INC., A FRANCHISE FOR AN ELECTRIC LIGHT AND
POWER SYSTEM IN THE MUNICIPALITIES OF LUGAIT, MANTICAO,
NAAWAN, INITAO, LIBERTAD, GITAGUM, LAGUINDINGAN,
ALUBIJID AND EL SALVADOR, ALL IN THE PROVINCE OF MISAMIS
ORIENTAL
AN ACT GRANTING LIPA ELECTRIC COMPANY, INCORPORATED A

PADRE GARCIA, PROVINCE OF BATANGAS, AND IN THE CITY OF
LIPA
1778
AN ACT GRANTING FELICIANO YU A FRANCHISE FOR AN ELECTRIC

LIGHT, HEAT AND POWER SYSTEM IN THE MUNICIPALITY OF SAN
ISIDRO, PROVINCE OF DAVAO ORIENTAL
AN ACT GRANTING MATI LIGHT AND POWER, INC. A FRANCHISE

MUNICIPALITY OF MATI, PROVINCE OF DAVAO ORIENTAL
AN ACT GRANTING ALFREDO ANGELES A FRANCHISE TO INSTALL,

MAINTAIN AND OPERATE AN ELECTRIC LIGHT, HEAT, POWER
SYSTEM AND AN ICE PLANT IN THE MUNICIPALITY OF MOLAVE,
PROVINCE OF ZAMBOANGA DEL SUR
AN ACT GRANTING PEDRO IBANEZ A FRANCHISE TO INSTALL,

SYSTEM AND AN ICE PLANT IN THE MUNICIPALITY OF MACARTHUR,
PROVINCE OF LEYTE, AND TO SELL AND DISTRIBUTE ELECTRIC
LIGHT, HEAT, POWER AND ICE THEREIN
AN ACT GRANTING VICENTE M. FORTICH ZERDA A FRANCHISE TO

SISON, PROVINCE OF SURIGAO DEL NORTE, AND TO DISTRIBUTE
ELECTRIC LIGHT, HEAT, POWER AND ICE FOR SALE THEREIN
1779
AN ACT APPROVING ANY ASSIGNMENT, SALE AND TRANSFER OF

THE FRANCHISE GRANTED TO JUAN R. ALCASID BY REPUBLIC ACT
NUMBERED FORTY-FIVE HUNDRED SIX, AND OF THE FRANCHISE
GRANTED TO FELICIANA S-BERMUDEZ UNDER REPUBLIC ACT
NUMBERED EIGHTEEN HUNDRED FORTY WHICH WAS LATER
ASSIGNED, SOLD AND TRANSFERRED TO JUAN R. ALCASID DULY
APPROVED BY CONGRESS UNDER REPUBLIC ACT NUMBERED
FORTY-FIVE HUNDRED FIFTY-THREE, IN FAVOR OF JURAL
ELECTRIC, INC.
AN ACT GRANTING BURAUEN ELECTRIC AND ICE PLANT

CORPORATION A FRANCHISE TO CONSTRUCT, OPERATE AND
MAINTAIN AN ELECTRIC LIGHT AND POWER SYSTEM, AN ICE
PLANT AND COLD STORAGE IN THE MUNICIPALITY OF BURAUEN,
PROVINCE OF LEYTE, AND TO SELL ELECTRIC CURRENT, ICE AND
TO SUPPLY COLD STORAGE THEREIN
AN ACT GRANTING MARCELA VDA. DE MARCON A FRANCHISE FOR

AN ELECTRIC LIGHT AND POWER SYSTEM IN THE MUNICIPALITY
OF BUENAVISTA, PROVINCE OF AGUSAN
AN ACT GRANTING JESUS SOL A FRANCHISE TO INSTALL,

AND ICE PLANT IN THE MUNICIPALITY OF GINATILAN,PROVINCE
OF CEBU
1780
AN ACT GRANTING FRANCISCO BORROMEO A FRANCHISE

MUNICIPALITY OF P1ODURAN, PROVINCE OF ALBAY

AND POWER SYSTEM TO CELIA M. MAPA VDA. DE FERIA, OWNER
AND OPERATOR OF LA CASTELLANA ELECTRIC PLANT IN THE
MUNICIPALITY OF LA CASTELLANA, PROVINCE OF NEGROS
OCCIDENTAL
AN ACT GRANTING MALASIQUT ELECTRIC PLANT A FRANCHISE

TO ESTABLISH, OPERATE AND MAINTAIN AN ELECTRIC LIGHT,
HEAT AND POWER SYSTEM IN THE MUNICIPALITY OF MALASIQUI,
AN ACT AMENDING REPUBLIC ACT NUMBERED FORTY-SIX

HUNDRED NINETEEN, ENTITLED “AN ACT GRANTING VISAYAN
ELECTRIC COMPANY, INC., A FRANCHISE FOR ELECTRIC LIGHT,
HEAT AND POWER SYSTEM IN THE CITY OF DUMAGUETE AND IN
THE MUNICIPALITIES OF BACONG, DAUIN AND VALENCIA, ALL IN
THE PROVINCE OF ORIENTAL NEGROS”
AN ACT AMENDING SECTION FIVE OF REPUBLIC ACT NUMBERED

FIFTY-ONE HUNDRED AND SIX, ENTITLED “AN ACT GRANTING
RAFAEL C. AQUINO A FRANCHISE TO INSTALL, MAINTAIN AND
1781
OPERATE AN ELECTRIC LIGHT, HEAT, POWER SYSTEM, AN ICE

PLANT AND COLD STORAGE IN THE MUNICIPALITIES OF BAYUGAN
AND PROSPERIDAD, PROVINCE OF AGUSAN
AN ACT AMENDING REPUBLIC ACT NUMBERED FORTY HUNDRED

TWENTY-EIGHT BY CHANGING THE NAME OF THE GRANTEE
FROM ANTONIA L. ALISANGCO TO BACNOTAN DEVELOPMENT
CORPORATION
AN ACT AMENDING REPUBLIC ACT NUMBERED THIRTY-

SEVEN HUNDRED TWO, ENTITLED “AN ACT GRANTING PEDRO
V. SERRANZANA A FRANCHISE TO INSTALL, MAINTAIN AND
OPERATE ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE
MUNICIPALITIES OF BAAO, IRIGA, NABUA, BATO AND SIPOCOT,
ALL IN THE PROVINCE OF CAMARINES SUR, AND IN THE
MUNICIPALITY OF LIBON, PROVINCE OF ALBAY, AND TO SELL
AND DISTRIBUTE ELECTRIC LIGHT, HEAT AND POWER THEREIN;
AND TO CONSTRUCT, MAINTAIN AND OPERATE AN ICE PLANT IN
THE MUNICIPALITY OF SIPOCOT, PROVINCE OF CAMARINES SUR
AND TO SELL AND DISTRIBUTE ICE IN THE WHOLE PROVINCE OF
CAMARINES SUR
AN ACT EXTENDING THE TERM OF THE FRANCHISE GRANTED

TO NILDA E. MARTINEZ FOR AN ELECTRIC LIGHT, HEAT AND
POWER SYSTEM IN THE MUNICIPALITY OF MASBATE, PROVINCE
OF MASBATE, BY AMENDING REPUBLIC ACT NUMBERED FOUR
HUNDRED SEVEN
1782

AND POWER SYSTEM TO THE NAGUILIAN ELECTRIC CO., INC., IN
THE MUNICIPALITY OF NAGUILIAN, PROVINCE OF LA UNION
AN ACT GRANTING THE MUNICIPALITY OF TAYASAN, PROVINCE

OF NEGROS ORIENTAL, A FRANCHISE FOR AN ELECTRIC LIGHT,
AN ACT GRANTING ZAMBALES ELECTRIC PLANT CORPORATION

SYSTEM IN THE MUNICIPALITY OF SAN ANTONIO, PROVINCE OF
ZAMBALES
AN ACT GRANTING EUSEBIO G. BERNALES, SR. A FRANCHISE TO

AND POWER SYSTEM, AND AN ICE PLANT IN THE MUNICIPALITY
OF BACOLOD, PROVINCE OF LANAO DEL NORTE
AN ACT GRANTING GARCIA, DIAPO AND CO., A FRANCHISE

MUNICIPALITIES OF BANGA AND NEW WASHINGTON, BOTH IN
THE PROVINCE OF AKLAN
1783
AN ACT GRANTING KALIBO ELECTRIC CO, A FRANCHISE TO

INSTALL, OPERATE AND MAINTAIN A TELEPHONE SYSTEM IN
THE MUNICIPALITY OF KALIBO, PROVINCE OF AKLAN
AN ACT GRANTING FORTUNE DEVELOPMENT CORPORATION A

TAYSAN, PROVINCE OF BATANGAS
AN ACT GRANTING NATIVIDAD R. ORTEGA A FRANCHISE TO

MAHAPLAG, PROVINCE OF LEYTE, AND TO SELL AND DISTRIBUTE
ELECTRIC LIGHT, HEAT, POWER AND ICE THEREIN
AN ACT GRANTING RESTITUTO PALMA GIL A FRANCHISE

MUNICIPALITY OF CARAGA, PROVINCE OF DAVAO ORIENTAL

AND POWER SYSTEM TO LEOPOLDO T. CALDERON, JR., IN THE
MUNICIPALITY OF PULILAN, PROVINCE OF BULACAN
1784
AN ACT GRANTING EDUARDO MARUHOM A FRANCHISE TO

INSTALL, OPERATE AND MAINTAIN AN ELECTRIC LIGHT AND
POWER SYSTEM IN THE MUNICIPALITY OF MAIGO, PROVINCE OF
LANAO DEL NORTE
AN ACT GRANTING MANUEL LAVIDES A FRANCHISE TO INSTALL,

MAINTAIN AND OPERATE ELECTRIC LIGHT, HEAT AND POWER
SYSTEM AND AN ICE PLANT IN THE MUNICIPALITY OF ATIMONAN,
PROVINCE OF QUEZON
AN ACT FURTHER AMENDING CERTAIN SECTIONS OK REPUBLIC

ACT NUMBERED THIRTY-TWO HUNDRED FORTY-SEVEN, AS
AMENDED BY REPUBLIC ACT NUMBERED THIRTY-FIVE HUNDRED
SEVENTY (re Cagayan Electric Power and Light Co., Inc. franchise
AN ACT GRANTING PANGI SANGKI A FRANCHISE FOR AN ELECTRIC

LIGHT, HEAT AND POWER SYSTEM AND AN ICE PLANT AND COLD
STORAGE IN THE MUNICIPALITY OF AMPATUAN, PROVINCE OF
COTABATO
AN ACT GRUNTING GAPAN RURAL ELECTRIC SERVICE

COOPERATIVE, INC. A FRANCHISE FOR AN ELECTRIC LIGHT,
HEAT AND POWER SYSTEM IN THE BARRIOS OF SANTO CRISTO
SUR, MALIMBA, SAN ROQUE AND A PORTION OF SANTO CRISTO
NORTE, ALL LOCATED IN THE MUNICIPALITY OF GAPAN, IN THE
PROVINCE OF NUEVA ECIJA
Approved June 19971
1785
AN ACT GRANTING CENON BUENCAMINO A FRANCHISE TO

POWER SYSTEM, AN ICE PLANT AND COLD STORAGE IN THE
MUNICIPALITY OF LUPAO, PROVINCE OF NUEVA ECIJA, AND TO
SELL AND DISTRIBUTE ELECTRIC LIGHT, HEAT, POWER AND ICE
AND SUPPLY COLD STORAGE THEREIN
Approved June 19971
AN ACT GRANTING SABLAYAN DEVELOPMENT CORPORATION A

IN THE MUNICIPALITY OF SABLAYAN, PROVINCE OF OCCIDENTAL
MINDORO
Approved October 04, 1971
AN ACT GRANTING FIRST GAS HOLDINGS CORPORATION A

FRANCHISE TO CONSTRUCT, INSTALL, OWN, OPERATE AND
MAINTAIN A NATURAL GAS PIPELINE FOR THE TRANSPORTATION
AND DISTRIBUTION OF NATURAL GAS TO DIFFERENT AREAS IN
THE ISLAND OF LUZON
AN ACT GRANTING THE MANILA ELECTRIC COMPANY A

FRANCHISE TO CONSTRUCT, OPERATE AND MAINTAIN A
DISTRIBUTION SYSTEM FOR THE CONVEYANCE OF ELECTRIC
POWER TO THE END-USERS IN THE CITIES/MUNICIPALITIES OF
METRO MANILA, BULACAN, CAVITE AND RIZAL, AND CERTAIN
CITIES/MUNICIPALITIES/BARANGAYS IN BATANGAS, LAGUNA,
QUEZON AND PAMPANGA
AN ACT AMENDING AND EXTENDING THE TERM OF THE

FRANCHISE GRANTED TO CAGAYAN ELECTRIC POWER AND
1786
LIGHT CO., INC. UNDER REPUBLIC ACT NUMBERED THIRTY-

TWO HUNDRED FORTY-SEVEN, AS AMENDED BY REPUBLIC ACT
NUMBERED THIRTY-FIVE HUNDRED SEVENTY AND REPUBIC ACT
NUMBERED SIXTY HUNDRED TWENTY
AN ACT FURTHER AMENDING THE FRANCHISE OF ANGELES

ELECTRIC CORPORATION GRANTED UNDER REPUBLIC ACT NO.
2341, AS AMENDED, TO CONSTRUCT, OPERATE AND MAINTAIN
A DISTRIBUTION SYSTEM FOR THE CONVEYANCE OF ELECTRIC
POWER TO THE END-USERS IN THE CITY OF ANGELES, PROVINCE
OF PAMPANGA AND RENEWING/EXTENDING THE TERM OF THE
FRANCHISE TO ANOTHER TWENTY-FIVE (25) YEARS FROM THE
DATE OF APPROVAL OF THIS ACT
AN ACT GRANTING THE NATIONAL GRID CORPORATION OF THE

PHILIPPINES A FRANCHISE TO ENGAGE IN THE BUSINESS
OF CONVEYING OR TRANSMITTING ELECTRICITY THROUGH
HIGH VOLTAGE BACK-BONE SYSTEM OF INTERCONNECTED
TRANSMISSION LINES, SUBSTATIONS AND RELATED FACILITIES,
AN ACT FURTHER AMENDING THE FRANCHISE OF SAN FERNANDO

ELECTRIC LIGHT AND POWER COMPANY, INC. GRANTED UNDER
REPUBLIC ACT NO. 3207, AS AMENDED, TO CONSTRUCT, OPERATE
AND MAINTAIN A DISTRIBUTION SYSTEM FOR THE CONVEYANCE
OF ELECTRIC POWER TO THE END-USERS IN THE CITY OF SAN
FERNANDO, THE MUNICIPALITY OF FLORIDABLANCA AND
BARANGAYS TALANG AND LIGAYA IN THE MUNICIPALITY OF
GUAGUA, ALL IN THE PROVINCE OF PAMPANGA, AND RENEWING/
EXTENDING THE TERM OF THE FRANCHISE TO ANOTHER TWENTY-
FIVE (25) YEARS FROM THE DATE OF APPROVAL OF THIS ACT
1787
AN ACT GRANTING THE OLONGAPO ELECTRICITY DISTRIBUTION

COMPANY, INC. A FRANCHISE TO CONSTRUCT, INSTALL,
ESTABLISH, OPERATE AND MAINTAIN A DISTRIBUTION SYSTEM
FOR THE CONVEYANCE OF ELECTRIC POWER TO THE END-USERS
IN THE CITY OF OLONGAPO AND ITS SUBURBS
AN ACT GRANTING COTABATO LIGHT AND POWER COMPANY, A

FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE
AND MAINTAIN A DISTRIBUTION SYSTEM FOR THE CONVEYANCE
OF ELECTRIC POWER TO THE END-USERS IN THE CITY OF
COTABATO AND PORTIONS OF THE MUNICIPALITIES OF DATU
ODIN SINSUAT AND SULTAN KUDARAT, BOTH IN THE PROVINCE
OF MAGUINDANAO
1788
IMPLEMENTING RULES
AND REGULATIONS
1789
1790
BATAS PAMBANSA BLG. 33
AN ACT DEFINING AND PENALIZING CERTAIN PROHIBITED

ACTS INIMICAL TO THE PUBLIC INTEREST AND
THEREFOR AND FOR OTHER PURPOSES
Be it enacted by the Batasang Pambansa in session assembled:
SECTION 1. Declaration of Policy.—It is the declared

policy of the State to institutionalize as a national way of life
energy conservation geared towards the judicious and efficient
use of energy in order to enhance availability of energy supplies
required to support economic, social and developmental goals. In
view of the continuing uncertainty of the international oil supply,
it is imperative that measures to conserve energy be strengthened
and that acts and activities involving petroleum and/or petroleum
products contrary to the intent and spirit of judicious usage and
conservation of energy, which are inimical to the public interest and
national security, be prohibited and appropriate sanction therefor
be imposed.
SEC. 2. Prohibited Acts.—The following acts are prohibited

and penalized:
(a) llegal trading in petroleum and/or petroleum products;
(b) Hoarding of petroleum and/or petroleum products;
(c) Overpricing in the sale of petroleum and/or petroleum

products;
(d) Misuse of petroleum allocations;
(e) Speed contests and rallies involving mainly the use

of motor vehicles, motor-driven watercraft or aircraft
utilizing petroleum-derived fuels, including car and
motorcycle rallies and drag racing; and
(f) Sky-diving and water-skiing.

1791
SEC. 3. Definition of terms.—For the purposes of this Act, the

following terms shall be understood to mean:
"Illegal trading in petroleum and/or petroleum products"—

the sale or distribution of petroleum products for profit
without license or authority from the Government; non-
issuance of receipts by licensed traders; misrepresentation
as to quality and/or quantity; and sale by oil companies,
distributors and/or dealers violative of government rules
and regulations.
"Hoarding"—the undue accumulation by a trader of

petroleum and/or petroleum products beyond his or its
normal inventory levels and/or the unjustified refusal to
dispose of, sell or distribute the same to consumers; or the
unreasonable accumulation by a person other than a trader
of petroleum and/or petroleum products.
"Overpricing"—the sale of petroleum and/or petroleum

products at prices in excess of those duly authorized by the
Government.
"Misuse of allocation"—the sale, transfer or diversion of

mandated petroleum fuel allocations by oil companies,
distributors, dealers or consumers contrary to the declared
intent of the Government in making such allocation.
SEC. 4. Penalties.—Any person who commits any act herein

prohibited shall, upon conviction, be punished with a fine of not less
than Two Thousand Pesos (P2,000) but not more than Ten Thousand
Pesos (P10,000), or imprisonment of at least two (2) months but
not more than one (1) year, or both, in the discretion of the court.
Furthermore, the petroleum and/or petroleum products, subject-
matter of the illegal trading, hoarding, overpricing and misuse,
shall be forfeited in favor of the Government: Provided, That if the
petroleum and/or petroleum products have already been delivered
and paid, the payment made shall be the subject of the forfeiture,
and if the seller who has not yet delivered has been fully paid, the
price received shall be returned to the buyer; and in addition, if the
offender is a trader, the cancellation of his license.
1792
Trials of cases arising under this Act shall be terminated

within thirty (30) days after arraignment.
When the offender is a corporation, partnership, or other

juridical person, the president, general manager, managing partner,
or such other officer charged with the management of the business
affairs thereof shall be criminally liable.
If the offender is a government official or employee, he shall

perpetually be disqualified from office.
SEC. 5. Repealing Clause.—All laws, decrees, orders,

instructions, rules and regulations which are inconsistent with,
or contrary to, the provisions of this Act are hereby repealed or
modified accordingly.
SEC. 6. Effectivity.—Upon its approval, this Act shall take

effect after five days from its publication in at least two newspapers
of general circulation.
APPROVED, June 6, 1979.
1793
PRESIDENTIAL DECREE NO. 1865
AMENDING BATAS PAMBANSA BLG. 33, ENTITLED "AN ACT

DEFINING AND PENALIZING CERTAIN PROHIBITED
ACTS INIMICAL TO THE PUBLIC INTERESTS AND
THEREFOR AND FOR OTHER PURPOSES", BY INCLUDING
SHORT-SELLING AND ADULTERATION OF PETROLEUM
AND PETROLEUM PRODUCTS AND OTHER ACTS IN THE
DEFINITION OF PROHIBITED ACTS, INCREASING THE
PENALTIES THEREIN, AND FOR OTHER PURPOSES"
WHEREAS, Batas Pambansa Blg. 33 defines and penalizes

certain prohibited acts inimical to the public interest and national
security involving petroleum and/or petroleum products;
WHEREAS, adulteration of finished petroleum products

or possession of adulterated finished petroleum products for the
purpose of sale, distribution, transportation, exchange or barter;
and underdelivery or underfilling beyond authorized limits in the
sale of petroleum products or liquefied petroleum gas cylinders are
pernicious practices that are rampant and widespread;
WHEREAS, there is an urgent need to curb, if not totally

eliminate, such nefarious practices in the industry in order to better
protect the consuming public;
WHEREAS, it is necessary to provide the implementing

government agencies with increased administrative and criminal
penalties with which it can effectively curtail petroleum product
adulteration and shortselling as well as other prohibited acts and
activities involving petroleum and/or petroleum products which are
inimical to public interest and national security;
WHEREAS, in view of the foregoing considerations, it has

become necessary to amend certain provisions of Batas Pambansa
Blg. 33, as well as to provide, new provisions in the law.
1794
NOW, THEREFORE, I, FERDINAND E. MARCOS, President

of the Philippines, by virtue of the powers vested in me by the
Constitution, do hereby order and decree as follows:
SECTION 1. Section two of Batas Pambansa Blg. 33, as

amended, is further amended to read as follows:
"Sec. 2. Prohibited Acts. — The following acts are prohibited

and penalized:
"(a) Illegal trading in petroleum and/or petroleum products;
"(b) ADULTERATION OF FINNISHED PETROLEUM

PRODUCTS, OR POSSESSION OF ADULTERATED FINISHED
PETROLEUM PRODUCTS FOR THE PURPOSE OF SALE,
DISTRIBUTION, TRANSPORTATION, EXCHANGE OR
BARTER;
"(c) UNDERDELIVERY OR UNDERFILLING BEYOND

AUTHORIZED LIMITS IN THE SALE OF PETROLEUM
PRODUCTS OR POSSESSION OF UNDERFILLED LIQUEFIED
PETROLEUM GAS CYLINDER FOR THE PURPOSE OF
SALE, DISTRIBUTION, TRANSPORTATION, EXCHANGE OR
BARTER;
"THE OIL COMPANY, PETROLEUM REFILLER,

MARKETER, DEALER AND RETAILER, AS THE CASE MAY
BE, AND THE HAULER SHALL BE RESPONSIBLE FOR THE
QUANTITY AND QUALITY OF THE PETROLEUM PRODUCT
DELIVERED WHEN THE SAME IS SOLD ON DELIVERED
BASIS.
"FOR THE PURPOSE OF THIS SUBPARAGRAPH, THE

EXISTENCE OF THE FACTS HEREUNDER SHALL GIVE RISE
TO THE FOLLOWING PRESUMPTIONS:
"1) THAT CYLINDERS CONTAINING LESS THAN THE

REQUIRED QUANTITY OF LIQUEFIED PETROLEUM GAS
WHICH ARE NOT PROPERTY IDENTIFIED, TAGGED AND
SET APART AND REMOVED OR TAKEN OUT FROM THE
1795
DISPLAY AREA AND MADE ACCESSIBLE TO THE PUBLIC BY

MARKETERS, DEALERS, SUB-DEALERS OR RETAIL OUTLETS
ARE PRESUMED TO BE FOR SALE;
"2) IN THE CASE OF A DISPENSING PUMP IN A

PETROLEUM PRODUCTS RETAIL OUTLET SELLING SUCH
PRODUCTS TO THE PUBLIC, THE ABSENCE OF AN OUT-OF-
ORDER SIGN, OR PADLOCKS, ATTACHED OR AFFIXED TO THE
PUMP TO PREVENT DELIVERY OF PETROLEUM PRODUCTS
THEREFROM SHALL CONSTITUTE A PRESUMPTION OF THE
ACTUAL USE OF THE PUMP IN THE SALE OR DELIVERY OF
SUCH PETROLEUM PRODUCTS; AND
"3) WHERE THE SEAL, WHETHER OFFICIAL OR OF

THE OIL COMPANY, AFFIXED TO THE DISPENSING PUMP,
TANK TRUCK OR LIQUEFIED PETROLEUM GAS CYLINDER,
IS BROKEN OR IS ABSENT OR REMOVED, IT SHALL GIVE
RISE TO THE PRESUMPTION THAT THE DISPENSING
PUMP IS UNDERDELIVERING, OR THAT THE LIQUEFIED
PETROLEUM GAS CYLINDER IS UNDERFILLED, OR THAT
THE TANK TRUCK CONTAINS ADULTERATED FINISHED
PETROLEUM PRODUCTS OR IS UNDERFILLED;
"THE USE OF SUCH PUMPS, CYLINDERS OR

CONTAINERS REFERRED TO IN SUB-PARAGRAPH (1), (2)
AND (3) OF THIS SUB-PARAGRAPH, TO DELIVER PRODUCTS
FOR SALE OR DISTRIBUTION SHALL CONSTITUTE PRIMA
FACIE EVIDENCE OF INTENT OF THE HAULER, MARKETER,
REFILLER, DEALER, RETAILER OUTLET OPERATOR TO
DEFRAUD;
"[(b)] (D) Hoarding of petroleum and/or petroleum products;
"[(c)] (E) Overpricing in the sale of petroleum products;
"[(d)] (F) Misuse of petroleum allocations;
"[(e)] (G) Speed contest and rallies involving mainly the use of
motor vehicles, motor-driven watercraft or craft utilizing petroleum-
derived fuels, including car and motorcycle rallies and drag racing,
1796
WITHOUT THE PERMIT FROM THE BUREAU OF ENERGY

UTILIZATION; and
"[(f)] (H) Sky-diving, and water skiing except when methanol

is used in the power-boat operation."
SEC. 2. Section three of the same Act is hereby amended to

read as follows:
"SEC. 3. Definition of terms. — For the purpose of this Act,

the following terms shall be construed to mean:
"Illegal trading in petroleum and/or petroleum products" —
"(A) The sale or distribution of petroleum products [for profit]

without license or authority from the [Government] Bureau of
Energy Utilization;
"(B) Non-issuance of receipts by licensed [traders] OIL

COMPANIES, MARKETERS, DISTRIBUTORS, DEALERS,
SUBDEALERS AND OTHER RETAIL OUTLETS, TO FINAL
CONSUMERS; PROVIDED: THAT SUCH RECEIPTS, IN THE
CASE OF GAS CYLINDERS, SHALL INDICATE THEREIN THE
BRAND NAME, TARE WEIGHT, GROSS WEIGHT, AND PRICE
THEREOF;
"(C) REFILLING OF LIQUEFIED PETROLEUM GAS

CYLINDERS WITHOUT AUTHORITY FROM SAID BUREAU, OR
REFILLING OF ANOTHER COMPANY'S OR FIRM'S CYLINDERS
WITHOUT SUCH COMPANY'S OR FIRM'S WRITTEN
AUTHORIZATION;
"(D) MARKING OR USING IN SUCH CYLINDERS A TARE

WEIGHT OTHER THAN THE ACTUAL OR TRUE TARE WEIGHT
THEREOF;
"(E) VIOLATION OF RULES AND REGULATIONS OF

SAID BUREAU REGARDING THE IMPLEMENTATION OF THIS
ACT;
1797
"(F) REMOVAL OR UNLOADING OF PETROLEUM

PRODUCTS FROM ANY LORRY, TANK TRUCK OR DELIVERY
VEHICLE BY ANY PERSON OTHER THAN THE CONTRACTED
PURCHASER, OR IN PREMISES OF THE PURCHASER'S RETAIL
OUTLET OR BUSINESS ESTABLISHMENT;
"(G) USE OF PUMP METERING UNIT WHICH HAS NOT

BEEN PROPERLY CALIBRATED AND SEALED BY THE OFFICE
OF THE CITY OR MUNICIPAL TREASURER WHERE STATION
OR OUTLET IS LOCATED, OR BY THE NATIONAL SCIENCE
AND TECHNOLOGY AUTHORITY (NSTA), OR BY ANY OTHER
GOVERNMENT AGENCY AUTHORIZED THEREFOR, OR IN
THE ABSENCE THEREOF BY THE OIL COMPANY; AND
"(H) USE OF A TANK TRUCK, LORRY, HAULING VEHICLE,

OR OTHER CONVEYOR OTHER THAN VESSELS OR BARGES
FOR THE DELIVERY OF PETROLEUM PRODUCTS WHICH HAS
NOT BEEN REGISTERED WITH THE BUREAU OF ENERGY
UTILIZATION AND TANKS, CONTAINERS OR COMPARTMENT
THEREOF ARE NOT PROPERTY CALIBRATED AND SEALED
BY THE NATIONAL SCIENCE AND TECHNOLOGY AUTHORITY
OR ANY OTHER GOVERNMENT AGENCY AUTHORIZED
THEREFORE [misrepresentation as to the quality and/or quantity;
and sale by oil companies, distributors and/or dealers violative of
government rules and regulations].
"PETROLEUM FUEL PRODUCT ADULTERATION" — THE

MIXING OF ANY PETROLEUM PRODUCT WITH ANOTHER
FINISHED OR UNFINISHED PETROLEUM PRODUCT OR
STOCK OR WITH ANY NON-PETROLEUM SUBSTANCE OR
MATERIAL THAT WILL RESULT IN PRODUCT QUALITY
CHANGE, OR RESULTING IN THE FAILURE OF SUCH FINISHED
PETROLEUM PRODUCT TO MEET THE REQUIRED PRODUCT
SPECIFICATIONS AS PRESCRIBED BY THE PRODUCTS
STANDARDS AGENCY OF THE MINISTRY OF TRADE AND
INDUSTRY, FOR THE PURPOSE OF THIS DEFINITION,
FINISHED PETROLEUM PRODUCT REFERS TO ANY OF THE
FOLLOWING: PREMIUM GASOLINE, REGULAR GASOLINE,
AVIATION GASOLINE, AVIATION TURBO FUEL, KEROSENE,
DIESEL FUEL, INDUSTRIAL FUEL OR PACKAGE LUBE OILS.
1798
THIS DEFINITION SHALL NOT APPLY TO ALCOGAS AND OIL

EMULSIONS.
"UNDERFILLING OR UNDERDELIVERY" — REFERS TO

A SALE, TRANSFER, DELIVERY OR FILLING OF PETROLEUM
PRODUCTS OF A QUANTITY THAT IS ACTUALLY BEYOND
AUTHORIZED LIMITS THAN THE QUANTITY INDICATED OR
REGISTERED ON THE METERING DEVICE OF CONTAINER.
THIS REFERS, AMONG OTHERS, TO THE QUANTITY
OF PETROLEUM PRODUCTS DELIVERED BY METERED
DISPENSING PUMPS IN PETROLEUM RETAIL OUTLETS OR
TO LIQUEFIED PETROLEUM GAS IN CYLINDER OR TO LUBE
OILS IN PACKAGES.
"Hoarding" — The undue accumulation of a trader of

petroleum and/or products beyond his or its normal inventory levels,
and/or unjustified refusal to dispose of, sell or distribute the same
to consumers; or the unreasonable accumulation by a person other
than a trader of petroleum and/or petroleum products.
"Overpricing" — The sale of petroleum and/or petroleum

products at prices in excess of those duly authorized by the
[Government] BOARD OF ENERGY.
"Misuse of allocation" — the sale, transfer or diversion of

mandated petroleum fuel allocation by oil companies, distributors,
dealers or consumers contrary to the declared intent of the
Government in making such allocation."
SEC. 3. The same Act is further amended by inserting between

Sections three and four thereof, a new Section which shall read as
follows:
"Sec. 3-A. RULES AND REGULATIONS; ADMINISTRATIVE

SANCTIONS FOR VIOLATION THEREOF . — THE BUREAU
OF ENERGY UTILIZATION SHALL ISSUE SUCH RULES AND
REGULATIONS AS ARE NECESSARY TO CARRY INTO EFFECT
THE PROVISIONS OF THIS ACT, SUBJECT TO THE APPROVAL
OF THE MINISTER OF ENERGY, AFTER CONSULTATION
WITH THE AFFECTED INDUSTRY SECTORS. SAID RULES
1799
AND REGULATIONS SHALL TAKE EFFECT FIFTEEN (15)

DAYS FROM THE DATE OF ITS PUBLICATION IN TWO (2)
NEWSPAPERS OF GENERAL CIRCULATION.
"THE BUREAU OF ENERGY UTILIZATION IS EMPOWERED

TO IMPOSE IN AN ADMINISTRATIVE PROCEEDING,
AFTER DUE NOTICE AND HEARING, UPON ANY PERSON
WHO VIOLATES ANY PROVISION OF SUCH RULES AND
REGULATIONS, A FINE OF NOT MORE THAN TEN THOUSAND
PESOS (P10,000.00) OR TO SUSPEND OR REMOVE THE
LICENSE OR PERMIT OF A HAULER, MARKETER, REFILLER,
DEALER, SUB-DEALER, OR RETAIL OUTLET: PROVIDED,
THAT HEARING IN ANY ADMINISTRATIVE PROCEEDINGS
MAY BE WAIVED BY RESPONDENT. PROVIDED, FURTHER,
THAT DURING THE PENDENCY OF SUCH ADMINISTRATIVE
PROCEEDINGS, THE BUREAU MAY SUSPEND THE BUSINESS
OPERATIONS OF SUCH HAULER, MARKETER, REFILLER,
DEALER, SUB-DEALER OR RETAILER OR RETAIL OUTLET
OPERATOR WHEN THE SUSPENSION IS CONSISTENT WITH
THE PUBLIC INTEREST. ADMINISTRATIVE PROCEEDINGS
SHALL BE DECIDED WITHIN THIRTY (30) DAYS AFTER
FILING OF THE LAST RESPONSIVE PLEADING BY THE
RESPONDENT, OR TERMINATION AND COMPLETION OF
THE ADMINISTRATIVE PROCEEDINGS.
"ALL LAW ENFORCEMENT AND OTHER CONCERNED

AGENCIES OF THE GOVERNMENT SHALL ASSIST THE
BUREAU OF ENERGY UTILIZATION IN THE IMPLEMENTATION
OF THIS SECTION.
"THE ADMINISTRATIVE SANCTION THAT MAY BE

IMPOSED SHALL BE WITHOUT PREJUDICE TO THE FILING
OF A CRIMINAL ACTION AS THE CASE MAY WARRANT."
SEC. 4. Section four of the same Act is amended to read as

follows:
"Sec. 4. Penalties. — Any person who commits any act herein

prohibited shall, upon conviction, be punished with a fine of not
1800
less than [two] TWENTY thousand pesos [(2,000)] (P20,000) but

not more than [Ten] FIFTY thousand pesos [(P10,000)], (P50,000),
or imprisonment of at least two (2) [months] YEARS but not more
than [one (1)] FIVE (5) years, or both, in the discretion of the court.
IN CASES OF SECOND AND SUBSEQUENT CONVICTION
UNDER THIS ACT, THE PENALTY SHALL BE BOTH FINE AND
IMPRISONMENT AS PROVIDED HEREIN. Furthermore, the
petroleum and/or petroleum products, subject matter of the illegal
trading, ADULTERATION, SHORTSELLING, hoarding, overpricing
[and] OR misuse, shall be forfeited in favor of the Government:
Provided, That if the petroleum and/or petroleum products have
already been delivered and paid for, THE OFFENDED PARTY [the
payment made] shall be INDEMNIFIED TWICE THE AMOUNT
PAID [the subject of forfeiture], and if the seller who has not yet
delivered has been fully paid, the price received shall be returned
to the buyer WITH AN ADDITIONAL AMOUNT EQUIVALENT
TO SUCH PRICE; and in the addition, if the offender is [a trader]
AN OIL COMPANY, MARKETER, DISTRIBUTOR, REFILLER,
DEALER, SUB-DEALER AND OTHER RETAIL OUTLETS, OR
HAULER, the cancellation of his license.
"Trials of case arising under this Act shall be terminated

within thirty (30) days after arraignment.
"When the offender is a corporation, partnership, or other

juridical person, the president, the general manager, managing
partner, or such other officer charged with the management of the
business affairs thereof, OR EMPLOYEE RESPONSIBLE FOR
THE VIOLATION shall be criminally liable, IN CASE OFFENDER
IS AN ALIEN, HE SHALL BE SUBJECT TO DEPORTATION
AFTER SERVING THE SENTENCE.
"If the offender is a government official or employee, he shall

be perpetually disqualified from office."
SEC. 5. All laws, decrees, orders, instructions, rules and

regulations which are inconsistent with, or contrary to, the provisions
of this Act are hereby repealed or modified accordingly.
SEC. 6. This decree shall take effect upon its approval.

1801
DONE in the City of Manila, this 25th day of May, in the year
of Our Lord, nineteen hundred and eighty-three.
(Sgd.) FERDINAND E. MARCOS

President
Republic of the Philippines
By the President:
(Sgd.) JUAN C. TUVERA

Presidential Executive Assistant
1802
RULES AND REGULATIONS ON THE IMPLEMENTATION

OF BATAS PAMBANSA BLG. 33, AS AMENDED BY
PRESIDENTIAL DECREE NO. 1865, ISSUED ON MAY 25,
1983
RULE I
GENERAL PROVISIONS
SECTION 1. Coverage. –These rules and regulations shall

apply in the implementation of Batas Pambansa Bilang 33, as
amended by Presidential Decree No. 1865 issued on May 25, 1983.
SEC. 2. Definition of Terms. – For the purposes of these rules and

regulations:
(1) “Bureau” shall mean the Bureau of Energy Utilization.
(2) “Ministry” shall mean the Ministry of Energy.
(3) “Board” shall mean the Board of Energy.
(4) “Act” shall refer to Batas Pambansa Blg. 33, as amended

by Presidential Decree No. 1865, issued on May 25, 1983.
(5) An “Oil Company” is one that manufactures, processes and

sells a broad range of petroleum products. It shall refer to
any of the following companies and such other companies that
may be organized for this purpose or business:
(i) Caltex Philippines, Inc.

(i) Mobil Oil Philippines, Inc.
(iii) Petrophil Corporation
(iv) Pilipinas Shell Petroleum Corporation
(6) A “Marketer” is one that is engaged in the sale or trading of

petroleum products including LPG. A marketer may or may
not manufacture or process the products sold. A marketer is
differentiated from an oil company in that marketers include
1803
companies dealing in one product only, such as LPG. An oil

company is also a marketer.
(7) A “Dealer” refers to one involved in the sale or trading of

petroleum products under contract with an oil company
or marketer. The dealer shall sell only the products of the
marketer.
(8) A “Retail Outlet” refers to one who sells petroleum products

directly to a consumer.
(9) A “Hauler” is one engaged in the transportation of petroleum

products as a business.
(10) “NSTA” shall refer to the National Science and Technology

Authority.
(11) “PSA” shall refer to the Products Standards Agency.
RULE II
ILLEGAL TRADING
Non-compliance with or violation of the following provisions

of this rule shall constitute ILLEGAL TRADING and shall be
punishable under the Act.
SECTION 1. Bureau of Energy Utilization Licensing. –

No person or entity may produce, sell, transport, process, or
manufacture, blend or package petroleum products for business
or profit without prior registration and license from the Bureau of
Energy Utilization. The registration and licensing requirements
are/shall be specified in BEU administrative rules and regulations
in this regard.
Annual license renewal is required.
SEC. 2. Issuance of Receipts. – All transactions involving the

sale or transfer of petroleum products to final consumers or end-
users must be covered by an official receipt bearing the registered
name and address of the seller and detailing the quantity, price
1804
and type or petroleum product sold and the date of the transaction.
In the case of the sale of LPG in cylinders, the receipt shall also
indicate the brand of the product, the gross weight of the cylinder
including its contents, the tare weight of the cylinder, excluding the
contents, the net weight of the LPG contained, the total price and
the unit price per cylinder.
SEC. 3. Refilling of LPG Cylinders. – Refilling of LPG cylinders

for purposes of sale or distribution for business or profit must have
prior registration and license from the Bureau as provided for in
BEU rules and regulations in this regard. Refilling of LPG cylinders
not owned by the refilling entity may be performed only with the
written authorization of the cylinder owner or the entity that has
entitlement to such cylinders.
SEC. 4. Marking of LPG Cylinder. – Within ninety (90) days

of the effectivity of these Rules and Regulations, all LPG cylinders
must be properly marked with the weight of the cylinder either
engraved or embossed. The weight shall be expressed in kilograms
and shall be indicated to the last one-tenth (0.1) of one kilogram.
The marking must be in a conspicuous spot in the cylinder and shall
not be less than 0.6 cm in height. All LPG cylinders must also have
the owner’s trade name, a distinguishing color and distinctive serial
number marked on every cylinder.
SEC. 5. Unloading of Petroleum Products. – Petroleum

products may be unloaded only by/or in the presence of the buyer,
or his authorized representative, as named on the sales invoice.
Moreover, unloading of the product may be performed only at the
premises designated by the buyer and indicated on the sales invoice.
For this purpose, the supplier must indicate on the sales invoice the
name of the buyer and eh delivery point of every shipment.
SEC. 6. Calibration and Sealing of Dispensing Pumps. – All

fuel pumps used in petroleum retail outlets to dispense petroleum
products sold to the public must be properly calibrated and after
calibration immediately sealed by authorized calibrating entity. A
dispensing pump that is not calibrated or sealed or one that goes off
calibration shall be marked with an “out-of-order” sign and shall not
be used until the said pump is recalibrated and resealed.
1805
The authorized calibrating entities are the Municipal or City

Treasurer, or in their absence or incapacity, the NSTA or, in their
absence or incapacity, any other government agency authorized
therefor, or in their absence, the oil company. In locations where the
Municipal or City Treasurer is capable of calibration, a calibration
by other authorized entities shall be provisional and subject to
final calibration by the Treasurer. The authority performing the
calibration shall install a seal after calibration to guard against
unauthorized adjustment of the dispensing pump meter which
seal may not be broken until the next calibration by an authorized
entity.
The calibration shall be performed as often as may be necessary

to correct any deviation from the appropriate delivered quantity as
measured by a calibration bucket certified and sealed by the NSTA.
Such a calibration bucket shall be maintained at all times in the
retail outlet premises.
SEC. 7. Calibration, Registration and Sealing of Petroleum

Product Transport Containers. – All tank trucks, tank trailers
and other mobile containers used to transport measured amounts
of petroleum products in bulk must be registered with the Bureau.
Moreover, the capacity of such transport containers must be certified
and calibrated by the National Science and Technology Authority or
by another government agency authorized therefor. Calibration
markers shall be fixed and provided with seal by the calibrating
agency. Removal, tampering or absence of such seals shall disqualify
such containers from further use until recalibration and resealing
by the proper authorities is performed. In the absence or incapacity
of a properly constituted authority to perform this requirement,
calibration and sealing by the oil company shall suffice.
To guard against pilferage in transit, tank trucks, tank trailers

and other mobile containers of petroleum products in bulk shall
have all the valves, hatches, and other openings sealed closed by
the marketer before leaving the source depot. Such seal may not be
removed, tampered or broken except by buyer or his representative,
or the supplier, and only at their respective places of business.
A broken or tampered valve or hatch seal, or the absence of

one, shall give rise to the presumption that the container is under
1806
filled or that the product contained is adulterated and the shipment

may be refused by the buyer.
SEC. 8. LPG Cylinder Sealing. – Within one hundred eighty

(180) days from the effectivity of these rules and regulations, all
LPG cylinders shall be provided with seal after every filling. LPG
in cylinders with broken seal or without seal shall not be sold or
distributed thereafter.
The seal must be of the type that must be broken or destroyed

before the product can flow out of the cylinder. The seal shall be
subject to approval of the Bureau.
The marketer and the filling plant, if the latter is a different

entity, shall be jointly responsible for providing the seal required
under the Act.
RULE III
PETROLEUM PRODUCT ADULTERATION
SECTION 1. Petroleum products not meeting the

pertinent PSA specifications shall be deemed adulterated: Provided,
That in the case of the octane number specifications for gasoline,
a deviation of one (1) octane or less below the minimum shall be
considered as meeting specifications for the purpose of the Act.
Mixing water or other substances not miscible and forming a

separate layer from the petroleum product, in quantities exceeding
the PSA allowable water and sediments content, shall constitute
adulteration.
The sale, distribution, transportation, exchange or barter of

adulterated products as defined in this Section or possession thereof
for any of the above purposes, shall constitute an act of adulteration
prohibited and penalized under the Act.
SEC. 2. Sampling and Testing of Petroleum Products by Oil

Companies. –
1807
(a) Oil companies shall take storage tank samples after

every shipment of premium and regular gasoline to their depots/bulk
plants and shall keep such samples except where such storage tank
samples have been tested, and found to meet the PSA specifications
in which case the results of the test shall be duly recorded and kept
in the depot for at least one year. Each sample shall be clearly
identified as to source tank and date of sampling. The sample shall
be kept for at least three weeks more after the next shipment.
(b) Oil companies shall expeditiously respond to dealer

request for confirmatory or verification testing of petroleum
products.
(c) Oil companies shall also periodically take samples and

test premium and regular gasoline stock of their retail outlets at
least once every three (3) months. The test results shall include
octane number and shall be reported to the Bureau on a monthly
basis.
SEC. 3. Testing or Retention of Sample of Petroleum Products

by the Dealer/Operator. – As a measure against delivery of
adulterated products, dealers are required to do either (a) or (b)
below:
(a) The dealer/operator shall take one (1) liter sample each
of the premium and/or regular gasoline delivered. The samples
shall be placed in a suitable container and sealed in the presence
of the tank truck driver who shall verify the sample-taking by so
indicating on the invoice. The sample shall be kept by the dealer
for at least one (1) month or until the third delivery thereafter,
whichever is shorter.
(b) Using a hydrometer, take the API gravity or density

and obtain the corrected API gravity at 60 degrees Fahrenheit or
specific gravity at 15 degrees Celsius and compare this against the
API gravity at 60 degrees.
(c) Fahrenheit or density at 15 degrees Celsius as indicated

in the product invoice. For this purpose, oil companies shall
indicate the API gravity at 60 degrees Fahrenheit or density at 15
degrees Celsius of all deliveries of premium and regular gasoline the
1808
corresponding invoice. A dealer may refuse to accept the shipment if

the API gravity difference exceeds by 0.6 degrees API or the density
difference exceeds by 0.0024. Both oil company and dealer specific
gravity or density readings should be recorded in a logbook kept for
this purpose.
Dealers may require their oil company supplier to perform

verificatory quality tests on products received.
SEC. 4. Sample Taking by the Bureau. – Bureau inspectors

and other law enforcement agents may require oil companies,
marketers, dealers, haulers and retail outlets to provide one (1) liter
sample of petroleum products for sale for laboratory test purposes.
SEC. 5. Removal of Water Phase in Underground Tank by

Dealer/Operator of Petroleum Product Retail Outlet. – The oil
company supplier of dealers and operators of petroleum retail outlets
should ensure that the product suction line of their storage tanks is
elevated at least four (4) inches from the bottom of the tank and the
dealers and operators of petroleum retail outlets should periodically
remove the water phase to avoid water draw off with the product.
RULE IV
UNDERDELIVERY AND UNDERFILLING
SECTION 1a. Underdelivery in Dispensing Pumps. – The

quantity of petroleum products delivered by dispensing pumps in
retail outlets as measured by the dispensing pump meter shall not
be less than actual quantity by more than 50 millimeters for every
10 liters as measured by a calibrating bucket certified by the NSTA.
The calibrating bucket shall be filled to the 10 liter mark three (3)
times as low, medium and fast flow rates and the average quantity
as measured by the pump meter shall constitute the quantity to be
compared with the actual quantity. Use of such pumps n the sale of
petroleum products shall be punishable under the Act. The absence
of an “out-of-order” sign or padlock on the pump that is found under-
delivering shall constitute a presumption of actual use of the pump
in the sale of the petroleum product. A dispensing pump found with
broken or no seal shall be presumed to be under delivering and
1809
absence of “out-of-order” notice or padlock shall likewise give rise to

a presumption of actual use of the pump in the sale of the product.
SEC. 1b. Daily Testing of Dispensing Pumps by Dealer. –

All retail outlets shall test dispensing pump meters daily before
opening for business using an NSTA calibrated bucket. Any pump
not delivering the correct quantity shall be marked with an “out-
of-order” sign and shall not be used until said pump is recalibrated
and resealed by a proper authority.
Retail outlets are given thirty (30) days from the date of
effectivity of these Rules to secure an NSTA certified calibrating
bucket and comply with the requirement of this Section. The oil
companies shall be responsible for informing their respective dealers
of the requirements of this Section and of reporting to the Bureau
their dealer’s compliance.
The dealer calibration bucket must be recalibrated and

resealed once every twelve (12) months by the NSTA.
The dealer shall keep a written record or logbook of the daily

testing required herein shall be made available to Bureau inspectors
and to the public upon demand.
SEC. 1c. Calibration of Dispensing Pumps by Oil Companies.

– Oil companies shall respond expeditiously to their dealer’s request
for calibration of pumps subject to the provisions of Section 6, Rule
12 hereof.
All oil companies shall also periodically calibrate all of the

dispensing pumps of their dealers and check their calibration bucket
at least once every sixty (60) days. The results of these calibrations
must be reported to the Bureau every three (3) months.
All calibrations shall be duly documented and signed by the

mechanic who performed the calibration and check their calibration
bucket and countersigned by the retail outlet dealer. A copy of this
document shall be kept on file at the retail outlet.
After the calibration, a sticker of at least one-half (1/2) inch by

two (2) inches bearing the date of the calibration and the initials of
1810
the mechanic who calibrated the pump shall be posted on the face of
the pump calibrated.
SEC.1d. Testing of Dispensing Pumps by Bureau Personnel and/

or by Other Law Enforcement Agents. – The dealer shall allow and
cooperate with Bureau inspectors and other law enforcement agents
in testing the calibration of dispensing pumps.
SEC. 2a. Underfilling of LPG Cylinders. – In case of LPG

for sale in cylinders, the net LPG quantity contained shall not be
more than three tenths (0.3) of one kilogram less than the required
cylinder content. Shortage in the quantity contained exceeding this
quantity shall constitute underfilling. A broken or tampered seal, or
the absence of one, shall give rise to the presumption that the LPG
cylinder is underfilled. Possession of underfilled LPG cylinders not
properly so identified or taken out from the sales area accessible to
the public, gives rise to presumption that they are for sale.
LPG cylinders with water capacity of twenty-one (21) liters to

twenty-nine (29) liters shall contain eleven (11) kilograms.
SEC. 2b. Weighing Devices Required. – All LPG marketers,

dealers and retail outlets selling directly to end-users shall maintain
at all times in their premises a suitable weighing scale for LPG
cylinders calibrated and sealed by the proper authority. Such
devices shall meet the required contents before selling or delivering
these in its sales area accessible to its customers.
SEC. 2c. Checking of LPG Cylinder Content by Dealers and

Retail Outlets. – All marketers, dealers and retail outlets selling
directly to end-users shall check by weighing that the LPG in its
cylinders meet the required contents before selling or delivering
or placing these in its sales or pick-up area accessible to its
customers.
SEC. 2d. Oil companies, marketers and dealers shall

periodically sample and check the LPG sold by their respective
dealers and/or retail outlets to verify compliance with the LPG
contents requirement at least once every ninety (90) days. They
shall likewise check whether dealers’ and/or retail outlets’ weighing
devices are calibrated and sealed in accordance with Section 2b
1811
above. The results of such test shall be recorded and kept by the oil
company, marketer or dealer for at least one (1) year and shall be
made available to the Bureau on demand.
RULE V
HOARDING
SECTION 1. All oil companies and marketers shall be open

during normal business hours herein set to be from eight in the
morning (8:00 A.M.) to four-thirty in the afternoon (4:30 P.M.),
Monday through Friday.
All dealers of gasoline products shall be open daily and during

normal business hours herein set to be from seven in the morning
(7:00 A.M.) to seven in the evening (7:00 P.M.). Dealers and retail
outlets of liquefied petroleum gas shall be open during normal
business hours set to be from eight in the morning (8:00 A.M.) to
five in the afternoon (5:00 P.M.), Monday through Friday.
Except for good cause, all oil companies, marketers, dealers

and retail outlets may not refuse to sell petroleum products. Refusal
to sell when the product is available and the consumer is paying in
cash shall constitute hoarding except when the available product
consists of unusable bottoms usually consisting of the bottom four
inches content of the storage tank in the case of gasoline dealers.
SEC. 2. Undue accumulation of petroleum products in times

of tight supply and shortly before an anticipated price increase by
marketers, retail outlets or consumers shall constitute hoarding.
Undue accumulation shall mean quantities beyond the normal
inventory levels maintained during the immediately preceding
thirty (30) days for marketers or retail outlets, and in the case of
consumers.
RULE VI
OVERPRICING
SECTION 1. Petroleum products whose prices are set by

the Board of Energy may not be sold above such fixed prices. Sale
1812
of petroleum products at prices in excess of the fixed prices shall

constitute overpricing punishable under the Act.
SEC. 2. In outlying areas where no price is published by

the Board of Energy, the retailer shall not sell at a price not more
than the ceiling price in the nearest locality where a Board of
Energy price is set. A retailer may, for reasonable cause, request
the Board of Energy to set a different price for his locality.
RULE VII
MISUSE OF PETROLEUM ALLOCATION
SECTION 1. In times of short supply of petroleum products,

the Minister of Energy and/or any other authority created for this
purpose may, with the approval of the President of the Philippines
allocate or ration the available supplies. Any consumer or marketer
who sells, exchanges, disposes or uses such allocation or ration
other than for the purpose of which granted by the authority shall
be in violation of the Act. Any misrepresentation for the purpose of
gaining subject allocation shall likewise be a violation of the Act.
RULE VIII
SPEED CONTESTS OR RALLIES
SECTION 1. Speed contests or rallies involving mainly the

use of motor powered vehicles, watercraft or aircraft may not be
held without prior authorization and permit from the Bureau.
RULE IX
SKYDIVING AND WATERSKIING
SECTION 1. Skydiving and waterskiing for pleasure or sports

requiring the use of motorized aircraft or watercraft, respectively,
shall not be allowed except when the fuel used in the aircraft or
watercraft is methanol.
1813
RULE X
IMPOUNDING OF EVIDENCE
SECTION 1. Impounding of petroleum and/or petroleum

products constituting evidence of illegal trading, adulteration, short
selling, hoarding, overpricing and misuse of petroleum allocation
shall be applicable in the following cases:
(1) Adulterated petroleum products in bulk depots, retail

outlets, or in transit.
(2) LPG in cylinders found to be underfilled.
(3) Petroleum products held in violation of the Anti-Hoarding

provisions of the Act.
(4) Petroleum product allocations obtained or disposed in

violation of the Misuse of Allocation provisions of the Act.
(5) Petroleum products sold at a price exceeding the

authorized price including all stocks still in possession of the
seller.
(6) Petroleum products diverted from buyer’s designated

delivery point.
(7) Petroleum products sold without Bureau’s license or

transported by haulers without Bureau license.
(8) Petroleum products sold without receipts.
(9) LPG filled into cylinders by filling plants without license

from the Bureau and/or filled in cylinders not owned by the filling
plant or marketer and who do not have written authorization by the
owner to use or fill the cylinder.
(10) LPG in cylinders without tare weight, or without seal

after the sealing requirement goes into effect.
1814
During the pendency of the criminal or administrative

proceedings, the petroleum products stored in fixed tanks and which
constitute evidence may be impounded in site by the appropriate
authorities.
RULE IX
ADMINISTRATIVE PROCEEDINGS
SECTION 1. Requirement of Notice and Hearing and Waiver

Thereof. – Through the administrative proceedings, the Bureau is
empowered to impose, after due notice and hearing, the penalties
stated hereunder for violation of any provision of the Act and these
implementing rules and regulations: Provided, however, That
hearing in any administrative proceedings may be waived by
respondent.
SEC. 2. Duration of Administrative Proceeding. –

Administrative proceeding shall be decided within thirty (30) days
after filing of the last responsive pleading by the respondent, or the
termination and completion of the administrative proceedings.
SEC. 3. Effect of Imposition of Administrative Sanction. –

The administrative sanction that may be imposed shall be without
prejudice to the filing of a criminal action as the case may warrant.
SEC. 4. Administrative Penalties. – Pursuant to the power

of the Bureau to issue, suspend or revoke licenses, and in order to
protect the public from short selling and adulteration of petroleum
products, the following administrative actions may be taken:
(a) Preventive Suspension – During the pendency of an

administrative proceeding, the Bureau may suspend the operations
of an oil company, marketer, dealer, hauler, LPG refiller or retail
outlet where any one of the following circumstances are present:
(1) Where at least three pumps in a retail outlet are found

to be under delivering by 100 milliliters or greater per 10
liters;
1815
(2) Where more than fifty (50) percent of the pumps in an

outlet are under delivering by 100 milliliters or greater
per 10 liters;
(3) Where the under delivering pump or pumps are without

seal or the seal is broken or tampered;
(4) Where the product sold is found adulterated by BEU

inspectors, as to the tank and pump involved;
(5) Where more than twenty (20) percent of the LPG

cylinders inspected and tested are underfilled;
(6) Where an LPG marketer, refiller, dealer or retail outlet

sells LPG in cylinders without the required seal;
(7) Where tank truck, lorry, hauling vehicle and other

conveyors are not calibrated and sealed as required by
the Act.
(b) The preventive suspension shall not exceed thirty (30)

days.
(8) Fine or suspension of not more than Ten Thousand Pesos

(P 10,000.00); or
(9) Suspension of license; or
(10) Revocation of license.
SEC. 5. Bureau Rules of Practices and Procedures Applicable.

– Whenever practicable and convenient, the provisions of Bureau
Rules of Practice and Procedures Governing Hearings Before the
Bureau issued on August 2, 1982, and which took effect on October
18, 1982, shall be applicable in the administrative proceedings
under the Act.
1816
RULE XII
REPEALING CLAUSE
SECTION 1. Any rule or regulation inconsistent with

the provisions of these Rules is hereby repealed or modified
accordingly.
RULE XIII
SEPARABILITY
SECTION 1. If, for any reason or reasons, any part of these

Rules be declared unconstitutional or invalid, no other part of
provisions hereof shall be affected thereby.
RULE XIV
EFFECTIVITY
SECTION 1. These Rules and Regulations shall take effect

fifteen (15) days from the date of its publication in two (2) newspapers
of general circulation.
Makati, Metro Manila, 3 August 1983.
GERONIMO Z. VELASCO
Minister of Energy
1817
AN ACT GRANTING INCENTIVES TO MINI-HYDROELECTRIC

POWER DEVELOPERS AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the

Philippines in Congress assembled:
SECTION 1. Title. – This Act shall be known as the “Mini-

Hydroelectric Power Incentives Act”.
SEC. 2. Declaration of Policy. – It is hereby declared the

policy of the State to strengthen and enhance the development of
the country’s indigenous and self-reliant scientific and technological
resources and capabilities and their adaptation to the country in order
to attain energy self-sufficiency and thereby minimize dependence
on outside source of energy supply. In pursuance thereof, it is further
declared that mini-hydroelectric power developers shall be granted
the necessary incentives and privileges to provide an environment
conducive to the development of the country’s hydroelectric power
resources to their full potential.
SEC. 3. Declaration of Objectives. – The objectives of the

framework being established for the development of minihydroelectric
power generation are as follows:
(1) To encourage entrepreneurs to develop potential sites

for hydroelectric power existing in their respective localities;
(2) To encourage entrepreneurs to develop potential sites for

hydroelectric power existing in the country by granting the necessary
incentives which will provide a reasonable rate of return;
(3) To facilitate hydroelectric power development by

eliminating overlapping jurisdiction of the many government
agencies whose permits, licenses, clearances and other similar
authorizations issued by various government agencies as presently
required for such development, and vesting in one agency the
exclusive authority and responsibility for the development of mini-
hydroelectric power;
1818
(4) To apportion a part of the realty and special privilege

taxes and other economic benefits of the hydroelectric power
potential to the respective localities where they are established;
and
(5) To provide a contractual framework wherein some

stability of conditions can be relied upon for long-term financing
purposes.
SEC. 4. Definition of Terms. – As used in this Act, the following

terms shall be understood, applied and construed as follows:
(1) “Hydroelectric power” shall refer to electric power

produced by utilizing the kinetic energy of falling or running water
to turn a turbine generator;
(2) “Mini-hydroelectric power plant” shall refer to an electric-

power-generating plant which: (a) utilizes the kinetic energy of falling
or running water (run-of-river hydro plants) to turn the turbine
generator producing electricity; and (b) has an installed capacity of
not less than 101 kilowatts nor more than 10,000 kilowatts;
(3) “Mini-hydroelectric power development” shall refer to the

construction and installation of a hydroelectric-power-generating
plant and its auxiliary facilities such as transmission, substation
and machine shop with an installed capacity of not less than 101
kilowatts nor more than 10,000 kilowatts;
(4) “Mini-hydroelectric power developer” or “developer”

shall refer to any individual, cooperative, corporation or association
engaged in the construction and installation the of a hydroelectric-
power-generating plant and with an installed capacity of not less
than 101 kilowatts nor more than 10,000 kilowatts;
(5) “Domestic use” shall refer to the utilization of water for

drinking, washing, bathing, cooking, or other household need, home
gardens and watering of lawns or domestic animals;
(6) “Municipal use” shall refer to the utilization of water for

supplying the water requirement of the community; and
1819
(7) “Irrigation use” shall refer to the utilization of water for

producing agricultural crops.
SEC. 5. Agency in Charge. – The Office of Energy

Affairs, hereinafter referred to as the OEA, shall be the sole and
exclusive authority responsible for the regulation, promotion and
administration of mini-hydroelectric power development and the
implementation of the provisions of this Act.
SEC. 6. Powers and Duties of the OEA. – The OEA shall

exercise the following powers and duties:
(1) Within six (6) months from approval of this Act,

promulgate, in consultation with the National Water Resources
Board (NWRB), such rules and regulations as may be necessary for
the proper implementation and administration of this Act;
(2) Process and approve applications for mini-hydroelectric

power development, imposing such terms and conditions as it may
deem necessary to promote the objectives of this Act, subject to the
following standards, namely:
(a) The applicant must be a citizen of the Philippines or a

corporation, partnership, association or joint stock company,
constituted and organized under the laws of the Philippines,
at least sixty percent (60%) of the stock or paid-up capital of
which belongs to citizens of the Philippines;
(b) The applicant must prove that the operation of the

proposed mini-hydroelectric project and the authorization to
do business will promote the public interest in a proper and
suitable manner and, for this purpose, within six (6) months
from approval of this Act, formulate, in consultation with
the National Economic and Development Authority (NEDA),
the National Electrification Administration (NEA), and the
Department of Trade and Industry (DTI), standards to measure
the technical and financial capability of the developer; and
(c) The applicant must be financially capable of undertaking

the proposed mini-hydroelectric project and meeting the
responsibilities incident to its operations;
1820
(3) Charge reasonable fees in connection with the filing,

processing, evaluation, and approval of applications for mini-
hydroelectric power development in all suitable sites in the
country;
(4) Exclusive authority to issue permits and licenses relative

to mini-hydroelectric power development;
(5) Require the developer to post a bond or other guarantee

of sufficient amount in favor of the Government and with surety or
sureties satisfactory to the OEA upon the faithful performance by
the contractor of any or all of the obligations under the pursuant
to the contract within sixty (60) days after the effective date of the
contract; and
(6) Generally, exercise all the powers necessary or incidental

to attain the purposes of this Act and other laws vesting additional
powers on the OEA.
SEC. 7. Sale of Power. – The mini-hydroelectric power

developer must first offer to sell electric power to either the National
Power Corporation (NPC), franchised private electric utilities
or electric cooperatives at a price per kilowatt-hour based on the
NPC’s or the utility’s avoided cost which shall refer to the costs of
the affected grids had NPC generated the equivalent electric power
itself before disposing the power to third parties. The NPC shall
allow the mini-hydroelectric developer to deliver its generated
electricity to the developer’s customers through existing NPC line so
as to serve such third parties under terms which are to be mutually
agreed upon or, if no agreement can be reached, under terms set by
the OEA.
SEC. 8. Non-exclusive Development. – Development of less

than fifty percent (50%) of the hydroelectric power potential of the
proposed site shall be non-exclusive. The OEA, after a thorough
review and evaluation of its technical and economic viability,
may grant the development of the site to its full power potential
to any qualified developer: Provided, That first option shall be
given to the original developer: Provided, further That, in case
the original developer forfeits his option to pursue development
1821
of the hydroelectric power resource to its full potential, it shall be

reimbursed by the successor developer of the value of its investment
based on the declared value of the development for real estate tax
purposes over the immediately preceding three (3) years or, in case
the declared value over said period differs, on the average value
thereof.
SEC. 9. Mandatory Restoration Work. – In all cases where the

proposed mini-hydroelectric power development entails the closure
or stoppage of existing water outlets, passageways, connections,
conduits, apertures or the like from the water source, it shall be
mandatory for the developer to restore or reengineer such water
outlets, passageways, connections, conduits, apertures or the like
on its account or expense, and in such manner that existing users
or appropriators shall not be permanently deprived of their use or
appropriation.
SEC. 10. Tax Incentives. – Any person, natural or juridical,

authorized to engage in mini-hydroelectric power development shall
be granted the following tax incentives or privileges:
(1) Special Privilege Tax Rates. – The tax payable by all

grantees to develop potential sites for hydroelectric power and to
generate, transmit and sell electric power shall be two percent
(2%) of their gross receipts from the sale of electric power and
from transactions incident to the generation, transmission and
sale of electric power. Such privilege tax shall be made payable
to the Commissioner of Internal Revenue or his duly authorized
representative on or before the 20th day of the month following the
end of each calendar or fiscal quarter;
(2) Tax- and Duty-free Importation of Machinery, Equipment

and Materials. – Within seven (7) years from the date of award
importation of machinery and equipment, materials and parts
shipped with such machinery and equipment including control and
communication equipment shall not be subject to tariff duties and
value added tax: Provided, That the said machinery, equipment,
materials and parts: (a) are not manufactured domestically in
reasonable quantity and quality at reasonable prices; (b) are
directly and actually needed and will be used exclusively in the
1822
construction and impounding of water transformation into energy,

and transmission of electric energy to the point of use; and (c) are
covered by shipping documents in the name of the duly registered
developer to whom the shipment will be directly delivered by customs
authorities: Provided, further, That prior approval of the OEA was
obtained before the importation of such machinery, equipment,
materials and parts was made;
(3) Tax Credit on Domestic Capital Equipment – A tax credit

equivalent to one hundred percent (100%) of the value of the value-
added tax and customs duties that would have been paid on the
machinery, equipment, materials and parts had these items been
imported shall be given to an awardee-developer who purchases
machinery, equipment, materials and parts from a domestic
manufacturer: Provided, That such machinery, equipment,
materials and parts are directly needed and will be used exclusively
by the awardee-developer: Provided, further, That prior approval by
the OEA was obtained by the local manufacturer. Provided, finally,
That the sale of such machinery, equipment, materials and parts
shall be made within seven (7) years from the date of award;
(4) Special Realty Tax Rates on Equipment and Machinery.

– Any provision of the Real Property Tax Code or any other law to
the contrary notwithstanding, realty and other taxes on civil works,
equipment, machinery and other improvements of a registered
minihydroelectric power developer shall not exceed two and a half
percent (2.5%) of their original cost;
(5) Value-added Tax Exemption. – Exemption from the ten

percent (10%) value-added tax on the gross receipts derived from
the sale of electric power whether wheeled through the NPC grid or
through existing electric utility lines; and
(6) Income Tax Holiday. – For seven (7) years from the start
of commercial operation, a registered mini-hydroelectric power
developer shall be fully exempt from income taxes levied by the
National Government.
SEC. 11. Disposition and Allotment of Special Privilege

Taxes. – If the mini-hydroelectric power development is located
in a city sixty percent (60%) of the special privilege taxes collected
1823
shall accrue to the city and forty percent (40%) to the National
Government.
If the mini-hydroelectric power development is located in a

municipality, thirty percent (30%) of the special privilege taxes
collected shall accrue to the municipality, thirty percent (30%) to
the province and forty percent (40%) to the National Government.
SEC. 12. Term of Contract. – The term of contract shall be for

a period of twenty-five (25) years extendible for another twenty five
(25) years under the same original terms and conditions: Provided,
That said awardee has complied faithfully with all terms and
conditions of the award.
SEC. 13. Official Development Assistance. – The provision

of Executive Order No. 230 of 1987, on the power of the NEDA
Board, and the rules and regulations governing the evaluation and
authorization for the availment of Official Development Assistance
notwithstanding, the privatization of the mini-hydroelectric power
plants as provided for in the Act shall be eligible for foreign loans
and grants without further evaluation by the NEDA Board, subject
to Section 21, Article XII of the Constitution.
SEC. 14. Reporting Requirements. – The OEA shall submit

an annual report to the Congress of the Philippines with respect to
the implementation of this Act.
SEC. 15. Repealing Clause. – All laws, decrees, executive

orders, rules and regulations, or parts thereof inconsistent with this
Act are hereby repealed, amended or modified accordingly.
SEC. 16. Effectivity. – This Act shall take effect fifteen (15)
days after its publication in at least two (2) newspapers of general
circulation.
APPROVED, September 12, 1991.
1824
RULE AND REGULATIONS GOVERNING THE FILING

PROCESSING OF APPLICATIONS FOR AUTHORITY TO
CONSTRUCT AND OPERATE MINI-HYDROELECTRIC
POWER PLANTS AND PROVIDING FOR THE TERMS
AND CONDITIONS OF THE OPERATING CONTRACTS
CONCLUDED PURSUANT THERETO
Pursuant to the authority vested upon it by Sec. 6 (1) and (4) of

Republic Act No. 7156, otherwise known as the Mini-Hydroelectric
Power Incentives Act, the Office of Energy Affairs hereby adopts
and promulgates the following rules and regulations governing the
filing and processing of applications for authority to construct and
operate mini-hydroelectric power plants providing for the terms and
conditions of the operating contacts concluded pursuant thereto for
the contracts concluded pursuant thereto for the information and
guidance of all concerned.
RULE I
GENERAL PROVISIONS
SECTION 1. Title. – These rules shall be known and cited as the

rules and regulations governing the construction and operation of
mini-hydroelectric (mini-hydro) power plants.
SEC. 2. Definition of Terms. – Unless the context otherwise

indicates, the following terms as used in these rules shall have the
following meanings:
(a) Avoided cost shall refer to the costs of the affected grids had
NAPOCOR generated the equivalent electric power itself
before disposing the power to third parties.
(b) Capacity shall refer to the electric load for which a generating
unit or other electrical apparatus is rated by the manufacturer;
its unit of measurement is usually kilowatts (kw).
(c) Electric cooperative shall refer to cooperatives duly authorized

to supply electricity or empowered to supply electric service.
1825
(d) Electric utility shall refer to an electric cooperative, local

government-owned or privately owned, operating a grid
within the NAPOCOR grids or other electric systems.
(e) End-use shall refer to a user of electricity generated by a mini-

hydro power plant.
(f) Feasibility study shall refer to a study which is based on data

specific to the site where the mini-hydro power plant will be
erected.
(g) Franchised area shall refer to a geographical area franchised

to an electric utility for electricity supply to end-users.
(h) Grid operator shall refer to any operator of electrical systems

of interconnected transmission lines, substations and
generating plants of the National Power Corporation or the
concerned electric utility as the case may be.
(i) Hydroelectric power shall refer to electric power produced by

utilizing the kinetic energy of falling or running water to turn
a turbine generator.
(j) Mini-hydroelectric power developer or developer shall refer to

any individual, cooperative, corporation or association that is
engaged in or one who intends to engage in the construction,
installation and operation of a hydroelectric-power-generating
plant with an installed capacity of not less than 101 kilowatts
nor more than 10,000 kilowatts. An end-user may also be a
developer.
(k) Mini-hydroelectric power development shall refer to the

construction and installation of a hydroelectric-power-
generating plant and its auxiliary facilities such as
transmission, substation and machine shop with an installed
capacity of not less than 101 kilowatts nor more than 10,000
kilowatts.
(l) Mini-hydroelectric power plant shall refer to an electric-power-

generating plant which (a) utilizes kinetic energy of falling or
running water (run-of-river hydro plants) to turn a turbine
1826
generator producing electricity; and (b) has an installed

capacity of not less than 101 kilowatts nor more than 10,000
kilowatts.
(m) NAPOCOR shall refer to the National Power Corporation

created pursuant to R.A. 6395.
(n) OEA shall mean the Office of Energy Affairs.
(o) Rate shall refer to any price or tariffs with respect to sale
or purchase of electric energy, usually measured in pesos per
kilowatt-hour for energy payment and pesos per kilowatt for
capacity payments.
(p) Person includes every individual not otherwise disqualified by

law, or corporation, partnership, association or joint company,
constituted and organized under the laws of the Philippines,
at least sixty percent (60%) of the stock or paid-up capital of
which belongs to the citizens of the Philippines.
(q) Water resource shall refer to a surface water course where

the flow to be used by the turbines of the mini-hydro power
plant is diverted form and restituted to after having passed
the installations.
(r) Wheeling shall refer to the electric energy transmission

services extended by NAPOCOR or an electric utility to enable
the developer of a mini-hydro power plant to transmit power
to another electric grid or end-user.
SEC. 3. Who May Apply. – Any person defined in Section 2.p if these
rules, not otherwise disqualified by law, any apply for authority to
construct and operate a mini-hydroelectric power plant. In cases
of holders of permits to operate mini-hydro power plants existing
and operating at the time of the effectivity of these rules and who
wish to avail of the incentive under R.A. 7156, registrati on and
payment with the OEA of the application fee as provided in these
rules shall be sufficient bases for the granting of their operating
contracts, provided, that they register within six (6) months form
the effectivity of these rules.
1827
SEC. 4. Content of the Application. – All applications shall be made

in writing, verified, accomplished in two (2) copies, and must show,
among other things, the jurisdictional facts, the name and address
of the applicant, the brief description of the project stating, among
others, how water will be used, amount of water needed, power to
be generated, etc., and place where applicant proposes to construct
a mini-hydro power plant.
SEC. 5. Documents to Accompany Application. – All applications

shall be accompanied by such documents as would reasonably
establish prima facie the truth of the factual allegation thereof,
including but not limited to the following:
(a) Certificate of Registration from the Securities and Exchange

Commission together with a copy of Articles of Incorporation
or Certification from the Department of Trade and Industry
in case the applicant is a single proprietorship;
(b) Proposed Memorandum of Agreement between the applicant

and either the NAPOCOR, the franchised electric utility, or
other end-user as the case may be, on power purchase as well
as on the use of existing lines and the associated wheeling
fees, as applicable;
(c) Comprehensive feasibility study providing the technical,

economic, financial, social, as well as the administrative
viability of the project. It shall likewise include a feasibility
reports particularly highlighting the activities for the proposed
project, such as:
(1) Data collection and review of any available pre-feasibility

study, other pertinent data and study reports relevant to
the proposed project;
(2) Detailed program for all survey and investigation works

required in the study, such as topographic survey which
will enable utilization of maps of sufficient scale (1:500)
for layout purposes, geologic mapping, drilling (if any),
establishment of gauging station, and others which may
be deemed necessary;
1828
(3) Site inspection and field reconnaissance from time to

time to confirm data obtained and design made;
(4) Necessary hydrologic and hydraulic studies;
(5) Plant operation and maintenance studies for optimization

and determination of the power and energy capability of
the project;
(6) Determination as to whether or not the power and

energy from the proposed mini-hydro power facility is
marketable as an isolated facility;
(7) Alternative layout of developments on the basis of

topographic data available for optimization of selected
parameters in the project;
(8) Detailed layout and preliminary design to establish

configuration of each structure in the development;
(9) Establishment of unit prices and preparation of detailed

quantity and cost estimates of the recommended
schemes;
(10) Project Description shall be submitted according to the

guidelines set by the Department of Environment and
Natural Resources (DENR). which should incorporate
the measures that a project proponent intends to take
to ensure that the adverse effects of the proposed project
on the environment will be avoided if not minimized. It
should also include a watershed development plan and
the endorsement from the Local Government Unit;
(11) Construction schedule for the proposed project;
(12) Economic and financial evaluation including sensitivity

analysis on specific factors;
(13) Recommendation on additional investigation program

to be carried out during the detailed design and
implementation phase, if deemed necessary; and
1829
(14) Manual for operations of the power plant which shall

be prepared in respect of all requirements provided by
law for the operation of a mini-hydro power plant. If
power is old to the gird, the operation of the plant shall
be governed by dispatch rules assigned by the grid
operator.
(d) Processing fee of one (1) Peso (P 1.00) per kilowatt estimated
installed capacity.
(e) Such other papers and documents as may be required by the

OEA.
SEC. 6. Financial Requirements. – In determining the financial

capability of the applicant, the OEA shall be guided by the following
financial indicators:
(a) The applicant has minimum working capital of at least

Thirty-Five Thousand Pesos (P 35,000.00) per kilowatt to
support the first two (2) years of the project’s work program
and must demonstrate that it has the capability to raise
additional working capital of at least sixty percent (60%) of
the estimated project cost to fund the remaining works and
the plant’s subsequent operations;
(b) Current ratio of 1.5:1;
(c) Debt equity ratio of 3:1; and
(d) Such other factors which would substantially establish the

applicant’s financial capability.
SEC. 7. The amounts specified in Section 6.a shall be adjusted

accordingly in cases of extraordinary inflation of the Philippines
Peso in accordance with the provisions of Article 1250 of the Civil
Code of the Philippines.
SEC. 8. Defective Application. –When an application is filed and it

is found to be defective either in form or in substance or incomplete
as to certain data, the OEA shall within two (2) days inform the
1830
applicant of such a fact in writing, with notice that the correction or

deficiency must be supplied within fifteen (15) working days from
receipt of the notice.
If the applicant fails to supply the required correction within the said
period, the application shall be deemed to have been abandoned and
forthwith, the same shall be returned to the applicant together with
all the documents attached thereto. However, for good cause shown,
the period may be extended by the OEA upon written request made
before the expiration of the period sought to be extended.
RULE II
CRITERIA IN DETERMINING THE APPROVAL OR

DISAPPROVAL OF THE APPLICATION
Section 1. The OEA, in processing an application, shall be guided,

but not limited, the following:
(a) The operation of the proposed mini-hydro power projects will

promote public interest in a proper and suitable manner.
(b) The applicant is financially and technically capable of

undertaking the proposed mini-hydro power project and
meeting the responsibilities incident to its operation.
(c) The construction and operation thereof will not result in the
closure or stoppage of existing water outlets, passageways,
conduits, or the like from the water source.
(d) The requirements of public safety and Environmental

Compliance Certificate are complied with.
(e) Generally, the construction and operations thereof will

promote and achieve the purposes of R.A. 7156.
SEC. 2. Processing Period. – The OEA shall resolve the application

within four (4) months from receipt thereof provided that all the
documents and clearances contemplated in these rules are timely
submitted and no objection have been raised by concerned parties.
1831
RULE III
GRANTING OF LICENSE OR AUTHORITY AND

EXECUTION OF OPERATING CONTRACT
SECTION 1. Issuance of Authority or License. – If the OEA approves

an application, it shall issue a certificate of authority or license to
construct and operate a mini-hydro power plant to the applicant
or to the person in whose name the application was made and an
operating contract detailing the rights and obligation between the
OEA and the developer shall forthwith be executed.
SEC. 2. Effectivity. – Unless sooner revoked for cause, the license

shall be co-terminus with the term of the mini-hydro power
operating contract which shall be for a period of 25 years, renewable
for another 25 years.
SEC. 3. Grounds for Revocation. – any of the following among other

things, may constitute a ground for the revocation or cancellation of
the license and the operating contract:
(a) Failure of the licensee/contractor to comply with the conditions

and requirements under which the license was issued;
(b) Licensee’s/contractor’s violation of any of the provisions of the

operating contract or R.A. 7156.
SEC. 4. The mini-hydro power plant operating contract contemplated

under these rules shall contain the following rights and privileges
as well as the obligations of the developer:
RIGHTS AND PRIVILEGES OF THE DEVELOPER
(a) The developer shall be fully exempted from income taxes

levied by the National Government for seven (7) years from
the start of commercial operations.
(b) Within seven (7) years from the date of awarding the contact,
it shall be exempted from payment of tariff duties and value-
added tax on the importations into the Philippines of all
1832
machinery and equipment including control and communication

equipment: Provided, That said machinery, equipment,
materials and parts: (a) are not manufactured domestically
in reasonable quantity and quality at reasonable prices; (b)
are directly and actually needed and will be used exclusively
in the construction and impounding of water, transformation
into energy, and transmission of electric energy to the point
of use; and (c) are covered by shipping documents in the name
of the duly registered developer to whom the shipment will be
directly delivered by customs authorities: Provided, further,
That prior approval of the OEA has been obtained before the
importation of such machinery, equipment, materials and
parts is made.
(c) The developer that purchases machinery, equipment,

materials and parts from a domestic manufacturer shall be
given a tax credit equivalent to one hundred percent (100%)
of the value of the value-added tax and customs duties that
would have been paid on the machinery, equipment, materials
and parts had these items been imported. The tax credit on
domestic capital equipment shall be given: Provided, That
the sale of such machinery, equipment, materials and parts
shall be made within seven (7) years from the date of issuance/
awarding and if such machinery, equipment, materials and
parts are directly needed and will be used exclusively by
the developer. The approval by the OEA shall also by the
developer. The approval by the OEA shall also be obtained by
the local manufacturer.
(d) The developer shall enjoy special realty tax rates on equipment
and machinery not exceeding two and a half percent (2.5%) of
their original cost.
(e) The developer shall be exempted from the ten percent (10%)
value-added tax on the gross receipts derived from the sale of
electric power whether wheeled through the NAPOCOR grid
or through existing electric utility lines.
1833
OBLIGATIONS OF THE DEVELOPER
(a) The developer shall perform all mini-hydro power operations

and provide all necessary services, technology and financing
in connection therewith. It shall commence construction of
the project within twelve (12) months from the awarding of
the contract. An extension may be applied for another twelve
(12) months for justifiable reasons, as determined by the
OEA.
(b) The developer shall be responsible for securing and complying

with all the legal requirements related to the construction of
mini-hydro power plant facilities and shall be subject to the
provisions of laws of general application relating to labor,
health, safety and ecology.
(c) The developer shall develop and operate the field in accordance
with accepted good mini-hydro power field practices using
modern and scientific methods to enable maximum economic
production of mini-hydro power and to avoid hazards to life,
health and waters pursuant to an safeguard the watershed
area of its mini-hydro power plant system against illegal
logging and other forms of forest destruction and/or assist the
DENR in the enforcement of forestry rules and regulations or
rehabilitation of the watershed area.
(d) The developer shall furnish the OEA promptly with mini-
hydro power information, data and reports relative to the
operations, except for proprietary techniques use in developing
such information, data and reports. It shall report to the OEA
any socio-economic project/programs implemented in the
mini-hydro power site/community.
(e) The developer shall maintain detailed financial and technical

records and accounts of its operations.
(f) The developer shall conform to regulations regarding, among

other, safety, demarcation of the contract area, non-interference
with rights of other operations such as irrigation, geothermal,
and coal mining, housing development, access roads, etc.
1834
It shall also undertake to negotiate for the acquisition, by

whatever legal mode, of private properties affected by the
project and the establishment of easement for the dam,
access roads and the related structures/facilities. It shall
be strictly required to observe its construction methods and
techniques which could not hamper or disrupt the operations
of other infrastructures at the upstream, downstream or
near the vicinity of the projects site. In all cases where the
proposed mini-hydro power development entails the closure or
stoppage of existing water outlets, passageways, connections,
conduits, apertures or the like from the water source, it shall
be mandatory for the developer to restore or reengineer such
water outlets, passageways, connections, conduits, apertures
or the like on its account or expense, and in such a manner
that existing users or appropriators shall not be permanently
deprived of their use or appropriation.
(g) The developer shall maintain all meters and measuring

equipment in good order and allow access to these as well as
the development sites and operations to inspectors authorized
by the OEA.
(h) The developer shall operate and maintain the mini-hydro

power plant or system at maximum efficiency as possible and
promote highest possible production of power and energy. It
shall provide the OEA with a quarterly report on electricity
generated by the power plant.
(i) The developer shall negotiate on the provision for

interconnection with either NAPOCOR, the local electric
cooperative grid or electric utilities and shall furnish the OEA
with a copy of its sales contract with the buyer. It shall first
offer to sell electric power to either NAPOCOR, franchised
private electric utilities or electric cooperatives. It shall
install adequate protective devices at the power plant which
are required to ensure safe and unperturbed operation of the
local electricity network to which the plant is interconnected.
(j) The developer shall allow the OEA to inspect the plant during
and after its construction, and shall also provide the OEA
1835
documents required for proper monitoring and planning

purposes.
(k) At all times, the developer shall observe and maintain proper
hygiene and sanitation at the projects site. Garbage, waste,
chemicals and the like shall be disposed off or dumped properly
on garbage pits. Chemicals such as acids, oils and grease shall
be stored properly and shall not be allowed to contaminate the
environment.
(l) The developer shall seek the approval of the OEA for any
major change in its work program.
(m) The developer shall allow appropriate officials of the Bureau

of Internal Revenue and authorized representatives of the
OEA at all reasonable times full access to accounts, books and
records relating to the mini-hydro power operations for tax
and other fiscal operations.
(n) The developer shall be subject to Philippine income tax after

seven (7) years of commercial operation. The OEA shall be
furnished a copy of the official receipt covering payment to the
Bureau of Internal Revenue for privilege tax paid, supported
with pertinent documents required in the application for
tax credits on domestic capital equipment procured in the
Philippines.
(o) The developer shall give priority in employment to Philippine

nationals. It shall agree to employ qualified Filipino personnel
in the operations and, after commercial production commences,
shall undertake, upon prior approval of the OEA, the schooling
and training of Filipino personnel for labor and staff position,
including administrative, technical and executive management
positions. It shall undertake a program of training assistance
for OEA. Costs and expenses of training Filipino personnel
for the developer’s own employment shall be included in the
operating expenses. Costs and expenses of a program of
training for the OEA’s personnel shall be borne on a basis to be
agreed upon by the OEA and the developer. The employment
of alien technical and specialized personnel (including the
1836
immediate members of their families) who may exercise their

professions solely for the mini-hydro power operations of the
developer shall not be unreasonably withheld. However, the
developer shall undertake a program of technology transfer
by assigning at least one (1) understudy to work with each of
the alien technical and specialized personnel. It shall be clear
that upon the termination of the employment or connection
of any such alien with developer, the pertinent laws and
regulations on immigration shall immediately apply to him
and his immediate family.
(p) The developer shall post a bond or other guarantee of

sufficient amount in favor of the OEA and with surety or
sureties satisfactory to the OEA conditioned upon the faithful
performance by the developer of any or all of the obligations
under and pursuant to the contract within sixty (60) days
after the effective date of the contract.
SEC. 5. The OEA shall verify and monitor the standards applied by
the developer of the mini-hydro power plant and ascertain whether
or not the construction and operation of the mini-hydro power plant
by the developer is in accordance with the approved design and
standards of optimum safety/electricity generation.
SEC. 6. The OEA shall appoint the developer its attorney-in-fact

and shall give and grant to the developer authority to act for and
in its behalf in the negotiation and conclusions of agreements and
payment for the use of surface rights, rights-of-way and similar
rights for the account of the developer so as to enable the developer
to have ingress into and egress from the contract area and to
perform all mini-hydro power operations in accordance with this
contract and otherwise for any and all purposes necessary or proper
in connection with this contract.
SEC. 7. Suspension of Obligations. – Any failure or delay on the

part of either party in the performance of its obligations or duties
hereunder shall be excused to the extent attributable to Force
Majeure. If operations are delayed, curtailed or prevented by
such causes, the time for enjoying the rights and carrying out the
obligations hereunder shall be extended for a period equal to the
1837
period thus involved: Provided, however, That if operations are

delayed, curtailed or prevented by force majeure for a continuous
period of three (3) months, the operating contract may thereafter be
terminated by either party at anytime that the force majeure exists.
Force Majeure shall include Acts of God, unavoidable accidents, acts
of war or conditions arising out of or attributable to war (declared
or undeclared), riots, insurrections, strikes, lockouts, and other
similar labor disturbances, floods and storms. The party whose
ability to perform its obligation is so affected shall notify the other
party thereof in writing stating the cause, and both parties shall do
all reasonably within their power to remove such cause.
RULE IV
NONEXCLUSIVE DEVELOPMENT
SECTION 1. The development of less than fifty percent (50%) of the

mini-hydro power potential of the proposed site shall be non exclusive.
The OEA, after a thorough review and evaluation of its technical
and economic viability, may grant the development of the site to
its full power potential to any qualified developer forfeits his option
shall be given to the original developer: Provided, further, That in
case the original developer forfeits his option to pursue development
of the hydroelectric power resource to its fullest potential, it shall be
reimbursed by the successor developer of the value of its investment
based on the declared value of the development for real estate tax
purposes over the immediately preceding three (3) years or, in case
the declared value over said period differs, on the average value
thereof.
SEC. 2. Nonexclusive Permit. – The OEA may issue, on a first-

come-first-served basis, a nonexclusive permit, to conduct a three-
month reconnaissance study on the mini-hydro power potential of
an area.
1838
RULE V
TERMS AND CONDITIONS FOR THE PURCHASE AND

TRANSMISSION OF ELECTRICITY GENERATED
Section 1. The NAPOCOR shall purchase the maximum electricity

generated by the mini-hydro power plant in case the mini-hydro
power plant cannot be connected with any other electric utilities or
end-users.
SEC. 2. Use of Transmission Lines. – The NAPOCOR and other

electric utilities shall allow the mini-hydro power developer to deliver
its generated electricity to the developer’s customers through their
existing lines so as to serve such third parties under terms which
are to be mutually agreed upon, or if no agreement can be reached,
under terms set by the OEA.
SEC. 3. Rates for the Purchase of Electricity. – The rates for the
purchase of electricity that the developer may charge to NAPOCOR
and other electric utilities shall be at a price agreed upon by the
parties. Such price shall be based on NAPOCOR’s or the utility’s
avoided cost which shall refer to the costs of the affected grids had
NAPOCOR generated the electric power itself before disposing the
power to third parties.
SEC. 4. In cases where a developer needs new transmission facilities

to bring the power from the mini-hydro power plant to such third
parties, the developer shall negotiate with NAPOCOR or electric
utility, as the case may be, for possible sharing of the cost of the
facilities construction.
RULE VI
SETTLEMENT OF CONFLICTS
Section 1. All conflicts or disputes arising from the implementation

of R.A. 7156 and the provisions of these rules, except those arising
from debtor-creditor relations, shall be under the jurisdiction of the
OEA.
1839
RULE VII
SECTION 1. These rules and any amendments thereof shall take

effect fifteen (15) days after publication in the Official Gazette.
Done this 10th day of March, nineteen hundred and ninety-two in

Makati, Metro Manila.
(Sgd.) RUFINO B. BOMASANG

Acting Executive Director
Office of Energy Affairs
Attested by:
(Sgd.) GRISELDA J. G. BAUSA

Officer-in-Charge
Office of the Deputy Executive Director
for Energy Operations
Office of Energy Affairs
1840
AN ACT PENALIZING THE PILFERAGE OF ELECTRICITY AND

THEFT OF ELECTRIC POWER TRANSMISSION LINES/
MATERIALS, RATIONALIZING SYSTEM LOSSES BY
PHASING OUT PILFERAGE LOSSES AS A COMPONENT
THEREOF, AND FOR OTHER PURPOSES

SECTION 1. Short Title. - This Act shall be

referred to as the "Anti-electricity and Electric
Transmission Lines/Materials Pilferage Act of 1994."
SEC. 2. Illegal Use of Electricity. - It is hereby declared

unlawful for any person, whether natural or juridical, public or
private, to:
(a) Tap, make or cause to be made any connection with

overhead lines, service drops, or other electric service wires, without
previous authority or consent of the private electric utility or rural
electric cooperative concerned;
(b) Tap, make or cause to be made any connection to the

existing electric service facilities of any duly registered consumer
without the latter's or the electric utility's consent or authority;
(c) Tamper, install or use a tampered electrical meter,

jumper, current reversing transformer, shorting or shunting wire,
loop connectio n or any other device which interferes with the proper
or accurate registry or metering of electric current or otherwise
results in its diversion in a manner whereby electricity is stolen or
wasted;
(d) Damage or destroy an electric meter, equipment, wire

or conduit or allow any of them to be so damaged or destroyed as to
interfere with the proper or accurate metering of electric current;
and
1841
(e) Knowingly use or receive the direct benefit of electric

service obtained through any of the acts mentioned in subsections
(a), (b), (c), and (d) above.
SEC. 3. Theft of Electric Power Transmission Lines and

Materials. – (a) It is hereby declared unlawful for any person to:
(1) Cut, saw, slice, separate, split, severe, smelt, or remove

any electric power transmission line/material or meter from a tower,
pole, any other installation or place of installation or any other place
or site where it may be rightfully or lawfully stored, deposited, kept,
stocked, inventoried, situated or located, without the consent of the
owner, whether or not the act is done for profit or gain;
(2) Take, carry away or remove or transfer, with or without

the use of a motor vehicle or other means of conveyance, any electric
power transmission line/material or meter from a tower, pole, any
other installation or place of installation, or any place or site where
it may be rightfully or lawfully stored, deposited, kept, stocked,
inventoried, situated or located, without the consent of the owner,
whether or not the act is done for profit or gain;
(3) Store, possess or otherwise keep in his premises, custody

or control, any electric power transmission line/material or meter
without the consent of the owner, whether or not the act is done for
profit or gain; and
(4) Load, carry, ship or move from one place to another,

whether by land, air or sea, any electrical power transmission line/
material, whether or not the act is done for profit or gain, without
first securing a clearance/permit for the said purpose from its owner
or the National Power Corporation (NPC) or its regional office
concerned, as the case may be.
(b) For purposes of this section, "electrical power

transmission line/material" refers to electric power transmission
steel towers, woodpoles, cables, wires, insulators, line hardwares,
electrical conductors and other related items with a minimum
voltage of sixty-nine kilovolts (69 kv), such as the following:
(1) Steel transmission line towers made of galvanized

steel angular members and plates or creosoted and/or tannelized
1842
woodpoles/concrete poles and designed to carry and support the

conductors;
(2) Aluminum conductor steel reinforced (ACSR) in excess

of one hundred (100) MCM;
(3) Overhead ground wires made of 7 strands of galvanized

steel wires, 3.08 millimeters in diameter and designed to protect the
electrical conductors from lightning strikes;
(4) Insulators made of porcelain or glass shell and designed

to insulate the electrical conductors from steel towers or woodpoles;
and
(5) Various transmission line hardwares and materials made

of aluminum alloy or malleable steel and designed to interconnect
the towers, conductors, ground wires, and insulators mentioned in
subparagraphs (1), (2), (3), and (4) above for the safe and reliable
operation of the transmission lines.
SEC. 4. Prima Facie Evidence. - The presence of any of the

following circumstances shall constitute prima facie evidence
of illegal use of electricity, as defined in this Act, by the person
benefitted thereby, and shall be the basis for: (1) the immediate
disconnection by the electric utility to such person after due notice,
(2) the holding of a preliminary investigation by the prosecutor and
the subsequent filing in court of the pertinent information, and (3)
the lifting of any temporary restraining order or injunction which
may have been issued against a private electric utility or rural
electric cooperative:
(i.) The presence of a bored hole on the glass cover of the

electric meter, or at the back or any other part of said meter;
(ii.) The presence inside the electric meter of salt, sugar and
other elements that could result in the inaccurate registration of
the meter's internal parts to prevent its accurate registration of
consumption of electricity;
(iii.) The existence of any wiring connection which affects the

normal operation or registration of the electric meter;
1843
(iv.) The presence of a tampered, broken, or fake seal on the

meter, or mutilated, altered, or tampered meter recording chart or
graph, or computerized chart, graph or log;
(v.) The presence in any part of the building or its premises

which is subject to the control of the consumer or on the electric
meter, of a current reversing transformer, jumper, shorting and/or
shunting wire, and/or loop connection or any other similar device;
(vi.) The mutilation, alteration, reconnection, disconnection,

bypassing or tampering of instruments, transformers, and
accessories;
(vii.) The destruction of, or attempt to destroy, any integral

accessory of the metering device box which encases an electric
meter, or its metering accessories; and
(viii.) The acceptance of money and/or other valuable

consideration by any officer or employee of the electric utility
concerned or the making of such an offer to any such officer or
employee for not reporting the presence of any of the circumstances
enumerated in subparagraphs (i), (ii), (iii), (iv), (v), (vi), or (vii)
hereof: Provided, however, That the discovery of any of the foregoing
circumstances, in order to constitute prima facie evidence, must be
personally witnessed and attested to by an officer of the law or a
duly authorized representative of the Energy Regulatory Board
(ERB).
(b.) The possession, control or custody of electric power

transmission line/material by any person, natural or juridical,
not engaged in the transformation, transmission or distribution
of electric power, or in the manufacture of such electric power
transmission line/material shall be prima facie evidence that such
line/material is the fruit of the offense defined in Section 3 hereof
and therefore such line/material may be confiscated from the person
in possession, control or custody thereof.
SEC. 5. Incentives. - An incentive scheme by way of a

monetary reward in the minimum amount of Five thousand pesos
(P5,000) shall be given to any person who shall report to the NPC
or police authorities any act which may constitute a violation of
1844
Section 3 hereof. The Department of Energy (DOE), in consultation

with the NPC, shall issue the necessary guidelines for the proper
implementation of this incentive scheme within thirty (30) days
from the effectivity of this Act.
SEC. 6. Disconnection of Electric Service. - The private electric

utility or rural electric cooperative concerned shall have the right
and authority to disconnect immediately the electric service after
serving a written notice or warning to that effect, without the need
of a court or administrative order, and deny restoration of the
same, when the owner of the house or establishment concerned or
someone acting in his behalf shall have been caught en flagrante
delicto doing any of the acts enumerated in Section 4(a) hereof,
or when any of the circumstances so enumerated shall have been
discovered for the second time: Provided, That in the second case,
a written notice or warning shall have been issued upon the first
discovery: Provided, further, That the electric service shall not be
immediately disconnected or shall be immediately restored upon
the deposit of the amount representing the differential billing by
the person denied the service, with the private electric utility or
rural electric cooperative concerned or with the competent court, as
the case may be: Provided, furthermore, That if the court finds that
illegal use of electricity has not been committed by the same person,
the amount deposited shall be credited against future billings, with
legal interest thereon chargeable against the private utility or rural
electric cooperative, and the utility or cooperative shall be made
to immediately pay such person double the value of the payment
or deposit with legal interest, which amount shall likewise be
creditable against immediate future billings, without prejudice to
any criminal, civil or administrative action that such person may be
entitled to file under existing laws, rules and regulations: Provided,
finally, That if the court finds the same person guilty of such illegal
use of electricity, he shall, upon final judgment, be made to pay
the electric utility or rural electric cooperative concerned double the
value of the estimated electricity illegally used which is referred to
in this section as differential billing.
For purposes of this Act, "differential billing" shall refer to

the amount to be charged to the person concerned for the unbilled
electricity illegally consumed by him as determined through the use of
methodologies which utilize, among others, as basis for determining
1845
the amount of monthly electric consumption in kilowatt-hours to be

billed, either: (a) the highest recorded monthly consumption within
the five-year billing period preceding the time of the discovery,
(b) the estimated monthly consumption as per the report of load
inspection conducted during the time of discovery, (c) the higher
consumption between the average consumptions before or after the
highest drastic drop in consumption within the five-year billing
period preceding the discovery, (d) the highest recorded monthly
consumption within four (4) months after the time of discovery, or
(e) the result of the ERB test during the time of discovery and, as
basis for determining the period to be recovered by the differential
billing, either: (1) the time when the electric service of the person
concerned recorded an abrupt or abnormal drop in consumption, or
(2) when there was a change in his service connection such as a
change of meter, change of seal or reconnection, or in the absence
thereof, a maximum of sixty (60) billing months, up to the time of
discovery: Provided, however, That such period shall, in no case, be
less than one (1) year preceding the date of discovery of the illegal
use of electricity.
SEC. 7. Penalties. - (a) Violation of Section 2 - The penalty

of prision mayor or a fine ranging from Ten thousand pesos (P10,000)
to Twenty thousand pesos (P20,000) or both, at the discretion of
the court, shall be imposed on any person found guilty of violating
Section 2 hereof.
(b) Violation of Section 3 - The penalty of reclusion temporal

or a fine ranging from Fifty thousand pesos (P50,000) to One hundred
thousand pesos (P100,000) or both, at the discretion of the court,
shall be imposed on any person found guilty of violating Section 3
hereof.
(c) Provision common to violations of Section 2 and Section

3 hereof - If the offense is committed by, or in connivance with, an
officer or employee of the power company, private electric utility or
rural electric cooperative concerned, such officer or employee shall,
upon conviction, be punished with a penalty one (1) degree higher
than the penalty provided herein, and forthwith be dismissed and
perpetually disqualified from employment in any public or private
utility or service company and from holding any public office.
1846
If, in committing any of the acts enumerated in Section

4 hereof, any of the other acts as enumerated is also committed,
then the penalty next higher in degree as provided herein shall be
imposed.
If the offense is committed by, or in connivance with an

officer or employee of the electric utility concerned, such officer or
employee shall, upon conviction, be punished with a penalty one
(1) degree higher than the penalty provided therein, and forthwith
be dismissed and perpetually disqualified from employment in any
public or private utility or service company. Likewise, the electric
utility concerned which shall have knowingly permitted or having
knowledge of its commission shall have failed to prevent the
same, or was otherwise guilty of negligence in connection with the
commission thereof, shall be made to pay a fine not exceeding triple
the amount of the "differential billing" subject to the discretion of
the courts.
If the violation is committed by a partnership, firm, corporation,

association or any other legal entity, including a government-owned
or -controlled corporation, the penalty shall be imposed on the
president, manager and each of the officers thereof who shall have
knowingly permitted, failed to prevent or was otherwise responsible
for the commission of the offense.
SEC. 8. Authority to Impose Violation of Contract Surcharges. -

A private electric utility or rural electric cooperative may impose
surcharges, in addition to the value of the electricity pilfered, on the
bills of any consumer apprehended for tampering with his electric
meter/metering facility installed on his premises, as well as other
violations of contract like direct connection, use of jumper, and other
means of illicit usage of electricity found installed in the premises
of the consumer. The surcharge for the violation of contract shall be
collected from and paid by the consumer concerned as follows:
(a) First apprehension - Twenty-five percent (25%) of the

current bill as surcharge;
(b) Second apprehension - Fifty percent (50%) of the current

bill as surcharge; and
1847
(c) Third and subsequent apprehension - One hundred

percent (100%) of the current bill as surcharge.
The private electric utility or rural electric cooperative is

authorized to discontinue the electric service in case the consumer
is in arrears in the payment of the above imposed surcharges.
The term "apprehension" as used herein shall be understood

to mean the discovery of the presence of any of the circumstances
enumerated in Section 4 hereof in the establishment or outfit of the
consumer concerned.
SEC. 9. Restriction on the Issuance of Restraining Orders or

Writs of Injunction. - No writ of injunction or restraining order shall
be issued by any court against any private electric utility or rural
electric cooperative exercising the right and authority to disconnect
electric service as provided in this Act, unless there is prima facie
evidence that the disconnection was made with evident bad faith or
grave abuse of authority.
If, notwithstanding the provisions of this section, a court issues

an injunction or restraining order, such injunction or restraining
order shall be effective only upon the filing of a bond with the court
which shall be in the form of cash or cashier's check equivalent to
the "differential billing," penalties and other charges, or to the total
value of the subject matter of the action: Provided, however, That
such injunction or restraining order shall automatically be refused
or, if granted, shall be dissolved upon filing by the public utility
of a counterboard similar in form and amount as that above
required: Provided, finally, That whenever such injunction is
granted, the court issuing it shall, within ten (10) days from its
issuance, submit a report to the Supreme Court setting forth in
detail the grounds or reasons for its order.
SEC. 10. Rationalization of System Losses by Phasing out

Pilferage Losses as a Component Thereof. - There is hereby established
a cap on the recoverable rate of system losses as follows;
(a) For private electric utilities:
1848
(i) Fourteen and a half percent (14 1/2 %) at the end of the
first year following the effectivity of this Act;
(ii) Thirteen and one-fourth percent (13 1/4%) at the end of

the second year following the effectivity of this Act;
(iii) Eleven and three-fourths percent (11 3/4%) at the end of

the third year following the effectivity of this Act; and
(iv) Nine and a half percent (9 1/2%) at the end of the fourth
year following the effectivity of this Act.
Provided, That the ERB is hereby authorized to determine at

the end of the fourth year following the effectivity of this Act, and as
often as necessary taking into account the viability of private electric
utilities and the interest of the consumers, whether the caps herein
or theretofore established shall be reduced further which shall, in
no case, be lower than nine percent (9%) and accordingly fix the
date of the effectivity of the new caps: Provided, further, That in the
calculation of the system loss, power sold by the NPC or any other
entity that supplies power directly to a consumer and not through
the distribution system of the private electric utility shall not be
counted even if the billing for the said power used is through the
private electric utility.
The term "power sold by NPC or any other entity that supplies
power directly to a consumer" as used in the preceding paragraph
shall for purposes of this section be deemed to be a sale directly to
the consumer if: (1) the point of metering by the NPC or any other
utility is less than one thousand (1,000) meters from the consumer,
or (2) the consumer's electric consumption is three percent (3%) or
more of the total load consumption of all the customers of the utility,
or (3) there is no other consumer connected to the distribution line
of the utility which connects to the NPC or any other utility point of
metering to the consumer meter.
(b) For rural electric cooperatives:
(i) Twenty-two percent (22%) at the end of the first year

following the effectivity of this Act;
1849
(ii) Twenty percent (20%) at the end of the second year

(iii) Eighteen percent (18%) at the end of the third year

(iv) Sixteen percent (16%) at the end of the fourth year

following the effectivity of this Act; and
(v) Fourteen percent (14%) at the end of the fifth year

following the effectivity of this Act.
Provided, That the ERB is hereby authorized to determine

at the end of the fifth year following the effectivity of this Act, and
as often as is necessary, taking into account the viability of rural
electric cooperatives and the interest of the consumers, whether the
caps herein or theretofore established shall be reduced further which
shall, in no case, be lower than nine percent (9%) and accordingly fix
the date of the effectivity of the new caps.
Provided, finally, That in any case nothing in this Act shall

impair the authority of the ERB to reduce or phase out technical or
design losses as a component of system losses.
SEC. 11. Area of Coverage. - The caps provided in Section

10 of this Act shall apply only to the area of coverage of private
electric utilities and rural electric cooperatives as of the date of the
effectivity of this Act.
The permissible levels of recovery for system losses in areas of

coverage that may be added on by either a private electric utility or
a rural electric cooperatives shall be determined by the ERB.
SEC. 12. Recovery of Pilferage Losses. - Any private electric

utility or rural electric cooperative which recovers any amount of
pilferage losses shall, within thirty (30) days from said recovery,
report in writing and under oath to the ERB: (a) the fact of recovery,
(b) the date thereof, (c) the name of the consumer concerned, (d) the
amount recovered, (e) the amount of pilferage loss claimed, (f) the
explanation for the failure to recover the whole amount claimed,
and (g) such other particulars as may be required by the ERB. If
1850
there is a case pending in court for the recovery of a pilferage loss,

no private electric utility or rural electric cooperative shall accept
payment from the consumer unless so provided in a compromise
agreement duly executed by the parties and approved by the court.
SEC. 13. Information Dissemination. - The private electric

utilities, the rural electric cooperatives, the NPC, and the National
Electrification Administration (NEA) shall, in cooperation with each
other, undertake a vigorous campaign to inform their consumers of
the provisions of this Act especially Sections 2,3,4, 5, 6, 7, and 8 hereof,
within sixty (60) days from the effectivity of this Act and at least
once a year thereafter, and to incorporate a faithful condensation of
said provisions in the contracts with new consumers.
SEC. 14. Rules and Regulations. - The ERB shall, within thirty
(30) working days after the conduct of due hearings which must
commence within thirty (30) working days upon the effectivity of this
Act, issue the rules and regulations as may be necessary to ensure
the efficient and effective implementation of the provisions of this
Act, to include but not limited to, the development of methodologies
for computing the amount of electricity illegally used and the amount
of payment or deposit contemplated in Section 7 hereof, as a result
of the presence of the prima facie evidence discovered.
The ERB shall, within the same period, also issue rules and
regulations on the submission of the reports required under Section
12 hereof and the procedure for the distribution to or crediting of
consumers for recovered pilferage losses.
SEC. 15. Separability Clause. - Any portion or provision of

this Act which may be declared unconstitutional or invalid shall not
have the effect of nullifying other portions or provisions hereof.
SEC. 16. Repealing Clause. - The provisions in Presidential

Decree No. 401, as amended by Batas Pambansa Blg. 876, penalizing
the unauthorized installation of electrical connections, tampering
and/or knowing use of tampered electrical meters or other devices,
and the theft of electricity are hereby expressly repealed. All other
laws, ordinances, rules, regulations, and other issuances or parts
thereof, which are inconsistent with this Act, are hereby repealed
or modified accordingly.
1851
SEC. 17. Effectivity Clause. - This Act shall take effect thirty
(30) days after its publication in the Official Gazette or in any two
(2) national newspapers of general circulation.
APPROVED, December 8, 1994.
1852
RULES AND REGULATIONS IMPLEMENTING

Pursuant to Section 14 of Republic Act No. 7832, the Energy

Regulatory Board hereby adopts and promulgates the following
Rules and Regulations to implement the aforesaid law.
RULE I
GENERAL PROVISIONS
SECTION 1. Title. – These Rules shall be known as the

Implementing Rules and Regulations of the Anti-Pilferage of
Electricity and Theft of Electric Transmission Lines/Materials Act
of 1994.
SEC. 2. Construction. – These Rules shall be strictly construed

to attain the efficient and effective implementation of R.A. 7832.
SEC. 3. Definition of Terms. – As used in these Rules:
(a) “ERB” means the Energy Regulatory Board;
(b) “DOE” means the Department of Energy;
(c) “NEA” means the National Electrification

Administration;
(d) “NPC” means the National Power Corporation;
(e) “Utility” means the Private or Investor-owned Electric

Utility and that is owned and/or operated by the Municipal,
City, Provincial or National Government;
(f) “Cooperative” means the Rural Electric Cooperative;
(g) “Electric power transmission line/material” refers to

electric power transmission steel towers, wood poles, cables,
wires, insulators, line hardwares, electrical conductors and
other related items with minimum voltage of sixty-nine
kilovolts (69 kv), such as the following:
1853
(1) Steel transmission line towers made of galvanized

steel angular members and plates or creosoted and/
or tannelized wood poles/concrete poles and designed
to carry and support the conductors;
(2) Aluminum conductor steel reinforced (ACSR) in

excess of one hundred (100) MCM;
(3) Overhead ground wires made of seven (7) strands of

galvanized steel wires, 3.08 millimeters in diameter
and designed to protect the electrical conductors
from lightning strikes;
(4) Insulators made of porcelain or glass shell and

designed to insulate the electrical conductors from
steel towers or wood poles; and
(5) Various transmission line hardwares and materials

made of aluminum alloy or malleable steel and
designed to inter-connect the towers, conductors,
ground wires, and insulators mentioned in
subparagraphs (1), (2), (3) and (4) above for the safe
and reliable operation of transmission lines.
(h) “Differential billing” shall refer to the amount to be

charged to the person concerned for the unbilled electricity
illegally consumed as determined through the use of
methodologies outlined in Section 6 of R.A. 7832;
(i) “Apprehension” shall be understood to mean the discovery

of the presence of any circumstances enumerated in Section
4 of R.A. 7832 in the establishment or outfit of the consumer
concerned as personally witnessed and attested to by the
consumer concerned or as duly authorized ERB representative
or any officer of the law, as the case may be;
(j) “Power sold by NPC or any other entity that supplies

power directly to a consumer” is deemed to be sale directly to
the consumer if: (1) the point of metering by the NPC or any
other utility is less than one thousand (1,000) meters from
the consumer, or (2) the consumer’s electric consumption is
1854
three percent (3%) or more of the total load consumption of all

the customers of the utility; or (3) there is no other consumer
connected to the distribution line of the utility which connects
to the NPC or any other utility point of metering to the
consumer meter;
(k) “Current rate” shall mean the average rate of electricity

per kilowatt-hour as reflected in the current bill;
(l) “Current bill” shall mean the latest monthly bill served
by the utility or cooperative which does not include any period
before the time of apprehension.
RULE II
ILLEGAL USE OF ELECTRICITY AND THEFT OF
ELECTRIC POWER TRANSMISSION LINES AND
MATERIALS
SECTION 1. Illegal Use of Electricity. – It shall be unlawful

for any person, natural or juridical, private or public to:
(a) Tap, make or cause to be made any connection with

overhead lines, service drops, or other electric service wires,
without previous authority or consent of the private electric
utility or rural electric cooperative concerned;
(b) Tap, make or cause to be made any connection to the

existing electric service facilities of any duly registered
consumer without the latter’s or the electric utility’s consent
or authority;
(c) Tamper, install or use a tampered electrical meter,

jumper, current reversing transformer, shorting or shunting
wire, loop connection or any other device which interferes with
the proper or accurate registry or metering of electric current
or otherwise results in its diversion in a manner whereby
electricity is stolen or wasted;
(d) Damage or destroy an electric meter, equipment, wire or

conduit or allow any of them to be so damaged or destroyed as
1855
to interfered with the proper or accurate metering of electric

current; and
(e) Knowingly use or receive the direct benefit of electric

service obtained through any of the acts mentioned in
subsections (a), (b), (c) and (d) above.
SEC. 2. Theft of Electric Power Transmission Lines and

Materials. – It shall be unlawful for any person, natural or juridical,
public or private to:
(a) Cut, saw, slice, separate, split, sever, smelt or remove

any electric power transmission line/material or meter from
a tower, pole, any other installation or place of installation or
any other place or site where it may be rightfully or lawfully
stored, deposited, kept, stocked, inventoried, situated or
located, without the consent of the owner, whether or not the
act is done for profit or gain;
(b) Take, carry away or remove or transfer, with or without

the use of a motor vehicle or other means of conveyance, any
electric power transmission line/material or meter from a
tower, pole, any other installation or place of installation, or
any place or site where it may be rightfully or lawfully stored,
deposited, kept, stocked, inventoried, situated or located,
without the consent of the owner, whether or not the act is
done for profit or gain;
(c) Store, possess or otherwise keep in his premises, custody

or control, any electrical power transmission line/material or
meter without the consent of the owner, whether or not the
act is done for profit or gain; and
(d) Load, carry, ship or move from one place to another,

whether by land, air or sea any electrical power transmission
line/material, whether or not the act is done for profit or gain,
without first securing a clearance, permit for the said purpose
from its owner or the NPC or its regional office concerned, as
the case may be.
1856
RULE III
PRIMA FACIE EVIDENCE
SECTION 1. Prima facie evidence of illegal use of electricity.

– The presence of any of the following circumstances shall
constitute prima facie evidence of illegal use of electricity by the
person benefited thereby:
(a) The presence of a bored hole on the glass cover of the

electric meter or at the back of any part of said meter;
(b) The presence of salt, sugar and other elements inside the
electric meter that could result in the inaccurate registration of
the meter’s internal parts to prevent its accurate registration
of consumption of electricity;
(c) The existence of any wiring connection which affects the

normal operation or registration of the electric meter;
(d) The absence of an ERB/NEA seal or the presence of a

tampered, broken or fake seal on the meter or mutilated,
altered or tampered meter recording chart or graph or
computerized chart, graph or log;
(e) The presence of a current reversing transformer, jumper,

shorting and/or shunting wire and/or loop connection or other
similar device in any part of the building or its premises which
is subject to the control of the consumer or on the electric
meter;
(f) The mutilation, alteration, reconnection, bypassing or

tampering of instruments, transformers and accessories;
(g) The destruction of or attempt to destroy any integral

accessory of the metering device box which encases an electric
meter or its metering accessories; and
(h) The acceptance of money and/or other valuable

consideration by any officer or employee of the electric utility
concerned or the making of such an offer to any such officer
or employee for not reporting the presence of any of the
1857
circumstances enumerated in subparagraphs (a), (b), (c), (d),

(e), (f), or (g) hereof.
A prima facie evidence of illegal use of electricity shall be

the basis for: (a) immediate disconnection by the electric utility
or cooperative to any such person after due notice; (b) the holding
of preliminary investigation by the prosecutor and the subsequent
filing in court of the pertinent information; and (c) the lifting of any
temporary restraining order or injunction which may have been
issued against a utility or cooperative.
In order to constitute prima facie evidence the discovery of

any of the circumstance enumerated in Section 1 hereof, must be
personally witnessed and attested to by the consumer concerned or
a duly authorized ERB representative or any officer of the law, as
the case may be.
An ERB authorized representative is one who is assigned

to conduct testing of electric meters or inspection of electric
lines and facilities of any distribution entity or one who may be
specifically authorized by the duly authorized head of the main or
regional ERB offices.
An officer of the law is any person who, by direct provision of

the law or by election or by appointment by competent authority,
is charged with the maintenance of public order and the protection
and security of life and property, such as barangay captain,
barangay chairman, barangay councilman, barangay leader,
officer or member of Barangay Community Brigades, barangay
policeman, PNP policeman, municipal councilor, municipal mayor,
and provincial fiscal.
SEC. 2. Prima facie evidence of Theft of Power Transmission

Lines and Materials. – The possession, control or custody of
electric power transmission line/material by any person, natural
or juridical, not engaged in the transformation, transmission or
distribution of electric power, or in the manufacture of such electric
power transmission line/material shall be prima facie evidence that
such line/material is the fruit of the offense in Section 2, Rule II
hereof, and such line/material may be confiscated from the person
in possession, control or custody thereof.
1858
RULE IV
INCENTIVES
SECTION 1. Incentive Scheme. – An incentive scheme by way

of a monetary reward in the minimum amount of Five Thousand
Pesos (P 5,000.00) shall be given to any person who shall report
to the NPC or police authorities any act which may constitute a
violation of Section 2, Rule II hereof, the Department of Energy
(DOE), in consultation with theNPC, shall issue the necessary
guidelines for the proper implementation of this incentive scheme
within thirty (30) days from the effectivity of R.A. 7832.
RULE V
DISCONNECTION OF ELECTRIC SERVICE
SECTION 1. Right to Disconnect and its Requirements. – The

utility or cooperative concerned shall have the right and authority
to disconnect immediately the electric service of any person, natural
or juridical, without need of a court order or administrative order
and deny restoration of the same, in the following circumstances:
(a) When the owner/occupant of the house or establishment

concerned or someone acting in his behalf shall have been
caught in flagrante delicto doing any of the acts enumerated
in Section 1, Rule II hereof: Provided, That a written
notice or warning to that effect has been served by the
utility or cooperative concerned to the owner of the house/
establishment or his duly authorized representative, prior to
such disconnection.
(b) When any of the circumstances enumerated in

Section 1, Rule II shall have been discovered for the second
time: Provided, That a written notice or warning shall have
been issued upon the first discovery.
The written notice or warning referred to herein shall be served

prior to each disconnection and shall indicate the name and address
of the consumer, consumer account number, date of apprehension,
findings of fact, amount of energy pilfered in kilowatt-hour, the
amount representing the differential billing and the method used in
computing the differential billing as determined herein, which shall
indicate the following:
1859
(a) Computation of the unbilled consumption in kilowatt-

hour.
(b) The period to be used in computing the differential

billing.
(c) The latest Inspection Report prior to apprehension.
SEC. 2. Deposit. – The utility or cooperative concerned shall

immediately restore the electric service upon deposit by the person
denied the service with the utility or cooperative concerned or with
the competent court, as the case may be, of the amount representing
the differential billing.
RULE VI
PENALTIES
SECTION 1. Liability of the utility/cooperative. – If the court

finds by final judgment that the person has not committed illegal
use of electricity, the amount deposited shall be credited against
future billings, with legal interest thereon chargeable against the
utility or cooperative.
Likewise, the utility or cooperative shall be made to

immediately pay such person double the value of the payment or
deposit with legal interest, which amount shall be creditable against
immediate future billings.
The foregoing remedies are without prejudice to any criminal,

civil or administrative action that such person may be entitled to
existing laws, rules and regulations.
SEC. 2. Liabilities Under Section 1, Rule II hereof. – If the

person has been found by final judgment to have violated Section
1, Rule II hereof, he shall be made to pay the utility or cooperative
concerned double the value of the estimated electricity illegally
used which is referred to in this Section has differential billing, in
addition to the penalty of prision mayor or a fine of Ten Thousand
Pesos (P 10,000.00) to Twenty Thousand Pesos (P 20,000.00) or
both, at the discretion of the court.
1860
(a) If the offense is committed by, or in connivance with, an

officer or employee of the power company, electric utility or
rural electric cooperative concerned, such officer or employee
shall, upon conviction, be punished with a penalty one (1)
degree higher than the penalty provided herein, and forthwith
be dismissed and perpetually disqualified from employment
in any public or private utility or service company and from
holding any public office.
(b) If, in committing any of the acts enumerated in Section

1, Rule II hereof, any of the other acts enumerated is also
committed, then the penalty next higher in degree herein
shall be imposed.
(c) If, in committing any of the acts enumerated in Section

committed by, or in connivance with an officer or employee
of the power company, utility or cooperative concerned,
such officer or employee shall, upon conviction, be punished
with a penalty of one (1) degree higher that the penalty
provided herein, and forthwith be dismissed and perpetually
disqualified from employment in any public or private utility
or service company. Likewise, the electric utility concerned
which shall have knowingly permitted or having knowledge
of its commission shall have failed to prevent the same, or
was otherwise guilty of negligence in connection with the
commission thereof, shall be made to pay a fine not exceeding
triple the amount of the “differential billing”, subject to the
discretion of the courts.
(d) If the violation is committed by a partnership, firm,

corporation, association, or any other legal entity, including
a government-owned or –controlled corporation, the penalty
shall be imposed on the president, manager, and each of the
officers thereof who shall have knowingly permitted, failed to
prevent or was otherwise responsible for the commission of
the offense.
SEC. 3. Liabilities Under Section 2, Rule II hereof. – A person

found by final judgment to have violated Section 2, Rule II hereof,
shall be meted the penalty of reclusion temporal or a fine ranging
1861
from Fifty Thousand Pesos (P 50,000.00) to One Hundred Thousand

Pesos (P 100,000.00) or both, at the discretion of the court.
(a) If the offense is committed by, or in connivance with, an

officer or employee of the power company, utility to cooperative
concerned, such officer or employee shall, upon conviction, be
punished with a penalty one (1) degree higher than the penalty
provided herein, and forthwith be dismissed and perpetually
disqualified form employment in any public or private utility
or service company and from holding any public office.
(b) If, in committing any of the acts enumerated in Section

committed, then the penalty next higher in degree as provided
herein shall be imposed.
(c) If, in committing any of the acts enumerated in Section

committed by, or in connivance with an officer or employee of
an electric utility concerned, such officer or employee shall,
upon conviction, be punished with a penalty of one (1) degree
higher than the penalty provided herein, and forthwith be
dismissed and perpetually disqualified from employment in
any public or private utility or service company. Likewise,
the utility concerned which shall have knowingly permitted
or having knowledge of its commission shall have failed to
prevent the same, or was otherwise guilty of negligence in
connection with the commission thereof, shall be made to
pay a fine not exceeding triple the amount of the “differential
billing”, subject to the discretion of the courts.
(d) If the violation is committed by a partnership, firm,

corporation, association, or any legal entity, including a
government-owned or –controlled corporation, the penalty
shall be imposed on the president, manager and each of the
officers thereof who shall have knowingly permitted, failed to
prevent or was otherwise responsible for the commission of
the offense.
1862
RULE VII
BILLINGS AND SURCHARGES
SECTION 1. Testing of Watt-hour Meter Standard Equipment.

– The NPC, NEA, and all electric utilities shall submit all their
working watt-hour meter standard equipment (which are used in
the testing of their respective consumers’ watt-hour meters) for
testing and sealing by the ERB within thirty (30) days following the
publication of this Implementing Rules and Regulations and every
year thereafter.
The NEA shall likewise furnish the ERB, within the same
period above prescribed, with copies of the test reports on the
calibration of the watt-hour meter standard equipment of all the
electric cooperatives.
SEC. 2. Testing of Meters. – All electric utilities and

cooperatives, as the case may be, shall cause the calibration of the
meters of their respective customers at least once every two (2)
years.
The said utilities and cooperatives shall likewise furnish

the ERB with copies of the test reports within thirty (30) days after
each calibration.
SEC. 3. Computation of the Differential Billing. – The

differential billing shall be determined by multiplying the
unbilled consumption in kilowatt-hour, the period covered by the
differential billing and the current rate of electricity at the time of
apprehension.
SEC. 4. Computation of the Unbilled Consumption in Kilowatt-

hour. – The unbilled consumption in kilowatt-hour may be computed
by using the following methodologies:
4.1. For cases falling under paragraph (a), (e), (f), and (g),
Section 1, Rule III hereof, the following methodologies shall be
used:
(a) The estimated monthly consumption as per report of

load inspection conducted during the time of discovery;
1863
(b) The highest recorded monthly consumption with the

five-year period preceding the time of the discovery;
(c) The higher consumption between the average

consumption before or after the highest drastic drop in
consumption within the five-year billing period preceding
the discovery;
(d) The highest recorded monthly consumption within four

(4) months after the time of the discovery.
4.2. For cases falling under paragraphs (b), (c), and (d),
Section 1, Rule III hereof, the following methodologies
shall be used:
(a) The result of the ERB test during the time of discovery;
(b) The higher consumption between the average

consumptions before or after the highest drastic drop in
consumption within the five-year billing period preceding
the discovery;
(c) The estimated monthly consumption as per report of

load inspection conducted during the time of discovery;
(d) The highest recorded monthly consumption within four

(4) months after the time of the discovery; or
(e) The highest recorded monthly consumption within the

five-year period preceding the time of discovery.
4.3. For cases falling under paragraph (h), Section 1, Rule

II hereof, any of the foregoing methodologies may be used,
whichever is applicable.
SEC. 5. Period to be Recovered. – In determining the period

to be recovered under the differential billing, the following shall be
considered:
(a) When there was a change in the customer’s connection,

such as change of meter, change of seal or reconnection, or
1864
replacement of parts, the period to be recovered under the

differential billing shall be reckoned from the time of the last
inspection;
(b) In the absence thereof, the period to be recovered under

the differential billing shall start from the time the electric
service of the person concerned recorded an abrupt or abnormal
drop in consumption; or
In the absence of both, a maximum of sixty (60) billing

months, up to the time of the discovery may be used as basis for
the computation: Provided, however, That if the person concerned
presents adequate and indubitable proof showing that the period to
be recovered by the differential billing is less than sixty (60) billing
months, the utility or cooperative may recompute the amount of the
differential billing based on the established period for recovery.
The period to be used shall, in no case, be less than one (1)

year preceding the date of discovery of the illegal use of electricity.
In cases where the affected period is less than one (1) year, the
utility or cooperative may be allowed to compute for the differential
billing using one (1) year as the minimum basis for computation.
SEC. 6. Discovery of Prima Facie Evidence. – The electric

utility or rural electric cooperative, upon discovery of any of the
circumstances mentioned in Rule II hereof, shall notify in writing
the owner/occupant of the house or establishment concerned or
someone of suitable age and discretion residing therein and acting
in behalf of the owner/occupant of the incident.
In case the apprehension is witnessed by an officer of the law

and not by an ERB authorized representative, the tampered electric
meter subject of the offense must be placed in a suitable container,
properly identified and sealed, and shall be opened only for testing
in the ERB’s meter laboratory by the duly authorized representative
of the Board.
SEC. 7. Inspection Report. – An Inspection Report must be

accomplished by the utility or cooperative concerned after every
1865
inspection, monitoring of meter installation or apprehension,

indicating the following:
(a) Date and time of the inspection;
(b) Condition of the meters, instrument, transformers and

metering installations;
(c) Changes made with the connections during the time of

the inspection;
(d) Replacement made on the metering installations, if there

is any;
(e) Signature over the printed name of the consumer or his

duly authorized representative; and
(f) Signature over the printed name of the consumer or his

duly authorized representative.
The accomplished Inspection Report shall be attested to by

the authorized ERB representative or by the officer of the law, as
the case may be.
The original copy of the Inspection Report shall be kept by

the electric utility or electric cooperative concerned and shall not be
destroyed without prior authority from the ERB. A duplicate of the
said report shall likewise be furnished to the owner/occupant of the
establishment concerned or someone of suitable age and discretion
residing therein and acting in behalf of the owner/occupant.
SEC. 8. Imposition of Surcharges. – An electric utility or

rural electric cooperative may impose surcharges in addition
to the value of electricity pilfered, on the bills of any consumer
apprehended for tampering with his electric meter/metering facility
installed on his premises, as well as other violations of contract like
direct connection, use of jumper and other means of illicit usage of
electricity found installed in the premises of the consumer. The
surcharge for the violation of contract shall be collected from and
paid by the consumer concerned as follows:
1866
(a) First apprehension – twenty-five percent (25%) of the

current bill;
(b) Second apprehension – fifty percent (50%) of the current

bill;
(c) Third and subsequent apprehensions – one hundred

percent (100%) of the current bill.
The electric utility or rural electric cooperative is authorized to

discontinue electric service in case the consumer is in arrears
in the payment of the above-imposed surcharges.
RULE VIII
ISSUANCE OF RESTRAINING ORDERS OR
WRITS OF INJUNCTION
SECTION 1. Issuance of Writ of the Injunction. – Unless

there is a prima facie evidence that the disconnection was made
evident bad faith or grave abuse of authority, no writ of injunction or
restraining order shall be issued by any court against any utility or
cooperative exercising the right and authority to disconnect electric
service as provided in these Rules.
SEC. 2. Filing of Bond/Counterbond. – A writ of injunction

or restraining order issued by a court in the absence of evident
bad faith or grave abuse of authority on the part of the utility or
cooperative concerned shall be effective only when the affected
person/consumer files a bond with the court in the form of cash
or cashier’s check equivalent to the differential billing, penalties
and other charges in cases of illegal use of electricity. Such writ of
injunction or restraining order shall automatically be refused or, if
already granted, shall be dissolved upon the filing by the utility or
cooperative concerned of a counterbond similar in form and amount
as that above required.
SEC. 3. Report to the Supreme Court. – Whenever a writ of

injunction or restraining order is granted, the court which issued
the same shall submit a report to the Supreme Court within ten (10)
days from its issuance, setting forth in detail the grounds or reasons
therefor.
1867
RULE IX
RATIONALIZATION OF SYSTEM LOSS
SECTION 1. Caps on Recoverable System Loss allowed to Private

Electric Utilities. – The maximum rate of system loss that the
utility can pass on to its customers shall be as follows:
(1) Fourteen and a half percent (14 1/2 %) effective on

February 1996 billing.
(2) Thirteen and one fourth percent (13 1/4%) effective on

(3) Eleven and three fourths percent (11 3/4%) effective on

(4) Nine and a half percent (9 1/2%) effective on February

1999 billing.
SEC. 2. Automatic Cost Adjustment Formula. – Each and

every utility shall file with the ERB, on or before September 30,
1995, an application for approval of an amended Generation Charge
or Power Cost Adjustment formula that would reflect the new system
loss cap to be included in its schedule of rates.
The automatic cost adjustment clause of every utility shall be

guided by the following formula:
Generation Charge
Subsidizing consumption shall be charged a generation charge per

kWh equal to:
A x 1 -E
B-(C+D) 1 – FT
1868
Where:
Cost of electricity purchased and generated for the
A = previous month less revenue from subsidized kWh
on generation charge as applicable
B = Total kWh purchased and generated for the

previous month
The actual system loss but not to exceed the

C = maximum recoverable rate of system loss in kWh
plus actual company use in kWh but not to exceed
1% of total kWh purchased and generated
D = kWh consumed by subsidized consumers

E = Applicable base cost of the amount incorporated
into their basic rate per kWh
FT = Franchise tax rate
SEC. 3. Fixing the Level and Effectivity of the New System

Loss for Utility. – Each and every utility shall file with the ERB,
before the end of the fourth year following the effectivity of these
Rules, an application for the purpose of determining the following:
(a) Whether the caps fixed shall be reduced further which

shall in no case be lower than nine percent (9%) after taking
into account the viability of the private electric utilities and
the interest of the consumers;
(b) The date of the effectivity of the new caps; and
(c) The permissible levels of recovery of system loss in areas

that may be added to the franchise area of the private electric
utility after the date of effectivity of R.A. No. 7832.
SEC. 4. Caps on System Loss Allowed to Rural Electric

Cooperatives. – The maximum rate of system loss that the
cooperative can pass on to its customers shall be as follows:
(a) Twenty-two percent (22%) effective on February 1996

billing.
1869
(b) Twenty percent (20%) effective on February 1997

billing.
(c) Eighteen percent (18%) effective on February 1998

billing.
(d) Sixteen percent (16%) effective on February 1999

billing.
(e) Fourteen percent (14%) effective on February 2000

billing.
SEC. 5. Automatic Cost Adjustment Formula. – Each and

every cooperative shall file with the ERB, on or before September
30, 1995, an application for approval of an amended Purchased
Power Adjustment Clause that would reflect the new system loss
cap to be included in its schedule of rates.
The automatic cost adjustment of every electric cooperative

shall be guided by the following formula:
Purchased Power Adjustment Clause
(PPA) = A -E
B – (C + D)
Where:
A = Cost of electricity purchased and generated for
the previous month
B = Total kWh purchased and generated for the

previous month
The actual system loss but not to exceed the

C = maximum recoverable rate of system loss
in kWh plus actual company use in kWh but
not to exceed 1% of total kWh purchased and
generated
D = kWh consumed by subsidized consumers
E = Applicable base cost of power equal to the

amount incorporated into their basic rate per
kWh.
1870
SEC. 6. Fixing the Level and Effectivity of the New System Loss
Cap. – Each and every cooperative shall file with the ERB, before
the end of the fifth year following the effectivity of these Rules, to
determine the following:
(a) Whether the caps fixed shall be reduced further which

shall in no case be lower than nine percent (9%) after taking
into account the viability of the electric cooperatives and the
interest of the consumers;
(b) The date fixed for the effectivity of the new caps; and
(c) The permissible levels of recovery of systems loss in

areas that may be added in the area of coverage of the rural
electric cooperative after the date of the effectivity of R.A. No.
7832.
SEC. 7. Authority of the Energy Regulatory Board. – Nothing

in this Rule shall impair the authority of the ERB to reduce or phase
out technical or design losses as a component of system losses.
RULE X
RECOVERY OF PILFERAGE LOSSES
SECTION 1. Submission of Report. – A utility or cooperative

which recovers any amount of pilferage losses shall submit to
the ERB, within thirty (30) days from said recovery, a written report
under oath, which shall contain the following:
(a) The fact of recovery

(b) The date of recovery
(c) The name of consumer concerned
(d) The amounts recovered including the amounts resulting
from compromise agreement and surcharges imposed, if any
(e) The amount of pilferage loss claimed
(f) The explanation for the failure to recover the whole
amount claimed
g) Itemized expenses incurred, if there is any
(h) The amount passed to the consumer
The utility or cooperative shall not accept payment from

the consumer during the pendency of the case for the recovery of
1871
pilferage loss, unless so provided in a compromise agreement duly

executed by the parties and approved by the court.
SEC. 2. The full amount recovered by the utility or cooperative

under the preceding section shall be reflected as a reduction in
the customer’s electric bill through the automatic cost adjustment
formula abovementioned, the application of which shall be verified
and confirmed by the Board through an Order.
RULE XI
INFORMATION DISSEMINATION
SECTION 1. Information Dissemination. – The private electric

utilities, the rural electric cooperatives, the NPC, and the National
Electrification Administration (NEA) shall, in cooperation with each
other, undertake vigorous campaign to inform their consumers of
the provisions of the Implementing Rules and Regulations, within
sixty (60) days from the effectivity thereof and at least once a
year thereafter, and to incorporate a faithful condensation of said
provisions in the contract with new consumers.
RULE XII
REPEAL AND SEPARABILITY
SECTION 1. Repeal and Separability. – All existing rules,

regulations or order or any parts thereof inconsistent with these
Rules are hereby repealed, amended or modified accordingly. If
any part or provision of these Rules or declared unconstitutional or
illegal, the other parts or provisions shall remain va lid.
RULE XIII
EFFECTIVITY
SECTION 1. Effectivity. – These Rules shall take effect

fifteen (15) days after its publication in two newspapers of general
circulation in the country.
Pasig City, July 7, 1995
REX V. TANTIONGCO
Chairman
1872
AN ACT DEREGULATING THE DOWNSTREAM OIL INDUSTRY,


CHAPTER I
GENERAL PROVISIONS
Section 1. Short Title. - This Act shall be known as the

"Downstream Oil Industry Deregulation Act of 1996."
Sec. 2. Declaration of Policy. - It shall be the policy of the State to

deregulate the downstream oil industry to foster a truly competitive
market which can better achieve the social policy objectives of fair
prices and adequate, continuous supply of environmentally-clean
and high-quality petroleum products.
Sec. 3. Coverage. - This Act shall apply to all persons or entities

engaged in any or all the activities of t he domestic downstream oil
industry, as well as persons or companies directly importing refined
petroleum products for their own use.
Sec. 4. Definition of Terms. - For purposes of this Act, the

following terms are herein below defined:
a) Downstream oil industry shall refer to the business

of importing exporting, re-exporting, shipping, transporting,
processing, refining, storing, distribution, marketing and/or selling,
crude oil, gasoline, diesel, liquefied petroleum gas (LPG), kerosene,
and other petroleum and crude oil products;
b) DOE shall refer to the Department of Energy;
c) Board shall refer to the Energy Regulatory Board;
d) Person shall refer to any person, whether natural or

juridical, who is engaged in the downstream oil industry;
1873
e) Petroleum shall refer to a naturally occurring mixture

of compounds of hydrogen and carbon with a small proportion
of impurities and shall include any mineral oil, petroleum gas,
hydrogen gas, bitumen, asphalt, mineral wax, and all other similar
or naturally-associated substances, with the exception of coal, peat,
bituminous shale, and/or other stratified mineral fuel deposits;
f) Crude Oil shall refer to oil in its natural state before the
same has been refined or otherwise treated but excluding water,
bottom substances and foreign substances;
g) Petroleum products shall refer to products formed

in the course of refining crude petroleum through distillation,
cracking, solvent refining and chemical treatment coming out as
primary stocks from the refinery such as, but not limited to, LPG,
Naphtha, gasolines, solvent, kerosenes, aviation fuels, diesel oils,
fuel oils, waxes and petrolatums, asphalts, bitumens, coke and
refinery sludges, or such refinery petroleum fractions which have
not undergone any process or treatment as to produce separate
chemically-defined compounds in a pure or commercially pure state
and to which various substances may have been added to render
them suitable for particular uses: Provided, That the resultant
product contains not less than fifty percent (50%) by weight of such
petroleum products;
h) Wholesale Posted Price (WPP) shall refer to the ceiling

price of petroleum products set by the Board based on a formula
using the Singapore Posting:
i) Singapore Import Parity (SIP) shall refer to the deemed

landed cost of a petroleum product imported from Singapore at a
free-on-board price equal to the average Singapore Posting for that
product at the time of loading;
j) Singapore Posting shall refer to the price of petroleum

products periodically posted by oil refineries in Singapore and
reported by independent international publications; and
k) Basel Convention shall refer to the international accord

which governs the trade or movement of hazardous and toxic waste
across borders.
1874
Sec. 5. Liberalization of Downstream Oil Industry and Tariff

Treatment. - a) Any law to the contrary notwithstanding, any
person or entity may import or purchase any quantity of crude oil
and petroleum products from a foreign or domestic source, lease or
own and operate refineries and other downstream oil facilities and
market such crude oil and petroleum products either in a generic
name or its own trade name, or use the same for his own requirement:
Provided, That any person or entity who shall engage in any such
activity shall give prior notice thereof to the DOE for monitoring
purposes: Provided, further, That such notice shall not exempt such
person or entity from securing certificates of quality, health and
safety and environmental clearance from the proper governmental
agencies; Provided, furthermore, That such person or entity shall, for
monitoring purposes, report to the DOE his or its every importation/
exportation: Provided, finally, That all oil importations shall be in
accordance with the Bases Convention.
b) Any law to the contrary notwithstanding and starting

with the effectivity of this Act, tariff shall be imposed and collected
on imported crude oil at the rate of three percent (3%) and imported
refined petroleum products at the rate of seven percent (7%), except
fuel oil and LPG, the rate for which shall be the same as that for
imported crude oil Provided, That beginning on January 1, 2004
the tariff rate on imported crude oil and refined petroleum products
shall be the same: Provided, further, That this provision may be
amended only by an Act of Congress.
c) For as long as the National Power Corporation (NPC)

enjoys exemptions from taxes and duties on petroleum products
used for power generation, the exemption shall apply to purchases
through the local refineries and to the importation of fuel oil and
diesel.
Sec. 6. Security of Supply. - To ensure the security and

continuity of petroleum crude and products supply, the DOE
shall require the refiners and importers to maintain a minimum
inventory equivalent to ten percent (10%) of their respective annual
sales volume or forty (40) days of supply, whichever is lower.
Sec. 7. Promotion of Fair Trade Practices. - The Department

of Trade and Industry (DTI) and DOE shall take all measures to
1875
promote fair trade and to prevent cartelization and monopolies and

combinations in restraint of trade and any unfair competition, as
defined in Articles 186, 188 and 189 of the Revised Penal Code, in
the downstream oil industry. The DOE shall continue to encourage
certain practices in the oil industry which serve the public interest
and are intended to achieve efficiency and cost reduction, ensure
continuous supply of petroleum products, or enhance environmental
protection. These practices may include borrow-and-loan agreements,
rationalized depot operations, hospitality agreements, joint tanker
and pipeline utilization, and joint actions on oil spill control and fire
prevention.
Sec. 8. Monitoring. - The DOE shall monitor and publish daily

international oil prices to enable the public to determine whether
current market oil prices are reasonable. It shall likewise monitor the
quality of petroleum products and stop the operation of businesses
involved in the sale of petroleum products which do not comply with
the national standards of quality. The Bureau of Product Standards
(BPS), in coordination with DOE, shall set national standards of
quality that are aligned with the international standards/protocols
of quality.
The DOE shall monitor the refining and manufacturing

processes of local petroleum products to ensure that clean and safe
(environment and worker-benign) technologies are applied. This
shall also apply to the process of marketing local and imported
petroleum products.
The DOE shall maintain a periodic schedule of present and

future total industry inventory of petroleum products for the purpose
of determining the level of supply. To implement this, the importers,
refiners, and markets are hereby required to submit monthly to the
DOE their actual and projected importations, local purchases, sales
and/or consumption, and inventory on a per crude/product basis.
Any report from any person of an unreasonable rise in the

prices of petroleum products shall be immediately acted upon.
For this purpose, the creation of a Department of Energy (DOE)
- Department of Justice (DOJ) Task Force is hereby mandated to
determine the merits of the report and to initiate the necessary
actions warranted under the circumstances to prevent cartelization,
among others.
1876
Sec. 9. Prohibited Acts. - To ensure fair competition and

prevent cartels and monopolies in the downstream oil industry, the
following acts are hereby prohibited.
a) Cartelization which means any agreement, combination or

concerted action by refiners and/or importers or their representatives
to fix prices, restrict outputs or divide markets, either by products
or by areas, or allocating markets, either by products or by areas, in
restrain of trade or free competition; and
b) Predatory pricing which means selling or offering to sell

any product at a price unreasonably below the industry average cost
so as to attract customers to the detriment of competitors.
Any person, including but not limited to the chief operating

officer or chief executive officer of the corporation involved, who
is found guilty of any of the said prohibited acts shall suffer the
penalty of imprisonment for three (3) years and fine ranging from
Five hundred thousand pesos (P500,000) to One million pesos
(P1,000,000)
Sec. 10. Other Prohibited Acts. - To ensure compliance with the

provisions of this Act, the failure to comply with any of the following
shall likewise be prohibited: 1) submission of any reportorial
requirements, 2) maintenance of the minimum inventory; and 3) use
of clean and safe (environment and worker-benign) technologies.

officer or chief executive officer of the corporation involved, who
is found guilty of any of the said prohibited acts shall suffer the
penalty of imprisonment for two (2) years and fine ranging from Two
hundred fifty thousand pesos (P250,000) to Five hundred thousand
pesos (P500,000).
CHAPTER II
TRANSITION PHASE
Sec. 11. Phases of Deregulation. - In order to provide a smooth

implementation of deregulation, the policy shift shall be done in two
phases: Phase I (Transition Phase) and Phase II (Full Deregulation
Phase).
1877
Sec. 12. OPSF Claims Buffer Fund. - Upon the effectivity of

this Act and prior to Phase I, the Secretary of DOE shall seek the
condonation of all outstanding claims against the OPSF: Provided,
however, That it shall keep or provide a buffer fund of One billion
pesos (P1,000,000,000) therein.
Sec. 13. OPSF Coverage. - Paragraph (c) Sec. 8 of Presidential

Decree No. 1956, as amended by Executive Order No. 137, is hereby
further amended to read as follows:
"c) Any additional amount to be imposed on petroleum products

to augment the resources of the Fund through an appropriate Order
that may be issued by the Board requiring payment by persons or
companies engaged in the business of importing, manufacturing
and/or marketing of petroleum products, including persons or
companies that will directly import refined petroleum products for
their own use."
Sec. 14. Automatic Oil Pricing Mechanism. - To enable the

domestic price of petroleum products to approximate and promptly
reflect the price of oil in the international market, an automatic
pricing mechanism shall be established. To this end, the following
laws are hereby amended:
a) Paragraph (a), Sec. 8 of Republic Act No. 6173, as

amended by Sec. 3 of Executive Order No. 172, to read as follows:
"Sec. 8. Powers of the Board Upon Notice and Hearing. - The

Board shall have the power:
a) To set the wholesale posted price of petroleum products

during the transition phase.
For this purpose and for the protection of the public interest,
the Board shall, after due notice and hearing at which any consumer
of petroleum products and other parties who may be affected may
appear and be heard, and within three (3) months after the effectivity
of this Act, approve a formula to determine the wholesale posted
prices (WPP) of petroleum products based on the Singapore posting
of refined petroleum products.
1878
Thereafter, the Board shall at the proper times automatically

adjust the WPP of petroleum products based on the Singapore
posting using the approved formula, through appropriate orders,
without the need for notice and hearing.
The Board shall, on the dates of effectivity of the automatic

oil pricing formula, the initial WPP or the adjusted WPP, publish
the same, together with the corresponding computation, in two (2)
newspapers of general circulation."
b) Paragraph 1 of Letter of Instruction No. 1441, to read as

follows:
"1. To review and reset prices of domestic petroleum

products up or down as necessary on or before the third Monday of
each month to reflect the new WPP of refined petroleum products
based on the appr ved automatic pricing formula."
c) Paragraph 2 of Letter of Instruction No. 1441 is hereby

deleted. In lieu thereof a new paragraph is inserted to read as
follows:
"2. The price adjustment shall be reflected automatically in

the approved wholesale posted prices of each petroleum product. Any
price increase beyond fifty centavos (P0.50) per liter shall be charged
against the OPSF. For this purpose, the OPSF accrued balance shall
be initially fixed at One billion pesos (P1,000,000,000)."
d) The provisions of Sec. 3 (a) and (c) and Sec. 5 of Executive

Order No. 172 to the contrary notwithstanding, the Board shall,
during the Transition Phase, maintain the current margin of dealers
and the rates charged by water transport operators, haulers and
pipeline concessionaries. Depending on the basis of the automatic
pricing mechanism, the Board may, within three (3) months after the
effectivity of this Act and after proper notice and full public hearing,
prescribe a formula which will automatically set the margins
of the refiners, marketers and dealers, and the rates charged by
water transport operators, haulers and pipeline concessionaries:
Provided, That such formula shall take effect simultaneously with
the effectivity of the automatic oil pricing formula. Thereafter, the
Board shall set the said margins and rates based on the approved
formula without the necessity for public notice and hearing.
1879
The Board shall, on the day of the effectivity of the aforesaid

formula, publish in at least two (2) newspapers of general circulation
the mechanics of the formula for the information of the public.
CHAPTER III
FULL DEREGULATION PHASE
Sec. 15. Implementation of Full Deregulation. - Pursuant to

Sec. 5 (e) of Republic Act No. 7638, the DOE shall, upon approval of
the President, implement the full deregulation of the downstream
oil industry not later than March, 1997. As far as practicable, the
DOE shall time the full deregulation when the prices of crude oil and
petroleum products in the world market are declining and when the
exchange rate of the peso in relation to the US dollar is stable. Upon
the implementation of the full deregulation as provided herein, the
transition phase is deemed terminated and the following laws are
deemed repealed:
a) Republic Act No. 6173, as amended;
b) Sec. 5 of Executive Order No. 172, as amended;
c) Letter of Instruction No. 1431 dated October 15, 1984;
d) Letter of Instruction No. 1441, dated November 20, 1984,

as amended;
e) Letter of Instruction No. 1460, dated May 9, 1985;
f) Presidential Decree No. 1880; and
g) Presidential Decree No. 1956, as amended by E.O. No.

137.
Sec. 16. Sec. 3 of Executive Order No. 172, is hereby amended

to read as follows:
"Sec. 3. Jurisdiction, Powers and Functions of the Board. - The

Board shall, upon proper notice and hearing, fix and regulate the rate
of schedule or prices of piped gas to be charged by duly franchised
1880
gas companies which distribute gas by means of underground pipe

system."
Sec. 17. Foreign Exchange Forward Cover. - Any law to the

contrary notwithstanding and upon full deregulation, no foreign
exchange forward cover shall be extended by the Government to
any private importation of crude oil and petroleum products.
Sec. 18. OPSF Balance. - Upon full deregulation, all

outstanding claims during the transition phase against the OPSF
shall be settled out of the One billion peso (P1,000,000,000) buffer
fund and the balance, if any, shall be transferred to the General
Fund.
CHAPTER IV
FINAL PROVISIONS
Sec. 19. Implementation Rules and Regulations. - The DOE,

in coordination with the Board, the Department of Environment
and Natural Resource, Department of Labor and Employment,
Department of Health, Department of Finance, Department of Trade
and Industry and National Economic and Development Authority,
shall formulate and issue the necessary implementing rules and
regulations within sixty (60) days after the effective of this Act.
Sec. 20. Administrative Fine. - The DOE may, after due notice
and hearing, impose a fine in the amount of not less than One
hundred thousand pesos (P100,000) but not more than One million
pesos and (P1,000,000) upon any person or entity who violates any
of its reportorial and minimum inventory requirements, without
prejudice to criminal sanctions.
The Secretary of the DOE may recommend to the proper

government agency the suspension or revocation and termination of
the business permit of the offender concerned.
Sec. 21. Public Information Campaign. - The DOE, in

coordination of the Board and the Philippine Information Agency,
shall undertake an information campaign to educate the public on
the deregulation program of the downstream oil industry.
1881
Sec. 22. Budgetary Appropriations. - Such amount as may be

necessary to effectively implement this Act shall be taken by the
DOE from its annual appropriations and the DOE's Special Fund
created under Sec. 8 of Presidential Decree No. 910, as amended.
Sec. 23. Separability Clause. - If, for any reason, any section
or provision of this Act is declared unconstitutional or invalid, such
parts not affected thereby shall remain in full force and effect.
Sec. 24. Repealing Clause. - All laws, presidential decrees,

executive orders, issuances, rules and regulations or parts thereof,
which are inconsistent with the provisions of this Act are hereby
repealed or modified accordingly.
Sec. 25. Effectivity. - This Act shall take effect fifteen (15)
days after its complete publication in at least two (2) newspapers of
general circulation.
APPROVED, 28 March 1996.
1882

REPUBLIC ACT NO. 8180, “AN ACT DEREGULATING
THE DOWNSTREAM OIL INDUSTRY AND FOR
OTHER PURPOSES”
Pursuant to Chapter IV, Section 19 of Republic Act No.

8180 (RA), An Act Deregulating the Downstream Oil Industry, the
Department of Energy, in coordination with the Energy Regulatory
Board, Department of Environment and Natural Resources,
Department of Labor and Employment, Department of Health,
Department of Finance, Department of Trade and Industry and the
National Economic Development Authority, hereby issues, adopts
and promulgates the following rules and regulations to govern, the
activities in the downstream oil industry.
Rule I
General Provisions
SECTION 1. Title - These rules shall be known and cited as

the “Implementing Rules and Regulations (IRR) of the Downstream
Oil Industry Deregulation Act of 1996.”
SECTION 2. Coverage - These rules shall to apply to all

persons or entities engaged in any or all activities of the domestic
downstream oil industry, which shall include the activity of the
domestic downstream oil industry, which shall include the activity
of blending, recycling, processing and/or re-processing of petroleum
and other crude oil products as well as persons or companies
directly importing refined petroleum products for their own use or
requirement.
SECTION 3. Definition of Terms - The terms used in this IRR

shall have the following respective meanings:
a) Act refers to Republic Act 8180.
b) Automatic Oil Price Mechanism refers to the process adopted

by the Energy Regulatory Board first after full public hearings and
subsequently without need of such hearings to automatically adjust
the wholesale posted price of petroleum products based on Singapore
1883
Posting and other factors and costs resulting in the formula to be

adopted by the Board.
c) Basel Convention refers to the international accord which

governs the trade or movement of hazardous and toxic waste across
borders.
d) Board refers to the Energy Regulatory Board.
e) BPS refers to the Bureau of Product Standards.
f) Bureau refers to the Energy Industry Administration Bureau

of the Department of Energy.
g) Crude Oil refers to the oil in its natural state before the same
has been refined or otherwise treated, but excluding water, bottom
sediments and foreign substances.
h) Dealer refers to any person that is engaged or intends to engage

in the retail of petroleum products.
i) DENR refers to the Department of Environment and Natural

Resources.
j) DOE refers to the Department of Energy.
k) Downstream Oil Industry refers to the business of importing,

exporting, re exporting, shipping, transporting, processing, refining,
storing, distributing, marketing, and or selling crude oil, gasoline,
diesel, liquefied petroleum gas (LPG), kerosene, and other petroleum
and crude oil products.
l) EMB refers to the Environmental Management Bureau of the

DENR.
m) Unless the context otherwise indicates, Importer, refers to any

person engaged in the importation of petroleum products, whether
for marketing or own use.
n) IRR refers to these rules and regulations implementing RA

8180.
1884
o) Liquefied Petroleum Gas (LPG) means commercial propane

gas or commercial butane gas or a mixture of the two gases, with
properties conforming to the specifications set by the BPS.
p) LPG cylinder refers to any portable pressure-vessel or container

for LPG, conforming to the specifications set by the BPS.
q) Marketer refers to any person engaged in the sale of petroleum

products, whether in bulk or retail.
r) Minimum Inventory refers to the lowest level of inventory

of crude oil and petroleum products that shall be maintained by
refiners and importers at any given time, as prescribed under this
lRR.
s) OPSF refers to the Oil Price Stabilization Fund established

under Presidential Decree No. 1956, as amended.
t Person refers to any person, whether natural or juridical that is

engaged or intends to engage in the downstream oil industry.
u) Petroleum refers to a naturally occurring mixture of compounds

of hydrogen and carbon with a small proportion of impurities and
shall include any mineral oil, petroleum gas, hydrogen gas, bitumen,
asphalt, mineral wax, and all other similar or naturally associated
substances; with exception of coal, peat, bituminous shale, and/or
stratified mineral fuel deposits.
v Petroleum Products refers to products formed in the course of

refining crude petroleum through distillation, cracking, solvent
refining and chemical treatment coming out as primary stocks from
the refinery such as but not limited to, liquefied petroleum gas
(LPG) naphtha, gasolines, solvent, kerosenes, aviation fuels, diesel
oils, fuel oils, waxes and petrolatums, asphalts, bitumens, coke and
chemically defined compounds in a pure or commercially pure state;
them suitable for particular uses: Provided, that the resultant
product contains not less than 50% by weight of such petroleum
products.
1885
w) Qualified serviceman refers to an individual who has been

trained, qualified and certified by the Philippine Liquefied Petroleum
Gas Association (PLPGA) or to an individual who has successfully
completed an approved training course for LPG servicemen in a
training school duly recognized and accredited by the Philippine
government.
y) Refilling Plant refers to installation that have LPG bulk

storage and filling/refilling facilities for bottling LPG.
z) Refiller refers to an LPG marketer who buys LPG in bulk from

bulk suppliers, refills LPG into cylinders under his own brand name
or that of other LPG marketers, and sells the same, whether in bulk
or retail to his customers.
aa) Refiner refers to any person which locally refines through

distillation, conversion and treatment of crude oil and other
naturally occurring petroleum hydrocarbons.
bb) Singapore Import Partity (SIP) refers to the deemed landed

cost of a petroleum product imported from Singapore at a free-on-
board price equal to the average Singapore Posting for that product
at the time of loading.
cc) Singapore Posting shall refer to the price of petroleum products

periodically posted by oil refineries in Singapore and reported by
independent international publications.
dd) Wholesale Posted Price (WPP) shall refer to the ceiling price of
petroleum products set by the Board based on a formula using the
Singapore Posting.
SECTION 4. Phases of Deregulation - Pursuant to Section 11

of RA 8180, the deregulation shall be done in two phases: Phase l
(Transition Phase) and Phase ll (Full Deregulation Phase).
Rule ll
Liberalization of Downstream Oil Industry and Tariff'
Treatment
SECTION 5. Liberalization of Downstream Oil Industry - Any

person or entity may import or purchase any quantity of crude oil
1886
and petroleum products from foreign or domestic source, lease or

market such crude and petroleum products either in generic name
or its own trade name, or use the same for this own requirement.
SECTION 6. Notice Prior to Engagement in any Activity

or Business in the Downstream Oil Industry – Any person who
intends to engage in the business of importing, exporting, refining,
processing, manufacturing, shipping, transporting, transshipping,
and marketing» of crude oil, gasoline, diesel, liquefied petroleum
gas (LPG), kerosene, and other petroleum and crude oil products,
and in any similar activities, shall file a notice with the Bureau
prior to initial engagement in the proposed activity or business.
The notice shall be accompanied by the project or business plan and
list of facilities to support the activity and business permits such
as Mayor's permit, building permit if applicable, locational/zoning
Clearance and other local government permits/clearances.
Persons or entities already legally engaged in any activity in

the downstream oil industry upon the effectivity of this IRR are
deemed to have complied with this notice requirement. All notice
requirements prescribed herein shall be made by the owner/
operator.
Procedure - All notices shall be made in writing, addressed

to the Bureau, containing such information as business name and
address, the scope of operation/activity and proof of the availability
of facilities to support the proposed business. Such person or entity
shall be subject to the reportorial requirements provided in Section
8 of this IRR.
SECTION 7. Notice Prior to Every Importation - For effective

monitoring, and to ensure conformance to the Basel Convention, any
person who shall import crude oil and/or petroleum products from
foreign countries, freeports and economic zones, whether for trade
or for his own use or requirement shall file a notice with the Bureau
prior to actual loading of every importation, indicating therein the
type and quantity of cargo to be imported, the estimated date of
loading and arrival and the port of discharge.
In the cases of importations of slop/used/waste oils, sludges

and similar petroleum products/by-products, such notice shall be
1887
accompanied by a clearance from the EMB-DENR pursuant to

RA 6969, otherwise known as "Toxic Substances, Hazardous and
Nuclear Wastes Control Act of 1990”, in accordance with the Basel
Convention.
SECTION 8. Reportorial Requirements -Any person who

is engaged or intends to engage in any activity or business in the
downstream oil industry shall submit the following reportorial
requirements to the Bureau:
a) Prior to Operation in Proposed Business or Activity – Any person

intending to engage in any business/activity in the downstream
oil industry shall submit authenticated copies of the following
documents and permits to the Bureau:
1) Fire Safety Inspection Certificate of the facilities;
2) Permits on the sustainability of facilities for the proposed

operation (Certificate of conformance of facilities to national
or accepted international standards on health, safety and
environment);
3) Product Liability Insurance Certificate or Product

Certificate of Quality;
4) Environment Compliance Certificate issued by EMB,

whenever applicable.
b) Importations – To ensure proper representation of the

importation and to ascertain the quality of imported crude oil,
petroleum products and petroleum-based products, the importer
shall submit to the Bureau the following documents:
1. No later than one (1) working day prior to loading

of every importation : crude/product shipment details ,
guaranteed specifications, cost and vessel particulars.
2. Not later than ten (10) working days after unloading

of every importation : Import Entry Declaration/Manifest
and Release Certificate issued by the Bureau of Customs
1888
(BOC) and Certificate of Quality issued by the supplier for

the actual shipment.
c) Exportations – Any person or entity who shall engage in

exportation of crude oil and petroleum products shall submit the
following to the Bureau, not later than five (5) working days
after the exportation: name and address of exporter and consignee;
crude/product shipment details, guaranteed specifications, cost
and vessels particulars. A copy of the Export Manifest and Release
Certificate shall likewise be submitted.
d) Bunkering From Freeports and Special Economic Zones – Any

person or entity who shall engage in bunkering of international
vessels in Philippine waters, bunkering of aircraft for domestic
service and liftings from Custom Bonded Warehouses located
outside the source freeports/special economic zones, but which
shall be eventually use for international bunkering shall report the
following to the Bureau, not later than five (5) working days
after bunkering: the details of such bunkering activity and copy
of bunkering permit from Bureau of Customs (BOC) for specific
vessels.
e. Chartering of Foreign Vessels – Any person who shall use,

charter or utilize a foreign-owned petroleum product tanker/vessel
from an international source for domestic use in the Philippines
as approved by the Maritime Industry Authority (MARINA), shall
report the following to the Bureau not more than five (5) working
days after the actual date of commissioning/utilization
of the tanker/vessel: name and capacity of vessel, number of
compartments, cargo segregation, draft and year built.
f) Inventory – All refiners and importers, except those importing

for their own use or requirement, shall submit to the Bureau monthly
reports of their actual and projected importations, local purchases,
actual and projected sales (local, international and exports) and/or
consumption on a per crude and/or product basis, in the format to be
prescribed for this purpose Submissions are due on the fifteenth
(15th) day of the following month.
SECTION 9. Tariff – Pursuant to Section 5(b) of RA 8180,

tariff duty shall be imposed and collected on imported crude oil
1889
at the rate of three percent (3%) and imported refined petroleum

products at the rate of seven percent (7%), except fuel oil and LPG,
the rate for which shall be at the same as that for imported crude
oil. Provided, That beginning on January 1, 2004 the tariff rate on
imported crude oil and refined petroleum products shall be the same
Provided further, That this provision may be amended only by an
Act of Congress.
NPC Exemption – Pursuant to Section 5(c) of RA 8180, for as

long as the National Power Corporation (NPC) enjoys exemptions
from taxes and duties on petroleum products used for power
generation, the exemption shall apply to purchases through the
local refineries and to the importation of fuel and diesel.
Rule III
Security of Supply and Fair Trade Practice
SECTION 10. Security of Supply – All refiners and importers

of crude oil and petroleum products shall maintain a minimum
inventory equivalent to ten percent (10%) of their respective annual
sales volume or forty (40) days of supply, whichever is lower. For
this purpose, the 40-day supply inventory shall consist of twenty
(20) days of supply of crude oil and twenty (20) days of supply of
refined petroleum products, or forty (40) days of total crude and
product supply.
a) Minimum Inventory Composition – The minimum inventory

shall consist of total stocks i.e., in stock, on-shore and/or enroute to
other stockpoints in the country, and importations in-transit to the
country. For practical reasons, in the case of importers exclusively
engaged in the LPG trade or business requiring specialized facilities
for storage, handling and distribution, and whose operation
necessities immediate turnover of the product, bulk supply in-
transit to its customers shall be deemed part of its inventory.
b) Minimum Inventory Determination – The volume of the

minimum inventory shall be based on the actual sales for the
preceding year of each refiner and importer. Towards this end, the
Bureau shall, upon consultation with refiners and importers, set
their respective minimum inventory requirements within one month
from the effectivity of this IRR, and every January 31 thereafter.
1890
In the case of new importers and refiners, the minimum inventory

shall be based on their sales projection for the year.
c) Contingency Plan – In cases of eminent supply disruptions, the

DOE shall adopt contingency measures pursuant to Section 12 (c)
(2) of RA 7638.
SECTION 11. Promotion of Fair Trade Practices – To promote

fair trade and to prevent carterlization and monopolies and
combinations in restraint of trade and any unfair competition, no
person complying with the requirements as provided in this IRR
shall be discriminated against the operation of any business in the
downstream oil industry.
Joint Industry Activities – To serve the public interests,

achieve efficiency and cost reduction, ensure continuous supply
of petroleum products, or enhance environmental protection,
the Bureau shall continue to encourage joint industry activities,
which may include borrow-and-loan agreements, rationalized
depot operations, hospitality agreements, joint tanker and pipeline
utilization, and joint actions on oil spill control and fire prevention.
Rule IV
Monitoring
SECTION 12. Prices – The DOE shall monitor international

and domestic oil prices pursuant to Section 8 of RA 8180.
a) Price Publication – To enable the public to determine whether

current market oil prices are reasonable, the DOE shall monitor
and publish daily international oil prices.
b) Price Display Boards – For the convenience of the public,

all retailers of petroleum products sold in gasoline stations in
prominently installed price display boards with backgrounds
conforming to the color coding scheme for the product , such as:
green for Unleaded Premium Gasoline, red for Premium Low Lead
Gasoline, orange for Regular Gasoline, yellow for Diesel Fuel, and
white for Kerosene. In the case of LPG (which has no product color),
the price display board shall be light blue in color. The numeric
entries in these boards shall be at least six (6) inches in height and
colored in black.
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The price display boards shall be installed within an reasonable

period of time after the effectivity of this IRR, but not later than
March 1997. The Bureau shall regularly monitor the industry’s
compliance with this requirement.
c) DOE-DOJ Task Force – Any report from any person of

unreasonable rise in the prices of petroleum products shall be
immediately acted upon by the Department of Energy (DOE) –
Department of Justice (DOJ) Task force. The said Task force shall
determine the merits of the report and shall initiate the necessary
actions warranted under the circumstances.
SECTION 13. Product Quality and Quantity – The Bureau

shall monitor the quality of Petroleum products, including
adulteration and other forms of product misrepresentation, and
stop the operation of business involved in the sale of petroleum
products which do not comply with the existing national standards
of quality and such other standards of product quality aligned with
international standards/protocols of quality, which the BPS may set
in coordination with the DOE.
Misrepresentation of the quantity of petroleum products such

as underdelivery and shortselling, including underfilling of LPG,
dispensed at the outlets shall be subject to the penalties provided
under Batas Pambansa Bilang 33, as amended.
a) Color coding – Products sold on retail shall conform to the

color coding scheme prescribed under Section 12 (b) hereof. The
required maker dyes for certain petroleum products shall likewise
be enforced to all marketers.
b) Sampling and Testing Products – To ascertain and ensure

conformance to national standards of quality, the Bureau may
conduct spot and periodic sampling and testing of petroleum
products at various points of the business.
Sample Testing Fees – All fees and charges to be encountered

during the testing of petroleum product samples shall be borne by
the refiners/importers/bulk marketers except in cases of product
complaints from the public against such entities, whereby the
corresponding testing fee for the product shall be borne by the
Bureau.
1892
c) Calibration – Periodic calibration of dispensing pumps, tank

trucks, storage tanks and weighing scales shall be done in accordance
with existing government standards, the records of which shall be
made available upon the Bureau’s inspection and validation.
SECTION 14. Refining, Manufacturing and Marketing

Processes – The Bureau shall monitor the local refining and
manufacturing processes and the process if marketing local
and imported petroleum products to ensure that clean and safe
(environment and worker-benign) technologies are applied.
a) Conformance to Standards and Facilities – The refiners and

marketers shall operate using processes and facilities conforming
to national standards and/or internationally-accepted standards for
the oil industry. The following documents shall be submitted upon
actual start of operation, and to be updated annually.
1) Refining, Processing, including Recycling and Blending
(i) Exact location of the refinery/plant;
(ii) Plot plan (location of various equipment and facilities for

the refinery/plant)
(iii) Process configuration and description;
(iv) Material balance and product yield;
(v) Maximum design and actual capacities for crude and

product storage, oil movements facilities (docking, berthing,
and loading), as well as process units capacities.
2) Storing (transshipment)
(i) Exact location of the storage site;
(ii) Plot plan (location of various facilities for the storage);
(iii) Maximum design and actual capacities of crude and

product storage oil movements facilities (docking, berthing,
and loading).
1893
3) Distribution/Operation of Petroleum Carriers (Pipeline,

Tankers, Barges, Tanktrucks)
(i) For tankers and barges: details and particulars of the

vessel
(ii) For pipelines: location and description, product service;

and capacity/pumping rate
(iii) For tank trucks; number of units and corresponding

capacities; and Calibration Certificate
4) Gasoline Stations
(i) Approved-type dispensing pumps;
(ii) Approved-type underground storage tanks
(iii) Fire Extinguisher consistent with the requirement of

local government;
(iv) Calibrating bucket;
(v) Price display boards; and
(vi) Oil-water separator with corresponding clearance from

the DENR for those offering car care services such as washing,
change oil and other similar car care services.
5) LPG Refilling Plant
(i) Approved-type filling equipment and facilities such as

weighi d regularly calibrated.
(ii) Adequate storage and fixed facilities
(iii) Qualified LPG servicemen
(iv) Duly licensed personnel
6. Bunkering From Freeports and Special Economoic Zones
1894
(i) Copy of the delivery receipt signed by both the transporter

and end-user vessels’ official/master/chief mate, and
representatives of the BOC and Philippine Ports Authority.
b) Inspection and Audit of Facilities – The Bureau shall conduct

periodic inspection and audit at various points of the business, such
as but not limited to refineries, manufacturing and storage plants,
handling, marketing, and distribution facilities, as well as terminals,
tankers, barges, pipeline, and tank, trucks, or in coordination with
the appropriate government agencies. Such facilities shall conform
to the government standards, or in its absence, internationally
accepted standards for the downstream oil industry.
c) Safety – to ensure safety of end-users and the buying public in

general, all persons engaged in the downstream oil industry shall
comply with the following:
1) All persons and entities engaged in the downstream

oil industry, including selling of gasolines and any
petroleum and petroleum based products, shall use
only facilities, and equipment that comply with the
specification, design, fabrication, inspection, marking
and requalification provision of the safety codes set and
observed in the industry.
2) All other matters affecting the safe and proper handling,

transport, storage, installation and use of equipment
and facilities used in the downstream oil industry shall
be governed by the pertinent provisions of the different
international safety codes now observed and adopted in
the industry.
3) All installations for the filling, use and storage of

petroleum products including gasoline and LPG as well
as its containers and their necessary appurtenances shall
conform to local zoning ordinances and regulations.
4) Any person undertaking the initial installation of an LPG

system shall be responsible for providing his customer
with adequate instructions for the proper and safe
handling, use and maintenance of the system installed.
1895
All installations of LPG systems shall be done only by

Qualified Servicemen.
5) All LPG brand owners shall keep their own cylinders in

safe, clean and serviceable condition and shall maintain
them in a manner consistent with the provisions of the
safety codes adopted in the industry
6) All persons or entities engaged in the sale and distribution

of petroleum products including LPG shall provide free
inspection and technical assistance to their customers,
retail outlets and dealers, as the case may be, to ensure
conformity to safety standards in accordance with the
provisions of this IRR and shall respond to all emergency
call affecting safety at any time.
7) To ensure safety of consumers, all LPG marketers are

enjoined to procure only brand new cylinders from
duly licensed cylinder manufacturers with their brand
name clearly embossed on the cylinder body and shall
conform with the provisions of the Philippine National
Standards (“Specification for Steel Cylinders for LPG”).
All cylinders shall be re-qualified ten (10) years from the
date of manufacture and every five (5) years thereafter.
8) All LPG marketers shall have appropriate provisions for

the safe handling of all cylinders in circulation.
9) Imported cylinders that are without the prescribed safety

and engineering standard markings must be requalified
prior to being put in circulation, and every five (5) years
thereafter.
10) Vehicles use in transporting LPG cylinders shall have

substantially flat floors and equipped with suitable
racks for holding the cylinders which shall be securely
fastened in a position that shall minimize the possibility
of movement and tipping over, which might cause danger
to life and property.
1896
11) All brand owners who sell LPG in bulk or retail shall
carry a product liability insurance to answer for whatever
damage or liability that may result from the unsafe
condition of LPG tanks, installation and equipment.
12) All cylinders offered for sale to the public shall be filled
only at authorized filling and refilling plants.
13) All unsafe or dilapidated empty cylinders shall be set

aside for requalification, repair, cleaning, painting prior
to having such cylinders refilled.
14) All LPG refillers shall test-weigh and leak test every
cylinder before each one leaves the refilling plant
premises.
d) Data on Facilities – Any person who shall engage in any

activity or business in the downstream oil industry shall provide the
Bureau with annual updates of information on the facilities used
in the operation, including the capacities and working/operating
conditions of such facilities. Pertinent permits for any or all new/
additional/renovated/refurbished facilities and its respective
operation shall be submitted to the Bureau prior to commissioning.
Decommissioning or non-operation of facilities, and the reasons for
such, have to be reported to the Bureau within five (5) working days
from the stoppage of operation.
Rule V
Prohibited Acts
SECTION 15. Prohibited Acts – Any person found to have

violated any of the prohibited acts namely, cartelization and
predatory pricing, as defined under Section 9 of RA 8180, shall suffer
the criminal and administrative penalties so provided therein.
Likewise, any person found to have violated the other

prohibited acts, defined under Section 10 of the said Act as failure
to comply with any of the following: 1) submission of any reportorial
requirements, (2) maintenance of the minimum inventory; and (3)
use of clean and safe (environment and worker-begin) technologies,
shall suffer the criminal and administrative penalties so provided
1897
therein, without prejudice to the administrative fine that may be

imposed pursuant to Section 20 of the said Act.
Rule IV
Phase I: The Transition
SECTION 16. OPSF/Buffer Fund – Pursuant to Section 12 of

RA 8180, upon the effectivity of the Act, and prior to Phase 1, the
DOE shall seek the condonation of all outstanding claims against
the OPSF; Provided, however, That it shall keep or provide a buffer
fund for One billion pesos (P1,000,000,000) therein.
SECTION 17. OPSF Coverage – All persons or entities engaged

in the business of importing, manufacturing and/or marketing
of petroleum products, including persons or companies that will
directly import refined petroleum products for their own use, shall
comply with the existing government regulations governing the
OPSF.
Amounts beyond the P0.50 per liter cap increase allowed under
the Act to be reflected in the domestic prices may be claimed by all
importers and refiners from the OPSF buffer fund. However, claims
by importers who are non-refiners resulting from negative imposts
on sales are limited to the extent of their respective contribution to
the OPSF.
SECTION 18. Automatic Oil Pricing Mechanism – Upon the

effectivity of the automatic oil price formula to be established by the
Board pursuant to Section 14 of RA 8180, the maximum domestic
prices shall be based on such formula.
Rule VII
Phase II: Full Deregulation
SECTION 19. Implementation of Full Deregulation – The

DOE shall, upon the approval of the President, implement the full
deregulation of the downstream oil industry not later than March,
1997. Upon the implementation of full deregulation, the transition
phase shall be deemed terminated.
1898
SECTION 20. OPSF and Foreign Exchange Forward Cover –

Upon full deregulation the OPSF mechanism shall be terminated,
including the extension of forward cover for foreign exchange. All
outstanding claims during the transition phase against the OPSF
shall be settled out of the One billion peso (P1,000,000,000) fund
and the balance, if any, shall be transferred to the General Fund.
Rule VIII
Final Provisions
SECTION 21. Administrative Fine – The DOE shall, after due

notice and hearing, impose a fine in the amount of not less than One
hundred thousand pesos (P100,000), but not more than One million
pesos (1,000,000) upon any person or entity who violates any of its
reportorial and minimum inventory requirements provided in this
IRR, without prejudice to criminal sanctions.
The Secretary of the DOE may recommend to the proper

government agency the suspension or revocation and termination of
the business permit of the offender concerned.
SECTION 22. Public Information Campaign – The DOE, in

coordination with the Board and the Philippine Information Agency,
shall undertake and information campaign to educate the public on
the deregulation program of the downstream oil industry.
SECTION 23. Effectivity – This IRR and any amendment

thereof shall take effect fifteen (15) days after its complete publication
in at least two (2) newspapers of general circulation.
Adopted: 31 May 1996
(SGD.) FRANCISCO L. VIRAY

Secretary
1899
AN ACT DEREGULATING THE DOWNSTREAM OIL INDUSTRY,


CHAPTER I
GENERAL PROVISIONS
SECTION 1. Short Title. - This Act shall be known as the

"Downstream Oil Industry Deregulation Act of 1998."
SEC. 2. Declaration of Policy. - It shall be the policy of the

State to liberalize and deregulate the downstream oil industry
in order to ensure a truly competitive market under a regime of
fair prices, adequate and continuous supply of environmentally-
clean and high-quality petroleum products. To this end, the State
shall promote and encourage the entry of new participants in the
downstream oil industry, and introduce adequate measures to
ensure the attainment of these goals.
SEC. 3. Coverage. - This Act shall apply to all persons or entities

engaged in any and all the activities of the domestic downstream oil
industry, as well as persons or companies directly importing refined
petroleum products for their own use.
SEC. 4. Definition of Terms. - For purposes of this Act, the

following terms are hereinbelow defined:
a) Basel Convention shall refer to the international accord

which governs the trade or movement of hazardous and toxic waste
across borders;
b) Board shall refer to energy Regulatory Board;
c) BOI shall refer to the Board of Investments;
1900
d) Crude Oil shall refer to oil in its natural state before the
same has been refined or otherwise treated, but excluding water,
bottoms, sediments and foreign substances;
e) Dealer shall refer to any person, whether natural or

juridical, who is engaged in the marketing and direct selling of
petroleum products to motorists, end users, and other consumers;
f) DOE shall refer to the Department of Energy;
g) DOJ shall refer to the Department of Justice;
h) Downstream Oil Industry (DOI) or Industry shall refer

to the business of importing, exporting, re-exporting, shipping,
transporting, processing, refining, storing, distributing, marketing
and/or selling crude oil, gasoline, diesel, liquefied petroleum gas
(LPG), kerosene, and other petroleum products;
i) Hauler shall refer to any person, whether natural or

juridical, engaged in the transport, distribution, hauling, and
carriage of petroleum products, whether in bulk or packed form,
from the oil companies and independent marketers to the petroleum
dealers and other consumers;
j) LPG Distributor shall refer to any person or entity,

whether natural or juridical, engaged in exporting, refilling,
transporting, marketing, and/or selling of LPG to end users and
other consumers;
k) New Industry Participants shall refer to new participants

in a particular sub-sector of the downstream oil industry with
investments and initial business operations commencing after
January 1,1994;
l) Person shall refer to any person, whether natural or

juridical, who is engaged in any activity of the downstream oil
industry;
m) Petroleum shall refer to the naturally occurring mixture

of compounds of hydrogen and carbon with a small proportion
of impurities and shall include any mineral oil, petroleum gas,
1901
bituminous shale and/or other stratified mineral fuel deposits;
n) Petroleum Products shall refer to products formed

in the course of refining crude petroleum through distillation,
cracking, solvent refining and chemical treatment coming out as
primary stocks from the refinery such as, but not limited to: LPG,
naphtha, gasolines, solvent, kerosenes, aviation fuels, diesel oils,
fuel oils, waxes and petrolatums, asphalt, bitumens, coke and
chemically-defined compounds in a pure or commercially pure state
them suitable for particular uses: Provided, That the resultant
product contains not less than fifty percent (50%) by weight of such
petroleum products;
o) Singapore Import Parity (SIP) shall refer to the deemed

landed cost of a petroleum product imported from Singapore at a
free-on-board price equal to the average Singapore Posting for the
product at the time of loading;
p) Singapore Posting shall refer to the price of petroleum

products periodically posted by oil refineries in Singapore and
reported by independent international publications; and
q) Wholesale Posted Price (WPP) shall refer to the ceiling

price of petroleum products set by the Board based on its duly
approved automatic pricing formula.
CHAPTER II
LIBERALIZATION OF THE DOWNSTREAM OIL INDUSTRY

AND PROMOTION OF FREE COMPETITION
SEC. 5. Liberalization of the Industry. - Any law to the

contrary notwithstanding, any person or entity may import or
purchase any quantity of crude oil and petroleum products from
a foreign or domestic source, lease or own and operate refineries
and other downstream oil facilities and market such crude oil and
1902
petroleum products either in a generic name or his or its own trade

name, or use the same for his or its own requirement: Provided,
That any person or entity who shall engage in any such activity
shall give prior notice thereof to the DOE for monitoring purposes:
Provided, further, That such notice shall not exempt such person or
entity from securing certificates of quality, health and safety and
environmental clearance from the proper governmental agencies:
Provided, furthermore, That such person or entity shall, for
monitoring purposes, report to the DOE his or its every importation/
exportation: Provided, finally, That all oil importations shall be in
accordance with the Basel Convention.
SEC. 6. Tariff Treatment. - a) Any law to the contrary

notwithstanding and starting with the effectivity of this Act, a
single and uniform tariff duty shall be imposed and collected both on
imported crude oil and imported refined petroleum products at the
rate of three percent (3%): Provided, however, That the President of
the Philippines may, in the exercise of his powers, reduce such tariff
rate when in his judgment such reduction is warranted, pursuant to
Republic Act No. 1937, as amended, otherwise known as the "Tariff
and Customs Code": Provided, further, That beginning January
1, 2004 or upon implementation of the Uniform Tariff Program
under the World Trade Organization and ASEAN Free Trade Area
commitments, the tariff rate shall be automatically adjusted to
the appropriate level notwithstanding the provisions under this
Section.
b) For as long as the National Power Corporation (NPC)

enjoys exemptions from taxes and duties on petroleum products
used for power generation, the exemption shall apply to purchases
through the local refineries and to the importation of fuel oil and
diesel.
SEC. 7. Promotion of Fair Trade Practices. - The Department

of Trade and Industry (DTI) and DOE shall take all measures
to promote fair trade and prevent cartelization, monopolies,
combinations in restraint of trade, and any unfair competition in the
Industry as defined in Article 186 of the Revised Penal Code, and
Articles 168 and 169 of Republic Act No. 8293, otherwise known as
the "Intellectual Property Rights Law." The DOE shall continue to
encourage certain practices in the Industry which serve the public
1903
interest and are intended to achieve efficiency and cost reduction,

ensure continuous supply of petroleum products, and enhance
environmental protection. These practices may include borrow-and-
loan agreements, rationalized depot and manufacturing operations,
hospitality agreements, joint tanker and pipeline utilization, and
joint actions on oil spill control and fire prevention.
The DOE shall monitor the relationship between the oil

companies (refiners and importers) and their dealers, haulers and
LPG distributors to help ensure the observance of fair and equitable
practices and to ensure the enforcement of existing contracts:
Provided, That the DOE shall conciliate and arbitrate any dispute
that may arise with respect to the contractual relationship between
the oil companies and the dealers, haulers and LPG distributors
involving the dealers' mark-up, the freight rate in transporting
petroleum products and the margins of LPG distributors for the
protection of the public and to prevent ruinous competition: Provided,
further, That the arbitration award of the DOE shall be subject to
judicial review under existing law.
SEC. 8. Program to Encourage the Entry of New Participants

in the Industry. - The DOE, the Department of Foreign Affairs (DFA)
and the DTI shall jointly formulate and establish a program that will
promote the entry of new participants in the Industry. Such program
shall, among others, include a strategic international information
campaign to be implemented through selected embassies and
consular offices of the Philippines. This program shall commence
implementation after three (3) months from the effectivity of this
Act.
In this regard, the DOE shall provide a "Philippine Downstream

Oil Industry Investment Guide" to new industry participants and
prospective participants. This guide shall, among others, contain:
a) An introduction to the Philippine Downstream Oil

Industry and the government's unwavering commitment to
deregulation;
b) The entry requirements;
1904
c) Information on the benefits and incentives for new

industry participants which shall specify: (i) all the incentives and
benefits they can enjoy, and (ii) the procedural and substantive
requirements needed for entitlement; and
d) Such other information the DOE may deem necessary to

promote the entry of new participants.
SEC. 9. Incentives for New Investments. - To the extent

applicable, persons with new investments as determined by the
DOE and registered with the BOI in refining, storage, marketing
and distribution of petroleum products, shall be extended the same
incentives granted to BOI-registered enterprises engaged in a
preferred area of investments pursuant to Executive Order No. 226,
otherwise known as the "Omnibus Investment Code of 1987."
Such incentives shall include:
1) Income tax holiday;
2) Additional deduction for labor expenses;
3) Minimum tax and duty of three percent (3 %) and value-

added tax (VAT) on imported capital equipment;
4) Tax credit on domestic capital equipment;
5) Exemption from contractor's tax;
6) Unrestricted use of consigned equipment;
7) Exemption from the real property tax on production

equipment or machineries;
8) Exemption from taxes and duties on imported spare

parts; and
9) Such other applicable incentives under Article 39 of

Executive Order No. 226.
1905
Any provision of law to the contrary notwithstanding, the said

incentives may be availed by persons with new investments for a
period of five (5) years from registration with the BOI: Provided,
however, That in the storage, marketing and distribution of petroleum
products, only the investments of new industry participants shall be
entitled to incentives provided in the said Code. As used herein,
"marketing of petroleum products" shall include the establishment
of gasoline stations.
For this purpose, the industry shall be included in the annual

Investment Priorities Plan (IPP): Provided, That nothing herein
contained shall preclude qualified persons or entities as provided
under the "Omnibus Investments Code" from applying for or
continue enjoying incentives and benefits under the said Code.
SEC. 10. Promotion of Retail Competition. - To achieve the

social policy objective of fair prices, and facilitate the attainment
of a truly competitive petroleum product market in the retail
level, the DOE shall promote and encourage by way of information
dissemination, networking and management/skills training, the
active and direct participation of the private sector and cooperatives
in the retailing of petroleum products through joint venture/supply
agreements with new industry participants for the establishment
and operation of gasoline stations: Provided, That the training
herein shall include LPG retailing.
To this end, the DOE shall, in cooperation with the Technology

and Livelihood Resource Center (TLRC) and Technical Education
and Skills Development Authority (TESDA), coordinate with new
industry participants and existing petroleum dealers' associations
in the formulation and implementation of a two-fold program on
management and skills training for the establishment, operation,
and maintenance of gasoline stations.
Persons who successfully complete the two-fold program shall

be entitled to government assistance being extended by government
lending agencies, in the form of medium-to long-term loans with
low interest rates and to the gasoline station training and loan fund
provided hereunder, to serve as capital for the establishment and
operation of gasoline stations.
1906
For these purposes, there is hereby established a gasoline

station training and loan fund with the initial amount of Three
hundred million pesos (P300,000,000) to be provided by the
Philippine Amusement and Gaming Corporation (PAGCOR) and
administered by the DOE under a separate account.
Of this amount, two percent (2%) plus any additional funding

shall be allocated for the two-fold program; one percent (1%)
plus any additional funding shall be set aside for administrative,
maintenance, and other operating expenses; ninety-four percent
(94%) shall be used exclusively for lending and financial assistance;
the remaining three percent (3%) shall be utilized in accordance
with the provision of Section 26 of this Act: Provided, That the loans
to be awarded herein shall be from short- to medium-term with low
interest rates: Provided, further, That these loans shall be awarded
to qualified persons who are able to comply with the conditions set
forth in the next two (2) preceding pa ragraphs.
CHAPTER III
ANTI-TRUST SAFEGUARDS, OTHER PROHIBITED ACTS AND

REMEDIES
SEC. 11. Anti-Trust Safeguards. - To ensure fair competition

and prevent cartels and monopolies in the Industry, the following
acts are hereby prohibited:
Cartelization which means any agreement, combination

or concerted action by refiners, importers and/or dealers, or their
representatives, to fix prices, restrict outputs or divide markets,
either by products or by areas, or allocate markets, either by products
or by areas, in restraint of trade or free competition, including any
contractual stipulation which prescribes pricing levels and profit
margins;
Predatory pricing which means selling or offering to sell any oil

product at a price below the seller's or offeror's average variable cost
for the purpose of destroying competition, eliminating a competitor
or discouraging a potential competitor from entering the market:
Provided, however, That pricing below average variable cost in order
to match the lower price of the competitor and not for the purpose of
1907
destroying competition shall not be deemed predatory pricing. For

purposes of this prohibition, "variable cost" as distinguished from
"fixed cost," refers to costs such as utilities or raw materials, which
vary as the output increases or decreases and "average variable
cost" refers to the sum of all variable costs divided by the number of
units of outputs.

officer, chief executive officer or chief finance officer of the
partnership, corporation or any entity involved, who is found guilty
of any of the said prohibited acts shall suffer the penalty of three
(3) to seven (7) years imprisonment, and a fine ranging from One
million pesos (P1,000,000) to Two million pesos (P2,000,000).
SEC. 12. Other Prohibited Acts. - To ensure compliance with

the provisions of this Act, the refusal to comply with any of the
following shall likewise be prohibited:
a) submission of any reportorial requirements;
b) use of clean and safe (environment and worker-benign)

technologies;
c) any order or instruction of the DOE Secretary issued in

the exercise of his enforcement powers under Section 15 of this Act;
and
d) registration of any fuel additive with the DOE prior to

its use as an additive.

officer or chief executive officer of the partnership, corporation or
any entity involved, who is found guilty of any of the said prohibited
acts shall suffer the penalty of imprisonment for two (2) years and
fine ranging from Two hundred fifty thousand pesos (P250,000) to
Five hundred thousand pesos (P500,000).
SEC. 13. Remedies. - Government Action - Whenever it is

determined by the Joint Task Force created under Section 14 (d)
of this Act, that there is a threatened, imminent or actual violation
1908
of Section 11 of this Act, it shall direct the provincial or city

prosecutors having jurisdiction to institute an action to prevent or
restrain such violation with the Regional Trial Court of the place
where the defendant or any of the defendants reside or has his
place of business. Pending hearing of the complaint and before final
judgment, the court may at any time issue a temporary restraining
order or an order of injunction as shall be deemed just within the
premises, under the same conditions and principles as injunctive
relief is granted under the Rules of Court.
Whenever it is determined by the Joint Task Force that the

Government or any of its instrumentalities or agencies, including
government-owned or -controlled corporations, shall suffer loss or
damage in its business or property by reason of violation of Section
11 of this Act, such instrumentality, agency or corporation may file
an action to recover damages and the costs of suit with the Regional
Trial Court which has jurisdiction as provided above.
b) Private Complaint. - Any person or entity shall report

any violation of Section 11 of this Act to the Joint Task Force. The
Joint Task Force shall investigate such reports in aid of which the
DOE Secretary may exercise the powers granted under Section 15 of
this Act. The Joint Task Force shall prepare a report embodying its
findings and recommendations as a result of any such investigation,
and the report shall be made public at the discretion of the Joint
Task Force. In the event that the Joint Task Force determines that
there has been a violation of Section 11 of this Act, the private person
or entity shall be entitled to sue for and obtain injunctive relief, as
well as damages, in the Regional Trial Court having jurisdiction
over any of the parties, under the same conditions and principles as
injunctive relief is granted under the Rules of Court.
CHAPTER IV
POWERS AND FUNCTIONS OF THE DOE AND DOE

SECRETARY
SEC. 14. Monitoring. - a) The DOE shall monitor and publish

daily international crude oil prices, as well as follow the movements
of domestic oil prices. It shall likewise monitor the quality of
petroleum products and stop the operation of businesses involved
1909
in the sale of petroleum products which do not comply with the

national standards of quality that are aligned with the national
standards/protocols of quality. The Bureau of Product Standards
(BPS) of the DTI, together with the Department of Environment and
Natural Resources (DENR), the DOE, the Department of Science
and Technology (DOST), representatives of the fuel and automotive
industries and the consumers, shall set the specifications for all
types of fuel and fuel-related products to improve fuel composition
for increased efficiency and reduced emissions. The BPS shall also
specify the allowable content of additives in all types of fuels and
fuel-related products.
b) The DOE shall monitor the refining and manufacturing

processes of local petroleum products to ensure that clean and safe
(environment and worker-benign) technologies are applied. This
shall also apply to the process of marketing local and imported
petroleum products.
c) The DOE shall maintain a periodic schedule of present

and future total industry inventory of petroleum products for the
purpose of determining the level of supply. To implement this, the
importers, refiners, and marketers are hereby required to submit
monthly to the DOE their actual and projected importations, local
purchases, sales and/or consumption, and inventory on a per crude/
product basis.
d) Any report from any person of an unreasonable rise in

the prices of petroleum products shall be immediately acted upon.
For this purpose, the creation of DOE-DOJ Task Force is hereby
mandated to determine within thirty (30) days the merits of the
report and initiate the necessary actions warranted under the
circumstance: Provided, motu proprio. That nothing herein shall
prevent the said task force from investigating and/or filing the
necessary complaint with the proper court or agency.
Upon the effectivity of this Act, the Secretaries of Energy and

Justice shall jointly appoint the members of a committee who shall
be tasked with the drafting of rules and guidelines to be adopted by
the Task Force in the performance of its duty. These guidelines shall
ensure efficiency, promptness, and effectiveness in the handling
1910
of its cases. The Task Force shall be organized and its members
appointed within one (1) month from the effectivity of this Act.
e) In times of national emergency, when the public interest

so requires, the DOE may, during the emergency and under
reasonable terms prescribed by it, temporarily take over or direct
the operation of any person or entity engaged in the Industry.
SEC. 15. Additional Powers of the DOE Secretary. - In

connection with the enforcement of this Act, the DOE Secretary
shall have the following powers:
a) To gather and compile appropriate information

concerning, and to investigate from time to time the organization,
business, conduct, practices, and management of any person or
entity in the Industry;
b) To require, by general or special orders, persons and

entities engaged in a particular activity of the Industry: (i) to file
an annual or special report, or both in such form as the Secretary
may prescribe; or (ii) to answer specific questions in writing,
furnishing to the Secretary such information as he may require as
to the organization, business, conduct, practices, management, and
relation to other corporations, partnerships, and individuals of the
respective persons or entities filing such reports or answer. Such
reports and/or answer shall be filed with the Secretary under oath
and within such reasonable time as the Secretary may prescribe;
Upon the direction of the President or either House of

Congress, to investigate and report the facts relating to any alleged
violation of this Act by any person or corporation;
Upon the application of the Secretary of Justice, to investigate

and make recommendations for the readjustment of the business of
any person or entity alleged to be violating this Act in order that such
person or entity may thereafter maintain his or its organization,
management, and conduct of business in accordance with law;
To recommend to the proper government agency the

suspension or revocation and termination of the business permit of
an offender;
1911
Concomitant with the policy of ensuring a continuous,

adequate and economic supply of energy to exercise his powers and
functions as provided under Section 5 (c) of Republic Act No. 7638;
To make public from time to time such portions of the

information obtained by him hereunder as are in the public interest;
and to make annual and special reports to Congress and to submit
therewith recommendations for additional legislation; and to
provide for the publication of his reports and decisions in such form
and manner as may be best adapted for public information and use:
Provided, That the Secretary shall not have any authority to make
public any trade secret or any commercial or financial information
which is obtained from any person or entity and which is privileged or
confidential, except that the Secretary may disclose such information
to officers and employees of appropriate law enforcement agencies
or to any officer or employee of any such law enforcement agency
upon the prior certification by an officer of any such law agency that
such information will be maintained in confidence and will be used
only for official law enforcement purposes; and
Whenever a final order has been entered against any defendant

in any suit brought by the government to prevent and restrain any
violation of the anti-trust provisions of this Act to make investigation,
upon his initiative, of the manner in which the decree has been or
is being carried out, and upon the application of the Secretary of
Justice, it shall be his duty to make such investigation. He shall
transmit to the Secretary of Justice a report embodying his findings
and recommendations as a result of any such investigation, and the
report shall be made public at the discretion of the Secretary.
CHAPTER V
TRANSITION PHASE
SEC. 16. Phases of Deregulation. - In order to provide a

smooth implementation of deregulation, the policy shift shall be
done in two (2) phases: Phase I (Transition Phase) and Phase II
(Full Deregulation Phase).
SEC. 17. Buffer Fund. - The President may, when the interest
of the consumers so requires, taking into account the rise in the
1912
domestic prices of petroleum products, use the "Reserve Control

Account" as a buffer fund in an amount not exceeding Two billion
nine hundred million pesos (P2,900,000,000) to cover increases in
the prices of petroleum products, except premium gasoline, during
the Transition Phase over the prices prevailing as of the date of
the effectivity of this Act. The "Reserve Control Account" refers
to a lump sum collation of reserve impositions deducted from
the appropriations approved by Congress for the operation of the
government and the implementation of projects and programs.
SEC. 18. Automatic Oil Pricing Mechanism. - To enable the

domestic price of petroleum products to approximate and promptly
reflect the price of oil in the international market, an automatic
pricing mechanism shall be established. To this end, the following
laws are hereby amended:
Paragraph (a), Section 8 of Republic Act No. 6173, as amended

by Section 3 of Executive Order No. 172, to read as follows:
"SEC. 8. Powers of the Board Upon Notice and Hearing. - The

Board shall have the power:
"a) To set the wholesale posted price of petroleum products

during the Transition Phase.
"For this purpose and for the protection of the public interest,
the Board shall, after due notice and hearing at which any consumer
of petroleum products and other parties who may be affected may
appear and be heard, and within one (1) month after the effectivity
of this Act, approve a market-oriented formula to determine the
WPP of petroleum products based solely on the changes of either
the Singapore Posting of refined petroleum products, the SIP or the
crude landed cost.
"Thereafter, the Board shall at the proper times automatically

adjust the WPP of petroleum products based on the approved
formula, through appropriate orders, without the need for notice
and hearing.
"The Board shall, on the dates of effectivity of the automatic

oil pricing formula, the initial WPP or the adjusted WPP, publish
1913
the same, together with the corresponding computation in two (2)

national newspapers of general circulation."
b) Paragraph 1 of Letter of Instruction No. 1441, to read as

follows:
"1) To review and reset prices of domestic petroleum

products up or down as necessary on or before the third Monday of
each month to reflect the new WPP of refined petroleum products
based on the approved automatic pricing formula."
Paragraph 2 of Letter of Instruction No. 1441 is hereby deleted.

In lieu thereof a new paragraph is inserted to read as follows:
"2) The price adjustment shall be reflected automatically in

the approved WPP of each petroleum product."
The provisions of Section 3(a) and (c) and Section 5 of

Executive Order No. 172 to the contrary notwithstanding, the
Board shall, during the Transition Phase, maintain the current
margin of dealers and rates charged by water transport operators,
haulers and pipeline concessionaires. Depending on the basis of the
APM, the Board shall, within one (1) month after the effectivity of
this Act and after proper notice and full public hearing, prescribe
a formula which will automatically set the margins of marketers
and dealers, and the rates charged by water transport operators,
haulers and pipeline concessionaires: Provided, That such formula
shall take effect simultaneously with the effectivity of the automatic
oil pricing formula. Thereafter, the Board shall set the said margins
and rates based on the approved formula without the necessity for
public notice and hearing.
The Board shall, on the day of the effectivity of the aforesaid

formula, publish in at least two (2) newspapers of general circulation
the mechanics of the formula for the information of the public.
CHAPTER VI
FULL DEREGULATION PHASE
SEC. 19. Start of Full Deregulation. - Full deregulation of the

Industry shall start five (5) months following the effectivity of this
1914
Act: Provided, however, That when the public interest so requires,

the President may accelerate the start of full deregulation upon the
recommendation of the DOE and the Department of Finance (DOF)
when the prices of crude oil and petroleum products in the world
market are declining and the value of the peso in relation to the US
dollar is stable, taking into account relevant trends and prospects:
Provided, further, That the foregoing provision notwithstanding,
the five (5)-month Transition Phase shall continue to apply to
LPG, regular gasoline and kerosene as socially-sensitive petroleum
products and said petroleum products shall be covered by the
automatic pricing mechanism during the said period.
Upon the implementation of full deregulation as provided

herein, the Transition Phase is deemed terminated and the following
laws are repealed:
a) Republic Act No. 6173, as amended;
b) Section 5 of Executive Order No. 172, as amended;
c) Letter of Instruction No. 1431, dated October 15, 1984;
d) Letter of Instruction No. 1441, dated November 20, 1984,

as amended;
e) Letter of Instruction No. 1460, dated May 9, 1985;
f) Presidential Decree No. 1889; and
g) Presidential Decree No. 1956, as amended by Executive

Order No. 137:
Provided, however, That in case full deregulation is started

by the President in the exercise of the authority provided in this
Section, the foregoing laws shall continue to be in force and effect
with respect to LPG, regular gasoline and kerosene for the rest of
the five (5)-month period.
SEC. 20. Jurisdiction on Pricing of Piped Gas. - Section 3 of

Executive Order No. 172, is hereby amended to read as follows:
1915
"SEC. 3. Jurisdiction, Powers and Functions of the Board. -

The Board shall, upon proper notice and hearing, fix and regulate
the rate of schedule or prices of piped gas to be charged by duly
franchised gas companies which distribute gas by means of
underground pipe system."
CHAPTER VII
FINAL PROVISIONS
SEC. 21. OPSF Balance. -All outstanding claims against

OPSF as of the effectivity of this Act, subject to the existing auditing
rules and regulations of the Commission on Audit (COA), shall be
considered as accounts payable of the National Government. For
this purpose, and any law to the contrary notwithstanding, the
reimbursement certificates issued by the DOE covering the said
outstanding claims shall be honored and accepted by the Bureau
of Customs and the Bureau of Internal Revenue as payment to the
extent of ten percent (10%) per payment of the tariff duties and
specific taxes due from the creditor-claimants against the OPSF until
such claims are settled in full: Provided, That the reimbursement
certificates shall not be transferable.
SEC. 22. Initial Public Offering. - In compliance with the

constitutional mandate to encourage private enterprises to broaden
their base of ownership and in recognition of the vital role of oil in the
national economy, any person or entity engaged in the oil refinery
business shall make a public offering through the stock exchange
of at least ten percent (10%) of its common stock within a period of
three (3) years from the effectivity of this Act or the commencement
of its refinery operations: Provided, That no single person or entity
shall be allowed to own more than five percent (5%) of the stock
offering: Provided, further, That any crude oil refining company
and any stockholder thereof shall not acquire, directly or indirectly,
any share of stock offered by any other crude oil refining company
pursuant to this Section: Provided, finally, That any such company
which made the requisite public offering before the effectivity of this
Act shall be exempted from the requirement.
SEC. 23. Implementing Rules and Regulations. - The DOE, in

coordination with the Board, the DENR, DFA, Department of Labor
1916
and Employment (DOLE), Department of Health (DOH), DOF, DTI,

National Economic and Development Authority (NEDA) and TLRC,
shall formulate and issue the necessary implementing rules and
regulations within sixty (60) days after the effectivity of this Act.
SEC. 24. Penal Sanction. - Any person who violates any of the
provision of this Act shall suffer the penalty of three (3) months to
one (1) year imprisonment and a fine ranging from Fifty thousand
pesos (P50,000) to Three hundred thousand pesos (P300,000).
SEC. 25. Public Information Campaign. - The DOE, in

coordination with the Board and the Philippine Information Agency
(PIA), shall undertake an information campaign to educate the
public on the deregulation program of the Industry.
SEC. 26. Budgetary Appropriations. - Such amount as may

be necessary to effectively implement this Act shall be taken by
the DOE from its annual appropriations, the DOE's Special Fund
created under Section 8 of Presidential Decree No. 910, as amended,
and such amount allocated under Section 10 of this Act.
SEC. 27. Separability Clause. - If, for any reason, any section
or provision of this Act is declared unconstitutional or invalid, such
parts not affected thereby shall remain in full force and effect.
SEC. 28. Repealing Clause. -All laws, presidential decrees,

executive orders, issuances, rules and regulations or parts thereof,
which are inconsistent with the provisions of this Act are hereby
repealed or immediately modified accordingly.
SEC. 29. Effectivity. - This Act shall take effect upon its
complete publication in at least two (2) newspapers of general
circulation.
APPROVED, February 10, 1998.
1917
Department Circular No. 98-03-004
RULES AND REGULATIONS IMPLEMENTING REPUBLIC

ACT 8479, “DOWNSTREAM OIL INDUSTRY DEREGULATION
ACT OF 1998”
Pursuant to Chapter VII, Section 23 of Republic Act 8479,

“Downstream Oil Industry Deregulation Act of 1998,” the Department
of Energy, in coordination with the Energy Regulatory Board,
Department of Environment and Natural Resources, Department of
Foreign Affairs, Department of Labor and Employment, Department
of Health, Department of Finance, Department of Trade and
Industry, National Economic and Development Authority and
Technology and Livelihood Resource Center, hereby issues, adopts
and promulgates the following rules and regulations to implement
the Act.
RULE I – GENERAL PROVISIONS
SECTION 1. Title.
These rules shall be known and cited as the “Implementing

Rules and Regulations (IRR) of the Downstream Oil Industry
Deregulation Act of 1998.”
SEC. 2. Coverage.
These rules shall apply to all persons or entities engaged in

any, a combination of, or all activities or business of the downstream
oil industry, such as importing, exporting, re-exporting, shipping,
transporting, processing, refining, storing, distributing, marketing,
and/or selling or crude oil, gasolines, diesel, fuel oils, aviation fuels,
liquefied petroleum gas, kerosene, and other petroleum products as
herein defined, as well as persons or companies directly importing
refined petroleum products for their own use or requirement.
This shall likewise include the activities or business of blending,
recycling, and/or re-processing of petroleum products.
SEC. 3. Definition of Terms.
1918
The terms used in this IRR shall have the following respective
meanings:
(a) Act refers to Republic Act 8479;
(b) Average Variable Cost refers to the sum of all variable costs
divided by the number of units of outputs;
(c) Basel Convention refers to the international accord which

governs the trade or movement of hazardous and toxic waste across
borders;
(d) Board refers to the Energy Regulatory Board;
(e) BOI refers to the Board of Investments;
(f) BPS refers to the Bureau of Product Standards of the DTI;
(g) Bulk Supplier refers to a person or entity engaged in the sale

of petroleum products in bulk;
(h) Bureau refers to the Energy Industry Administration Bureau

of the DOE;
(i) Cartelization refers to any agreement, combination of concerted

action by refiners, importers and/or dealers, or their representatives,
to fix prices, restrict outputs or divide markets, either by products
or by areas, or allocate markets, either by products or by areas, in
restraint of trade or free competition, including any contractual
stipulation which prescribes pricing levels and profit margins;
(j) Crude Oil refers to the oil in its natural state before the same
has been refined or otherwise treated, but excluding water, bottoms,
sediments and foreign substances;
(k) Dealer refers to any person, whether natural or juridical,

engaged in the marketing and direct selling of petroleum products
to motorists, end users, and other consumers;
(l) DENR refers to the Department of Environment and Natural

Resources;
1919
(m) DFA refers to the Department of Foreign Affairs;
(n) DOE refers to the Department of Energy;
(o) DOF refers to the Department of Finance;
(p) DOH refers to the Department of Health;
(q) DOJ refers to the Department of Justice;
(r) DOLE refers to the Department of Labor and Employment;
(s) DTI refers to the Department of Trade and Industry;
(t) Oil Industry or Industry refers to the business of importing,

exporting, re-exporting, shipping, transporting processing, refining,
storing, distributing, marketing, and/or selling of crude oil, gasoline,
diesel, liquefied petroleum gas (LPG), kerosene, and other petroleum
products;
(u) EMB refers to the Environmental Management Bureau of the

DENR;
(v) Hauler refers to any person, whether natural or juridical,

engaged in the transport, distribution, hauling, and carriage of
petroleum products, whether in bulk or packed form, from the oil
companies and independent marketers to the petroleum dealers
and consumers;
(w) Unless the context otherwise indicates, Importer refers to any

person, whether natural or juridical, engaged in the importation
of crude oil and/or petroleum products, whether for processing,
marketing or own use;
(x) IRR refers to these rules and regulations implementing the

Act;
(y) Liquefied Petroleum Gas or LPG means commercial propane

gas or commercial butane gas or a mixture of the two gases, with
properties conforming to the specifications set by the BPS;
1920
(z) LPG cylinder refers to any portable pressure-vessel or container

for LPG, conforming to the specifications set by the BPS;
(aa) LPG Distributor refers to any person or entity, whether natural

or juridical, engaged in exporting, refilling, transporting, marketing,
and/or selling of LPG to end users and other consumers;
(bb) LPG Retail Outlet refers to any person, whether natural or

juridical, engaged in direct selling of LPG to consumers and whose
supply comes from dealers;
(cc) Marketer refers to any person, whether natural or juridical,

engaged in the sale of petroleum products, whether in bulk or
retail;
(dd) NEDA refers to the National Economic and Development

Authority;
(ee) New Industry Participants refers to new participants in

a particular sub-sector of the downstream oil industry with
investments and initial business operations commencing after
January 1, 1994;
(ff) OPSF refers to the Oil Price Stabilization Fund established

under Presidential Decree No. 1956, as amended;
(gg) Person refers to any person, whether natural or juridical, who

is engaged in any activity of the downstream oil industry;
(hh) Petroleum refers to the naturally occurring mixture of

compounds of hydrogen and carbon with a small proportion of
impurities and shall include any mineral oil, petroleum gas,
bituminous shale, and/or other stratified mineral fuel deposits;
(ii) Petroleum Products refers to products formed in the course

of refining crude petroleum through distillation, cracking, solvent
refining and chemical treatment coming out as primary stocks from
the refinery such as, but not limited to: LPG, naphtha, gasolines,
solvent, kerosenes, aviation fuels, diesel oils, fuel oils, waxes and
1921
petrolatums, asphalt, bitumens, coke and refinery sludges, or such

refinery petroleum factions which have not undergone any process
or treatment as to produce separate chemically-defined compounds
in a pure or commercially pure state and to which various substances
may have been added to render them suitable for particular uses:
Provided, That the resultant product contains not less than fifty
percent (50%) by weight of such petroleum products;
(jj) PNS refers to the Philippine National Standards;
(kk) Predatory Pricing refers to selling or offering any oil product

at a price below the seller’s or offeror’s average variable cost for
the purpose of destroying competition, eliminating a competitor
Provided, however, That pricing below average variable cost in
order to match lower price of the competitor and not for the purpose
of destroying competition shall not be deemed predatory pricing;
(ll) Qualified LPG Serviceman refers to an individual who has

been trained, qualified and certified by the Philippine Liquefied
Petroleum Gas Association (PLPGA) or to an individual who has
successfully completed an approved training course and accredited
by the Philippine government;
(mm) Refilling Plant refers to any installation that has LPG bulk
storage and filling/refilling facilities for bottling LPG;
(nn) Refiller refers to an LPG marketer who buys LPG in bulk from
bulk suppliers, refills LPG into cylinders under his own brand name
or that of other LPG marketers, and sells the same to his dealers,
whether in bulk or retail to his customers;
(oo) Refiner refers to any person who locally refines through

distillation, conversion and treatment of crude oil and other
naturally occurring petroleum hydrocarbons; and
(pp) Variable Cost refers to costs such as utilities or raw materials,

which vary as the output increases or decreases.
1922
RULE II – LIBERALIZATION OF DOWNSTREAM OIL

INDUSTRY AND TARIFF TREATMENT
SEC. 4. Liberalization of Downstream Oil Industry.
Any person may import or purchase any quantity of crude oil

and petroleum products from foreign or domestic source, lease or
market such crude oil and petroleum products either in a generic
name or his or its own trade name, or use the same for his or its
own requirement: Provided, That, such person shall comply with
the notice, reportorial, quality, health, safety and environmental
requirement as set forth in this IRR.
SEC. 5. Notice Prior to Engagement in any Activity or Business

in the Downstream Industry.
Any person who intends to engage in the business of importing,

exporting, re-exporting, refining, processing, shipping, transporting,
transshipping, storing, distributing, and marketing and/or selling
of crude oil, gasoline, diesel, LPG, kerosene, and other petroleum
products, and in any similar activities, shall file a notice with the
Bureau prior to initial engagement in the proposed activity or prior
to construction of the petroleum products facilities, as the case may
be.
All notices shall be in writing, addressed to the Bureau, and

shall contain the following information, as may be applicable:
(a) Business name, address, telephone/fax number;
(b) Project or business plan indicating the scope of operation/

activity;
(c) List of facilities and proof of the availability of such facilities to

support the proposed business;
(d) Business permits such as Mayor’s permit, Securities and

Exchange Commission (SEC)/DTI registration;
(e) Building permit;
1923
(f) Locational/zoning clearance; and
(g) Other local government permits/clearances.
Any person already legally engaged in any activity in the

downstream oil industry upon the effectivity of this IRR is deemed
to have complied with this notice requirement.
SEC. 6. Notice Prior to Every Importation.
For effective monitoring, and to ensure conformance to the

Basel Convention, any person who shall import crude oil and/or
petroleum products from foreign countries, freeports and economic
zones, whether for trade or for his own use or requirement, shall file
a notice with the Bureau prior to actual loading of every importation,
indicating details and/or accompanying documents related to the
importation, as follows:
(a) type and quantity of cargo;
(b) the estimated date of loading and arrival;
(c) supplier of cargo;
(d) FOB price, freight and insurance cost;
(e) vessel particulars;
(f) port of loading and discharge;
(g) guaranteed specification of the product; and
(h) proforma invoice.
In the case of importations of slop/used/waste oils, sludges

and similar petroleum products/by-products, such notice shall be
accompanied by a clearance from the EMB/DENR pursuant to
RA 6969, otherwise known as “Toxic Substances, Hazardous and
Nuclear Wastes Control Act of 1990”, in accordance with the Basel
Convention.
1924
SEC. 7. Reportorial Requirements.
Any person who is engaged or intends to engage in any

activity or business in the downstream oil industry shall submit the
following reportorial requirements to the Bureau:
(a) Prior to Operation in Proposed Business or Activity
Any person intending to engage in any business/activity in the

downstream oil industry shall submit authenticated copies of the
following documents and permits to the Bureau prior to operation:
(1) Fire Safety Inspection Certificate of the facilities;
(2) Permits on the suitability of facilities for the proposed operation

(Certificate of conformance of facilities to national or accepted
international standards on health, safety and environment);
(3) Product Liability Insurance Certificate or Product Certificate

of Quality; and
(4) Environmental Compliance Certificate issued by EMB,

whenever applicable.
For LPG dealers and retail outlets, an authenticated copy of

the Fire Safety Inspection Certificate will suffice.
(b) Importations
To ensure proper representation of the importation and to

ascertain the quality of imported crude oil, petroleum products and
petroleum-based products, the importer shall submit to the Bureau
the following information/documents:
(1) Not later than one (1) working day prior to loading of every
importation: details of importation as enumerated in Section 6 of
this Rule.
(2) Not later than twenty (20) working days after unloading of
every importation:
1925
(i) Bill of lading;
(ii) Commercial Invoice;
(iii) Final Import Entry Declaration; and
(iv) Certificate of Quality issued by the supplier for the actual

shipment including the Delivery Receipt or Receiving Report.
(c) Exportations
Any person or entity who shall engage in exportation of crude

oil and petroleum products shall submit the following to the Bureau,
not later than ten (10) days after the departure of shipment:
(1) Details of Exportation;
(i) Name and address of exporter and consignee;
(ii) Type and quantity of cargo;
(iii) Loading and discharge ports and dates; and
(iv) Cost and vessel particulars.
(2) Certificate of Quality;
(3) Export Manifest and Release Certificate; and
(4) Bill of Lading.
(d) Bunkering From Freeports and Special Economic Zones
Any person or entity who shall engage in bunkering of

international vessels in Philippine waters, bunkering of aircraft
for domestic service and liftings from Customs Bonded Warehouses
located outside the source freeports/special economic zones, but
which shall be eventually used for international bunkering shall
report to the Bureau, not later than ten (10) working days after
bunkering:
1926
(1) Details of bunkering such as name and registry of vessel, type,

quantity and price of product, place of bunkering, destination of
vessel, transporter (product carrying vessel), loading and bunkering
date;
(2) Proforma Invoice;
(3) Bunkering permit from Bureau of Customs (BOC) for specific

vessels;
(4) Certificate of Quality.
(e) Chartering of Foreign Vessel
Any person who shall use, charter or utilize foreign-owned

petroleum product tanker/vessel from an international source for
domestic use in the Philippines, subject to existing and pertinent
cabotage and maritime laws as approved by the Maritime Industry
Authority (MARINA), shall report the following to the Bureau
not later than ten (10) working days after the actual date of
commissioning/utilization of the tanker/vessel: name and capacity
of vessel, number of compartments, cargo segregation, draft and
year built.
(f) Monitoring Reports
All refiners, importers, and marketers shall submit to the

Bureau monthly reports of their actual and projected importations,
exportations, local purchases, actual and projected sales (local,
international and exports), and/or consumption, and inventory on
a per crude and/or product basis, in the format to be prescribed for
this purpose. Submissions are due on the fifteenth (15th) day of the
month.
For those engaged in the petroleum products business as bulk

suppliers, they shall submit the following data to the Bureau on or
before January 15 of each year:
(1) List of names and addresses of their dealers/buyers;
(2) Annual volume of petroleum products supplied to each dealer/

buyer; and
1927
(3) List of names and business addresses of authorized petroleum

product haulers.
(g) Penal Provision
Failure to comply with the reportorial requirements shall

constitute violation of and shall be penalized under Section 12 of
the Act.
SEC. 8. Tariff.
Pursuant to Section 6 (a) of the Act, a single and uniform tariff

duty shall be imposed and collected both on imported crude oil and
imported refined petroleum products at the rate of three percent
(3%): Provided, however, That the President of the Philippines
may, in the exercise of his powers, reduce such tariff rate when on
his judgment such reduction is warranted, pursuant to Republic Act
No. 1937, as amended, otherwise known as the “Tariff and Customs
Code”: Provided, further, That beginning on January 1, 2004 or upon
implementation of the Uniform Tariff Program under the World
Trade Organization and ASEAN Free Trade Area commitments,
the tariff shall be automatically adjusted to the appropriate level
notwithstanding the provisions under the aforementioned Section.
(a) NPC Exemption
Pursuant to Section 6 (b) of the Act, for as long as the National

Power Corporation (NPC) enjoys exemptions from taxes and duties
on petroleum products used for power generation, the exemption
shall apply to purchases through the local refineries and to the
importation of fuel oil and diesel.
RULE III – FAIR TRADE PRACTICES AND PROMOTION

OF FREE COMPETITION
SEC. 9. Promotion of Fair Trade Practices.
The DTI and DOE shall take all measures to promote fair trade
and prevent cartelization, monopolies, combinations in restraint
of trade and any unfair competition in the Industry as defined in
Article 186 of the Revised Penal Code, and Articles 168 and 169
1928
of Republic Act No. 8293, otherwise known as the “Intellectual

Property Rights Law.”
(a) Joint Industry Activities
To serve the public interest, achieve efficiency and cost

reduction, ensure continuous supply of petroleum products, and
enhance environmental protection, the DOE shall continue to
encourage joint industry activities, which may include borrow-and-
loan agreements, rationalized depot and manufacturing operations,
hospitality agreements, joint tanker and pipeline utilization, and
joint actions on oil spill control and fire prevention. Participants to
these joint industry activities, either as a group or individual, shall
inform the DOE, through the Bureau, of occurrences and details of
such activities.
SEC. 10. Monitoring and Arbitration by the DOE.
(a) Monitoring
To help ensure the observance of fair and equitable practices

and to ensure the enforcement of existing contracts, the DOE shall
monitor the relationship between the oil companies (refiners and
importers) and their dealers, haulers and LPG distributors.
For purposes of such monitoring, within three (3) months from

the effectivity of the IRR, the oil companies shall provide the DOE,
through the Bureau, with copies of all existing contracts between
them and their dealers, haulers, and LPG distributors.
(b) Arbitration and Conciliation
(1) Disputes subject to arbitration
The DOE shall conciliate and arbitrate any dispute that

may arise with respect to the contractual relationship involving
the dealer’s mark-up, the freight rate in transporting petroleum
products and the margins of LPG distributors for the protection of
the public and to prevent ruinous competition.
1929
In case contracts existing prior to the effectivity of this IRR

already provide for a mode of settlement of disputes, the parties to
such contract may continue to observe such stipulation.
Contracts entered into after the effectivity of the IRR shall

provide for the settlement of disputes covered under this Section by
arbitration as provided under the IRR.
(2) Arbitrator
The DOE Secretary shall be the arbitrator for any dispute

that may arise under Section 10 of this IRR in relation to Section
7 of the Act: Provided, That the DOE Secretary may designate or
appoint an official in the DOE to act as arbitrator on his behalf, the
rank of which official shall not be lower than a Director: Provided
further, That any award resulting from such arbitration shall be
signed by the Secretary.
(3) Guidelines and Procedures
(i) Upon filing of the complaint, the Arbitrator shall forthwith

furnish the adverse party/parties with a copy of the complaint,
notify said party/parties in writing of the issues raised in the said
complaint and shall require him/them within ten (10) days from
receipt thereof to submit position papers with respect to arbitrable
issues and the possible evidences that the parties may present to
support his/their respective position(s).
(ii) The Arbitrator shall set definite time and place for the hearing
of the dispute submitted to him and must cause sufficient notice
thereof to be given to each of the parties.
(iii) The hearing may proceed in the absence of any party who,
after due notice, fails to be present at such hearing or fails to file a
motion for the postponement or continuance thereof.
(iv) The Arbitrator shall not make an award based solely on the
default of a party but shall require the other party to submit such
evidence ex parte as he may require for making an award.
1930
(v) Each of the party to the dispute may be represented by

counsel.
(vi) The Arbitrator shall arrange for the taking of stenographic

record of the proceedings.
(vii) The Arbitrator shall have to power to administer oaths to

all witnesses in the hearing. This oath shall be required of every
witness before his testimony is heard.
(viii) The Arbitrator may subpoena any person to attend a hearing

and testify as a witness or to produce documents and/or testify on
the said documents whenever he may deem necessary.
(ix) In the absence of any agreement, the normal order of arbitration

is as follows:
(1) Opening statements of the parties
The Arbitrator may, at the commencement of the hearing, ask

both parties for brief statements of the issues in controversy and/or
agreed statements of facts. He shall have wide latitude of discretion
in determining the order of presentation.
(2) Stipulation of facts
The Arbitrator, when warranted, shall always attempt to

draw the parties to stipulate facts, which are no longer disputable,
leaving the presentation and examination of evidence only to such
facts that are still in dispute.
(3) Presentation of evidence
The parties may offer such evidence as they desire, and shall
produce such evidence as the Arbitrator shall require or deem
necessary to a better understanding and determination of the
dispute.
(4) Formal offer of evidence
The parties shall make a formal offer of evidence.
1931
(5) Appreciation of evidence
The Arbitrator shall be the sole judge of the relevancy and

materiality of the evidence offered or produced and shall not be
bound to conform to the Rules of Court pertaining to evidences. He
shall have his award on the evidence submitted. He shall receive as
exhibits in evidence any document, which the parties may wish to
submit, and the exhibits shall be properly identified and marked at
the time of submission.
(6) Submission of memoranda
The Arbitrator may require the parties to submit their

respective memoranda. A definite time limit for the filing of such
memoranda shall be fixed by the arbitrator at the close of the
hearing.
(7) Time for rendering award
The written award of the Arbitrator shall be rendered thirty

(30) days after the closing of the hearings, or if the oral hearings
shall have been waived, within thirty (30) days after the Arbitrator
shall have declared such proceedings as closed.
In the event that the parties to an arbitration have, during the

course of such arbitration, settled their dispute, they may request
the Arbitrator that such settlement be embodied in an award, which
shall be signed by him.
(8) Form of award
The award must be made in writing and signed by the DOE

Secretary.
(9) Proceedings in lieu of hearing
The parties may, by written agreement, submit their dispute

to arbitration by a mode other than oral hearing. The parties may
submit an agreed statement of facts. They may also submit their
respective contentions to the Arbitrator in writing which shall
include a statement of facts, together with all documentary proof.
1932
Parties may also submit a written argument. Each party shall

provide all other parties to the dispute with a copy of all statements
and documents submitted to the Arbitrator. Each party shall have
an opportunity to reply in writing to any other party’s statements
and proofs, but if such party fails to do so within seven (7) days after
receipt of such statements and proofs, he shall be deemed to have
waived his right to reply. Upon the delivery to the Arbitrator of all
statements and documents, together with any reply statements, the
Arbitrator shall declare the proceedings in lieu of hearing closed.
(10) Reconsideration
Any motion for reconsideration of any award by the Arbitrator

shall be filed with the DOE Secretary within fifteen (15) days from
receipt of the award by the adverse party.
(11) Judicial review
Any appeal that may be taken from an award shall be instituted

by certiorari and the proceedings thereof shall be governed by the
Rules of Court, as these are applicable.
SEC. 11. Program to Encourage the Entry of New Participants

in the Industry.
Pursuant to Section 8 of the Act, the DOE, the DFA and the
DTI shall jointly formulate and establish a program that will promote
the entry of new participants in the industry. This program shall
commence after three (3) months from the effectivity of the Act.
(a) International Information Campaign
Among others, the program shall include a strategic

international information campaign to be implemented through
selected embassies and consular officers of the Philippines.
(b) “Philippine Downstream Oil Industry Investment Guide”
The DOE shall provide an investment guide to new industry

participants and prospective participants, which shall contain,
among others, the following:
1933
(1) An introduction to the Philippine Downstream Oil Industry

and the government’s unwavering commitment to deregulation;
(2) The entry requirements;
(3) Information on the benefits and incentives for new industry

participants which shall specify: (i) all the incentives and benefits
they can enjoy, and (ii) the procedural and substantive requirements
needed for entitlement; and
(4) Such other information the DOE may deem necessary to

promote the entry of new participants.
SEC. 12. Incentives for New Investments.
The same incentives granted to BOI-registered enterprises

engaged in a preferred area of investments, pursuant to Executive
Order No. 226 (Omnibus Investment Code of 1987), shall be
extended, as applicable, to persons with new investments as
determined by the DOE and registered with the BOI in refining,
storage, marketing and distribution of petroleum products. Such
incentives shall include the following:
(a) Income tax holiday;
(b) Additional deduction for labor expenses;
(c) Minimum tax and duty of three percent (3%) and value-added
tax (VAT) on imported capital equipment;
(d) Tax credit on domestic capital equipment;
(e) Exemption from contractor’s tax;
(f) Unrestricted use of consignment equipment;
(g) Exemption from real property tax on production equipment or

machineries;
(h) Exemption from taxes and duties on imported spare parts;

and
1934
(i) Such other applicable incentives under Article 39 of Executive

Order No. 226.
SECTION 13. Availment of Incentives.
The incentives cited under Section 12 hereof may be availed of

by persons with new investments for a period of five (5) years from
registration with the BOI: Provided, however, That in the storage,
marketing (including the establishment of gasoline stations) and
distribution of petroleum products, only the investments of new
industry participants shall be entitled to incentives provided in the
Omnibus Investments Code of 1987.
For this purpose, the industry shall be included in the Annual

Investment Priorities Plan (IPP): Provided, That nothing herein
contained shall preclude qualified persons or entities as provided
under the Code from applying for or continue enjoying incentives
and benefits under the said Code.
SEC. 14. Promotion of Retail Competition.
To achieve the social policy of fair prices, and facilitate the

attainment of a truly competitive petroleum product market in
the retail level, the DOE shall promote and encourage by way of
information dissemination, networking and management/skills
training, the active and direct participation of the private sector and
cooperatives in the retailing of petroleum products through joint
venture/supply agreements with new Industry participants for the
establishment and operation of gasoline stations: Provided, That
the training herein shall include LPG retailing.
(a) Management and Skills Training
The DOE shall, in cooperation with the Technology and

Livelihood Resource Center (TLRC) and Technical Education
and Skills Development Authority (TESDA), coordinate with new
Industry participants and existing petroleum dealer’s associations
in the formulation of a two-fold program on management and skills
training for the management, establishment and operation of
gasoline stations and LPG retail outlets.
1935
(b) Government Assistance
Persons who shall successfully complete the two-fold program

shall be entitled to government assistance being extended by
government lending agencies, in the form of medium- to long-term
loans with low interest rates and to the training and loan fund.
(c) Training and Loan Fund
This shall serve as capital for the establishment of and

operation of gasoline stations and shall be administered by the DOE
under a separate account.
An initial amount of Three hundred million pesos (P

300,000,000.00) shall be provided by the Philippine Amusement
and Gaming Corporation (PAGCOR). Of this amount, two percent
(2%) plus any additional funding shall be allocated for the two-
fold program; one percent (1%) plus any additional funding shall
be set aside for administrative, maintenance, and other operating
expenses; ninety-four percent (94%) shall be used exclusively for
lending and financial assistance; and the remaining three percent
(3%) shall be utilized in accordance with the provision of Section 26
of the Act: Provided, That the loans to be awarded herein shall be
from short- to medium-term with low interest rates.
RULE IV – ANTI-TRUST SAFEGUARDS, OTHER PROHIBITED

ACTS AND REMEDIES
SEC. 15. Anti-Trust Safeguards.
To ensure fair competition and prevent cartels and monopolies

in the Industry, the following acts are hereby prohibited:
(a) Cartelization which means any agreement, combination or

concerted action by refiners, importers and/or dealers, or their
representatives, to fix prices, restrict outputs or divide markets,
either by products or by areas, or allocate markets, either by products
or by areas, in restraint of trade or free competition, including any
contractual stipulation which prescribes pricing levels and profit
margins;
1936
(b) Predatory Pricing which means selling or offering to sell any oil
product at a price below the seller’s or offeror’s average variable cost
for the purpose of destroying competition, eliminating a competitor
Provided, however, That pricing below average variable cost in order
to match the lower price of the competitor and not for the purpose of
destroying competition shall not be deemed predatory pricing. For
purposes of this prohibition, “variable cost” as distinguished from
“fixed cost”, refers to costs such as utilities or raw materials, which
vary as the output increases or decreases and “average variable
cost” refers to the sum of all variable costs divided by the number of
units of outputs.

officer, chief executive officer or chief finance officer of the partnership,
corporation or any entity involved, who is found guilty of any of the
said prohibited acts shall suffer the penalty of three (3) to seven (7)
years of imprisonment, and a fine ranging from One million pesos (P
1,000,000.00) to Two million pesos (P 2,000,000.00).
SEC. 16. Other Prohibited Acts.
To ensure compliance with the provisions of the Act, the refusal

to comply with any of the following shall likewise be prohibited:
(a) submission of any reportorial requirements;
(b) use of clean and safe (environment and worker-benign)

technologies;
(c) any order or instruction of the DOE Secretary issued in the

exercise of his enforcement powers under Section 15 of the Act;
and
(d) registration of any fuel additive with the DOE prior to its use
as an additive.

officer, chief executive officer of the partnership, corporation or any
entity involved, who is found guilty of any of the said prohibited acts
shall suffer the penalty of imprisonment for two (2) years and fine
1937
ranging from Two hundred fifty thousand pesos (P 250,000.00) to

Five hundred thousand pesos (P 500,000.00).
SEC. 17. Remedies.
The DOE-DOJ Task Force, created under Section 14 (d) of the

Act, shall take the following remedial measures:
(a) investigate and act upon complaints or reports from any person
of an unreasonable rise in the prices of petroleum products and may,
motu propio, investigate and/or file the necessary complaint with
the proper court or agency;
(b) investigate and act upon complaints or reports of commission

of the prohibited acts under Section 11 of the Act, and after
determination of such violation endorse the same to the provincial or
city prosecutor having jurisdiction for institution of the appropriate
action;
(c) prepare and submit a report to the Secretary of Energy and

Secretary of Justice embodying its finding and recommendations as
a result of its investigation of the alleged violation of Section 11 of
the Act;
(d) investigate and act upon a complaint by any instrumentality

or agency of the Government, including government-owned or
–controlled corporations, that loss or damage has been suffered or
incurred by such instrumentality, agency or government corporation
by reason of violation of Section 11 of the Act; and
(e) perform such other functions as may be jointly be assigned by

the Secretary of Energy and the Secretary of Justice.
RULE V – POWERS AND FUNCTIONS OF THE DOE

AND DOE SECRETARY
SEC. 18. Monitoring.
The DOE shall monitor the following pursuant to Section 14 of

the Act. Any misrepresentation, mislabeling, concealment or fraud,
shall be subject to penalties under existing applicable laws.
1938
(a) Prices
The DOE shall monitor and publish international oil prices as

well as follow the movement of domestic oil prices.
(1) Price Display Board
For the convenience of the public, all retailers of petroleum

products shall display the prices of each type of petroleum product
sold in gasoline stations in prominently installed price display boards
with backgrounds preferably conforming to the color coding scheme
for the product, such as: green for Unleaded Premium Gasoline,
red for Premium Low Lead Gasoline, orange for Regular Gasoline,
yellow for Diesel Fuel, and white for Kerosene. In the case of LPG
(which has no product color), the price display board may be light
blue in color. The numeric entries in these boards shall be at least
six (6) inches in height.
The price display boards shall be properly installed and labeled not
later than June 30, 1998. Failure to comply with this requirement
shall be penalized pursuant to Section 24 of the Act.
(2) Unreasonable Rise in Prices
Any report from any person of an unreasonable rise in the

prices of petroleum products shall be immediately acted upon by the
DOE-DOJ Task Force in accordance with Section 17 of this IRR. The
said Task Force shall determine within thirty (30) days the merits of
the report and shall initiate the necessary actions warranted under
the circumstances.
(b) Product Quality and Quantity
The Bureau shall monitor the quality of petroleum products,

including adulteration and other forms of product misrepresentation
or mislabeling, and stop the operation of businesses involved in the
sale of petroleum products which do not comply with the national
standards of quality, which the BPS, together with the DENR,
the DOE, the DOST, representatives of the fuel and automotive
industries and the consumers, shall set pursuant to Section 14 of
the Act.
1939
Misrepresentation of the quantity of petroleum products such

as underdelivery, shortselling, underfilling of LPG, dispensed at
the outlets, as well as inaccurate tare weight markings on the LPG
cylinders, shall be subject to penalties under existing applicable
laws.
(1) Color Coding/Use of Marker Dyes
Products sold on retail shall conform to the color coding

scheme prescribed under Section 18 (b) hereof. The required marker
dyes for certain petroleum products shall likewise be enforced to all
refiners and marketers directly importing these products.
(2) Sampling and Testing of Product
To ascertain and ensure conformance to national standards

of quality, the Bureau may conduct spot and periodic sampling and
testing of petroleum products at various points of the business.
Likewise, quality control certificates shall be made available for
monitoring purposes.
All fees and charges to be encountered during testing of

petroleum product samples shall be borne by the refiners/importers/
bulk marketers except in cases of product complaints from the public
against such entities, whereby the corresponding testing fee for the
product shall be borne by the Bureau.
(3) Calibration
Periodic calibration of dispensing pumps, tank trucks, storage

tanks, weighing scales and calibration buckets shall be done in
accordance with existing government standards, the records of
which shall be made available upon the Bureau’s inspection and
validation. Likewise, the required weighing scale shall be installed
and rendered usable at all times.
(c) Refining, Manufacturing and Marketing Processes
The Bureau shall monitor the local refining and manufacturing

processes and the process of marketing local and imported petroleum
products to ensure that clean and safe (environment and worker-
benign) technologies are applied.
1940
(1) Conformance to Standards and Facilities
The refiners and marketers shall operate using processes and

facilities conforming to national standards and/or internationally-
accepted standards for the oil industry. The following information/
documents shall be submitted upon actual start of operation, and to
be updated annually:
(i) Refining, Processing, including Recycling and Blending
(a) Exact location of the refinery/plant;
(b) Plot plan (location of various equipment and facilities for the
refinery/plant);
(c) Process configuration and description;
(d) Material balance and product yield;
(e) Maximum design and actual capacities for crude and product
storage, oil movements facilities (docking, berthing, and loading), as
well as process units capacities.
(ii) Storing (transshipment)
(a) Exact location of the storage site;
(b) Plot plan (location of various facilities for the storage);
(c) Maximum design and actual capacities of crude and product

storage of movements’ facilities (docking, berthing, and loading).
(iii) Distribution/Operation of Petroleum Carriers (Pipeline,

Tankers, Barges, Tank trucks)
(a) For tankers and barges: details and particulars of the vessel;
(b) For pipelines: location and description, product service, and

capacity/pumping rate;
(c) For tank trucks: number of units and corresponding capacities,

and Calibration Certificate.
1941
(iv) Gasoline Stations
(a) List of dispensing pumps and underground asks with the

corresponding capacities and products stored; and
(b) Lay-out plan and latest photograph of the outlet.
(v) LPG Refilling Plant
(a) List of approved-type filling equipment;
(b) Plant data on storage and other fixed facilities;
(c) Technical data on plant capacity;
(d) List Qualified LPG servicemen and duly licensed personnel;

and
(e) Lay-out plan and latest photograph of the plant.
(vi) Bunkering From Freeports and Special Economic Zones – Copy

of the delivery receipt signed by both the transporter and end-user
vessels’ official/master/chief mate, and representatives of the BOC
and Philippine Ports Authority.
(2) Inspection and Audit of Facilities
The Bureau shall conduct periodic inspection and audit at

various points of the business, such as but not limited to refineries,
manufacturing and storage plants, handling, marketing, and
distribution facilities, as well as terminals, tankers, barges,
pipeline, and tank trucks, or in coordination with the appropriate
government agencies. Such facilities shall conform to the government
standards, or in its absence, internationally-accepted standards for
the downstream oil industry.
(3) Safety
To ensure safety of end-users and the buying public in general,

all persons engaged in the downstream oil industry shall comply
with the following:
1942
(i) All persons and entities engaged in the downstream oil

industry shall use only facilities and equipment that comply with
the specification, design, fabrication, inspection, marking and
requalification provision of the safety codes set and observed in the
industry.
(ii) All other matters affecting the safe and proper handling,
transport, storage, installation and use of equipment and facilities
used in the downstream oil industry shall be governed by the
pertinent provisions of the different international safety codes now
observed and adopted in the industry.
(iii) All installations for the filling, use and storage of petroleum
products including gasoline and LPG as well as its containers
and their necessary appurtenances shall conform to local zoning
ordinances and regulations.
(iv) Any person undertaking the initial installation of an LPG

system shall be responsible for providing his customers with adequate
instructions for the proper and safe handling, use and maintenance
of the system installed. All installations of LPG systems shall be
done only by Qualified Servicemen.
(v) All LPG brand owners shall keep their own cylinders in safe,
clean and serviceable condition and shall maintain them in a
manner consistent with the provisions of the safety codes adopted
in the industry.
(vi) All persons or entities engaged in the sale and distribution of

petroleum products including LPG shall provide free inspection and
technical assistance to their customers, retail outlets and dealers,
as the case may be, to ensure conformity to safety standards in
accordance with the provisions of this IRR and shall respond to all
emergency calls affecting safety at any time.
(vii) To ensure safety of consumers, all LPG marketers are

enjoined to procure only brand new cylinders from duly licensed
cylinder manufacturers with their brand name clearly embossed
on the cylinder body and shall conform with the provisions of the
Philippine National Standards (“Specification for Steel Cylinders
for LPG”). All cylinders shall be re-qualified ten (10) years from
date of manufacture and every five (5) years thereafter.
1943
(viii)All LPG marketers shall have appropriate provisions for the

safe handling of all cylinders in circulation.
(ix) Imported cylinders that are without the prescribed safety and
engineering standard markings must be requalified prior to being
put in circulation, and every five (5) years thereafter.
(x) Vehicles used in transporting LPG cylinders shall have

substantially flat floors and equipped with suitable racks for holding
the cylinders which shall be securely fastened in a position that
shall minimize the possibility of movement and tipping over, which
might cause danger to life and property.
(xi) All brand owners who sell LPG in bulk or retail shall carry
a product liability insurance to answer for whatever damage or
liability that may result from the unsafe condition of LPG tanks,
installation and equipment.
(xii) All cylinders offered for sale to the public shall be filled only at
the authorized filling and refilling plants.
(xiii) All unsafe and dilapidated empty cylinders shall be set aside
for requalification, repair, cleaning, painting prior to having such
cylinders refilled.
(xiv) All re-assembled or the so-called “chop-chop” cylinders shall

not be used by those engaged in the LPG business.
(xv) All LPG refillers shall test-weigh and leak test every cylinder
before each one leaves the refilling plant premises.
(4) Data on Facilities
Any person who shall engage in any activity or business in

the downstream oil industry shall provide the Bureau with annual
updates of information on the facilities used in the operation,
including the capacities and working/operating conditions of such
facilities. Pertinent permits for any or all new/additional/renovated/
refurbished facilities and their respective operation shall be
submitted to the Bureau prior to commissioning. Decommissioning
or non-operation of facilities, and the reasons for such, shall be
reported to the Bureau within five (5) working days from stoppage
of operation.
1944
SEC. 19. National Emergency.
By virtue of Section 14 (e) of the Act, in times of national

emergency, when the public interest so requires, the DOE may,
during the emergency and under reasonable terms prescribed by it,
temporarily take over or direct the operation of any person or entity
engaged in the Industry.
In cases of imminent supply disruptions, the DOE shall adopt

contingency measures pursuant to the Section 12 (c) (2) of RA 7638
or the Department of Energy Act of 1992.
RULE VI – TRANSITION PHASE
SEC. 20. Phases of Deregulation.
Pursuant to Section 16 of the Act, the deregulation shall be

done in two (2) phases: Phase I (Transition Phase) and Phase II
(Full Deregulation Phase).
SEC. 21. Buffer Fund.
An amount not exceeding Two billion nine hundred million

pesos (P 2,900,000,000.00) from the Reserve Control Account or RCA
may be used by the President as a buffer fund to cover increases in the
prices of petroleum products, except for premium gasoline, during
the Transition Phase over the prices prevailing as of February 12,
1998. The RCA refers to a lump sum of reserve impositions deducted
from the appropriations approved by Congress for the operation of
the government and the implementation of projects and programs.
SEC. 22. Automatic Oil Pricing Mechanism.
Pursuant to Section 18 of the Act, the Board shall establish

an automatic pricing mechanism to enable the domestic price of
petroleum products to approximate and promptly reflect the price
of oil in the international market.
RULE VII – FULL DEREGULATION
SEC. 23. Start of Full Deregulation.
1945
As provided under Section 19 of the Act, full deregulation of

the Industry shall start five (5) months following the effectivity of
the Act. However, the DOE and DOF are authorized to recommend
to the President of the Philippines the acceleration of the start of
the full deregulation when the prices of crude oil and petroleum
products in the world market are declining and the value of the peso
in relation to the US dollar is stable, taking into account relevant
trends and prospects.
Notwithstanding the foregoing premises, the five (5)-month

Transition Phase shall continue to apply to LPG, regular gasoline
and kerosene as socially-sensitive petroleum products and said
petroleum products shall be covered by the automatic pricing
mechanism during the said period. Upon the implementation of
full deregulation, the transition phase is deemed terminated.
RULE VII – FINAL PROVISIONS
SEC. 24. OPSF Balance.
All outstanding claims against the OPSF as of the effectivity

of the Act, subject to the existing auditing rules and regulations of
the Commission on Audit (COA), shall be considered as accounts
payable of the National Government.
The reimbursement certificates issued by the DOE covering

the said outstanding claims shall be honored and accepted by the
Bureau of Customs and the Bureau of Internal Revenue as payment
to the extent of ten percent (10%) per payment of the tariff duties
and specific taxes due from the creditor-claimant against the OPSF
until such claims are settled in full. All reimbursement certificates
are not transferable.
SEC. 25. Initial Public Offering.
Any person engaged in the oil refinery business shall make

a public offering through the stock exchange of at least ten percent
(10%) of its common stock within a period of three (3) years from the
effectivity of the Act, or the commencement of its refinery operations:
Provided, That no single person or entity shall be allowed to own
more than five percent (5%) of the stock offered by any other crude
oil refining company pursuant to Section 22 of the Act: Provided,
1946
finally, that any such company which made the requisite public
offering before the effectivity of the Act shall be exempted from the
requirement.
SEC. 26. Penal Sanction.
Any person who violates any of the provisions of the Act shall
suffer the penalty of three (3) months to one (1) year imprisonment
and a fine ranging from Fifty thousand pesos (P 50,000.00) to Three
hundred thousand pesos (P 300,000.00).
SEC. 27. Public Information Campaign.
The DOE, in coordination with the Board and the Philippine

Information Agency, shall undertake an information campaign to
educate the public on the deregulation program of the Industry.
SEC. 28. Repealing Clause.
Any rule or regulation inconsistent with the provisions of this

IRR is hereby repealed or modified accordingly.
SEC. 29. Separability Clause.
If, for any reason or reasons, any part of this IRR be declared
unconstitutional or invalid, no other parts or provisions hereof shall
be affected thereby.
SEC. 30. Effectivity.
This IRR and any amendments thereto shall take effect upon
complete publication in at least two (2) newspapers of general
circulation.
(Sgd.) FRANCISCO L. VIRAY

Secretary
Fort Bonifacio, Taguig City, Metro Manila, March 11, 1998.
1947
AN ACT ORDAINING REFORMS IN THE ELECTRIC POWER

INDUSTRY, AMENDING FOR THE PURPOSE CERTAIN
LAWS AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House of Representatives of the

CHAPTER I
TITLE AND DECLARATION OF POLICY

"Electric Power Industry Reform Act of 2001". It shall hereinafter
be referred to as the Act.
SEC. 2. Declaration of Policy. - It is hereby declared the policy

of the State:
(a) To ensure and accelerate the total electrification of the

country;
(b) To ensure the quality, reliability, security and

affordability of the supply of electric power;
(c) To ensure transparent and reasonable prices of electricity

in a regime of free and fair competition and full public accountability
to achieve greater operational and economic efficiency and enhance
the competitiveness of Philippine products in the global market;
(d) To enhance the inflow of private capital and broaden

the ownership base of the power generation, transmission and
distribution sectors in order to minimize the financial risk exposure
of the national government;
(e) To ensure fair and non-discriminatory treatment of

public and private sector entities in the process of restructuring the
electric power industry;
1948
(f) To protect the public interest as it is affected by the

rates and services of electric utilities and other providers of electric
power;
(g) To assure socially and environmentally compatible

energy sources and infrastructure;
(h) To promote the utilization of indigenous and new and

renewable energy resources in power generation in order to reduce
dependence on imported energy;
(i) To provide for an orderly and transparent privatization of

the assets and liabilities of the National Power Corporation (NPC).
(j) To establish a strong and purely independent regulatory

body and system to ensure consumer protection and enhance the
competitive operation of the electricity market; and
(k) To encourage the efficient use of energy and other

modalities of demand side management.
SEC. 3. Scope. - This Act shall provide a framework for

the restructuring of the electric power industry, including the
privatization of the assets of NPC, the transition to the desired
competitive structure, and the definition of the responsibilities of
the various government agencies and private entities.
Section 4. Definition of Terms. -
(a) "Aggregator" refers to a person or entity, engaged in

consolidating electric power demand of end-users in the contestable
market, for the purpose of purchasing and reselling electricity on a
group basis;
(b) "Ancillary Services" refer to those services that are

necessary to support the transmission of capacity and energy from
resources to loads while maintaining reliable operation of the
transmission system in accordance with good utility practice and
the Grid Code to be adopted in accordance with this Act;
1949
(c) "Captive market" refers to electricity end-users who do

not have the choice of a supplier of electricity, as may be determined
by the Energy Regulatory Commission (ERC) in accordance with
this Act;
(d) "Central Dispatch" refers to the process of scheduling

and issuing direct instructions by the grid operator to achieve the
economic operation and maintenance of quality, stability, reliability
and security of the transmission system;
(e) "Co-generation Facility" refers to a facility which

produces electrical and/or mechanical energy and forms of useful
thermal energy such as heat or steam which are used for industrial
commercial heating or cooling purposes through the sequential use
of energy
(f) "Commission" refers to the decision-making body of the

ERC composed of a Chairman and four (4) members as provided
under Section 38 hereof;
(g) "Concession Contract" refers to the award by the

government to a qualified private entity of the responsibility for
financing, operating, expanding, maintaining and managing specific
Government-owned assets;
(h) "Contestable Market" refers to the electricity end-users

who have a choice of a supplier of electricity, as may be determined
by the ERC in accordance with this Act;
(i) "Department of Energy" or "DOE" refers to the

government agency created pursuant to Republic Act No. 7638
whose expanded functions are provided herein;
(j) "Department of Finance" or "DOF" refers to the

government agency created pursuant to Executive Order No. 127;
(k) "Distribution Code" refers to a compilation of rules

and regulations governing electric utilities in the operation and
maintenance of their distribution systems which includes, among
others, the standards for service and performance, and defines and
1950
establishes the relationship of the distribution systems with the

facilities or installations of the parties connected thereto;
(l) "Distribution of Electricity" refers to the conveyance

of electric power by a distribution utility through its distribution
system pursuant to the provisions of this Act;
(m) "Distribution System" refers to the system of wires and

associated facilities belonging to a franchised distribution utility
extending between the delivery points on the transmission or
subtransmission system or generator connection and the point of
connection to the premises of the end-user;
(n) "Distribution Retail Wheeling Charge" refers to the cost

or charge regulated by the ERC for the use of a distribution system
and/or the availment of related services;
(o) "Distribution Retail Supply Rate" refers to the total

price paid by end-users consisting of the charges for generation,
transmission and related ancillary services, distribution, supply
and other related charges for electric service;
(p) "Distribution Utility" refers to any electric cooperative,

private corporation, government-owned utility or existing local
government unit which has an exclusive franchise to operate a
distribution system in accordance with this Act;
(q) "Electric Cooperative" refers to a distribution utility

organized pursuant to Presidential Decree No. 269, as amended, or
as otherwise provided in this Act;
(r) "Electric Power Industry Participant" refers to any person

or entity engaged in the generation, transmission, distribution or
supply of electricity;
(s) "End-user" refers to any person or entity requiring the

supply and delivery of electricity for its own use;
(t) "Energy Regulatory Board" or "ERB" refers to the

independent, quasi-judicial regulatory body created under Executive
Order No. 172, as amended;
1951
(u) "Energy Regulatory Commission" or "ERC" refers to the

regulatory agency created herein;
(v) "Franchise Area" refers to a geographical area exclusively

assigned or granted to a distribution utility for distribution of
electricity;
(w) "Generation Company" refers to any person or entity

authorized by the ERC to operate facilities used in the generation of
electricity;
(x) "Generation of Electricity" refers to the production

of electricity by a generation company or a co-generation facility
pursuant to the provisions of this Act;
(y) "Grid" refers to the high voltage backbone system

of interconnected transmission lines, substations and related
facilities;
(z) "Grid Code" refers to the set of rules and regulations

governing the safe and reliable operation, maintenance and
development of the high voltage backbone transmission system and
its related facilities;
(aa) "Implementing Rules and Regulations" or "IRR" refers

to the implementing rules and regulations consistent with this Act
promulgated by the DOE in consultation with the electric power
industry participants and representatives of the business sector
and approved by the Joint Congressional Power Commission to
implement the provisions of this Act;
(bb) "Independent Power Producer" or "IPP" refers to

an existing power generating entity which is not owned by the
government;
(cc) "Isolated Distribution System" refers to the low or high

voltage backbone system of wires and associated facilities not
directly connected to the national transmission system;
(dd) "Lifeline Rate" refers to the subsidized rate given to low-

income captive market end-users who cannot afford to pay at full
cost;
1952
(ee) "National Electrification Administration" or "NEA"

refers to the government agency created under Presidential Decree
No. 269, as amended, and whose additional mandate is further set
forth herein;
(ff) "National Power Corporation" or "NPC" refers to the

government corporation created under Republic Act No. 6395, as
amended;
(gg) "National Transmission Corporation" or "TRANSCO"

refers to the corporation organized to acquire all the transmission
assets of the NPC pursuant to this Act;
(hh) "Open Access" refers to the provision of allowing any

qualified user the use of transmission, and/or distribution system
and associated facilities subject to the payment of transmission and/
or distribution retail wheeling rates duly approved by the ERC;
(ii) "Philippine Energy Plan" or "PEP" refers to the overall

energy program formulated and updated yearly by the DOE for
submission to Congress pursuant to Republic Act No. 7638;
(jj) "Power Development Program" or "PDP" refers to the

indicative plan for managing electricity demand through energy-
efficient programs and for the upgrading, expansion, rehabilitation,
repair and maintenance of power generation and transmission
facilities, formulated and updated yearly by the DOE in coordination
with the generation, transmission and electric utility companies;
(kk) "Power Sector Assets and Liabilities Management

Corporation" or "PSALM Corp." refers to the corporation organized
pursuant to Section 49 hereof;
(ll) "Privatization" refers to the sale, disposition, change and

transfer of ownership and control of assets and IPP contracts from
the Government or a government corporation to a private person or
entity;
(mm) "Renewable Energy Resources" refers to energy

resources that do not have an upper limit on the total quantity
to be used. Such resources are renewable on a regular basis and
1953
the renewable rate is rapid enough to consider availability over an

indefinite time. These include, among others, biomass, solar, wind,
hydro and ocean energy;
(nn) "Restructuring" refers to the process of reorganizing

the electric power industry in order to introduce higher efficiency,
greater innovation and end-user choice. It shall be understood as
covering a range of alternatives enhancing exposure of the industry
to competitive market forces;
(oo) "Small Power Utilities Group" or "SPUG" refers to the

functional unit of NPC created to pursue missionary electrification
function;
(pp) "Stranded contract costs of NPC or distribution utility"

refer to the excess of the contracted cost of electricity under eligible
contracts over the actual selling price of such contracts in the
market. Such contracts shall have been accredited by the DOE or
NPC and approved by the ERB as of the effectivity of this Act;
(qq) "Stranded Debts of NPC" refer to any unpaid financial

obligations of NPC which have not been liquidated by the proceeds
from sales and privatization of NPC assets;
(rr) "Subtransmission Assets" refer to the facilities related

to the power delivery service below the transmission voltages and
defined as facilities based on the functional assignment of assets
including, but not limited to, step-down transformers solely used
by load customers, associated switchyard/substation, control and
protective equipment, reactive compensation equipment to improve
customer power factor, overhead lines, and the land where such
facilities/equipment are located, where applicable. These include NPC
assets linking the transmission system and the distribution system
which are neither classified as generation nor transmission;
(ss) "Supplier" refers to any person or entity authorized by

the ERC to sell, broker, market or aggregate electricity to the end-
users;
(tt) "Supply Charge" refers to the charge imposed by electricity

suppliers for the sale of electricity to end-users, excluding the
charges for generation, transmission and distribution wheeling;
1954
(uu) "Supply of Electricity" means the sale of electricity by

persons or entities authorized pursuant to this Act;
(vv) "Transmission Charge" refers to the regulated cost or

charges for the use of a transmission system which may include the
availment of ancillary services
(ww) "Transmission Development Plan" or "TDP" refers to the

program for managing the transmission system through efficient
planning for the expansion, upgrading, rehabilitation, repair and
maintenance, to be formulated by DOE and implemented by the
TRANSCO pursuant to this Act;
(xx) "Transmission of Electricity" refers to the conveyance of

electricity through the high voltage backbone system; and
(yy) "Universal Charge" refers to the charge, if any, imposed

for the recovery of the stranded cost and other purposes.
CHAPTER II
ORGANIZATION AND OPERATION OF THE ELECTRIC

POWER INDUSTRY
SEC. 5. Organization. - The electric power industry shall

be divided into four (4) sectors, namely: generation; transmission;
distribution and supply.
SEC. 6. Generation Sector. - Generation of electric power shall

be competitive and open.
Upon the effectivity of this Act, any new generation company

shall, before it operates, secure from the Energy Regulatory
Commission a certificate of compliance pursuant to the standards
set forth in this Act, as well as health, safety and environmental
clearances from the appropriate government agencies under existing
laws.
Any law to the contrary notwithstanding, power generation

shall not be considered a public utility operation. For this purpose,
any person or entity engaged or which shall engage in power
1955
generation and supply of electricity shall not be required to secure a

local or national franchise.
Upon implementation of retail competition and open access,

the prices charged by a generation company for supply of electricity
shall not be subject to regulation by the ERC except as otherwise
provided in this Act
Pursuant to the objective of lowering electricity rates to end-

users, sales of generated power by generation companies shall be
value added tax zero-rated.
The ERC shall, in determining the existence of market

power abuse or anti-competitive behavior, require from generation
companies the submission of their individual pricing formulas as
well as their financial statements.
SEC. 7. Transmission Sector. - The transmission of electric

power shall be a regulated common electricity carrier business,
subject to the ratemaking powers of the ERC.
The ERC shall set the standards of the voltage transmission

that shall distinguish the transmission from the subtransmission
assets. Pending the issuance of such new standards, the distinction
between the transmission and subtransmission assets shall be as
follows: 230 kilovolts and above in the Luzon Grid, 69 kilovolts and
above in the Visayas and in the isolated distribution systems, and
138 kilovolts and above in the Mindanao Grid: Provided, That for the
Visayas and the isolated distribution system, should the 69 kilovolt
line not form part of the main transmission grid and be directly
connected to the substation of the distribution utility, it shall form
part of the subtransmission system.
SEC. 8. Creation of the National Transmission Company. -

There is hereby created a National Transmission Corporation,
hereinafter referred to as TRANSCO, which shall assume the
electrical transmission function of the National Power Corporation,
and have the powers and functions hereinafter granted. The
TRANSCO shall assume the authority and responsibility of NPC
for the planning, construction and centralized operation and
1956
maintenance of its high voltage transmission facilities, including

grid interconnections and ancillary services.
Within six (6) months from the effectivity of this Act, the
transmission and subtransmission facilities of NPC and all other
assets related to transmission operations, including the nationwide
franchise of NPC for the operation of the transmission system and
the grid, shall be transferred to the TRANSCO. The TRANSCO
shall be wholly owned by the Power Sector Assets and Liabilities
Management Corporation (PSALM Corp.).
The subtransmission functions and assets shall be segregated

from the transmission functions, assets and liabilities for
transparency and disposal: Provided, That the subtransmission
assets shall be operated and maintained by TRANSCO until their
disposal to qualified distribution utilities which are in a position to
take over the responsibility for operating, maintaining, upgrading,
and expanding said assets. All transmission and subtransmission
related liabilities of NPC shall be transferred to and assumed by
the PSALM Corp.
TRANSCO shall negotiate with and thereafter transfer

such functions, assets, and associated liabilities to the qualified
distribution utility or utilities connected to such subtransmission
facilities not later than two (2) years from the effectivity of this
Act or the start of open access, whichever comes earlier: Provided,
That in the case of electric cooperatives, the TRANSCO shall grant
concessional financing over a period of twenty (20) years: Provided,
however, That the installment payments to TRANSCO for the
acquisition of subtransmission facilities shall be given first priority
by the electric cooperatives out of the net income derived from such
facilities. The TRANSCO shall determine the disposal value of
the subtransmission assets based on the revenue potential of such
assets.
In case of disagreement in valuation, procedures, ownership

participation and other issues, the ERC shall resolve such issues.
The take over by a distribution utility of any subtransmission

asset shall not cause a diminution of service and quality to the end-
users. Where there are two or more connected distribution utilities,
1957
the consortium or juridical entity shall be formed by and composed

of all of them which has been granted a franchise to operate the
subtransmission asset by the ERC. The subscription rights of each
distribution utility involved shall be proportionate to their load
requirements unless otherwise agreed by the parties.
Aside from the PSALM Corp., TRANSCO and connected

distribution utilities, no third party shall be allowed ownership
or management participation, in whole or in part, in such
subtransmission entity.
The TRANSCO may exercise the power of eminent domain

subject to the requirements of the Constitution and existing laws.
Except as provided herein, no person, company or entity other than
the TRANSCO shall own any transmission facilities.
Prior to the transfer of the transmission functions by NPC

to TRANSCO, and before promulgation of the Grid Code, ERC
shall ensure that NPC shall provide to all electric power industry
participants open and non-discriminatory access to its transmission
system. Any violation thereof shall be subject to the fines and
penalties imposed herein.
SEC. 9. Functions and Responsibilities. - Upon the effectivity

of this Act, the TRANSCO shall have the following functions and
responsibilities:
(a) Act as the system operator of the nationwide electrical

transmission and subtransmission system, to be transferred to it by
NPC;
(b) Provide open, equal and non-discriminatory access to its

transmission system to all electricity users;
(c) Ensure and maintain the reliability, adequacy, security,

stability and integrity of the nationwide electrical grid in accordance
with the performance standards for the operation and maintenance
of the grid, as set forth in a Grid Code to be adopted and promulgated
by the ERC within six (6) months from the effectivity of this Act;
(d) Improve and expand its transmission facilities,

consistent with the Grid Code and the Transmission Development
1958
Plan (TDP) to be promulgated pursuant to this Act, to adequately

serve generation companies, distribution utilities and suppliers
requiring transmission service and/or ancillary services through the
transmission system: Provided, That TRANSCO shall submit any
plan for expansion or improvement of its facilities for approval by
the ERC;
(e) Subject to technical constraints, the grid operator of the

TRANSCO shall provide central dispatch of all generation facilities
connected, directly or indirectly, to the transmission system in
accordance with the dispatch schedule submitted by the market
operator, taking into account outstanding bilateral contracts; and
(f) TRANSCO shall undertake the preparation of the TDP.

In the preparation of the TDP, TRANSCO shall consult the other
sectors of the power industry such as the generation companies,
distribution utilities, and the electricity end-users. The TDP shall be
submitted to the DOE for integration with the Power Development
Program and the National Energy Plan, provided for in Republic
Act No. 7638 otherwise known as "the Department of Energy Act of
1992".
A generation company may develop and own or operate

dedicated point-to-point limited transmission facilities that are
consistent with the TDP: Provided, That such facilities are required
only for the purpose of connecting to the transmission system, and are
used solely by the generating facility, subject to prior authorization
by the ERC: Provided, further, That in the event that such assets
are required for competitive purposes, ownership of the same shall
be transferred to the TRANSCO at a fair market price: Provided,
finally, That in case of disagreement on the fair market price, the
ERC shall determine the fair market value of the asset.
Section 10. Corporate Powers of the TRANSCO. - As a corporate

entity, TRANSCO shall have the following corporate powers:
(a) To have continuous succession under its corporate name

until otherwise provided by law;
(b) To adopt and use a corporate seal and to change, alter or

modify the same, if necessary;
1959
(c) To sue and be sued;
(d) To enter into a contract and execute any instrument

necessary or convenient for the purpose for which it is created;
(e) To borrow funds from any source, whether private or

public, foreign or domestic, and issue bonds and other evidence of
indebtedness: Provided, That in the case of the bond issues, it shall
be subject to the approval of the President of the Philippines upon
recommendation of the Secretary of Finance: Provided, further,
That foreign loans shall be obtained, for and in behalf of TRANSCO,
in accordance with law and the rules and regulations of the Bangko
Sentral ng Pilipinas;
(f) To maintain a provident fund which consists of

contributions made by both the TRANSCO and its officials and
employees and their earnings for the payment of benefits to
such officials and employees or their heirs under such terms and
conditions as it may prescribe;
(g) To do any act necessary or proper to carry out the

purpose for which it is created, or which, from time to time, may be
declared by the TRANSCO Board as necessary, useful, incidental or
auxiliary to accomplish its purposes and objectives; and,
(h) Generally, to exercise all the powers of a corporation

under the corporation law insofar as they are not inconsistent with
this Act.
SEC. 11. TRANSCO Board of Directors. - All the powers

of the TRANSCO shall be vested in and exercised by a Board of
Directors. The Board shall be composed of a Chairman and six (6)
members. The Secretary of the Department of Finance (DOF) shall
be the ex-officio Chairman of the Board. The other members of the
TRANSCO Board shall include the Secretary of the Department of
Energy (DOE), the Secretary of the Department of Environment
and Natural Resources (DENR), the President of TRANSCO, one
member each representing Luzon, Visayas and Mindanao.
The members of the Board shall be appointed by the President

of the Philippines and shall serve for a term of six (6) years, except
1960
that any person appointed to fill-in a vacancy shall serve only

the unexpired term of his/her predecessor in office. All members
of the Board shall be professionals of recognized competence and
expertise in the fields of engineering, finance, economics, law
or business management. No member of the Board or any of his
relatives within the fourth civil degree of consanguinity or affinity
shall have any interest, either as investor, officer or director, in any
generation company or distribution utility or other entity engaged
in transmitting, generating and supplying electricity specified by
ERC.
SEC. 12. Powers and Duties of the Board. - The following are
the powers of the Board:
(a) To provide strategic direction for TRANSCO, and

formulate medium and long-term strategies pursuant to the vision,
mission, and objectives of TRANSCO;
(b) To develop and adopt policies and measures for the

efficient and effective management and operation of TRANSCO;
(c) To organize, re-organize, and determine the

organizational structure and staffing pattern of TRANSCO; abolish
and create offices and positions; fix the number of its officers and
employees; transfer and re-align such officers and personnel; fix
their compensation, allowance, and benefits;
(d) To fix the compensation of the President of TRANSCO

and to appoint and fix the compensation of other corporate officers;
(e) For cause, to suspend or remove any corporate officer

appointed by the Board;
(f) To adopt and set guidelines for the employment of

personnel on the basis of merit, technical competence, and moral
character; and
(g) Any provisions of the law to the contrary notwithstanding,

to write-off bad debts.
1961
SEC. 13. Board Meetings. - The Board shall meet as often as

may be necessary upon the call of the Chairman of the Board or by
a majority of the Board members.
SEC. 14. Board Per Diems and Allowances. - The members of

the Board shall receive per diem for each regular or special meeting
of the Board actually attended by them, and, upon approval of the
Secretary of the Department of Finance, such other allowances as
the Board may prescribe.
SEC. 15. Quorum. - The presence of at least four (4) members

of the Board shall constitute a quorum, which shall be necessary for
the transaction of any business. The affirmative vote of a majority
of the members present in a quorum shall be adequate for the
approval of any resolution, decision or order except when the Board
shall agree that a greater vote is required.
SEC. 16. Powers of the President of TRANSCO. - The President

of TRANSCO shall be appointed by the President of the Philippines.
In the absence of the Chairman, the President shall preside over
Board meetings. The TRANSCO President shall be the Chief
Executive Officer of TRANSCO.
The President of TRANSCO shall have the following powers

and duties:
(a) To execute and administer the policies and measures

approved by the Board, and take responsibility for the efficient
discharge of management functions;
(b) To oversee the preparation of the budget of TRANSCO;
(c) To direct and supervise the operation and internal

administration of TRANSCO and, for this purpose, may delegate
some or any of his administrative responsibilities and duties to
other officers of TRANSCO
(d) Subject to the guidelines and policies set up by the Board,

to appoint and fix the number and compensation of subordinate
officials and employees of TRANSCO; and for cause, to remove,
suspend, or otherwise discipline any subordinate employee of
TRANSCO
1962
(e) To submit an annual report to the Board on the activities

and achievements of TRANSCO at the close of each fiscal year
and upon approval thereof, submit a copy to the President of the
Philippines and to such other agencies as may be required by law
(f) To represent TRANSCO in all dealings and transactions

with other offices, agencies, and instrumentalities of the Government
and with all persons and other entities, private or public, domestic
or foreign; and
(g) To exercise such other powers and duties as may be

vested in him by the Board from time to time.
SEC. 17. Exemption from the Salary Standardization Law.

- The salaries and benefits of employees in the TRANSCO shall
be exempt from Republic Act No. 6758 and shall be fixed by the
TRANSCO Board.
SEC. 18. Profits. - The net profit, if any, of TRANSCO shall be

remitted to the PSALM Corp. not later than thirty (30) days after
the immediately preceding quarter.
SEC. 19. Transmission Charges. - The transmission charges

of the TRANSCO shall be filed with and approved by the ERC
pursuant to paragraph (f) of Section 43 hereof.
SEC. 20. TRANSCO Related Businesses. - TRANSCO may

engage in any related business which maximizes utilization of its
assets: Provided, That a portion of the net income derived from such
undertaking utilizing assets which form part of the rate base shall
be used to reduce transmission wheeling rates as determined by the
ERC. Such portion of net income used to reduce the transmission
wheeling rates shall not exceed fifty percent (50%) of the net income
derived from such undertaking.
Separate accounts shall be maintained for each business

undertaking to ensure that the transmission business shall neither
subsidize in any way such business undertaking nor encumber its
transmission assets in any way to support such business.
SEC. 21. TRANSCO Operations & Maintenance (O&M)

Concessionaire. - The TRANSCO shall award, in open competitive
1963
bidding, a concession contract to a qualified party for the operation,

maintenance, improvement and expansion of its transmission assets
and the operation of any related business for a period of twenty-five
(25) years, subject to review and renewal for a maximum period of
another twenty-five (25) years. The contract shall include, but not
limited to, the provision for performance and financial guarantees
or any other covenants which may be required in order to fulfill the
obligations of the concession contract.
The TRANSCO O & M Concessionaire shall comply with the

Grid Code and the TDP as approved. Failure to comply with such
obligations shall result in the imposition of appropriate sanctions
or penalties by the ERC: Provided, however, That in cases of major
or serious economic and/or technical reasons, TRANSCO O & M
Concessionaire may seek authority from the ERC to defer any
expansion or improvement.
The concessionaire shall be financially and technically capable,

with proven domestic and/or international experience and expertise
as a leading transmission system operator under a competitive
electric power industry structure. The experience of the strategic
partner must be with a transmission system of equal, if not greater,
capacity and coverage as the Philippines.
SEC. 22. Distribution Sector. - The distribution of electricity

to end-users shall be a regulated common carrier business requiring
a franchise. Distribution of electric power to all end-users may be
undertaken by private distribution utilities, cooperatives, local
government units presently undertaking this function and other
duly authorized entities, subject to regulation by the ERC.
SEC. 23. Functions of Distribution Utilities. - A distribution

utility shall have the obligation to provide distribution services and
connections to its system for any end-user within its franchise area
consistent with the distribution code. Any entity engaged therein
shall provide open and non-discriminatory access to its distribution
system to all users.
Any distribution utility shall be entitled to impose and collect

distribution retail wheeling charges and connection fees from such
end-users as approved by the ERC. A distribution utility shall have
1964
the obligation to supply electricity in the least cost manner to its

captive market, subject to the collection of distribution retail supply
rate duly approved by the ERC.
To achieve economies of scale in utility operations, distribution

utilities may, after due notice and public hearing, pursue structural
and operational reforms such as but not limited to, joint actions
between or among the distribution utilities, subject to the guidelines
issued by the ERC. Such joint actions shall result in improved
efficiencies, reliability of service, reduction of costs and compliance
to the performance standards prescribed in the IRR of this Act.
Distribution utilities shall submit to the ERC a statement of their
compliance with the technical specifications prescribed in the
Distribution Code and the performance standards prescribed in the
IRR of this Act. Distribution utilities which do not comply with any
of the prescribed technical specifications and performance standards
shall submit to the ERC a plan to comply, within three (3) years, with
said prescribed technical specifications and performance standards.
The ERC shall, within sixty (60) days upon receipt of such plan,
evaluate the same and notify the distribution utility concerned of its
action. Failure to submit a feasible and credible plan and/or failure
to implement the same shall serve as grounds for the imposition of
appropriate sanctions, fines or penalties.
Distribution utilities shall prepare and submit to the DOE

their annual distribution development plans. In the case of electric
cooperatives, such plans shall also be submitted through the
National Electrification Administration.
Distribution utilities shall provide universal service within

their franchise, including unviable areas, as part of their social
obligations in a manner that shall sustain the economic viability of
the utility, subject to the approval by the ERC in the case of private or
government-owned utilities. Areas which a franchised distribution
utility cannot or does not find viable may be transferred to another
distribution utility, if any is available, who will provide the service,
subject to approval by ERC. In cases where franchise holders fail
and/or refuse to service any area within their franchise territory and
allowed another utility to service the same, then the status quo shall
be respected. To this end, distribution utilities shall submit to the
DOE their plans for serving such areas as part of their distribution
1965
development plans. In cases of major or serious economic and/or

technical reasons, the distribution utility shall seek prior authority
from the ERC to defer such expansion or improvement.
Distribution utilities may exercise the power of eminent

domain subject to the requirements of the constitution and existing
laws.
SEC. 24. Distribution Retail Wheeling Charge. - The retail

wheeling rates of distribution utilities shall be filed with and
approved by the ERC pursuant to paragraph (f) of Section 43
hereof.
SEC. 25. Distribution Retail Supply Rate. - The rates charged

by distribution utilities for the supply of electricity in their captive
market shall be subject to regulation by the ERC based on the
principle of full recovery of prudent and reasonable economic costs
incurred, or such other principles that will promote efficiency as
may be determined by the ERC.
Every distribution utility shall identify and segregate in its

bills to end-users the components of the distribution retail supply
rate, as defined in this Act.
SEC. 26. Distribution Related Businesses. - Distribution

utilities may, directly or indirectly, engage in any related business
undertaking which maximizes the utilization of their assets:
Provided, That a portion of the net income derived from such
undertaking utilizing assets which form part of the rate base
shall be used to reduce its distribution retail wheeling charges as
determined by the ERC: Provided, further, That such portion of net
income used to reduce their distribution retail wheeling charges
shall not exceed fifty percent (50%) of the net income derived
from such undertaking: Provided, finally, That separate accounts
are maintained for each business undertaking to ensure that the
distribution business shall neither subsidize in any way such
business undertaking nor encumber its distribution assets in any
way to support such business.
SEC. 27. Franchising Power in the Electric Power Sector. - The

power to grant franchises to persons engaged in the transmission
1966
and distribution of electricity shall be vested exclusively in the

Congress of the Philippines and all laws inconsistent with this Act
particularly, but not limited to, Section 43 of PD 269, otherwise
known as the "National Electrification Decree," are hereby deemed
repealed or modified accordingly: Provided, That all existing
franchises shall be allowed to their full term: Provided, further,
That in the case of electric cooperatives, renewals and cancellations
shall remain with the National Electricity Commission under the
National Electrification Administration for five (5) more years after
the enactment of this Act.
SEC. 28. De-monopolization and Shareholding Dispersal.

- In compliance with the constitutional mandate for dispersal of
ownership and de-monopolization of public utilities, the holdings
of persons, natural or juridical, including directors, officers,
stockholders and related interests, in a generation company,
distribution utility and their respective holding companies shall
not exceed fifteen (15%) percent of the voting shares of stock unless
the utility or the company holding the shares or its controlling
stockholders are already listed in the Philippine Stock Exchange
(PSE): Provided, That controlling stockholders of small distribution
utilities are required to list in the PSE within five (5) years from the
enactment of this Act if they already own the stocks. New controlling
stockholders shall undertake such listing within five (5) years from
the time they acquire ownership and control. A small distribution
company is one whose peak demand is One hundred megawatts
(100MW) or less.
The ERC shall, within sixty (60) days from the effectivity of
this Act, promulgate the rules and regulations to implement and
effect this provision.
SEC. 29. Supply Sector. - The supply of electricity to the

contestable market shall require a license from the ERC, except for
distribution utilities and electric cooperatives with respect to their
existing franchise areas.
For this purpose, the ERC shall promulgate rules and

regulations prescribing the qualifications of electricity suppliers
which shall include, among other requirements, a demonstration of
their technical capability, financial capability, and creditworthiness:
1967
Provided, That the ERC shall have authority to require electricity

suppliers to furnish a bond or other evidence of the ability of a
supplier to withstand market disturbances or other events that may
increase the cost of providing service.
Any law to the contrary notwithstanding, supply of electricity

to the contestable market shall not be considered a public utility
operation. For this purpose, any person or entity which shall engage
in the supply of electricity to the contestable market shall not be
required to secure a local or national franchise.
The prices to be charged by suppliers for the supply of electricity

to the contestable market shall not be subject to regulation by the
ERC.
Electricity suppliers shall be subject to the rules and

regulations concerning abuse of market power, cartelization, and
other anti-competitive or discriminatory behavior to be promulgated
by the ERC.
In its billings to end-users, every supplier shall identify and

segregate the components of its supply charge, as defined herein.
SEC. 30. Wholesale Electricity Spot Market. - Within one

(1) year from the effectivity of this Act, the DOE shall establish
a wholesale electricity spot market composed of the wholesale
electricity spot market participants. The market shall provide the
mechanism for identifying and setting the price of actual variations
from the quantities transacted under contracts between sellers and
purchasers of electricity.
Jointly with the electric power industry participants, the DOE

shall formulate the detailed rules for the wholesale electricity spot
market. Said rules shall provide the mechanism for determining
the price of electricity not covered by bilateral contracts between
sellers and purchasers of electricity users. The price determination
methodology contained in said rules shall be subject to the approval
of ERC. Said rules shall also reflect accepted economic principles
and provide a level playing field to all electric power industry
participants. The rules shall provide, among others, procedures
for:
1968
(a) Establishing the merit order dispatch instructions for

each time period;
(b) Determining the market-clearing price for each time

period;
(c) Administering the market including criteria for admission

to and termination from the market which includes security or
performance bond requirements, voting rights of the participants,
surveillance and assurance of compliance of the participants with
the rules and the formation of the wholesale electricity spot market
governing body;
(d) Prescribing guidelines for the market operation in

system emergencies; and
(e) Amending the rules.
The wholesale electricity spot market shall be implemented

by a market operator in accordance with the wholesale electricity
spot market rules. The market operator shall be an autonomous
group, to be constituted by DOE, with equitable representation
from electric power industry participants, initially under the
administrative supervision of the TRANSCO. The market operator
shall undertake the preparatory work and initial operation of the
wholesale electricity spot market. Not later than one (1) year after
the implementation of the wholesale electricity spot market, an
independent entity shall be formed and the functions, assets and
liabilities of the market operator shall be transferred to such entity
with the joint endorsement of the DOE and the electric power
industry participants. Thereafter, the administrative supervision of
the TRANSCO over such entity shall cease.
Subject to the compliance with the membership criteria,

all generating companies, distribution utilities, suppliers, bulk
consumers/end-users and other similar entities authorized by the
ERC shall be eligible to become members of the wholesale electricity
spot market.
The ERC may authorize other similar entities to become

eligible as members of the wholesale electricity spot market either
1969
directly or indirectly. All generating companies, distribution

utilities, suppliers, bulk consumers/end-users and other similar
entities authorized by the ERC, whether direct or indirect members
of the wholesale electricity spot market, shall be bound by the
wholesale electricity spot market rules with respect to transactions
in that market. NEA may, in exchange for adequate security and a
guarantee fee, act as a guarantor for purchases of electricity in the
wholesale electricity spot market by any electric cooperative or small
distribution utility to support their credit standing consistent with
the provisions hereof. For this purpose, the authorized capital stock of
NEA is hereby increased to Ten billion pesos (P10,000,000,000.00).
All electric cooperatives which have outstanding uncollected

billings to any local government unit shall report such billings to
NEA which shall, in turn, report the same to the Department of
Budget and Management (DBM) for collection pursuant to Executive
Order 190 issued on December 21, 1999.
The cost of administering and operating the wholesale

electricity spot market shall be recovered by the market operator
through a charge applied to all market members: Provided, That
such charge shall be filed with and approved by the ERC.
In cases of national and international security emergencies

or natural calamities, the ERC is hereby empowered to suspend
the operation of the wholesale electricity spot market or declare a
temporary wholesale electricity spot market failure.
SEC. 31. Retail Competition and Open Access. - Retail

competition and open access on distribution wires shall be
implemented not later than three (3) years upon the effectivity of this
Act subject to compliance with the following conditions precedent:
(a) Establishment of the wholesale electricity spot market;
(b) Approval of unbundled transmission and distribution

retail wheeling charges;
(c) Initial implementation of the cross subsidy removal

scheme; and
1970
(d) Privatization of at least 70% of the total capacity of

generating assets of NPC and of the total capacity of the power
plants under contract with NPC in Luzon and Visayas. Upon the
initial implementation of open access, the ERC shall allow all
electricity end-users located in Luzon with a maximum demand of
at least two megawatts (2MW) to be the contestable market. For the
Visayas and Mindanao areas, the initial threshold level shall be one
and a quarter megawatts (1.25MW). However, the ERC shall, on
January 1, 2004, reduce the maximum demand for the contestable
market in Luzon to one megawatt (1MW) for at least two (2) years
and Seven hundred fifty kilowatts (750kW) for the Visayas and
Mindanao areas. Thereafter, the ERC shall determine a threshold
level when open access shall apply to all distribution utilities.
In the case of electric cooperatives, retail competition and open

access shall be implemented not earlier than five (5) years upon the
effectivity of this Act.
SEC. 32. NPC Stranded Debt and Contract Cost Recovery. -

Stranded debt of NPC shall refer to any unpaid financial obligations
of NPC which have not been liquidated by the proceeds from sales
and privatization of NPC assets.
Stranded contract costs of NPC shall refer to the excess of

the contracted cost of electricity under eligible IPP contracts of
NPC over the actual selling price of such contracts in the market.
Such contracts shall have been accredited by the DOE or NPC and
approved by the ERB as of the effectivity of this Act.
The national government shall, in exchange for the

equivalent amount of the equity of NPC, directly assume a portion
of the financial obligations of NPC in an amount not to exceed Two
Hundred Billion Pesos (P200,000,000,000.00). For this purpose, the
capital stock of NPC shall be increased to Three hundred billion
pesos (P300,000,000,000.00) common shares which shall be divided
into Three billion (3,000,000,000.00) shares with a par value of One
hundred pesos (P100.00) per share.
The ERC shall verify the reasonable amounts and determine

the manner and duration for the full recovery of stranded debt
and stranded contract costs as defined herein: Provided, That the
1971
duration for such recovery shall not be shorter than fifteen (15)
years nor longer than twenty-five (25) years. The ERC shall, at the
end of the first year of the implementation of stranded cost recovery
and every year thereafter, conduct a review to determine whether
there is under-recovery or over-recovery and adjust (true-up) the
level of stranded cost recovery charge accordingly.
The NPC and PSALM shall have the duty to mitigate all
potential stranded contract costs of NPC.
SEC. 33. Distribution Utilities Stranded Contract Costs

Recovery. - Stranded contract costs of distribution utilities shall
refer to the excess of the contracted cost of electricity under eligible
contracts of such utilities over the actual selling price of such
contracts in the market. Such contracts shall have been accredited
by the DOE or NPC and approved by the ERB as of the effectivity
of this Act.
Within one (1) year from the start of open access, any
distribution utility that intends to seek recovery of stranded contract
costs shall file notice of such intent with the ERC together with an
estimate of such obligations, including the present value thereof
and such other supporting data as may be required by the ERC.
Any distribution utility that does not file within the date specified
shall not be eligible for such recovery.
Any distribution utility which opts to recover stranded cost

shall have a duty to mitigate its potential stranded contract costs by
making reasonable best efforts to:
(a) reduce the costs of its existing contracts with IPPs; and
(b) submit to an annual earnings review by the ERC and

use its earnings above its authorized rate of return to reduce the
book value of contracts until the end of the stranded cost recovery
period.
Other mitigating measures which are reasonably known

and generally accepted within the electric power industry shall be
utilized. The ERC shall not require the distribution utility to take
1972
a loss to reduce stranded contract costs or divest assets, unless the

divestiture is imposed as a penalty as provided herein.
The relevant distribution utility shall submit to the ERC

quarterly reports showing the amount of stranded costs recovered
and the balance remaining to be recovered. The ERC shall verify the
reasonable amounts and determine the manner and duration for the
full recovery of stranded contract costs as defined herein: Provided,
That the duration for such recovery shall not be shorter than fifteen
(15) years nor longer than twenty-five (25) years. The ERC shall,
at the end of the first year of the implementation of stranded cost
recovery and every year thereafter, conduct a review to determine
whether there is under-recovery or over recovery and adjust (true-
up) the level of stranded cost recovery charge accordingly.
SEC. 34. Universal Charge. - Within one (1) year from the
effectivity of this Act, a universal charge to be determined, fixed and
approved by the ERC, shall be imposed on all electricity end-users
for the following purposes:
(a) Payment for the stranded debts and stranded contract

costs of NPC and qualified distribution utilities resulting from the
restructuring of the industry;
(b) Missionary electrification;
(c) The equalization of the taxes and royalties applied to

indigenous or renewable sources of energy vis-à-vis imported energy
fuels;
(d) An environmental charge equivalent to one-fourth of one

centavo per kilowatt-hour (P0.0025/kWh), which shall accrue to an
environmental fund to be used solely for watershed rehabilitation
and management. Said fund shall be managed by NPC under
existing arrangements; and
(e) A charge to account for all forms of cross-subsidies for a

period not exceeding three (3) years.
The universal charge shall be a non-bypassable charge which

shall be passed on and collected from all end-users on a monthly
1973
basis by the distribution utilities. Collections by the distribution

utilities and the TRANSCO in any given month shall be remitted to
the PSALM Corp. on or before the fifteenth (15 th ) of the succeeding
month, net of any amount due to the distribution utility. Any
end-user or self-generating entity not connected to a distribution
utility shall remit its corresponding universal charge directly to the
TRANSCO.
The PSALM Corp., as administrator of the fund, shall create

a Special Trust Fund which shall be disbursed only for the purposes
specified herein in an open and transparent manner. All amounts
collected for the universal charge shall be distributed to the
respective beneficiaries within a reasonable period to be provided
by the ERC.
SEC. 35. Royalties, Returns and Tax Rates for Indigenous

Energy Resources. - The provision of Section 79 of Commonwealth Act
No. 137 (C.A. No. 137) and any law to the contrary notwithstanding,
the royalties, returns and taxes collected for the exploitation of all
indigenous sources of energy, including but not limited to, natural
gas and geothermal steam, shall be adjusted so as to effect parity
of tax treatment with the existing rates for imported coal, crude oil,
bunker fuel and other imported fuels.
To ensure that the adjustment of tax rates and royalties shall

result in lower rates for end-users, the Department of Finance shall,
within sixty (60) days from the effectivity of this Act, issue the rules
and regulations thereof. Consistent with this objective, the ERC
shall forthwith revise the rates of power from all indigenous sources
of energy.
SEC. 36. Unbundling of Rates and Functions. - Within six

(6) months from the effectivity of this Act, NPC shall file with the
ERC its revised rates. The rates of NPC shall be unbundled between
transmission and generation rates and the rates shall reflect the
respective costs of providing each service. Inter-grid and intra-grid
cross subsidies for both the transmission and the generation rates
shall be removed in accordance with this Act.
Within six (6) months from the effectivity of this Act, each
distribution utility shall file its revised rates for the approval by the
1974
ERC. The distribution retail wheeling charge shall be unbundled

from the distribution retail supply rate and the rates shall reflect the
respective costs of providing each service. For both the distribution
retail wheeling and supply charges, inter-class subsidies shall be
removed in accordance with this Act.
Within six (6) months from the date of submission of revised

rates by NPC and each distribution utility, the ERC shall notify the
entities of their approval.
Any electric power industry participant shall functionally and

structurally unbundle its business activities and rates in accordance
with the sectors as identified in Section 5 hereof. The ERC shall
ensure full compliance with this provision.
CHAPTER III
ROLE OF THE DEPARTMENT OF ENERGY
SEC. 37. Powers and Functions of the DOE. - In addition to

its existing powers and functions, the DOE is hereby mandated to
supervise the restructuring of the electricity industry. In pursuance
thereof, Section 5 of R. A. 7638 otherwise known as "The Department
of Energy Act of 1992" is hereby amended to read as follows:
"(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 annually the existing Philippine

Energy Plan, hereinafter referred to as 'The Plan', 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 plan shall include a policy direction
towards the privatization of government agencies related to energy,
deregulation of the power and energy industry, and reduction of
1975
dependency on oil-fired plants. Said Plan shall be submitted to

Congress not later than the fifteenth day of September every year
thereafter;
(c) Prepare and update annually a Power Development

Program (PDP) and integrate the same into the Philippine Energy
Plan. The PDP shall consider and integrate the individual or
joint development plans of the transmission, generation, and
distribution sectors of the power industry, which are submitted
to the Department: Provided, however, That the ERC shall have
exclusive authority covering the Grid Code and the pertinent rules
and regulations it may issue;
(d) Ensure the reliability, quality and security of supply of

electric power;
(e) Following the restructuring of the electricity sector, the

DOE shall, among others:
(i) Encourage private sector investments in the electricity

sector and promote development of indigenous and renewable
energy sources;
(ii) Facilitate and encourage reforms in the structure and

operations of distribution utilities for greater efficiency and lower
costs;
(iii) In consultation with other government agencies, promote

a system of incentives to encourage industry participants, including
new generating companies and end-users to provide adequate and
reliable electric supply; and
(iv) Undertake, in coordination with the ERC, NPC, NEA and

the Philippine Information Agency (PIA), information campaign to
educate the public on the restructuring of the electricity sector and
privatization of NPC assets;
(f) Jointly with the electric power industry participants,

establish the wholesale electricity spot market and formulate the
detailed rules governing the operations thereof;
1976
(g) Establish and administer programs for the exploration,

transportation, marketing, distribution, utilization, conservation,
stockpiling, and storage of energy resources of all forms, whether
conventional or non-conventional;
(h) Exercise supervision and control over all government

activities relative to energy projects in order to attain the goals
embodied in Section 2 of RA 7638;
(i) Develop policies and procedures and, as appropriate,

promote a system of energy development incentives to enable
and encourage electric power industry participants to provide
adequate capacity to meet demand including, among others, reserve
requirements;
(j) Monitor private sector activities relative to energy projects

in order to attain the goals of the restructuring, privatization, and
modernization of the power sector 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;
(k) 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; (l) Formulate and implement programs, including
a system of providing incentives and penalties, for the judicious
and efficient use of energy in all energy-consuming sectors of the
economy;
(m) Formulate and implement a program for the accelerated

development of non-conventional energy systems and the promotion
and commercialization of its applications;
(n) 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;
1977
(o) 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;
(p) Formulate such rules and regulations as may be

necessary to implement the objectives of this Act; and
(q) Exercise such other powers as may be necessary or

incidental to attain the objectives of this Act."
CHAPTER IV
REGULATION OF THE ELECTRIC POWER INDUSTRY
SEC. 38. Creation of the Energy Regulatory Commission. -

There is hereby created an independent, quasi-judicial regulatory
body to be named the Energy Regulatory Commission (ERC). For
this purpose, the existing Energy Regulatory Board (ERB) created
under Executive Order No. 172, as amended, is hereby abolished.
The Commission shall be composed of a Chairman and four

(4) members to be appointed by the President of the Philippines.
The Chairman and the members of the Commission shall be
natural-born citizens and residents of the Philippines, persons of
good moral character, at least thirty-five (35) years of age, and of
recognized competence in any of the following fields: energy, law,
economics, finance, commerce, or engineering, with at least three
(3) years actual and distinguished experience in their respective
fields of expertise: Provided, That out of the four (4) members of the
Commission at least one (1) shall be a member of the Philippine Bar
with at least ten (10) years experience in the active practice of law,
and one (1) shall be a certified public accountant with at least ten
(10) years experience in active practice.
Within three (3) months from the creation of ERC, the Chairman
shall submit for approval of the President of the Philippines the new
organizational structure and plantilla positions necessary to carry
out the powers and functions of the ERC.
1978
The Chairman of the Commission who shall be a member of

the Philippine Bar shall act as the Chief Executive Officer of the
Commission.
All members of the Commission shall have a term of seven (7)

years: Provided, That for the first appointees, the Chairman shall
hold office for seven (7) years, two (2) members shall hold office for
five (5) years and the other two (2) members shall hold office for
three (3) years: Provided, further, That appointment to any future
vacancy shall only be for the unexpired term of the predecessor:
Provided, finally, That there shall be no reappointment and in no
case shall any member serve for more than seven (7) years in the
Commission.
The Chairman and Members of the Commission shall assume

office at the beginning of their terms: Provided, That, if upon the
effectivity of this Act, the Commission has not been constituted
and the new staffing pattern and plantilla positions have not been
approved and filled-up, the current Board and existing personnel of
ERB shall continue to hold office.
The existing personnel of the ERB, if qualified, shall be given

preference in the filling up of plantilla positions created in the ERC,
subject to existing civil service rules and regulations. Members
of the Commission shall enjoy security of tenure and shall not be
suspended or removed from office except for just cause as specified
by law.
The Chairman and members of the Commission or any of

their relatives within the fourth civil degree of consanguinity or
affinity, legitimate or common law, shall be prohibited from holding
any interest whatsoever, either as investor, stockholder, officer
or director, in any company or entity engaged in the business of
transmitting, generating, supplying or distributing any form of
energy and must, therefore, divest through sale or legal disposition
of any and all interests in the energy sector upon assumption of
office.
The presence of at least three (3) members of the Commission

shall constitute a quorum and the majority vote of two (2) members
in a meeting where a quorum is present shall be necessary for the
adoption of any rule, ruling, order, resolution, decision or other act
1979
of the Commission in the exercise of its quasi-judicial functions:

Provided, That in fixing rates and tariffs of transmission, and
distribution retail wheeling charges and tariffs of franchise electric
utilities and all electric power rates, an affirmative vote of three (3)
members shall be required.
SEC. 39. Compensation and Other Emoluments for ERC

Personnel. - The compensation and other emoluments for the
Chairman and members of the Commission and the ERC personnel
shall be exempted from the coverage of Republic Act No. 6758,
otherwise known as the Salary Standardization Act. For this
purpose, the schedule of compensation of the ERC personnel, except
for the initial salaries and compensation of the Chairman and
members of the Commission, shall be submitted for approval by
the President of the Philippines. The new schedule of compensation
shall be implemented within six (6) months from the effectivity of
this Act and may be upgraded by the President of the Philippines as
the need arises: Provided, That in no case shall the rate be upgraded
more than once a year.
The Chairman and members of the Commission shall initially

be entitled to the same salaries, allowances and benefits as those of
the Presiding Justice and Associate Justices of the Supreme Court,
respectively. The Chairman and the members of the Commission,
upon completion of their term or upon becoming eligible for retirement
under existing laws shall be entitled to the same retirement benefits
and privileges provided for the Presiding Justice and Associate
Justices of the Court of Appeals, respectively.
SEC. 40. Enhancement of Technical Competence. - The ERC

shall establish rigorous training programs for its staff for the
purpose of enhancing the technical competence of the ERC in the
following areas: evaluation of technical performance and monitor
compliance with service and performance standards, performance-
based rate-setting reform, environmental standards and such other
areas as will enable the ERC to adequately perform its duties and
functions.
SEC. 41. Promotion of Consumer Interests. - The ERC shall

handle consumer complaints and ensure the adequate promotion of
consumer interests.
1980
SEC. 42. Fiscal Autonomy of the ERC. - The ERC shall enjoy
fiscal autonomy, subject to regular audits by the Commission
on Audit. The amount of One hundred fifty million pesos (PHP
150,000,000.00) is hereby allocated from the existing budget of the
ERB for the initial operation of the ERC. Any balance shall initially
be sourced from the Office of the President of the Philippines.
Thereafter, the annual budget certified by the ERC, through its
chairman, as necessary to defray its expenses shall be provided
for in the regular or special appropriations and shall be released
automatically and regularly.
SEC. 43. Functions of the ERC. - The ERC shall promote

competition, encourage market development, ensure customer choice
and discourage/penalize abuse of market power in the restructured
electricity industry. Towards this end, it shall be responsible for the
following key functions in the restructured industry:
(a) Enforce the implementing rules and regulations of this

Act;
(b) Within six (6) months from the effectivity of this Act,
promulgate and enforce, in accordance with law, a National Grid
Code and a Distribution Code which shall include, but not limited
to, the following:
(i) Performance standards for TRANSCO O & M

Concessionaire, distribution utilities and suppliers: Provided, That
in the establishment of the performance standards, the nature and
function of the entities shall be considered; and
(c) (ii) In consultation with the DOE and DOF, financial

capability standards for the generating companies, the TRANSCO,
distribution utilities and suppliers: Provided, That in the formulation
of the financial capability standards, the nature and function of the
entity shall be considered: Provided, further, That such standards
are set to ensure that the electric power industry participants meet
the minimum financial standards to protect the public interest.
Determine, fix, and approve, after due notice and public hearings
the universal charge, to be imposed on all electricity end-users
pursuant to Sections 34 hereof;
1981
(d) Enforce the rules and regulations governing the

operations of the electricity spot market and the activities of the
spot market operator and other participants in the spot market,
for the purpose of ensuring a greater supply and rational pricing of
electricity;
(e) Determine the level of cross subsidies in the existing retail

rate until the same is removed pursuant to Section 73 hereof;
(f) Amend or revoke the authority to operate of any person

or entity which fails to comply with the provisions hereof, the IRR or
any order or resolution of the ERC, after due notice and hearing. In
the event a divestment is required, the ERC shall allow the affected
party sufficient time to remedy the infraction or for an orderly
disposal, but shall in no case exceed twelve (12) months from the
issuance of the order;
(g) In the public interest, establish and enforce a methodology

for setting transmission and distribution wheeling rates and retail
rates for the captive market of a distribution utility, taking into
account all relevant considerations, including the efficiency or
inefficiency of the regulated entities. The rates must be such as to
allow the recovery of just and reasonable costs and a reasonable
return on rate base (RORB) to enable the entity to operate viably.
The rate-setting methodology so adopted and applied must ensure
a reasonable price of electricity. The rates prescribed shall be non-
discriminatory. To achieve this objective and to ensure the complete
removal of cross subsidies, the cap on the recoverable rate of system
losses prescribed in Section 10 of Republic Act No. 7832, is hereby
amended and shall be replaced by caps which shall be determined
by the ERC based on load density, sales mix, cost of service, delivery
voltage and other technical considerations it may promulgate. The
ERC shall determine such form of rate-setting methodology, which
shall promote efficiency. In case the rate setting methodology used
is RORB, it shall be subject to the following guidelines:
(i) For purposes of determining the rate base, TRANSCO

or any distribution utility may be allowed to revalue its eligible
assets not more than once every three (3) years by an independent
appraisal company: Provided, however, That ERC may give an
exemption in case of unusual devaluation: Provided, further, That
1982
the ERC shall exert efforts to minimize price shocks in order to

protect the consumers;
(ii) Interest expenses are not allowable deductions from

permissible return on rate base;
(iii) In determining eligible cost of services that will be

passed on to the end-users, the ERC shall establish minimum
efficiency performance standards for TRANSCO and distribution
utilities including systems losses, interruption frequency rates, and
collection efficiency;
(iv) Further, in determining rate base, TRANSCO or any

distribution utility shall not be allowed to include management
inefficiencies like cost of project delays not excused by force majeure,
penalties and related interest during construction applicable to
these unexcused delays; and
(v) Any significant operating costs or project investments of

TRANSCO and distribution utilities which shall become part of the
rate base shall be subject to the verification of the ERC to ensure
that the contracting and procurement of the equipment, assets and
services have been subjected to transparent and accepted industry
procurement and purchasing practices to protect the public
interest.
(h) Three (3) years after the imposition of the universal

charge, ensure that the charges of the TRANSCO or any distribution
utility shall bear no cross subsidies between grids, within grids, or
between classes of customers, except as provided herein;
(i) Review and approve any changes on the terms and

conditions of service of the TRANSCO or any distribution utility;
(j) Allow TRANSCO to charge user fees for ancillary services

to all electric power industry participants or self-generating entities
connected to the grid. Such fees shall be fixed by the ERC after due
notice and public hearing;
(k) Set a lifeline rate for the marginalized end-users;
1983
(l) Monitor and take remedial measures to penalize abuse of

market power, cartelization, and anti-competitive or discriminatory
behavior by any electric power industry participant;
(m) Impose fines or penalties for any non-compliance with or

breach of this Act, the IRR of this Act and the rules and regulations
which it promulgates or administers;
(n) Take any other action delegated to it pursuant to this

Act;
(o) Before the end of April of each year, submit to the Office
of the President of the Philippines and Congress, copy furnished the
DOE, an annual report containing such matters or cases which have
been filed before or referred to it during the preceding year, the
actions and proceedings undertaken and its decision or resolution
in each case. The ERC shall make copies of such reports available
to any interested party upon payment of a charge which reflects the
printing costs. The ERC shall publish all its decisions involving rates
and anti-competitive cases in at least one (1) newspaper of general
circulation, and/or post electronically and circulate to all interested
electric power industry participants copies of its resolutions to
ensure fair and impartial treatment;
(p) Monitor the activities of the generation and supply

of the electric power industry with the end in view of promoting
free market competition and ensuring that the allocation or pass
through of bulk purchase cost by distributors is transparent, non-
discriminatory and that any existing subsidies shall be divided pro-
rata among all retail suppliers;
(q) Act on applications for or modifications of certificates of

public convenience and/or necessity, licenses or permits of franchised
electric utilities in accordance with law and revoke, review and
modify such certificates, licenses or permits in appropriate cases,
such as in cases of violations of the Grid Code, Distribution Code
and other rules and regulations issued by the ERC in accordance
with law;
(r) Act on applications for cost recovery and return on

demand side management projects;
1984
(s) In the exercise of its investigative and quasi-judicial

powers, act on any complaint by or against any participant or player
in the energy sector for violations of any laws, rules and regulations
governing the same, including the rules on cross-ownership, anti-
competitive practices and other acts of abuse of market positions by
any participant or player in the energy sector, as may be provided by
law, and require any person or entity to submit any report or data
relative to any investigation or hearing conducted in accordance
with this Act;
(t) Inspect, on its own or through duly authorized

representatives, the premises, books of accounts and records of any
person or entity at any time, in the exercise of its quasi-judicial power
for purposes of determining the existence of any anti-competitive
behavior and/or market power abuse and any violation of rules and
regulations issued by the ERC;
(u) Perform such other regulatory functions as are appropriate

in order to ensure the successful restructuring and modernization
of the electric power industry, such as, but not limited to, the rules
and guidelines under which generation companies, distribution
utilities which are not publicly listed shall offer and sell to the
public a portion not less than fifteen percent (15%) of their common
shares of stocks: Provided, however, That generation companies,
distribution utilities or their respective holding companies that are
already listed in the PSE are deemed in compliance. For existing
companies, such public offering shall be implemented not later than
five (5) years from the effectivity of this Act. New companies shall
implement their respective public offerings not later than five (5)
years from the issuance of their certificate of compliance.
(v) The ERC shall have the original and exclusive jurisdiction
over all cases contesting rates, fees, fines and penalties imposed by
the ERC in the exercise of the abovementioned powers, functions
and responsibilities and over all cases involving disputes between
and among participants or players in the energy sector. All notices
of hearings to be conducted by the ERC for the purpose of fixing
rates or fees shall be published at least twice for two successive
weeks in two (2) newspapers of nationwide circulation.
1985
SEC. 44. Transfer of Powers and Functions. - The powers

and functions of the Energy Regulatory Board not inconsistent
with the provisions of this Act are hereby transferred to the ERC.
The foregoing transfer of powers and functions shall include all
applicable funds and appropriations, records, equipment, property
and personnel as may be necessary.
SEC. 45. Cross Ownership, Market Power Abuse And Anti-

Competitive Behavior. - No participant in the electricity industry
may engage in any anti-competitive behavior including, but not
limited to, cross-subsidization, price or market manipulation, or
other unfair trade practices detrimental to the encouragement and
protection of contestable markets.
No generation company or distribution utility, or its

respective subsidiary or affiliate or stockholder or official of a
generation company or distribution utility, or other entity engaged
in generating and supplying electricity specified by ERC shall be
allowed to hold any interest, direct or indirect, in TRANSCO or
its concessionaire. Likewise, the TRANSCO, or its concessionaire
or any of its stockholders or officials or any of their relatives
within the fourth civil degree of consanguinity or affinity, shall
not hold any interest, whether direct or indirect, in any generation
company or distribution utility. Except for government-appointed
representatives, no person who is an officer or director of TRANSCO
or its concessionaire shall be an officer or director of any generation
company, distribution utility or supplier.
To promote true market competition and prevent harmful

monopoly and market power abuse, the ERC shall enforce the
following safeguards:
(a) Starting not later than five (5) years from the approval of
this Act and until such time that the ERC has reduced the threshold
level to one hundred kilowatts (100kW), no company or related
group can own and operate or control and operate more than forty
percent (40%) of the installed generating capacity of a grid and/or
thirty percent (30%) of the national installed capacity; and
(b) Distribution utilities may enter into bilateral power

supply contracts subject to review by ERC.
1986
For purposes of this Section, the grid basis shall consist of

three (3) separate grids, namely Luzon, Visayas and Mindanao. The
ERC shall have the authority to modify or amend this definition of a
grid when two or more of the three separate grids become sufficiently
interconnected to constitute a single grid or as conditions may
otherwise permit.
Exceptions from these limitations shall be allowed for isolated

grids that are not connected to the high voltage transmission system.
Except as otherwise provided for in this Section, any restriction on
ownership and/or control between or within sectors of the electricity
industry may be imposed by ERC only insofar as the enforcement of
the provisions of this Section is concerned.
The ERC shall, within one (1) year from the effectivity of
this Act, promulgate rules and regulations to promote competition,
encourage market development and customer choice and
discourage/penalize abuse of market power, cartelization and any
anti-competitive or discriminatory behavior, in order to further the
intent of this Act and protect the public interest. Such rules and
regulations shall define the following:
(a) the relevant markets for purposes of establishing abuse

or misuse of monopoly or market position;
(b) areas of isolated grids; and
(c) the periodic reportorial requirements of electric power

industry participants as may be necessary to enforce the provisions
of this Section.
The ERC shall, motu propio, monitor and penalize any market
power abuse or anti-competitive or discriminatory act or behavior
by any participant in the electric power industry.
Upon finding that a market participant has engaged in such

act or behavior, the ERC shall stop and redress the same. Such
remedies shall, without limitation, include the imposition of price
controls, issuance of injunctions, requirement of divestment or
disgorgement of excess profits and imposition of fines and penalties
pursuant to this Act.
1987
The ERC shall, within one (1) year from the effectivity of this
Act, promulgate rules and regulations providing for a complaint
procedure that, without limitation, provides the accused party with
notice and an opportunity to be heard.
SEC. 46. Fines and Penalties. - The fines and penalties that
shall be imposed by the ERC for any violation of or non-compliance
with this Act or the IRR shall range from a minimum of Fifty
thousand pesos (P50,000.00) to a maximum of Fifty million pesos
(P50,000,000.00).
Any person who is found guilty of any of the prohibited acts

pursuant to Section 45 hereof shall suffer the penalty of prision
mayor and a fine ranging from Ten thousand pesos (P10,000.00) to
Ten million pesos (P10,000,000.00), or both, at the discretion of the
court.
The members of the Board of Directors of the juridical

companies participating in or covered in the generation companies,
the distribution utilities, the TRANSCO or its concessionaire or
supplier who violate the provisions of this Act may be fined by an
amount not exceeding double the amount of damages caused by the
offender or by imprisonment of one year or two years or both at
the discretion of the court. This rule shall apply to the members of
the Board who knowingly or by neglect allows the commission or
omission under the law.
If the offender is a government official or employee, he shall, in

addition, be dismissed from the government service with prejudice
to reinstatement and with perpetual or temporary disqualification
from holding any elective or appointive office.
If the offender is an alien he may, in addition to the penalties

prescribed, be deported without further proceedings after service of
sentence.
Any case which involves question of fact shall be appealable to

the Court of Appeals and those which involve question of law shall
be directly appealable to the Supreme Court. The administrative
sanction that may be imposed by the ERC shall be without prejudice
to the filing of a criminal action, if warranted.
1988
To ensure compliance with this Act, the penalty of prision

correccional or a fine ranging from Five thousand pesos (P5,000.00)
to Five million pesos (P5,000,000.00), or both, at the discretion of
the court, shall be imposed on any person, including but not limited
to the president, member of the Board, Chief Executive Officer
or Chief Operating Officer of the corporation, partnership, or any
other entity involved, found guilty of violating or refusing to comply
with any provision of this Act or its IRR, other than those provided
herein.
Any party to an administrative proceeding may, at any time,

make an offer to the ERC, conditionally or otherwise for a consented
decree, voluntary compliance or desistance and other settlement of
the case. The offer and any or all of the ultimate facts upon which
the offer is based shall be considered for settlement purposes only
and shall not be used as evidence against any party for any other
purpose and shall not constitute an admission by the party making
the offer of any violation of the laws, rules, regulations, orders and
resolutions of the ERC, nor as a waiver to file any warranted criminal
actions. In addition, Congress, upon recommendation of the DOE
and/or ERC, may revoke such franchise or privilege granted to the
person or entity who violated the provisions of this Act.
CHAPTER V
PRIVATIZATION OF THE ASSETS OF THE NATIONAL POWER

CORPORATION
SEC. 47. NPC Privatization. - Except for the assets of SPUG,

the generating assets, real estate, and other disposable assets as
well as generation contracts of NPC shall be privatized in accordance
with this Act. Within six (6) months from the effectivity of this
Act, the PSALM Corp. shall submit a plan for the endorsement by
the Joint Congressional Power Commission and the approval of
the President of the Philippines, on the total privatization of the
generation assets, real estate, other disposable assets as well as
existing generation contracts of NPC and thereafter, implement
the same, in accordance with the following guidelines, except as
provided for in paragraph (e) herein:
1989
(a) The privatization value to the national government of

the NPC generation assets, real estate, other disposable assets as
well as IPP contracts shall be optimized;
(b) The participation by Filipino citizens and corporations

in the purchase of NPC assets shall be encouraged;
In the case of foreign buyers at least seventy-five percent (75%)

of the funds used to acquire NPC-generating assets and generating
contracts shall be inwardly remitted and registered with the Bangko
Sentral ng Pilipinas.
(c) The NPC plants, its related assets and assigned liabilities,
if any, shall be grouped in a manner which shall promote the viability
of the resulting generating companies (gencos), ensure economic
efficiency, encourage competition, foster reasonable electricity rates
and create market appeal to optimize returns to the government
from the sale and disposition of such assets in a manner consistent
with the objectives of this Act. In the grouping of the generating
assets of NPC, the following criteria shall be considered:
(1) A sufficient scale of operations and balance sheet strength

to promote the financial viability of the restructured units;
(2) Broad geographical groupings to ensure efficiency of

operations but without the formation of regional companies or
consolidation of market power;
(3) Portfolio of plants to achieve management and operational

synergy without dominating any part of the market or of the load
curve; and
(4) Such other factors as may be deemed beneficial to the best

interest of the national government while ensuring attractiveness
to potential investors.
(d) All generation assets and IPP contracts shall be sold in

an open and transparent manner through public bidding;
(e) The Agus and the Pulangui complexes in Mindanao

shall be excluded from among the generating companies that will
1990
be initially privatized. Their ownership shall be transferred to the

PSALM Corp. and both shall continue to be operated by NPC. In
case of privatization, said complexes may be privatized not earlier
than ten (10) years from the effectivity of this Act, and, until
privatized, shall not be subject to Build-Operate-Transfer (B-O-T),
Build-Rehabilitate-Operate-Transfer (B-R-O-T) and other variations
pursuant to Republic Act No. 6957, as amended by Republic Act No.
7718. The privatization of Agus and Pulangui complexes shall be left
to the discretion of PSALM Corp. in consultation with Congress;
(f) The steamfield assets and generating plants of each

geothermal complex shall not be sold separately. They shall be
combined and each geothermal complex shall be sold as one package
through public bidding. The geothermal complexes covered by this
requirement include, but not limited to, Tiwi-Makban, Leyte A and
B (Tongonan), Palinpinon, and Mt. Apo;
(g) The ownership of the Caliraya-Botokan-Kalayaan

(CBK) pump storage complex shall be transferred to the PSALM
Corporation and shall continue to be operated by NPC;
(h) Not later than three (3) years from the effectivity of
this Act, and in no case later than the initial implementation of
open access, at least seventy percent (70%) of the total capacity
of generating assets of NPC and of the total capacity of the power
plants under contract with NPC located in Luzon and Visayas shall
have been privatized; and
(i) NPC may generate and sell electricity only from the
undisposed generating assets and IPP contracts of PSALM Corp.:
Provided, That any unsold capacity shall be privatized not later
than eight (8) years from the effectivity of this Act.
SEC. 48. National Power Board of Directors. - Upon the

passage of this Act, the provisions of R.A. 6395, otherwise known
as the NPC Charter, referring to the composition of the National
Power Board of Directors, are hereby repealed and a new Board
shall be immediately organized. The new Board shall be composed
of the Secretary of Finance as Chairman, with the following as
members: the Secretary of Energy, the Secretary of Budget and
Management, the Secretary of Agriculture, the Director-General of
1991
the National Economic and Development Authority, the Secretary of

Environment and Natural Resources, the Secretary of Interior and
Local Government, the Secretary of the Department of Trade and
Industry, and the President of the National Power Corporation.
CHAPTER VI
POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT
SEC. 49. Creation of Power Sector Assets and Liabilities

Management Corporation. - There is hereby created a government
owned and controlled corporation to be known as the "Power Sector
Assets and Liabilities Management Corporation", hereinafter
referred to as the "PSALM Corp.", which shall take ownership of
all existing NPC generation assets, liabilities, IPP contracts, real
estate and all other disposable assets. All outstanding obligations
of the National Power Corporation arising from loans, issuances of
bonds, securities and other instruments of indebtedness shall be
transferred to and assumed by the PSALM Corp. within ninety (90)
days from the approval of this Act.
SEC. 50. Purpose and Objective, Domicile and Term of

Existence. - The principal purpose of the Corporation is to manage
the orderly sale, disposition, and privatization of NPC generation
assets, real estate and other disposable assets, and IPP contracts
with the objective of liquidating all NPC financial obligations and
stranded contract costs in an optimal manner.
The Corporation shall have its principal office and place of

business within Metro Manila.
The Corporation shall exist for a period of twenty five (25)

years from the effectivity of this Act, unless otherwise provided by
law, and all assets held by it, all moneys and properties belonging
to it, and all its liabilities outstanding upon the expiration of its
term of existence shall revert to and be assumed by the National
Government.
SEC. 51. Powers. - The Corporation shall, in the performance

of its functions and for the attainment of its objective, have the
following powers:
1992
(a) To formulate and implement a program for the sale and

privatization of the NPC assets and IPP contracts and the liquidation
of NPC debts and stranded contract costs, such liquidation to be
completed within the Corporation's term of existence;
(b) To take title to and possession of, administer and conserve

the assets and IPP contracts transferred to it; to sell or dispose of
the same at such price and under such terms and conditions as it
may deem necessary or proper, subject to applicable laws, rules and
regulations;
(c) To calculate the amount of the stranded debts and

stranded contract costs of NPC which shall form the basis for ERC
in the determination of the universal charge;
(d) To liquidate the NPC stranded contract costs utilizing

proceeds from sales and other property contributed to it, including
the proceeds from the universal charge;
(e) To adopt rules and regulations as may be necessary or

proper for the orderly conduct of its business or operations;
(f) To sue and be sued in its name;
(g) To appoint or hire, transfer, remove and fix the

compensation of its personnel; Provided, however, That the
Corporation shall hire its own personnel only if absolutely necessary,
and as far as practicable, shall avail itself of the services of personnel
detailed from other government agencies;
(h) To own, hold, acquire, or lease real and personal

properties as may be necessary or required in the discharge of its
functions;
(i) To borrow money and incur such liabilities, including

the issuance of bonds, securities or other evidences of indebtedness
utilizing its assets as collateral and/or through the guarantees of
the National Government: Provided, however, That all such debts
or borrowings shall have been paid off before the end of its corporate
life;
1993
(j) To restructure existing loans of NPC;
(k) To collect, administer, and apply NPC's portion of the

universal charge;
(l) To relend to NPC successor gencos and TRANSCO such

amounts on such terms and conditions which shall optimize the
value and sale prices of said assets.
SEC. 52. Power Sector Assets and Liabilities Management

Corporation, Meetings, Quorum and Voting. - The Corporation shall
be administered, and its powers and functions exercised, by a Board
of Directors which shall be composed of the Secretary of Finance
as the Chairman, the Secretary of Budget and Management, the
Secretary of the Department of Energy, the Director-General of the
National Economic and Development Authority, the Secretary of the
Department of Justice, the Secretary of the Department of Trade
and Industry and the Secretary of the Department of Agriculture as
ex-officio members thereof.
The Board of Directors shall meet regularly and as frequently

as may be necessary to enable it to discharge its functions and
responsibilities. The presence at a meeting of four (4) members
shall constitute a quorum, and the decision of the majority of three
members present at a meeting where there is quorum shall be the
decision of the Board of Directors.
SEC. 53. Powers of the President of PSALM Corp. - The

President of PSALM Corp. shall be appointed by the President of
the Philippines. In the absence of the Chairman, the President shall
preside over Board meetings. The PSALM Corp. President shall be
the Chief Executive Officer of PSALM Corp.
The President of PSALM Corp. shall have the following powers

and duties:
(a) To execute and administer the policies and measures

(b) To oversee the preparation of the budget of PSALM

Corp.;
1994
(c) To direct and supervise the operation and internal

administration of PSALM Corp. and, for this purpose, may delegate
other officers of PSALM Corp;
(d) Subject to the guidelines and policies set up by the Board,

officials and employees of PSALM Corp; and for cause, to remove,
PSALM Corp;
(e) To submit an annual report to the Board on the activities

and achievements of PSALM Corp. at the close of each fiscal year
Philippines and to such other agencies as may be required by law;
(f) To represent PSALM Corp. in all dealings and

transactions with other offices, agencies, and instrumentalities of
the Government and with all persons and other entities, private or
public, domestic or foreign; and
(g) To exercise such other powers and duties as may be

SEC. 54. Exemption from the Salary Standardization Law. -

The salaries and benefits of employees in the PSALM Corp. shall
PSALM Corp. Board.
SEC. 55. Property of the PSALM Corp. - The following funds,

assets, contributions and other property shall constitute the property
of the PSALM Corp.:
(a) The generation assets, real estate, IPP contracts, other

disposable assets of NPC, proceeds from the sale or disposition of
such assets and the residual assets from B-O-T, R-O-T, and other
variations thereof;
(b) Transfers from the national government;
1995
(c) Proceeds from loans incurred to restructure or refinance

NPC's transferred liabilities: Provided, however, That all borrowings
shall be fully paid for by the end of the life of the PSALM Corp.;
(d) Proceeds from the universal charge allocated for stranded

contract costs and the stranded debts of NPC;
(e) Net profit of NPC;
(f) Net profit of TRANSCO;
(g) Official assistance, grants, and donations from external

sources; and
(h) Other sources of funds as may be determined by PSALM

Corp. necessary for the above-mentioned purposes.
SEC. 56. Claims Against the PSALM Corp. - The following

shall constitute the claims against the PSALM Corp.:
(a) NPC liabilities transferred to the PSALM Corp.;
(b) Transfers from the national government;
(c) New loans; and
(d) NPC stranded contract costs.
CHAPTER VII
PROMOTION OF RURAL ELECTRIFICATION
SEC. 57. Conversion of Electric Cooperatives. -Electric

cooperatives are hereby given the option to convert into either
stock cooperative under the Cooperatives Development Act or stock
corporation under the Corporation Code. Nothing contained in
this Act shall deprive electric cooperatives of any privilege or right
granted to them under existing laws, particularly those under the
provisions of Republic Acts No. 6938, 7160 and 8241
1996
SEC. 58. Additional Mandate of the National Electrification

Administration (NEA). - NEA shall develop and implement
programs:
(a) To prepare electric cooperatives in operating and

competing under the deregulated electric market within five (5)
years from the effectivity of this Act, specifically in an environment
of open access and retail wheeling
(b) To strengthen the technical capability and financial

viability of rural electric cooperatives; and
(c) To review and upgrade regulatory policies with a view

to enhancing the viability of rural electric cooperatives as electric
utilities.
NEA shall continue to be under the supervision of the DOE

and shall exercise its functions under Presidential Decree No. 269,
as amended by Presidential Decree No. 1645 insofar as they are
consistent with this Act.
SEC. 59. Alternative Electric Service for Isolated Villages. -

The provision of electric service in remote and unviable villages that
the franchised utility is unable to service for any reason shall be
opened to other qualified third parties.
SEC. 60. Debts of Electric Cooperatives. - Upon the effectivity of

this Act, all outstanding financial obligations of electric cooperatives
to NEA and other government agencies incurred for the purpose
of financing the rural electrification program shall be assumed by
the PSALM Corp. The ERC shall ensure a reduction in the rates of
electric cooperatives commensurate with the resulting savings due
to the removal of the amortization payments of their loans. Within
five (5) years from the condonation of debt, any electric cooperative
which shall transfer ownership or control of its assets, franchise
or operations thereof shall repay PSALM Corp. the total debts
including accrued interests thereon.
1997
CHAPTER VIII
GENERAL PROVISIONS
SEC. 61. Reportorial Requirements. -The DOE shall take the

necessary measures to ensure that the provisions of this Act are
properly implemented, and shall submit to the Power Commission
a semi-annual report on the implementation of this Act, which shall
be on or before the last week of April and October of each year.
SEC. 62. Joint Congressional Power Commission. - Upon

the effectivity of this Act, a congressional commission, hereinafter
referred to as the Power Commission, is hereby constituted. The
Power Commission shall be composed of fourteen (14) members
WITH the chairmen of the Committee on Energy of the Senate
and the House of Representatives and six (6) additional members
from each House, to be designated by the Senate President and the
Speaker of the House of Representatives, respectively. The minority
shall be entitled to pro-rata representation but shall have at least
one (1) representative in the Power Commission.
The Commission shall, in aid of legislation, perform the

following functions, among others:
(a) Set the guidelines and overall framework to monitor and

ensure the proper implementation of this Act;
(b) Approve genco groupings, IPP groupings, and sequencing

of sale of gencos;
(c) Endorse the privatization plan prepared by PSALM for

approval of the President of the Philippines;
(d) To ensure transparency, require the submission of

reports from government agencies concerned on the conduct of public
bidding procedures regarding privatization of NPC generating and
transmission assets before any final award is made;
(e) Review and evaluate the performance of the industry

participants in relation to the objectives and timelines set forth in
this Act;
1998
(f) Approve the budget for the programs of the Power

Commission and all disbursements therefrom, including
compensation of all personnel;
(g) Submit periodic reports to the President of the Philippines

and Congress;
(h) Determine inherent weaknesses in the law and

recommend necessary remedial legislation or executive measures;
and
(i) Perform such other duties and functions as may be

necessary to attain its objectives.
In furtherance hereof, the Power Commission is hereby

empowered to require the DOE, ERC, NEA, TRANSCO, generation
companies, distribution utilities, suppliers and other electric power
industry participants to submit reports and all pertinent data and
information relating to the performance of their respective functions
in the industry. Any person who willfully and deliberately refuses
without just cause to extend the support and assistance required
by the Power Commission to effectively attain its objectives shall,
upon conviction, be punished by imprisonment of not less than one
(1) year but not more than six (6) years or a fine of not less than
Fifty thousand pesos (P50,000.00) but not more than Five hundred
thousand pesos (P500,000.00) or both at the discretion of the court.
The Power Commission shall adopt its internal rules of

procedures; conduct hearings and receive testimonies, reports and
technical advice; invite or summon by subpoena ad testificandum
any public official, private citizen or any other person to testify
before it, or require any person by subpoena duces tecum to produce
before it such records, reports, documents or other materials as
it may require; and generally require all the powers necessary to
attain the purposes for which it is created. The Power Commission
shall be assisted by a secretariat to be composed of personnel who
may be seconded from the Senate and the House of Representatives
and may retain consultants. The secretariat shall be headed by an
executive director who has sufficient background and competence
on the policies and issues relating to electricity industry reforms as
provided in this Act. To carry out its powers and functions, the initial
1999
sum of twenty- five million pesos (P25,000,000.00) shall be charged

against the current appropriations of the Senate. Thereafter, such
amount necessary for its continued operation shall be included in
the annual General Appropriations Act.
The Power Commission shall exist for period of ten (10) years
from the effectivity of this Act and may be extended by a joint
concurrent resolution.
SEC. 63. Separation Benefits of Officials and Employees of

Affected Agencies. - National government employees displaced or
separated from the service as a result of the restructuring of the
electricity industry and privatization of NPC assets pursuant to
this Act, shall be entitled to a separation pay and other benefits
in accordance with existing laws, rules or regulations. Displaced or
separated personnel as a result of the privatization, if qualified, shall
be given preference in the hiring of the manpower requirements of
the privatized companies.
All employees of NPC affected by the passage of this Act

shall be entitled to avail of the privileges provided under the NPC
separation plan existing as of January 1, 2001.
The salaries of employees of NPC shall continue to be exempt

from the coverage of Republic Act No. 6758, otherwise known as
"The Salary Standardization Act".
With respect to employees who are not retained by NPC, the

government, through the Department of Labor and Employment,
shall endeavor to implement re-training, job counseling, and job
placement programs.
SEC. 64. Fiscal Prudence - To promote the prudent management

of government resources, the creation of new positions and the levels
of or increases in salaries and all other emoluments and benefits
of TRANSCO and PSALM Corp. personnel shall be subject to the
approval of the President of the Philippines. The compensation and
all other emoluments and benefits of the officials and members of
the Board of TRANSCO and PSALM Corp. shall be subject to the
approval of the President of the Phillippines.
2000
SEC. 65. Environmental Protection. - Participants in the

generation, distribution and transmission sub-sectors of the industry
shall comply with all environmental laws, rules, regulations and
standards promulgated by the Department of Environment and
Natural Resources including, in appropriate cases, the establishment
of an environmental guarantee fund.
SEC. 66. Benefits to Host Communities. - The obligations

of generating companies and energy resource developers to
communities hosting energy generating facilities and/or energy
resource developers as defined under Chapter II, Sections 289 to 294
of the Local Government Code and Section 5(i) of Republic Act No.
7638 and their implementing rules and regulations and applicable
orders and circulars consistent with this Act shall continue:
Provided, further, That the obligations mandated under Chapter II,
Section 291 of Republic Act No. 7160, shall apply to privately-owned
corporations or entities utilizing the national wealth of the locality.
To ensure the effective implementation of the reduction in

cost of electricity in the communities where the source of energy is
located, the mechanics and procedures prescribed in the Department
of the Interior and Local Government (DILG)-DOE Circulars No.
95-01 and 98-01 dated October 31, 1995 and September 30, 1998,
respectively and other issuances related thereto shall be pursued.
Towards this end, the fund generated from the eighty percent
(80%) of the national wealth tax shall, in no case, be used by any
local government unit for any purpose other than those for which it
was intended.
In case of any violation or noncompliance by any local

government official of any provision thereof, the DILG shall, upon
prior notice and hearing, order the project operator, through the
DOE, to withhold the remittance of the royalty payment to the host
community concerned pending completion of the investigation. The
unremitted funds shall be deposited in a government bank under a
trust fund.
SEC. 67. NPC Offer of Transition Supply Contracts. - Within

six (6) months from the effectivity of this Act, NPC shall file with the
ERC for its approval a transition supply contract duly negotiated
2001
with the distribution utilities containing the terms and conditions

of supply and a corresponding schedule of rates, consistent with
the provisions hereof, including adjustments and/or indexation
formulas which shall apply to the term of such contracts. The term
of the transition supply contracts shall not extend beyond one year
from the introduction of open access. Such contracts shall be based
on the projected demand of such utilities less any of their currently
committed quantities under eligible IPP contracts as defined in
Section 33 hereof:
Provided, That the total generation capacity of such signed

transition supply contracts shall not exceed the level of NPC owned,
controlled or committed capacity as of the effectivity of this Act.
Such transition supply contracts shall be assignable to the NPC
successor generating companies. Within six (6) months from the date
of submission of the transition supply contract by NPC, the ERC
shall notify NPC of their approval of the rates contained therein.
The ERC shall maintain a record of the contract terms and

rates offered by NPC. Likewise, the ERC shall update monthly, the
rates using the appropriate adjustment and/or indexation formula.
Notwithstanding the provisions of Section 25 hereof, the rates
charged by a distribution utility for the generation component of the
supply of electricity in their distribution retail supply rate shall, for
the term of the transition supply contracts, not exceed the transition
supply contract rates, as updated monthly. The recovery of costs
incurred by a distribution utility for any generation component in
excess of the transition supply contract rates shall be disallowed by
the ERC, except for eligible contracts as defined under Section 33
hereof: Provided, That such limitation on the recovery of generation
component costs by a distribution utility shall apply only to the
equivalent quality and quantity of electricity still available to the
distribution utility from NPC.
SEC. 68. Power Supply Agreement. - It shall be a condition

of the privatization of NPC that PSALM Corp. shall diligently
seek reasonable mitigating steps to correct onerous provisions
on its generating contracts, guaranteed by government specially
independent power producers, where NPC is experiencing substantial
losses as a result of excessive price, chronic underutilization,
2002
inappropriate fee structure, or buy-out provisions that exceed levels

needed for fair return on investment.
The NPC shall sell electricity only from undisposed generation

assets and IPP contracts and shall not incur any new obligations
to purchase power through bilateral contracts with generation
companies or other suppliers. NPC shall act as the administrator
of IPP contracts.
SEC. 69. Renegotiation of Power Purchase and Energy

Conversion Agreements between Government Entities. - Within
three (3) months from the effectivity of this Act, all power purchase
and energy conversion agreements between the PNOC-Energy
Development Corporation (PNOC-EDC) and NPC, including but
not limited to the Palimpinon, Tongonan and Mt. Apo Geothermal
complexes, shall be reviewed by the ERC and the terms thereof
amended to remove any hidden costs or extraordinary mark-ups
in the cost of power or steam above their true costs. All amended
contracts shall be submitted to the Joint Congressional Power
Commission for approval. The ERC shall ensure that all savings
realized from the reduction of said mark-ups shall be passed on to
all end-users.
SEC. 70. Missionary Electrification. - Notwithstanding the

divestment and/or privatization of NPC assets, IPP contracts and
spun-off corporations, NPC shall remain as a National Government-
owned and -controlled corporation to perform the missionary
electrification function through the Small Power Utilities Group
(SPUG) and shall be responsible for providing power generation and
its associated power delivery systems in areas that are not connected
to the transmission system. The missionary electrification function
shall be funded from the revenues from sales in missionary areas
and from the universal charge to be collected from all electricity
end-users as determined by the ERC.
SEC. 71. Electric Power Crisis Provision - Upon the

determination by the President of the Philippines of an imminent
shortage of the supply of electricity, Congress may authorize,
through a joint resolution, the establishment of additional generating
capacity under such terms and conditions as it may approve.
2003
SEC. 72. Mandated Rate Reduction. - Upon the effectivity

of this Act, residential end-users shall be granted a rate reduction
from NPC rates of thirty centavos per kilowatt-hour (P0.30/kWh).
Such reduction shall be reflected as a separate item in the consumer
billing statement.
SEC. 73. Lifeline Rate. - A socialized pricing mechanism

called a lifeline rate for the marginalized end-users shall be set by
the ERC, which shall be exempted from the cross subsidy phase-out
under this Act for a period not exceeding ten (10) years, until or
unless expressly rescinded by law. The level of consumption and the
rate shall be determined by the ERC after due notice and hearing.
SEC. 74. Cross Subsidies. - Cross subsidies within a grid,

between grids and/or classes of customers shall be phased out in a
period not exceeding three (3) years from the establishment by the
ERC of a universal charge which shall be collected from all electricity
end-users. Such level of cross subsidies shall be made transparent
and identified separately in the billing statements provided to end-
users by the suppliers or by the DOE as the case may be.
The ERC may extend the period for the removal of cross
subsidies for a maximum period of one (1) year upon finding that
cessation of such mechanism would have a material adverse effect
upon the public interest, particularly the residential end-user; or
would have an immediate, irreparable, and adverse financial effect
on distribution utility.
CHAPTER IX
FINAL PROVISIONS
SEC. 75. Statutory Construction. - This Act shall, unless

the context indicates otherwise, be construed in favor of the
establishment, promotion, preservation of competition and people
empowerment so that the widest participation of the people, whether
direct or indirect, is ensured.
SEC. 76. Education and Protection of End Users. - End users

shall be educated about the implementation of retail access and
its impact on end-users and on the proper use of electric power.
2004
Such education shall include, but not limited to, the existence of
competitive electricity suppliers, choice of competitive electricity
services, regulated transmission and distribution services, systems
reliability, aggregation, market, itemized billing, stranded cost,
uniform disclosure requirements, low-income bill payment, energy
conservation and safety measures. The DOE, in coordination with
the NPC, NEA, ERC and the Office of the Press Secretary-Philippine
Information Agency (OPS-PIA), shall undertake an information
campaign to educate the public on the restructuring of the electric
power industry and privatization of NPC.
SEC. 77. Implementing Rules and Regulations. - The DOE

shall, in consultation with the electric power industry participants
and end-users, promulgate the Implementing Rules and Regulations
(IRR) of this Act within six (6) months from the effectivity of this
Act, subject to the approval by the Power Commission.
SEC. 78. Injunction and Restraining Order. - The

implementation of the provisions of this Act shall not be restrained
or enjoined except by an order issued by the Supreme Court of the
Philippines.
SEC. 79. Separability Clause. - If for any reason, any provision

of this Act is declared unconstitutional or invalid, the other parts or
provisions hereof which are not affected thereby shall continue to be
in full force and effect.
SEC. 80. Applicability and Repealing Clause. - The applicability

provisions of Commonwealth Act No. 146, as amended, otherwise
known as the "Public Services Act"; Republic Act 6395, as amended,
revising the charter of NPC; Presidential Decree 269, as amended,
referred to as the NEA decree; Republic Act 7638, otherwise known
as the "Department of Energy Act of 1992"; Executive Order 172,
as amended, creating the ERB; Republic Act 7832 otherwise known
as the "Anti-Electricity and Electric Transmission Lines/Materials
Pilferage Act of 1994", shall continue to have full force and effect
except in so far as inconsistent with this Act.
Presidential Decree No. 40 and all laws, decrees, rules and

regulations, or portions thereof, inconsistent with this Act are
hereby repealed or modified accordingly.
2005
SEC. 81. Effectivity Clause. - This Act shall take effect on the
fifteenth day following its publication in at least two (2) national
papers of general circulation.
APPROVED, June 8, 2001.
2006
RULES AND REGULATIONS TO IMPLEMENT

REPUBLIC ACT NO. 9136,
ENTITLED "ELECTRIC POWER INDUSTRY REFORM
ACT OF 2001"
Pursuant to Sections 37 and 77 of Republic Act No. 9136, an

Act Ordaining Reforms in the Philippine Electric Power Industry,
otherwise known as the "Electric Power Industry Reform Act of
2001" (Act), the Department of Energy (DOE), in consultation with
the appropriate government agencies such as the Energy Regulatory
Commission (ERC), Department of Finance (DOF), National
Electrification Administration (NEA), National Power Corporation
(NPC), Department of Trade and Industry (DTI), Department of
Justice (DOJ), Department of Budget and Management (DBM),
Power Sector Assets and Liabilities Management Corporation
(PSALM), the Electric Power Industry Participants, and with the
approval of the Joint Congressional Power Commission (Power
Commission), hereby issues, adopts and promulgates the following
rules and regulations to implement the provisions of the Act.
PART I
General Provisions
The succeeding rules and regulations shall include the general

provisions to be followed in implementing the major structural
reforms for the electric power industry and the Privatization of the
state-owned NPC.
RULE 1
Title and Scope
SECTION 1. Title. —
These rules and regulations shall be referred to as the

"Implementing Rules and Regulations of Republic Act No. 9136"
(Rules) otherwise known as the "Electric Power Industry Reform
Act of 2001 (Act)".
SECTION 2. Scope. —
2007
These Rules are promulgated under the authority of the

DOE to formulate, in consultation with relevant government
agencies, Electric Power Industry Participants, non-government
organizations, End-users and consumers, such rules and regulations
as may be necessary to implement the objectives of the Act and
pursuant to the exercise of such other powers as may be necessary
or incidental to attain the objectives of the Act. These Rules shall
govern the relation and responsibilities of Electric Power Industry
Participants and governmental authorities, including but not
limited to: the DOE, NPC, NEA, ERC and PSALM.
RULE 2
Declaration of Policy
It is hereby declared the policy of the State:

country;


to achieve greater operational and economic efficiency, promote
consumer choice and enhance the competitiveness of Philippine
products in the global market;
(d) To enhance the inflow of private capital, participation in

the attendant risks, and broaden the ownership base of the power
generation, transmission and distribution sectors;

public and private sector entities in the process of Restructuring
the electric power industry;

power;
2008


renewable energy resources in power generation in order to reduce
dependence on imported energy;
(i) To provide for an orderly and transparent Privatization

of the assets and liabilities of the NPC;
(j) To establish a strong and purely independent regulatory

body and system to ensure consumer protection and enhance the
competitive operation of the electricity market; and
(k) To encourage the efficient use of energy and other

modalities of Demand Side Management (DSM).
RULE 3
Responsibilities of the DOE, ERC, NPC, NEA and PSALM
SECTION 1. Responsibilities of the DOE. —
In addition to its existing powers and functions, the DOE shall

supervise the Restructuring of the electricity industry and perform
the following 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 annually the existing Philippine

Energy Plan, hereinafter referred to as PEP, 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 PEP shall include a policy direction
towards the Privatization of government agencies related to energy,
2009
deregulation of the power and energy industry, and reduction of

dependency on oil-fired plants. Said PEP shall be submitted to
Congress not later than the fifteenth (15th) day of September and
every year thereafter; CSIHDA
(c) Prepare and update annually a Power Development

Program (PDP) and integrate the same into the PEP. The PDP shall
consider and integrate the individual or joint development plans of
the transmission, generation, and distribution sectors of the electric
power industry which are submitted to the DOE: Provided, however,
That the ERC shall have exclusive authority covering the Grid Code
and the Distribution Code; and the pertinent rules and regulations
it may issue. The DOE, following its approval of the Transmission
Development Plan (TDP) prepared by the National Transmission
Corporation (TRANSCO) or its Buyer or Concessionaire, shall
integrate the TDP with the annual development plans of Distribution
Utilities and NPC, and other relevant data as are available to DOE,
which shall be incorporated in the PEP;
(d) Ensure the reliability, quality and security of supply of

electric power;
(e) Following the Restructuring of the electricity sector, the

DOE shall, among others:
(i) Encourage private sector investments in the electricity

sector and promote development of indigenous and Renewable
Energy Sources including small-scale renewable energy generating
sources;
(ii) Facilitate and encourage reforms in the structure and

operations of Distribution Utilities for greater efficiency and lower
costs;
(iii) In consultation with other government agencies,

promote a system of incentives to encourage Electric Power Industry
Participants, including new Generation Companies and End-users,
to provide adequate and reliable electric supply; and
(iv) Undertake, in coordination with the ERC, NPC, NEA and

the Philippine Information Agency (PIA), information campaigns to
2010
educate the public on the Restructuring of the electricity sector and

Privatization of NPC assets;
(f) Jointly with the Electric Power Industry Participants,

establish the Wholesale Electricity Spot Market (WESM) and
formulate the detailed rules governing the operations thereof;
(g) Establish and administer programs for the exploration,

transportation, marketing, distribution, utilization, conservation,
stockpiling, and storage of energy resources of all forms, whether
conventional or non-conventional;
(h) Exercise supervision and control over all government

activities relative to energy projects in order to attain the goals
embodied in Section 2 of Republic Act No. 7638;
(i) Develop policies and procedures and, as appropriate,

promote a system of energy development incentives to enable
and encourage Electric Power Industry Participants to provide
adequate capacity to meet demand including, among others, reserve
requirements;
(j) Monitor private sector activities relative to energy projects

in order to attain the goals of the Restructuring, Privatization, and
modernization of the electric power sector as provided for under
existing laws: Provided, That the DOE shall endeavor to provide
for an environment conducive to free and active private sector
participation and investment in all energy activities;
(k) 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;
(l) Formulate and implement programs, including a system

of providing incentives and penalties, for the judicious and efficient
use of energy in all energy-consuming sectors of the economy;
(m) Formulate and implement a program for the accelerated

development of non-conventional energy systems and the promotion
and commercialization of its applications;
2011
(n) 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;
(o) 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;
(p) Formulate such rules and regulations as may be

necessary to implement the objectives of the Act;
(q) As part of the reportorial requirements of the Act, the

DOE shall prepare and submit to the Power Commission a semi-
annual report on the status of the implementation of the Act on or
before the last week of April and October of each year. Towards this
end, the DOE may require reports or documents from the Electric
Power Industry Participants as necessary to facilitate compliance
with this mandate and subject to appropriate measures to preserve
the confidentiality of proprietary or commercially sensitive
information; and
(r) Exercise such other powers as may be necessary or

incidental to attain the objectives of the Act.
SECTION 2. Responsibilities of the NPC . —
(a) Pursuant to Section 70 of the Act, notwithstanding the

divestment and/or Privatization of NPC assets, IPP contracts and
spun-off corporations, NPC shall remain as a National Government-
owned and -controlled corporation to perform the missionary
electrification function through the Small Power Utilities Group
(SPUG) and shall be responsible for providing power generation and
its associated power delivery systems in areas that are not connected
to the transmission system. The missionary electrification function
shall be funded from the revenues from sales in missionary areas
and from the Universal Charge to be collected from all electricity
End-users as determined by the ERC.
2012
(b) Consistent with Section 34(d) of the Act, the NPC shall
manage under existing arrangements, an environmental charge
equivalent to P0.0025 per kilowatt-hour (kWh) sales, intended solely
for the rehabilitation and management of watersheds nationwide.
(c) Pursuant to Section 47(f) of the Act, NPC shall continue

to operate Agus and Pulangui complexes, which shall be owned by
PSALM.
(d) Pursuant to Section 47(j) of the Act, NPC/PSALM may

continue to generate and sell electricity only from the undisposed
generating assets and IPP contracts of PSALM. NPC/PSALM shall
not incur any new obligations to purchase power through bilateral
contracts with Generation Companies or other Suppliers.
SECTION 3. Responsibilities of the NEA. —
(a) NEA shall continue to be under the supervision of the

DOE and shall exercise its functions under Presidential Decree No.
269, as amended by Presidential Decree No. 1645 insofar as they
are consistent with the Act. To this end, NEA shall develop and
implement programs:
(i) To prepare Electric Cooperatives (ECs) in operating and

competing under the deregulated electricity market within five (5)
years from the effectivity of the Act, specifically in an environment
of Open Access and retail wheeling and Retail Competition;
(ii) To strengthen the technical capability and financial

viability of ECs, through the following activities:
(1) NEA may offer services to the ECs other than those
related to its lending functions, for a fee duly approved by the NEA
Board of Administrators; and
(2) NEA may consider hiring qualified external industry

management experts and shall provide their services to the ECs:
Provided, That such services will not increase Retail Rates.
(iii) To review and upgrade regulatory policies with a view to

enhancing the viability of the ECs as electric utilities.
2013
(b) NEA may, in exchange for adequate security and a

guarantee fee, act as a guarantor for purchases of electricity in the
WESM by any EC or small Distribution Utility to support their
credit standing consistent with the provisions of the Act. For this
purpose, the authorized capital stock of NEA is hereby increased to
Fifteen Billion Pesos (P15,000,000,000.00).
(c) NEA shall submit the report of ECs on their outstanding

uncollected billings due from any local government unit (LGU) to
the Department of Budget and Management (DBM) pursuant to
Executive Order (E.O.) No. 190 issued on 21 December 1999. The
DBM shall effect withholding from the Internal Revenue Allotment
(IRA) of the concerned LGU: Provided, That there is a Memorandum
of Agreement (MOA) executed between the LGU and NEA: Provided,
further, That the uncollected billings are supported by a certification
issued by the Municipality/City or Provincial Treasurer.
SECTION 4. Responsibilities of the ERC . —
(a) Pursuant to Section 43 of the Act, the ERC shall have

the responsibility of promoting competition, encouraging market
development, ensuring customer choice, and penalizing abuse of
market power in the electric power industry.
(b) Pursuant to Sections 43 and 45 of the Act, the ERC

shall promulgate such rules and regulations as authorized thereby,
including but not limited to Competition Rules and limitations on
recovery of system losses, and shall impose fines or penalties for any
non-compliance with or breach of the Act, these Rules and the rules
and regulations which it promulgates or administers.
(c) The ERC shall review and approve any plan for the
expansion or improvement of transmission facilities submitted by
TRANSCO or its Buyer or Concessionaire with due regard to the
TDP.
(d) To promote efficiency and non-discrimination, the ERC,

after the conduct of public hearings, shall determine, fix and approve
Transmission and Distribution Wheeling Charges, and Retail Rates
through an ERC established and enforced methodologies setting
the same. It shall fix and regulate the rates and charges to be
2014
imposed by Distribution Utilities on their Captive Market as well

as the Universal Charge to be imposed on all electricity End-users
including self-generating entities.
(e) Any application or petition for rate adjustment or for any

relief affecting the consumers must be verified, and accompanied
with an acknowledgment of receipt of a copy thereof by the LGU
Legislative Body of the locality where the applicant or petitioner
principally operates together with the certification of the notice
of publication thereof in a newspaper of general circulation in the
same locality.
The ERC may grant provisionally or deny the relief prayed

for not later than seventy five (75) calendar days from the filing of
the application or petition, based on the same and the supporting
documents attached thereto and such comments or pleadings the
consumers or the LGU concerned may have filed within thirty (30)
calendar days from receipt of a copy of the application or petition or
from the publication thereof as the case may be.
Thereafter, the ERC shall conduct a formal hearing on the

application or petition, giving proper notices to all parties concerned,
with at least one public hearing in the affected locality, and shall
decide the matter on the merits not later than twelve (12) months
from the issuance of the aforementioned provisional order.
This Section 4(e) shall not apply to those applications or

petitions already filed as of 26 December 2001 in compliance with
Section 36 of the Act.
(f) Amend or revoke, after due notice and hearing, the

authority to operate of any Person or entity which fails to comply
with the provisions of the Act, these Rules or any order or resolution
of the ERC. In the event a divestment is required, the ERC shall
allow the affected party sufficient time to remedy the infraction
or for an orderly disposal, but shall in no case exceed twelve (12)
months from the issuance of the order.
(g) In order to facilitate the provision of an efficient, reliable

and quality service to End-users, the ERC shall promulgate a
Grid Code and a Distribution Code that shall include performance
2015
standards and the minimum financial capability standards and

other terms and conditions for access to and use of the transmission
and distribution facilities within six (6) months from the effectivity
of the Act.
(h) Act on applications for cost recovery and return on

DSM.
(i) The ERC shall set the criteria for eligibility and authorize
eligible Generation Companies, Distribution Utilities, Suppliers,
IPP Administrators, End-users and other entities authorized by
ERC in accordance with the Act for membership in the WESM.
For the purpose of ensuring a greater supply and rational pricing
of electricity, the ERC shall enforce the rules and regulations
governing the operations of WESM and the activities of the WESM
Operator and other WESM Participants. In cases of national and
international security emergencies or natural calamities, it can
suspend spot market operations within the WESM.
(j) The ERC shall ensure that Electric Power Industry

Participants and NPC functionally and structurally unbundle their
respective business activities and rates and determine the levels of
cross subsidies in the existing Retail Rates until the same is removed
in accordance with the sectors as identified in and as required by
Sections 5, 36 and 74 of the Act. ERC shall set a Lifeline Rate for the
Marginalized End-users. In particular, the distribution rates should
unbundle at least the following business activities or assets: supply,
distribution, and such other services as the ERC may determine.
(k) The ERC shall promulgate rules and regulations

prescribing the qualifications of Suppliers, which shall include
among others their technical and financial capability and credit
worthiness.
(l) The ERC shall determine the electricity End-users

comprising the Contestable and Captive Markets. The ERC shall
also seek to foster competition in credit, collection and metering
services in Contestable Markets. It shall likewise license Suppliers
to Contestable Markets.
2016
(m) The ERC shall perform such other regulatory functions

as are appropriate and necessary in order to ensure the successful
Restructuring and modernization of the electric power industry,
such as, but not limited to, the rules and guidelines under which
Generation Companies, Distribution Utilities, which are not publicly
listed, shall offer and sell to the public a portion not less than
fifteen percent (15%) of their common shares of stocks: Provided,
however, That Generation Companies, Distribution Utilities or
their respective holding companies that are already listed in the
Philippine Stock Exchange (PSE) are deemed in compliance. For
existing companies, such public offering shall be implemented
not later than five (5) years from the effectivity of the Act. New
companies shall implement their respective public offerings not
later than five (5) years from the issuance of their Certificate of
Compliance (COC);
(n) The ERC shall have the original and exclusive jurisdiction
over all cases contesting rates, fees, fines and penalties imposed in
the exercise of its powers, functions and responsibilities and over all
cases involving disputes between and among participants or players
in the energy sector relating to the foregoing powers, functions and
responsibilities.
(o) It shall also be empowered to issue such other rules that

are essential in the discharge of its functions as an independent
quasi-judicial body.
(p) All actions taken by the ERC pursuant to the Act are
subject to judicial review and the requirements of due process
and the cardinal rights and principles applicable to quasi-judicial
bodies.
(q) The ERC may require reports or documents from the

Electric Power Industry Participants as necessary to facilitate
compliance with the Act, subject to appropriate measures to
preserve the confidentiality of proprietary or commercially sensitive
information.
(r) All notices of hearings to be conducted by the ERC for

the purpose of fixing rates or fees shall be published at least twice
for two (2) successive weeks in two (2) newspapers of nationwide
circulation.
2017
(s) The ERC shall conduct rate application hearings in the

locality where the applicant is conducting its operations: Provided,
That this requirement shall not apply to applications filed pursuant
to Section 36 of the Act.
SECTION 5. Responsibilities of the PSALM. —
(a) Consistent with Section 49 of the Act, PSALM shall take

ownership of all existing NPC generation assets, liabilities, IPP
contracts, real estate and all other disposable assets. All outstanding
obligations of NPC arising from loans, issuances of bonds, securities
and other instruments of indebtedness shall be transferred to and
assumed by PSALM.
(b) The PSALM shall formulate and implement a program

for the sale and Privatization of the NPC assets and IPP contracts
and the liquidation of NPC Debts and Stranded Contract Costs in
accordance with the Act.
It shall calculate the amount of the Stranded Debts and

Stranded Contract Costs of NPC, which amount shall form part of
the Universal Charge to be determined, fixed, and approved by the
ERC.
(c) Pursuant to Section 60 of the Act, the PSALM shall

assume all outstanding financial obligations of ECs to NEA and
other government agencies arising from their respective Rural
Electrification Program. This shall be done in accordance with the
program duly approved by the President of the Philippines.
RULE 4
Definition of Terms
As used in these Rules, the following terms shall have the

following respective meanings:
(a) "Act" unless otherwise stated, refers to, Republic Act No.
9136, otherwise known as the "Electric Power Industry Reform Act
of 2001";
2018
(b) "Accredited Facility" refers to a facility granted the

certificate of accreditation by NPC or DOE pursuant to Executive
Order No. 215 and its implementing rules and regulations;
(c) "Affiliate" means any Person which, alone or together

with any other Person, directly or indirectly, through one or more
intermediaries, Controls, is Controlled by, or is under common
Control with another Person. Affiliates shall include a subsidiary
company and parent company and subsidiaries, directly or indirectly,
of a common parent;
(d) "Aggregator" refers to a Person or entity duly licensed by

the ERC to engage in consolidating electric power demand of End-
users in a Contestable Market for the purpose of purchasing and
reselling electricity on a group basis;
(e) "Ancillary Services" refer to those services that are

necessary to support the transmission of capacity and energy from
resources to loads while maintaining reliable operation of the
transmission system in accordance with good utility practice and
the Grid Code to be adopted in accordance with the Act;
(f) "Bureau of Internal Revenue" or "BIR" refers to an

attached agency of the Department of Finance (DOF);
(g) "Board of Investments" or "BOI" refers to an attached

agency of the Department of Trade and Industry (DTI) created
under Republic Act No. 5186, as amended;
(h) "Bonafide Member" refers to a Person that has met all

the requirements set forth under the applicable EC by-laws and has
been enlisted as such, with voting rights under the "one-man-one-
vote" cooperative principle;
(i) "Build-Operate-Transfer" or "BOT " shall have the

meaning specified by Republic Act No. 6957, as amended, otherwise
known as "BOT Law" and its implementing rules and regulations;
(j) "Buyer or Concessionaire" refers to a qualified party

awarded the sale agreement or Concession Contract for transmission
assets;
2019
(k) "Captive Market" refers to electricity End-users who do

not have the choice of a Supplier of electricity, as may be determined
by the ERC in accordance with the Act;
(l) "Central Dispatch" refers to the process of issuing

direct instructions to Electric Power Industry Participants by the
grid operator to achieve the economic operation and maintenance
of quality, stability, reliability and security of the transmission
system;
(m) "Competition Rules" refer to the rules promulgated

by ERC to promote and ensure competition in the electric power
industry pursuant to the Act and these Rules;
(n) "Concession Contract" refers to the award by the

government to a qualified private entity of the responsibility for
financing, operating, expanding, maintaining and managing specific
Government-owned transmission assets;
(o) "Condonation" refers to the setting aside or suspension

from the ECs' books of accounts of all their financial obligations
to NEA and other government agencies as a result of PSALM's
assumption of the same, subject to their compliance with the
Program approved by the President of the Philippines;
(p) "Contestable Market" refers to the electricity End-users

who have a choice of a Supplier of electricity, as may be determined
by the ERC in accordance with the Act;
(q) "Contiguous Area" refers to areas which are within the

same boundaries such as subdivisions, villages, Economic Zones,
business districts and other similarly situated End-users in which
Supply of Electricity can be measured through metering devices;
(r) "Control" shall mean the power to direct or cause the

direction of the management policies of a Person by contract, agency
or otherwise;
(s) "Cooperative Development Authority" or "CDA" refers to

an entity created under Republic Act No. 6939;
2020
(t) "Corporation Code" refers to Batas Pambansa Bilang 68,

otherwise known as "The Corporation Code of the Philippines;"
(u) "Demand Side Management" or "DSM" refers to

measures undertaken by Distribution Utilities to encourage End-
users in the proper management of their load to achieve efficiency
in the utilization of fixed infrastructures in the system;
(v) "Department of Budget and Management" or "DBM"

refers to the government agency created pursuant to Executive
(w) "Department of Energy" or "DOE" refers to the

government agency created pursuant to Republic Act No. 7638
whose expanded functions are provided in the Act;
(x) "Department of Finance" or "DOF" refers to the

government agency created pursuant to Executive Order No. 127,
as amended;
(y) "Distribution Code" refers to a compilation of rules

and regulations governing electric utilities in the operation and
maintenance of their Distribution Systems, which includes, among
others, the standards for service and performance, and defines and
establishes the relationship of Distribution Systems with facilities
or installations of parties connected thereto;
(z) "Distribution of Electricity" refers to the conveyance of

electric power from transmission facilities or Embedded Generators
to End-users by a Distribution Utility through its Distribution
System pursuant to the provisions of the Act and these Rules;
(aa) "Distribution System" refers to the system of wires and

associated facilities belonging to a franchised Distribution Utility
extending between the delivery points on the transmission or
Subtransmission System or generator connection and the point of
connection to the premises of the End-user;
(bb) "Distribution Wheeling Charge" refers to the cost or

charge regulated by the ERC for the use of a Distribution System
and/or the availment of related services;
2021
(cc) "Distribution Utility" refers to any EC, private

corporation, government-owned utility or existing local government
unit which has an exclusive franchise to operate a Distribution
System in accordance with its franchise and the Act;
(dd) "Economic Zones" or "EZs" refer to selected areas

which are being developed into agro-industrial, industrial, tourist,
recreational, commercial, banking, investment and financial
centers. An EZ may refer to any of the following: Industrial Estates
(IEs), Export Processing Zones (EPZs), Free Trade Zones (FTZs),
Information Technology Parks and Tourist/Recreational Centers,
such as those managed, administered, or operated by the Bases
Conversion Development Authority (BCDA), Cagayan Economic
Zone Authority (CEZA), Clark Development Corporation (CDC),
Philippine Economic Zone Authority (PEZA), Phividec Industrial
Authority (PIA), and Zamboanga City Economic Zone Authority
(ZCEZA);
(ee) "Electric Cooperative" or "EC" refers to a Distribution

Utility organized pursuant to Presidential Decree No. 269, as
amended or as otherwise provided in the Act;
(ff) "Electric Power Industry Participant" refers to any Person

or entity engaged in the generation, transmission, distribution or
Supply of Electricity;
(gg) "Embedded Generators" refer to generating units that are

indirectly connected to the Grid through the Distribution Utilities'
lines or industrial generation facilities that are synchronized with
the Grid;
(hh) "End-user" refers to any Person or entity requiring the

supply and delivery of electricity for its own use;
(ii) "Energized Area" refers to a geographical area enjoying

dependable and adequate electric service;
(jj) "Energy Regulatory Board" or "ERB" refers to the

independent, quasi-judicial regulatory body created under Executive
2022
(kk) "Energy Regulatory Commission" or "ERC" refers to the

regulatory agency created by Section 38 of the Act;
(ll) "Financing for Rural Electrification" refers to those loans

and grants extended to ECs, for the construction or acquisition,
operation and maintenance of distribution, generation, and
subtransmission facilities for the purpose of supplying electric
service, and those loans for the restoration, upgrading and expansion
of such facilities, in areas which are considered rural at the time of
the grant of such loans;
(mm) "Franchise Area" refers to a geographical area

exclusively assigned or granted to a Distribution Utility for
Distribution of Electricity;
(nn) "Generation Company" refers to any Person or entity

authorized by the ERC to operate facilities used in the Generation
of Electricity;
(oo) "Generation Facility" refers to a facility for the production

of electricity;
(pp) "Generation of Electricity" refers to the production of

electricity by a Generation Company or a co-generation facility
pursuant to the provisions of the Act;
(qq) "Grid" refers to the high voltage backbone system of

interconnected transmission lines, substations and related facilities,
located in each of Luzon, Visayas and Mindanao, or as may otherwise
be determined by the ERC in accordance with Section 45 of the
Act;
(rr) "Grid Code" refers to the set of rules and regulations

governing the safe and reliable operation, maintenance and
development of the high voltage backbone transmission system and
its related facilities;
(ss) "Independent Market Operator" or "IMO" refers to a

person who is financially and technically capable, with proven
experience and expertise of not less than two (2) years as a leading
independent market operator of similar or larger size electricity
2023
markets endorsed jointly by the DOE and Electric Power Industry

Participants to assume the functions, assets and liabilities from the
Autonomous Group Market Operator (AGMO), pursuant to Section
30 of the Act;
(tt) "Independent Power Producer" or "IPP" refers to an

existing power generating entity which is not owned by NPC as of
the effectivity of the Act;
(uu) "Inter-Class Cross Subsidy" refers to an amount charged

by Distribution Utilities to industrial and commercial End-users
as well as to other subsidizing customer sectors in order to reduce
electricity rates of other customer sectors such as the residential
End-users, hospitals, and streetlights;
(vv) "Inter-Regional Grid Cross Subsidy" refers to an amount

embedded in the electricity rates of NPC charged to its customers
located in a viable regional grid in order to reduce the electricity
rates in a less viable regional grid;
(ww) "Intra-Regional Grid Cross Subsidy" refers to an amount

embedded in the electricity rates of NPC charged to Distribution
Utilities and non-utilities with higher load factor and/or delivery
voltage in order to reduce the electricity rates charged to Distribution
Utilities with lower load factor and/or delivery voltage located in the
same regional grid;
(xx) "IPP Administrator" refers to qualified independent

entities appointed by PSALM who shall administer, conserve
and manage the contracted energy output of NPC-IPP contracts,
including selling the contracted energy output of these contracts
and offering Ancillary Services, where applicable;
(yy) "Lifeline Rate" refers to the subsidized rate given to

Marginalized/low-income Captive Market End-users who cannot
afford to pay at full cost;
(zz) "Marginalized End-users" refer to low-income, captive,

household electricity consumers who cannot afford to pay at full cost
and have levels of electricity consumption below a threshold level to
be determined by the ERC;
2024
(aaa) "Market Fees" refer to the charges imposed on all market

members by the Market Operator to cover the cost of administering
and operating the WESM, as approved by the ERC;
(bbb) "Market Operator" refers to either the "Autonomous

Group Market Operator" or "AGMO" constituted by the DOE under
Section 30 of the Act, with equitable representation from Electric
Power Industry Participants, initially under the administrative
supervision of the TRANSCO, which shall assume the functions,
assets and liabilities of the AGMO or the IMO, the entity jointly
endorsed by the DOE and Electric Power Industry Participants to
assume the functions, assets and liabilities from AGMO pursuant to
Section 30 of the Act;
(ccc) "Merit Order Dispatch Instructions" refer to the dispatch

schedule that will be submitted by the Market Operator to the Grid/
system operator for the purpose of providing Central Dispatch;
(ddd)"Missionary Electrification" refers to the provision of

basic electricity service in Unviable Areas with the ultimate aim of
bringing the operations in these areas to viability levels;
(eee) "National Electrification Administration" or "NEA"

refers to the government agency created under Presidential Decree
No. 269, as amended, with additional mandate set forth in the Act;
(fff) "National Power Corporation" or "NPC" refers to the

amended;
(ggg) "National Transmission Corporation" or "TRANSCO"

refers to the corporation organized pursuant to the Act to acquire
all the transmission assets of the NPC;
(hhh) "Open Access" refers to the system of allowing any

qualified Person the use of transmission, and/or Distribution System
and associated facilities subject to the payment of transmission
and/or distribution retail wheeling rates duly approved by the
ERC. For this purpose, qualified Persons shall include all WESM
Participants;
2025
(iii) "Person" refers to a natural or juridical person, as the

case may be;
(jjj) "Philippine Energy Plan" or "PEP" refers to the overall

energy program formulated and updated yearly by the DOE and
submitted to Congress pursuant to Republic Act No. 7638;
(kkk) "Philippine Stock Exchange" or "PSE" refers to the

corporate body duly organized and existing under Philippine law,
licensed to operate as a securities exchange by the Securities and
Exchange Commission (SEC);
(lll) "Power Commission" refers to the Joint Congressional

Power Commission created pursuant to Section 62 of the Act;
(mmm) "Power Development Program" or "PDP" refers

to the indicative plan for managing electricity demand through
energy-efficient programs and for the upgrading, expansion,
rehabilitation, repair and maintenance of power generation and
transmission facilities, formulated and updated yearly by the DOE
in coordination with the generation, transmission and Distribution
Utility companies;
(nnn) "Power Sector Assets and Liabilities Management

Corporation" or "PSALM Corp." or "PSALM" refers to the corporation
created pursuant to Section 49 of the Act;
(ooo) "Privatization" refers to the sale, disposition, change

and transfer of entire ownership and control of all assets and IPP
contracts from the Government or a government corporation to a
private Person or entity;
(ppp)"Qualified Distribution Utilities" refer to Distribution

Utilities that are technically and financially capable of owning,
operating, maintaining, upgrading and expanding subtransmission
facilities in accordance with the requirement of the Act;
(qqq) "Referendum" refers to an electoral process which

Bonafide Members of ECs register their respective vote on the issue
of conversion, through secret balloting, in designated voting centers,
the conduct of which shall be under the supervision of NEA;
2026
(rrr) "Related Group" refers to a Person and any business

entity Controlled by that Person, along with the Affiliates of such
business entity, and the directors and officers of the business entity
or its Affiliates, and relatives by consanguinity or affinity, legitimate
or common law, within the fourth civil degree, of the Person or any
of the foregoing directors or officers;
(sss) "Renewable Energy Resources" refer to energy resources

that do not have an upper limit on the total quantity to be used.
Such resources are renewable on a regular basis and the renewable
rate is rapid enough to consider availability over an indefinite time.
These include, among others, biomass, solar, wind, hydro and ocean
energy;
(ttt) "Restructuring" refers to the process of reorganizing

the electric power industry in order to introduce higher efficiency,
greater innovation and End-user choice. It shall be understood as
covering a range of alternatives enhancing exposure of the industry
to competitive market forces;
(uuu) "Retail Rate" refers to the total price paid by End-

users consisting of the charges for generation, transmission and
related Ancillary Services, distribution, supply and other related
charges for electric service;
(vvv) "Retail Competition" refers to the provision of electricity

to a Contestable Market by Suppliers through Open Access;
(www) "Return-On-Rate-Base" or "RORB" refers to the rate

setting methodology as determined by the ERC whereby TRANSCO
or its Buyer or Concessionaire and Distribution Utilities are allowed
to recover just and reasonable costs and earn a reasonable return so
as to enable such entities to operate viably;
(xxx) "Rural Electrification" refers to the delivery of basic

electric services, consisting of power generation, subtransmission
and/or extension of associated power delivery system that would bring
about important social and economic benefits to the countryside;
(yyy) "Rural Electrification Loan" refers to financial obligations

strictly incurred for Rural Electrification;
2027
(zzz) "Rural Electrification Program" refers to the National

Government plan to achieve total electrification of the countryside
for the purpose of fostering economic development and uplifting the
living standards of the Filipino people;
(aaaa) "Self-Generation Facility" refers to a power

Generation Facility owned and constructed by an End-user for such
End-user's own consumption or internal use excluding Generation
Facilities for use by households, clinics, hospitals and other medical
facilities;
(bbbb) "Small Power Utilities Group" or "SPUG" refers to the

functional unit of NPC created to pursue Missionary Electrification
function;
(cccc) "Small Distribution Company" refers to a

Distribution Utility whose peak demand is equal to or less than ten
(10) megawatts;
(dddd) "Stock Cooperative" refers to a duly-registered

association of Persons with a common bond of interest, who have
voluntarily joined together to achieve a lawful common social or
economic end, making equitable contributions to the capital required
and accepting a fair share of the risks and benefits of the undertaking
in accordance with the universally-accepted cooperative principles
as defined under Article 4, Chapter 1 of Republic Act No. 6938,
otherwise known as the "Cooperative Code of the Philippines";
(eeee) "Stock Corporation" refers to an artificial being

created by operation of law with capital stock divided into shares
and authorized to distribute to its shareholders dividends out of
its surplus profits, having the right of succession and the powers,
attributes and properties expressly authorized by law or incident to
its existence;
(ffff) "Stranded Contract Costs of Eligible Contracts of

Distribution Utilities" refer to the excess of the contracted cost of
electricity under eligible contracts of Distribution Utilities over the
actual selling price of the contracted energy output of such contracts
that would be incurred upon Retail Competition and Open Access.
For this purpose, "eligible contracts" are contracts which have been
approved by the ERB as of 31 December 2000;
2028
(gggg) "Stranded Contract Costs of NPC" refer to the excess

of the contracted cost of electricity under eligible contracts of NPC
over the actual selling price of the contracted energy output of such
contracts in the market. Such contracts shall have been approved
by the ERB as of 31 December 2000;
(hhhh) "Stranded Debts of NPC " or "Stranded Debts" refer

to any unpaid financial obligations of NPC which have not been
liquidated by the proceeds from the sales and Privatization of NPC
assets: Provided, however, That such obligations include any of such
obligations refinanced by PSALM: Provided, further, That such
refinancing of such unpaid obligations shall not result in increasing
the Universal Charge burden;
(iiii) "Subtransmission Assets" refer to the facilities related

to the power delivery service below the transmission voltages and
based on the functional assignment of assets including, but not
limited to step-down transformers used solely by load customers,
associated switchyard/substation, control and protective equipment,
reactive compensation equipment to improve customer power
factor, overhead lines, and the land where such facilities/equipment
are located. These include NPC assets linking the transmission
system and the Distribution System which are neither classified as
generation nor transmission;
(jjjj) "Subtransmission System" refers to systems comprised

of Subtransmission Assets;
(kkkk) "Supplier" refers to any Person licensed by the ERC

to sell, broker, market or aggregate electricity to End-users;
(llll) "Supplier's Charge" refers to the charge imposed by

Suppliers for the sale of electricity to End-users, excluding the
charges for generation, transmission and distribution wheeling;
(mmmm) "Supply of Electricity" refers to the sale of

electricity by a party other than a Generation Company or a
Distribution Utility in the Franchise Area of a Distribution Utility
using the wires of such Distribution Utility;
2029
(nnnn) "Technical Constraints" refer to line, equipment, and

other limitations as defined in the WESM Rules, Grid Code and
Distribution Code;
(oooo) "Transmission Charge" refers to the regulated cost

or charges for the use of a transmission system which may include
the availment of Ancillary Services;
(pppp) "Transmission Development Plan" or "TDP" refers to

the program for managing the transmission system through efficient
planning for its expansion, upgrading, rehabilitation, repair and
maintenance, to be formulated by DOE and implemented by the
TRANSCO or its Buyer or Concessionaire pursuant to the Act;
(qqqq) "Transmission of Electricity" refers to the conveyance

of electricity through the high voltage backbone system;
(rrrr) "Universal Charge" refers to the charge, if any,

imposed for the recovery of the Stranded Debts, Stranded Contract
Costs of NPC, and Stranded Contract Costs of Eligible Contracts of
Distribution Utilities and other purposes pursuant to Section 34 of
the Act;
(ssss) "Unviable Area" refers to a geographical area within

the Franchise Area of a Distribution Utility where immediate
extension of distribution line is not feasible;
(tttt) "Wholesale Electricity Spot Market" or "WESM" refers

to the Wholesale Electricity Spot Market to be created in accordance
with the Act;
(uuuu) "WESM Participants" refer to all Generation

Companies, Distribution Utilities, Suppliers, Aggregators,
End-users, the TRANSCO or its Buyer or Concessionaire, IPP
Administrators, and other entities authorized by the ERC to
participate in the WESM in accordance with the Act; and
(vvvv) "WESM Rules" refer to the detailed rules that govern

the administration and operation of the WESM.
2030
PART II
Structure and Operation of the Electric Power Industry
RULE 5
Generation Sector
SECTION 1. Guiding Principle. —
Pursuant to Section 6 of the Act, generation of electric power,

a business affected with public interest, shall be competitive and
open to all qualified Generation Companies. Generation shall not be
considered a public utility operation. For this purpose, any Person
engaged or intending to engage in Generation of Electricity shall
not be required to secure a national franchise.
No Person may engage in the Generation of Electricity as a new

Generation Company unless such Person has received a COC from
the ERC to operate facilities used in the Generation of Electricity.
A Person that demonstrates compliance with the standards and
requirements of this Rule 5, and such other terms and conditions
as determined by the ERC to be appropriate to ensure that Persons
comply with all applicable legal and regulatory requirements, shall
be issued a COC.
SECTION 2. Scope of Application. —
This Rule shall apply to all facilities used or to be used for

the Generation of Electricity, including but not limited to the
following:
(a) Existing Generation Facilities.
Existing Generation Facilities shall include:
(i) Spin-off Facilities of NPC or their transferees, including

Generation Facilities owned by NPC transferred to PSALM and
subsequently privatized pursuant to the Act;
(ii) Agus and Pulangui Complexes;
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(iii) Facilities owned and operated by SPUG;
(iv) Accredited facilities under BOT arrangement and other

variants with NPC, SPUG, National Irrigation Administration
(NIA), Philippine National Oil Company-Energy Development
Corporation (PNOC-EDC) and other government agencies;
(v) Accredited facilities under BOT arrangement and other

variant with Distribution Utilities;
(vi) Facilities Owned or Operated by a Distribution Utility;
(vii) Facilities under Contract with a Distribution Utility;
(viii) Self-Generation Facilities;
(ix) Facility operating in EZs; and
(x) Facility operating in isolated areas.
(b) Generation Facilities Under Construction.
Generation Facilities under construction shall include:
(i) DOE-Accredited Facility under BOT arrangement and

other variants with NPC, SPUG, PNOC-EDC, NIA and other
government agencies;
(ii) DOE-Accredited Facility under BOT arrangement and

other variants with Distribution Utilities;
(iii) Non DOE-Accredited Facility under contract with

Distribution Utilities;
(iv) Self-Generation Facility;
(v) Facility locating in EZs; and
(vi) Facility operating in isolated areas.
(c) New Generation Facilities
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New Generation Facilities shall include:
(i) Any newly-constructed facility with appropriate health,

safety and environmental clearances connected to the Grid;
(ii) Any facility currently under BOT arrangement and

other variants with NPC, SPUG, PNOC-EDC, other government
agencies, and government-owned and -controlled corporations; and
(iii) Any facility that shall operate in an isolated area.
(d) This Rule shall also apply to the PSALM-appointed IPP

Administrators.
SECTION 3. Ownership Limitation. —
No Generation Company, Distribution Utility, or its respective

subsidiary or Affiliate or stockholder or official of a Generation
Company or Distribution Utility, or other entity engaged in generating
and supplying electricity specified by ERC within the fourth civil
degree of consanguinity or affinity, legitimate or common law, shall
be allowed to hold any interest, directly or indirectly, in TRANSCO
or its Buyer or Concessionaire. Likewise, the TRANSCO or its Buyer
or Concessionaire or any of its stockholders or officials or any of their
relatives within the fourth civil degree of consanguinity or affinity,
legitimate or common law, shall not hold any interest, whether
directly or indirectly, in any Generation Company or Distribution
Utility. Except for ex officio government-appointed representatives,
no Person who is an officer or director of the TRANSCO or its Buyer
or Concessionaire shall be an officer or director of any Generation
Company, Distribution Utility or Supplier. This section shall not
apply to PSALM during the period that its generation assets are
being privatized pursuant to Section 47 of the Act.
SECTION 4. Obligations of a Generation Company. —
(a) A COC shall be secured from the ERC before commercial

operation of a new Generation Facility. The COC shall stipulate all
obligations of a Generation Company consistent with this Section
and such other operating guidelines as ERC may establish. The
ERC shall establish and publish the standards and requirements
2033
for issuance of a COC. A COC shall be issued upon compliance with

such standards and requirements.
(i) A Person owning an existing Generation Facility or a

Generation Facility under construction, shall submit within ninety
(90) days from effectivity of these Rules to ERC, when applicable, a
certificate of DOE/NPC accreditation, a three (3) year operational
history, a general company profile and other information that ERC
may require. Upon making a complete submission to the ERC, such
Person shall be issued a COC by the ERC to operate such existing
Generation Facility.
(ii) A Generation Facility which has been previously issued

a COC shall not be required to secure a COC even if acquired by a
new owner: Provided, That such new owner shall register with ERC
as specified above. Upon registration, such Person shall be deemed
authorized to operate such Generation Facility.
(b) A Generation Company shall comply with the following

operating standards:
(i) Technical Standards.
A Generation Company shall ensure that all its facilities

connected to the Grid meet the technical design and operational
criteria of the Grid Code and Distribution Code promulgated by
ERC, Philippine Electrical Code, and the TRANSCO or its Buyer
or Concessionaire including, among others, standards for voltage
fluctuation, frequency, harmonics, security, reliability, unplanned
outages and provision of Ancillary Services and shall operate in
accordance with such operational criteria.
(ii) Financial Standards.
A Generation Company with facilities connected to the Grid

shall conform to the financial standards provided in the Grid Code.
These standards shall take into consideration the nature and
function of a Generation Facility. Furthermore, such standards are
set to ensure that the Generation Company meets the minimum
financial standards to protect the public interest and any customer
procuring services from the said Generation Company.
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(iii) Environmental Standards.
A Generation Company shall ensure that its facilities comply

with applicable environmental laws, rules and regulations.
(c) A Generation Company operating a Generation Facility

in isolated areas shall meet the technical and financial standards
to be issued by the ERC using applicable and practicable criteria
within two (2) years, or such other period as may be specified by the
ERC, from the issuance of such technical and financial standards.
(d) A Generation Company shall structurally and

functionally unbundle its generation business activities and rates
from its distribution and supply businesses as provided in Rule 10
on Structural and Functional Unbundling of Electric Power Industry
Participants and Rule 15 on Unbundling of Rates.
(e) Prior to the implementation of Open Access and Retail

Competition, the prices charged by a Generation Company for the
Supply of Electricity shall be subject to ERC regulation on the
Retail Rates charged by Distribution Utilities and transition supply
contracts (TSCs) as specified in Section 67 of the Act.
Upon introduction of Open Access and Retail Competition

or establishment of WESM, whichever comes first, the rates of a
Generation Company shall not be subject to regulation by the ERC
except as otherwise provided by the Act.
However, for a Generation Company operating a facility

in SPUG areas and isolated areas, the generation rates for such
facility shall be fixed and determined by ERC as set forth in Rule 13
on Missionary Electrification.
(f) A self-generation company not connected to a Distribution

Utility, unless otherwise provided under these Rules, shall remit
directly to TRANSCO the corresponding Universal Charge set by
ERC. In relation to this, TRANSCO or its Buyer or Concessionaire
or the appropriate Distribution Utility, when connected to the self-
generation company, shall have access to the customer side of the
meter in order to determine the utilization of such Generation
Facility for the purpose of assessing the corresponding Universal
Charge as provided in Rule 18 on Universal Charge.
2035
(g) A Generation Company shall comply with Rule 29 on

Benefits to Host Communities.
(h) Upon the establishment of the WESM by the DOE, jointly

with Electric Power Industry Participants, a Generation Company
shall comply with the membership criteria as prescribed under the
WESM Rules as set forth in Rule 9 on WESM.
(i) Pursuant to Section 9(e) of the Act, a Generation

Company with facilities connected to a Grid shall make information
available to the Market Operator to enable the Market Operator to
implement the appropriate dispatch scheduling and shall comply
with the said scheduling in accordance with the WESM Rules. A
Generation Company shall likewise make information available
to the grid operator to facilitate Central Dispatch by the grid
operator. Subject to Technical Constraints, the grid operator of the
TRANSCO or its Buyer or Concessionaire shall provide Central
Dispatch to a Generation Facility connected, directly or indirectly,
to the transmission system in accordance with the dispatch schedule
submitted by the Market Operator, which schedule shall take into
account outstanding bilateral contracts.
(j) A Generation Company shall comply with Rule 11 on

Cross Ownership, Market Abuse and Anti-Competitive Behavior.
(k) A Generation Company that owns a dedicated point-to-

point limited transmission facility shall transfer ownership of such
facility to the TRANSCO at a fair market price in the event that
such facility is required for competitive purposes as prescribed in
Section 5 (b) of this Rule.
(l) A Generation Company shall submit to DOE any

information as may be required by the DOE for the preparation of the
PDP, subject to appropriate measures to preserve the confidentiality
of proprietary or commercially sensitive information.
(m) A Generation Company that fails to comply with any of

these obligations, including compliance with technical standards,
shall be subject to fines and penalties as may be imposed by the
ERC.
2036
SECTION 5. Dedicated Point-to-Point Limited Transmission

Facility of a Generation Company. —
(a) Subject to prior authorization from ERC, TRANSCO

or its Buyer or Concessionaire may allow a Generation Company
to develop, own and/or operate dedicated point-to-point limited
transmission facilities: Provided, That:
(i) Such dedicated point-to-point limited transmission

facilities are required only for the purpose of connecting to the Grid
which will be used solely by the Generation Facility, and are not
used to serve End-users or Suppliers directly; ESTDIA
(ii) facilities are included and consistent with the TDP as

certified by TRANSCO or its Buyer or Concessionaire; and
(iii) Any other documents that may be required by the ERC.
(b) In the event that such assets are required for competitive
purposes, ownership of the same shall be transferred to the
TRANSCO at a fair market price. In case of disagreement on the
fair market price, the ERC shall determine the fair market value
of such asset, either directly or through such dispute resolution
mechanisms as ERC may specify.
SECTION 6. Generation Charges and VAT . —
(a) Within ninety (90) days from the effectivity of these Rules,
the ERC shall issue guidelines for the regulation of power sales by
Generation Companies applicable prior to the implementation of
Retail Competition and Open Access or establishment of WESM,
whichever comes first.
(b) Pursuant to the policy of reducing electricity rates to

End-users, sales of generated power by a Generation Company
shall, from the effectivity of the Act, be zero-rated for the purpose
of imposition of value-added tax. Towards this end, the imposition
of zero percent (0%) VAT shall apply to the sale of generated power
by a Generation Company through all stages of sale until it reaches
the End-user. The DOF, through the BIR, shall issue the necessary
2037
revenue regulation within sixty (60) calendar days from effectivity

of these Rules.
RULE 6
Transmission Sector
The transmission of electric power is affected with public

interest and shall be a regulated common electricity carrier business,
subject to the ratemaking powers of the ERC.
This Rule shall apply to TRANSCO or its Buyer or

Concessionaire and any other successor-in-interest thereto.
The TRANSCO or its Buyer or Concessionaire or any of its

stockholders, directors, officers or any of their relatives within the
fourth civil degree of consanguinity or affinity, legitimate or common
law, shall not hold any interest, whether directly or indirectly, in
any Generation Company, Distribution Utility, IPP Administrator
and Supplier.
SECTION 4. Separation Between Transmission and

Subtransmission. —
The ERC shall set the standards of the transmission voltages

and other factors that shall distinguish transmission assets from
Subtransmission Assets. Towards this end, ERC shall issue
appropriate guidelines to distinguish between these categories of
assets according to voltage level and function. The ERC shall take
into account the objective of allowing non-discriminatory Open
Access to the transmission and Subtransmission Systems.
The technical and functional criteria to be considered in

distinguishing transmission assets from Subtransmission Assets
shall include, but not limited to:
2038
(a) Subtransmission Assets are normally in close proximity

to retail customers;
(b) Subtransmission Assets are primarily radial in

character;
(c) Power flows into Subtransmission Assets; it rarely, if

ever, flows out;
(d) When power enters Subtransmission Assets, it is not

reconsigned or transported on to some other market;
(e) Power entering Subtransmission Assets is consumed in

a comparatively restricted geographic area;
(f) Meters are based at the interface of transmission and

Subtransmission Assets to measure flows into the Subtransmission
Assets; and
(g) Subtransmission Assets will be of reduced voltage.
SECTION 5. Initial Classification of Transmission Assets. —
Pending the issuance of the new standards for classification

of transmission assets by ERC, transmission assets shall be defined
as follows:
(a) For the Luzon Grid, transmission facilities rated 230 kV

and above shall generally be considered transmission assets;
(b) For the Visayas Grid, transmission facilities rated 69 kV

and above shall generally be considered transmission assets;
(c) For the Mindanao Grid, transmission facilities rated 138

kV and above shall generally be considered transmission assets;
and
(d) Notwithstanding the foregoing provisions, any line at

the specified level for each Grid that serves an End-user or customer
shall be considered a subtransmission line, and any line below the
2039
specified level for each Grid that serves a transmission function

shall be considered a transmission line.
SECTION 6. Initial Classification of Subtransmission

Assets. —
Step-down transformers used solely by load customers are

considered Subtransmission Assets.
In the case of step-down transformer banks serving a single

Distribution Utility, the Distribution Utility or Distribution
Utilities shall have the option to purchase said facility, provided,
it will guarantee the reliable Supply of Electricity to grid control
equipment.
SECTION 7. Functions and Responsibilities of TRANSCO or

its Buyer or Concessionaire. —
The TRANSCO or its Buyer or Concessionaire shall have,

among others, the following functions and responsibilities:
(a) Act as the system operator of the nationwide electrical

transmission and Subtransmission System, transferred to it by
NPC;
(b) Provide open and non-discriminatory access to its system

to all electricity users;
(c) Ensure and maintain the reliability, adequacy, security,

stability and integrity of the Grid in accordance with the performance
standards for the operation and maintenance of the Grid, as set
forth in the Grid Code and the Distribution Code.
The performance indicators for reliability, security, adequacy,

integrity and stability shall include but are not limited to the
following:
(i) Number of Interruption Events;
(ii) Sustained Average Interruption Frequency Index;
2040
(iii) Momentary Average Interruption Frequency Index;
(iv) Sustained Average Interruption Duration Index;
(v) System Interruption Severity Index;
(vi) Frequency of tripping per 100 c-km;
(vii) Average Forced Outage Duration;
(viii) Accumulated Time Error;
(ix) Frequency Limit Violation; and
(x) Voltage limit Violations.
(d) Improve and expand its transmission facilities,

consistent with the TDP and the Grid Code, to adequately serve
Generation Companies, Distribution Utilities and Suppliers
requiring transmission service and/or Ancillary Services through
the transmission system. TRANSCO or its Buyer or Concessionaire
shall submit any plan for expansion or improvement of its facilities
for approval by the ERC; and
(e) Provide Central Dispatch, through its grid operator, to

all Generation Facilities and loads connected, directly or indirectly,
submitted by the Market Operator, taking into account outstanding
bilateral contracts and subject to Technical Constraints.
SECTION 8. Obligations of TRANSCO. —
The TRANSCO shall have, among others, the following

obligations:
(a) Prepare the TDP in consultation with Electric Power

Industry Participants.
(b) Submit an updated TDP for approval to the DOE on a

timely basis each year for integration with the PDP and PEP.
2041
(c) Remit its net profit, if any, to the PSALM not later than
ninety (90) days after the immediately preceding quarter subject
to annual reconciliation when the audited and certified annual
financial statements are finally made available. Net profit is defined
as:
Net Profit = Total Utility Revenue – (Total Operating Expenses

– Other Income + Interest & Other Charges)
Net proceeds from the Privatization of TRANSCO shall be

immediately remitted to PSALM.
(d) TRANSCO shall secure approval of its Transmission

Charges from the ERC pursuant to Section 43 (f) of the Act.
(e) TRANSCO shall sell its Subtransmission Assets to

qualified Distribution Utilities pursuant to the Act and, Part IV,
Section 13 of Rule 22 on National Transmission Corporation. In
the event that a Distribution Utility is not qualified or a qualified
Distribution Utility refuses to acquire such assets, then TRANSCO
shall be deemed in compliance with this obligation.
The Buyer or Concessionaire shall be responsible for the

obligations under Subsections (a), (b), and (d) hereof.
SECTION 9. Compliance with Grid Code. —
TRANSCO or its Buyer or Concessionaire shall comply with

the provisions of the Grid Code in the process of improving and
expanding its transmission facilities in order to ensure and maintain
the reliability, adequacy, security, stability and integrity of the Grid
and adequately serve Electric Power Industry Participants requiring
transmission service or Ancillary Services through the Grid.
SECTION 10. Transmission Development Plan. —
(a) The TDP refers to a plan for managing the transmission

system through efficient planning for expansion, upgrading,
rehabilitation, repair and maintenance, to be prepared and
implemented by TRANSCO or its Buyer or Concessionaire.
2042
(b) TRANSCO or its Buyer or Concessionaire shall be

responsible for the preparation of the TDP, in consultation with
the Electric Power Industry Participants. TRANSCO or its Buyer
or Concessionaire shall submit the TDP for approval by DOE for
integration into the PDP and PEP.
(c) Any plan for expansion or improvement of transmission

facilities shall be approved by the ERC: Provided, That such approval
shall not be unreasonably withheld.
SECTION 11. TRANSCO Related Businesses. —
The TRANSCO or its Buyer or Concessionaire shall be

primarily responsible for maintaining and operating the Grid
pursuant to this Rule.
(a) TRANSCO or its Buyer or Concessionaire may engage in

any related business which maximizes utilization of its assets;
(b) A portion of the annual net income of not more than fifty
percent (50%) derived from such undertaking utilizing assets which
form part of the rate base shall be used to reduce the transmission
wheeling charges as determined by ERC; and
(c) Separate audited accounts shall be maintained for each

business undertaking to ensure that the transmission business
shall neither subsidize in any way such business undertaking
nor encumber its transmission assets in any way to support such
business.
SECTION 12. Transmission Charges. —
(a) Transmission Charges shall be paid to TRANSCO or

its Buyer or Concessionaire for the use of the transmission system.
Transmission users shall also pay charges for the use of Ancillary
Services. The WESM Rules shall provide for the methodology for the
price and cost recovery of Ancillary Services that are to be provided
by the Generation Company.
(b) Transmission Charges and fees for Ancillary Services

shall be fixed by the ERC.
2043
RULE 7
Distribution Sector
SECTION 1. Guiding Principles. —
(a) Pursuant to Section 22 of the Act, the Distribution

of Electricity to End-users shall be a regulated common carrier
business, requiring a national franchise. For purposes of these Rules,
distribution franchise shall mean the privilege of a Distribution
Utility to convey electric power through its Distribution System in a
given geographical area granted by the Congress of the Republic of
the Philippines. The Distribution of Electricity is a business affected
with public interest.
(b) The following rules shall apply to the Distribution of

Electricity.
This Rule shall apply to an entity that owns, operates, or

Controls one or more Distribution Systems such as but not limited
to:
(a) ECs;
(b) Privately-Owned Distribution Utilities;
(c) Local Government Unit Owned-and-Operated

Distribution Systems;
(d) Entities duly authorized to operate within the EZs; and
(e) Other duly authorized entities engaged in the Distribution

of Electricity.
(a) A Distribution Utility and any of its subsidiaries,

Affiliates, stockholders, directors, officers or their relatives within
the fourth civil degree of consanguinity or affinity, legitimate or
2044
common law, shall not hold any interest, directly or indirectly, in

the TRANSCO or its Buyer or Concessionaire, or the IMO.
(b) The holdings of any Person, natural or juridical, including

its directors, officers, stockholders, and their related interests in a
Distribution Utility and their respective holding companies shall not
exceed twenty-five percent (25%) of the total voting shares of stock.
This shall not apply to a Distribution Utility or the company holding
the shares or its controlling stockholders whose shares are listed in
the PSE. Implementation of this provision shall be in accordance
with the rules and regulations issued by ERC. This section shall not
apply to ECs in accordance with Section 28 of the Act.
(c) A Distribution Utility shall be required to sell to the

public a portion of not less than fifteen percent (15%) of its common
shares of stock not later than five (5) years from the effectivity of
the Act, except those Distribution Utilities or its respective holding
companies listed in the PSE, subject to the rules and regulations of
the ERC to be issued for this purpose.
SECTION 4. Obligations of a Distribution Utility. —
(a) A Distribution Utility shall provide distribution services

and connections to its systems for any End-user within its Franchise
Area consistent with the Distribution Code. Any existing End-
user within the Franchise Area of a Distribution Utility that is
connected to TRANSCO facilities shall be served by the franchised
Distribution Utility upon acquisition of the subtransmission
facilities: Provided, however, That the Distribution Utility which
acquired the subtransmission facilities shall be paid by the End-
user the corresponding subtransmission rates or wheeling charge
imposed by NPC in accordance with its contract to the End-user as
approved by ERC.
(b) A Distribution Utility shall structurally and functionally

unbundle its distribution business activities and rates from its
wires, generation and supply businesses. A Distribution Utility
shall comply with Rule 10 on Structural and Functional Unbundling
of Electric Power Industry Participants.
2045
(c) A Distribution Utility shall provide open and non-

discriminatory access to its Distribution System to all End-users,
including Suppliers and Aggregators.
(d) A Distribution Utility shall comply with the technical

specifications and financial standards prescribed in the Distribution
Code and the performance standards prescribed in these Rules. To
this end, ERC shall issue submission requirements for Distribution
Utilities to comply with the technical specifications, financial and
the performance standards after the effectivity of these Rules and
the Distribution Code.
(i) A Distribution Utility shall submit to ERC a statement

of compliance.
(ii) A Distribution Utility that does not comply with the

technical specifications, performance standards and financial
capability standards as prescribed in the Distribution Code shall
submit to ERC a plan to comply within three (3) years therewith.
The ERC shall, within sixty (60) days from receipt of such plan,
evaluate the same and notify the Distribution Utility concerned of
its action.
(iii) A Distribution Utility is required to implement the

ERC-approved plan to comply with the said technical specifications
prescribed in the Distribution Code and the performance standards
of these Rules within three (3) years from the approval of said
plan.
(iv) Failure by the Distribution Utility to submit a feasible

and credible plan or failure to implement the same shall serve as
ground for the imposition of appropriate sanctions, fines or penalties
as may be prescribed by ERC.
(e) A Distribution Utility shall comply with the requirements

in the Grid Code, WESM Rules and all applicable laws.
(f) A Distribution Utility shall provide universal service

within its Franchise Area, over a reasonable time, including
Unviable Areas, as part of its social obligations. This obligation
shall be performed in a manner that shall allow such Distribution
2046
Utilities to collect different rates in Unviable Areas to sustain its

economic viability, subject to approval by the ERC.
(g) A Distribution Utility shall file with the ERC its petition
to allow another Distribution Utility to provide electricity to areas
that it does not find viable, pursuant to Section 6 of this Rule.
(h) A Distribution Utility shall supply electricity in the

least cost manner to the Captive Market within its Franchise Area,
subject to the collection of Retail Rates duly approved by ERC.
(i) A Distribution Utility shall file for review and approval

by the ERC its unbundled rates reflecting the true costs of service
pursuant to Rule 15 on Unbundling of Rates, and the proposal for the
removal of cross subsidies among the customers it serves pursuant
to Rule 16 on Removal of Cross Subsidies.
(j) A Distribution Utility shall file with the ERC its petition
on the Lifeline Rate to be applied to its Marginalized End-users,
pursuant to Rule 20 on Lifeline Rate.
(k) A Distribution Utility shall recover Stranded Contract

Costs under eligible contracts approved by ERB as of 31 December
2000, subject to review by the ERC pursuant to Rule 17 on Stranded
Debts and Contract Costs Recovery.
(l) A Distribution Utility shall collect on a monthly basis

from all End-users a Universal Charge set by ERC, to be remitted to
PSALM on or before the fifteenth (15th) of the succeeding month,
net of any amount due to the Distribution Utility.
(m) A Distribution Utility shall identify and segregate in its

customer billing statements the components of the Retail Rate.
(n) A Distribution Utility shall comply with Rule 11 on Cross

Ownership, Market Abuse and Anti-Competitive Behavior.
(o) A Distribution Utility shall file for review and approval

by the ERC any changes in the terms and conditions of services to
its Franchise Areas.
2047
(p) A Distribution Utility shall prepare and submit to the

DOE an annual 5-year distribution development plan not later than
the fifteenth (15th) of March of every year, for integration with the
PDP and PEP.
In the case of the ECs, such plans shall be submitted through

NEA for review and consolidation. To this end, NEA shall submit
to the DOE the National Electric Cooperatives Distribution
Development Plan not later than the 15th of March of every year.
(q) A Distribution Utility shall pay a franchise tax only on

its distribution wheeling and Captive Market supply revenues. To
this end, the DOF shall issue the necessary guidelines.
(r) A Distribution Utility shall comply with the reportorial

requirements as may be prescribed by the ERC and the DOE.
(s) A Distribution Utility that fails to comply with any of

these obligations shall be subject to fines and penalties as imposed
by the ERC.
SECTION 5. Privileges of a Distribution Utility. —
(a) A Distribution Utility shall be entitled to impose and

collect Distribution Wheeling Charges and connection fees, Retail
Rates and other charges as approved by the ERC from the End-user
and other qualified customers.
(b) A Distribution Utility may exercise the power of eminent

domain subject to the requirements of the Constitution and existing
laws.
(c) A Distribution Utility may, directly or indirectly,

engage in any related business undertaking that maximizes the
utilization of its assets: Provided, That quality of service shall not
deteriorate pursuant to the standards provided in the Grid Code
and Distribution Code and Rule 10 on Structural and Functional
Unbundling of Electric Power Industry Participants. To this end,
the Distribution Utility shall submit to the ERC the appropriate
documents to effect the following:
2048
(i) A portion of the net annual income derived from such

undertaking utilizing assets which form part of the rate base shall
be used to reduce its Distribution Wheeling Charges: Provided,
That, such portion shall not exceed fifty percent (50%) of the net
income derived from such undertaking.
(ii) Separate accounts shall be maintained for each business

undertaking to ensure that the distribution business shall neither
subsidize in any way such business undertaking nor encumber its
distribution assets in any way to support such business.
SECTION 6. Provision of Service in Unviable Areas. —
(a) Unenergized areas that a Distribution Utility does not

find viable may be transferred to another Distribution Utility, if
any is available, which will provide the service, subject to approval
by ERC. In cases where a Distribution Utility failed or refused to
service any area within its Franchise Area and allows another utility
to service the same, the arrangements between the Distribution
Utilities shall not affect their respective Franchise Areas. The ERC
shall issue the appropriate guidelines to implement this provision.
(b) In remote and Unviable Areas where the Distribution

Utility is unable to serve for any reason as authorized by ERC in
accordance with the Act, the areas shall be opened to other qualified
third parties that may provide the service pursuant to Rule 14 on
Provision of Electricity by Qualified Third Parties.
SECTION 7. Structural and Operational Reforms Between

and Among Distribution Utilities. —
(a) Pursuant to Section 23 of the Act, the ERC shall issue the
appropriate guidelines for the structural and operational reforms of
a Distribution Utility. Such reforms shall include, but not limited,
to merger, consolidation, integration, bulk procurement and joint
ventures.
(b) With respect to ECs, the DOE through NEA shall

facilitate and encourage reforms in the structure and operations of
a Distribution Utility for greater efficiency and lower costs.
2049
(c) Pursuant to Section 57 of the Act, ECs are given the

option to convert into Stock Cooperatives under the CDA or Stock
Corporations under the Corporation Code. Nothing contained in
the Act shall deprive ECs of any privilege or right granted to them
under Section 39 of Presidential Decree No. 269, as amended, and
other existing laws. The conversion and registration of ECs shall be
implemented in the following manner:
(i) ECs shall, upon approval of a simple majority of the

required number of turnout of voters as provided in the Guidelines in
the Conduct of Referendum (Guidelines), in a referendum conducted
for such purpose, be converted into a Stock Cooperative or Stock
Corporation and thereafter shall be governed by the Cooperative
Code of the Philippines or the Corporation Code, as the case may
be. The NEA, within six (6) months from the effectivity of these
Rules, shall promulgate the guidelines in accordance with Section 5
of Presidential Decree No. 1645.
(ii) ECs converted into Stock Corporations shall be registered

with the SEC in accordance with the Corporation Code, while those
converted into Stock Cooperatives, shall be registered with the CDA:
Provided, however, That the ECs which opt to remain as non-Stock
Cooperatives shall continue to be registered with the NEA and shall
be governed by the provisions of Presidential Decree No. 269, as
amended.
(iii) An EC heretofore converted, regardless of the corporate

form, or its successor entity, shall retain its franchise rights:
Provided, further, That its operations shall be regulated by the ERC
and other Government instrumentalities insofar as practicable and
consistent with the Act.
SECTION 8. Franchise for a Distribution Utility. —
(a) Pursuant to Section 27 of the Act, a franchise to a Person

intending to engage in Distribution of Electricity shall be granted
exclusively by the Congress of the Philippines.
(b) All existing franchises shall be allowed to their full

term.
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(c) In the case of ECs, renewals and cancellations of franchise

shall remain with the National Electrification Commission (NEC)
under the NEA for five (5) more years after the effectivity of the
Act.
RULE 8
Supply Sector
SECTION 1. Guiding Principles. —
(a) Pursuant to Section 29 of the Act, the Supply of Electricity

to End-users is a business affected with public interest.
(b) The Supply of Electricity to End-users in Contestable

Market requires a license from the ERC except for the Supply of
Electricity by Distribution Utilities within their Franchise Areas
and Persons authorized to supply electricity within their respective
EZs.
(a) This Rule shall apply to all Suppliers.
(b) Subject to the qualifications set by the ERC, any of the

following may obtain a license to become a Supplier:
(i) A Generation Company or Affiliate thereof;
(ii) An Affiliate of a Distribution Utility with respect to the

latter's Contestable Market within or outside its Franchise Area;
(iii) Aggregators;
(iv) An IPP Administrator; and
(v) Any other Person authorized by the ERC to engage in

the selling, brokering or marketing of electricity to the Contestable
Market, consistent with the Act and these Rules.
SECTION 3. Ownership Limitation and Restrictions. —
2051
(a) A Supplier or Affiliate thereof or any stockholder, director

or officer or any of their relatives within the fourth civil degree of
consanguinity or affinity, legitimate or common law, shall not own
any interest, directly or indirectly, in TRANSCO or its Buyer or
Concessionaire, or IMO.
(b) Except for ex-officio government-appointed

representatives, no Person who is an officer or director of the
TRANSCO or its Buyer or Concessionaire shall be an officer or
director of any Supplier.
SECTION 4. Obligations of a Supplier. —
(a) A Supplier shall secure a license from the ERC prior to

engaging in the Supply of Electricity to End-users in any Contestable
Market.
(b) A Supplier, where applicable, shall functionally and

structurally unbundle its supply business activities and rates from
its generation and distribution businesses, if any, as presented in
Rule 10 on Structural and Functional Unbundling of Electric Power
Industry Participants.
(c) A Supplier shall identify and segregate the components

of its Supplier's Charge, as required by the Act and further provided
in Rule 15 on Unbundling of Rates.
(d) A Supplier shall comply with the WESM Rules.
(e) A Supplier shall comply with any reportorial requirements

prescribed by the ERC for monitoring purposes.
(f) A Supplier shall comply with the Competition Rules

to be prescribed by the ERC concerning abuse of market power,
cartelization, and any other anti-competitive or discriminatory
behavior.
(g) A Supplier that fails to comply with any of these

obligations shall be subject to fines and penalties imposed by the
ERC and, as so required to protect the public interest, may have its
license suspended, revised or revoked.
2052
SECTION 5. Licensing of Suppliers. —
The ERC shall issue the appropriate licensing rules, guidelines

and procedures for the issuance of licenses to Suppliers, which shall
include but not limited to the following:
(a) General Procedures for License Applications and

Monitoring.
(i) The applicant shall submit all pertinent information

and documents required by ERC for purposes of evaluating the
application for a license to supply electricity to End-users in a
Contestable Market.
(ii) Upon receipt of all the information required to evaluate

compliance with the requirements applicable to obtaining a license
to supply electricity to End-users in a Contestable Market, and upon
demonstration of compliance with such requirements, the ERC shall
issue the necessary resolution, order, and/or the appropriate license
as a Supplier.
(iii) The ERC shall monitor the compliance of Suppliers with

the requirements of their respective licenses and the rules and
regulations applicable to Suppliers.
(b) Qualification Criteria
(i) Compliance with Section 3 of this Rule 8.
(ii) Technical and Financial Standards, Creditworthiness

Criteria and such financial security to secure proper performance as
a Supplier as may be determined by the ERC to protect the interests
of End-users in Contestable Markets.
(iii) Such other qualification or criteria as may be determined

by the ERC to protect the public interest.
RULE 9
Wholesale Electricity Spot Market (WESM)
2053
Pursuant to Section 30 of the Act, all WESM Participants

shall comply with the WESM Rules.
This Rule shall apply to the Market Operator and all WESM
Participants.
SECTION 3. Organization. —
Within one (1) year from the effectivity of the Act, the DOE
shall establish a WESM composed of the WESM Participants. For
this purpose, the DOE shall, jointly with Electric Power Industry
Participants, promulgate the WESM Rules, and undertake actions
including but not limited to the following:
(a) Organize and establish the appropriate market design

and governance structure of the WESM;
(b) Pursuant to Section 30 of the Act, constitute the AGMO,

which shall undertake the preparatory work and initial operation of
the WESM;
(c) Oversee the development of the WESM organization

and necessary supporting infrastructure, including the funding
requirements.
SECTION 4. Membership. —
Subject to compliance with the membership criteria specified

in the WESM Rules, the following Persons shall be eligible to become
members of the WESM:
(a) Generation Companies;
(b) Distribution Utilities;
(c) Suppliers;
(d) IPP Administrators;
2054
(e) End-users; and
(f) Other similar Persons authorized by the ERC eligible to

become members of the WESM.
SECTION 5. The WESM Rules. —
(a) The WESM Rules shall provide the mechanism

for identifying and setting the price of actual variations from
the quantities transacted under contracts between sellers and
purchasers of electricity. The WESM Rules shall include rules
governing the central scheduling and dispatch, and settlement of
quantities sold and purchased under bilateral contracts in order to
identify variations therefrom. The WESM Rules shall also reflect
accepted economic principles and provide an open, competitive
market for all WESM Participants.
(b) Jointly with the Electric Power Industry Participants,

the DOE shall formulate the detailed rules for the WESM, in
accordance with the following principles:
(i) Provide an efficient, competitive, transparent and

reliable spot market;
(ii) Ensure efficient operation of the WESM by the Market

Operator in coordination with the system operator in a way which:
(1) Minimizes adverse impacts on system security;
(2) Encourages market participation; and
(3) Enables access to the market.
(iii) Subject to the provisions of Section 43(u) of the Act,

provide a cost-effective framework for resolution of disputes among
WESM Participants, and between WESM Participants and the
Market Operator;
(iv) Provide for adequate sanctions in cases of breaches of

the WESM Rules; and
2055
(v) Provide efficient, transparent and fair processes for

amending the WESM Rules.
(c) The WESM Rules shall provide, among others, procedures

for:
(i) Establishing the Merit Order Dispatch Instructions for

each time period for Central Dispatch;
(ii) Determining the market-clearing price for each time

period;
(iii) Administering the market, including criteria for admission

to and termination from the market which includes security or
performance bond requirements, voting rights of the participants,
surveillance and assurance of compliance of the participants with
the rules and the formation of the WESM governing body;
(iv) Prescribing guidelines for the market operation in

system emergencies;
(v) Amending the WESM Rules; and
(vi) Establishing the transition to full implementation of the

WESM.
(d) Methodology for Price Determination.
The WESM Rules shall provide the mechanism for determining

the price of electricity not covered by bilateral contracts between
sellers and purchasers of electricity. The price determination
methodology contained in the WESM Rules shall be subject to the
approval of the ERC.
SECTION 6. The Market Operator. —
(a) A Market Operator in accordance with the WESM Rules

shall implement the WESM. Not later than one (1)year after the
implementation of the WESM, an independent entity, the IMO,
shall be formed and the functions, assets and liabilities of the AGMO
shall be transferred to such entity with the joint endorsement of the
2056
DOE and the Electric Power Industry Participants: Provided, That

the IMO shall be financially and technically capable, with proven
experience and expertise of not less than two (2) years as a leading
independent market operator of similar or larger size electricity
market.
(b) Subject to Technical Constraints, the grid operator of

the TRANSCO or its Buyer or Concessionaire shall provide Central
Dispatch of all Generation Facilities connected, directly or indirectly,
submitted by the Market Operator, which schedule shall take into
account outstanding bilateral contracts.
(c) The Market Operator shall have the following functions

and responsibilities:
(i) Operate and administer the WESM and allocate resources

to enable it to operate and administer the market, in accordance
with the WESM Rules;
(ii) Determine the dispatch schedule of all facilities

in accordance with the WESM Rules. Such schedule shall be
submitted to the grid operator of the TRANSCO or its Buyer or
Concessionaire;
(iii) Monitor daily trading activities in the market;
(iv) Oversee transaction billing and settlement procedures;

and
(v) Maintain and publish a register of all WESM Participants

and must update and publish the register whenever a Person
becomes or ceases to be a WESM Participant.
SECTION 7. Constitution of the AGMO. —
The DOE shall, within one (1) year from the effectivity of the
Act, constitute the AGMO which shall undertake the preparatory
work and initial operation of the WESM.
(a) AGMO Governing Board.
2057
The AGMO shall be governed, and its powers and functions

exercised, by a governing body with equitable representation from
Electric Power Industry Participants. The representatives of the
AGMO governing body shall be selected, in accordance with the
WESM Rules. The DOE Secretary shall chair the AGMO.
(b) Composition.
Any sectoral representation on the AGMO governing body

should as far as possible meet the following criteria:
(i) Representatives of each sector of the Philippine electric

power industry on the governing body should be reflective of that
sector's size in relation to the electric industry as a whole;
(ii) The number of representatives of each sector of the

Philippine electric power industry should be such that no one sector
of the industry can dominate proceedings or decision-making by the
governing body; and be selected in such a way that deadlocks in
decision making will be avoided; and
(iii) There should be independent members on the governing

body.
(d) Powers and Duties.
The following are the powers and duties of the AGMO

governing body:
(i) Govern the operation of the WESM until the formation

or the selection of an IMO;
(ii) Develop and adopt guidelines for the efficient, competitive,

transparent and reliable management and operation of the market
in accordance with WESM Rules;
(iii) Adopt and set internal procedures for the conduct of

meetings and determination of a quorum; and
(iv) Perform the preparatory work (information technology

system development, testing, and trial operation) and initial
operation of the WESM with support from the DOE.
2058
(e) Not later than one (1) year after the implementation
of the WESM, the AGMO shall transfer its functions, assets and
liabilities to the IMO.
SECTION 8. Functions and Responsibilities of TRANSCO

with respect to the WESM. —
The TRANSCO shall provide administrative supervision to

AGMO.
SECTION 9. Market Fees. —
(a) The cost of administering and operating the WESM shall

be recovered by the IMO through a charge imposed on all WESM
Participants or WESM transactions, provided such charge shall be
filed with and approved by the ERC, consistent with the WESM
Rules.
(b) The structure of Market Fees should be transparent and

should not discriminate against a category or categories of WESM
Participants.
(c) Upon the approval of ERC, the Market Operator

shall publish the structure of Market Fees, the methods used in
determining the structure and an assessment of the extent to which
the structure complies with the principles specified above, at least
three (3) months prior to the implementation of WESM.
SECTION 10. Market Suspension. —
In cases of national or international security emergencies or

natural calamities, the ERC is empowered to suspend the operation
of the WESM or declare a temporary WESM failure in accordance
with the procedures set out in the WESM Rules.
RULE 10
Structural and Functional Unbundling of Electric Power Industry
Participants
2059
Consistent with the last paragraph of Section 36 of the Act,

any Electric Power Industry Participant shall structurally and
functionally unbundle its business activities in accordance with
Section 5 of the Act, namely: generation, transmission, distribution
and supply. Structural unbundling shall mean the separation of
different activities through the creation of separate divisions or
departments within a single company or, at the option of any Electric
Power Industry Participant, a separation into different juridical
entities, with a clear separation of accounts between regulated and
non-regulated business activities. Functional unbundling shall
mean the separation of functions into different components. For this
purpose, business activities resulting from the initial unbundling
process may be further unbundled to widen the scope for competitive
activities. The ERC shall formulate the appropriate guidelines and
shall ensure full compliance with this provision.
This Rule shall apply to all Electric Power Industry

Participants that are currently engaged or will be engaged in any of
the following business activities:
(a) Power generation;
(b) Transmission;
(c) Distribution;
(d) Supply of Electricity including collection and metering;
(e) Related businesses which utilize the generation,

transmission, distribution or supply assets for non-electricity
related services; and
(f) Other electricity related services that may be identified

and authorized by the ERC.
The ERC may relax or eliminate the unbundling requirements

for specified business activities if such activity operates in a
competitive market.
2060
SECTION 3. Procedures for the Structural and Functional

Unbundling of Business Activities. —
The following shall govern all Electric Power Industry

Participants in undertaking the structural and functional
unbundling of its business activities:
(a) An Electric Power Industry Participant shall identify

its business activities according to each major business function as
defined in Section 2 of this Rule.
(b) An Electric Power Industry Participant shall prepare

and submit for approval by the ERC its Business Separation and
Unbundling Plan (BSUP) on or before 31 December 2002.
(c) The BSUP shall contain among others, the following

information:
(i) A complete description of the separation of books and

records, including but not limited to, sources of revenues, costs as
allocated, asset transferred, and information systems separation;
(ii) A comprehensive description of the functional, structural

or juridical separation of generation, distribution and supply as
provided for in the BSUP;
(iii) Milestones and highlights of the planned structural

and functional unbundling of the business activities in which the
Electric Power Industry Participant is currently engaged: Provided,
That in any case, no Electric Power Industry Participant that has
not completed structural and functional unbundling of the business
shall be eligible to participate in Retail Competition and Open
Access;
(iv) A plan for complying with all Code of Conduct provisions

specified by ERC, including training or developmental programs for
its employees to help ensure compliance; and
(v) Other documents or information as may be required by

the ERC.
2061
(d) The ERC may adopt the Electric Power Industry

Participant's BSUP, recommend modifications to the BSUP, or
reject the BSUP for revision and direct the concerned Electric Power
Industry Participant to file a new BSUP based on its comments. In
any case, ERC shall render its decision within six (6) months from
filing of the BSUP.
(e) Upon receipt of the ERC decision, the Electric Power

Industry Participant shall implement said decision fully and
promptly.
(f) The ERC shall provide for appropriate fines and penalties
for any Electric Power Industry Participant that fails to comply with
its decision in full.
SECTION 4. Guiding Principles for Business Separation of

Distribution Utilities. —
(a) Once a Distribution Utility has separated and unbundled

its business activities, the Distribution System portion of its business
shall no longer provide competitive energy services, i.e. generation
and supply. A Distribution Utility, which has not structurally and
functionally unbundled its business activities shall be prohibited
from operating in a Contestable Market.
(b) ECs shall follow the structural and functional unbundling

procedures set forth in these Rules except that such unbundling
shall be implemented no later than 26 June 2006, the start of Retail
Competition and Open Access in the Franchise Areas of ECs.
RULE 11
Cross Ownership, Market Abuse and Anti-Competitive Behavior
SECTION 1. General Principle. —
No Electric Power Industry Participant or any other Person

may engage in any anti-competitive behavior including, but not
limited to, cross-subsidization, price or market manipulation, false
or deceptive marketing, or other unfair trade practices detrimental
to the encouragement and protection of Contestable Markets or the
WESM.
2062
This Rule shall apply to all Persons, including all Electric

Power Industry Participants, such as but not limited to Generation
Companies, subsidiaries and Affiliates of Generation Companies,
stockholders and officials of Generation Companies, IPP
Administrators, Distribution Utilities, Suppliers, NPC, and the
TRANSCO or its Buyer or Concessionaire.
SECTION 3. Prohibition of Cross Ownership. —
(a) Pursuant to Section 45 of the Act, no Generation

Company, IPP Administrators, Distribution Utility or Supplier,
their respective subsidiaries, Affiliates, stockholders, directors
or officers or other entity engaged in generating and supplying
electricity specified by ERC, shall hold any interest, directly or
indirectly, in the TRANSCO or its Buyer or Concessionaire, or the
Market Operator.
(b) TRANSCO or its Buyer or Concessionaire and any of its

stockholders, directors or officers or any of their relatives within the
fourth civil degree of consanguinity or affinity, legitimate or common
law, shall not hold any interest, whether directly or indirectly, in
any Generation Company, IPP Administrators, Distribution Utility
or Supplier.
(c) Except for ex officio government-appointed

representatives, no Person who is an officer or director of the
TRANSCO or its Buyer or Concessionaire shall be an officer
or director of any Generation Company, IPP Administrators,
Distribution Utility or Supplier.
(d) This Section shall not apply to PSALM in the course of

its Privatization of NPC assets pursuant to Sec. 47 of the Act.
SECTION 4. Limits on Concentration of Ownership, Operation

or Control of Installed Generating Capacity. —
(a) No company, Related Group or IPP Administrator, singly

or in combination, can own, operate or Control more than thirty
percent (30%) of the installed generating capacity of a Grid and/
2063
or twenty-five percent (25%) of the national installed generating

capacity: Provided, That such restrictions shall not apply to PSALM
or NPC during the time that its assets are being privatized pursuant
to Section 47 of the Act and isolated grids that are not connected to
the high voltage transmission system. The ERC shall determine the
installed generating capacity in a Grid and the national installed
generating capacity.
(b) The capacity of such facility shall be credited to the entity

controlling the terms and conditions of the prices or quantities of the
output of such capacity sold in the market in cases where different
entities own the same Generation Facility.
In cases where different Persons own, operate or Control

the same Generation Facility, the capacity of such facility shall be
credited to the Person controlling the capacity of the Generation
Facility.
SECTION 5. Limits on Bilateral Supply Contracts by a

Distribution Utility. —
(a) A Distribution Utility may enter into bilateral power

supply contracts subject to the provisions of Section 5 of Rule 30 on
NPC Offer of Transition Supply Contracts and a review by the ERC:
Provided, That such review shall only be required for a Distribution
Utility whose level of Open Access has not reached household
demand level.
(b) No Distribution Utility shall be allowed to source from

bilateral power supply contracts more than fifty percent (50%) of
its total demand from an Affiliate engaged in generation, but such
limitation shall not prejudice contracts entered into prior to the
effective date of the Act. This limitation shall apply regardless of
whether demand is expressed in terms of capacity or energy.
SECTION 6. Encouragement of Participation in the WESM.

—
For the first five (5) years from the establishment of the WESM,
no Distribution Utility shall source more than ninety percent (90%)
of its total demand from bilateral power supply contracts.
2064
SECTION 7. ERC Responsibilities. —
(a) ERC shall enforce the competitive safeguards specified in

this Rule in order to promote true market competition and prevent
harmful monopoly and market power abuse. However, ERC shall
not apply the limitations specified in this Rule to isolated grids that
are not connected to the Grid.
(b) ERC shall have the authority to determine the appropriate

Grid or Grids to use in the application of this Rule when two or more
of the three separate Grids become sufficiently interconnected to
constitute a single Grid or as conditions may otherwise permit.
(c) ERC shall, within one (1) year from the effectivity of
the Act, promulgate Competition Rules to ensure and promote
competition, encourage market development and customer choice
and discourage or penalize abuse of market power, cartelization
and any anti-competitive or discriminatory behavior, or unfair
trade practice that distorts competition or harms consumers. Such
Rules shall define relevant markets for the purpose of establishing
abuse or misuse of market power, areas of isolated grids that are
not connected to the high voltage transmission system, and the
reportorial requirements of Electric Power Industry Participants as
may be necessary to enforce the provisions of Section 45 of the Act.
(d) ERC shall, motu proprio, monitor and penalize any

market power abuse or anti-competitive or unduly discriminatory
act or behavior, or any unfair trade practice that distorts competition
or harms consumers, by any Electric Power Industry Participant.
Upon a finding of a prima facie case that an Electric Power Industry
Participant has engaged in such act or behavior, the ERC shall after
due notice and hearing, stop and redress the same. Such remedies
shall, without limitation, include the separation of the business
activities of an Electric Power Industry Participant into different
juridical entities, the imposition of bid or price controls, issuance
of injunctions in accordance with the Rules of Court, divestment or
disgorgement of excess profits, and imposition of fines and penalties
pursuant to Section 46 of the Act.
(e) ERC shall, within one (1) year from the effectivity of the
Act, promulgate rules and regulations providing for a complaint
2065
procedure that, without limitation, provides the accused party with

its rights to due process.
SECTION 8. Anti-Competitive Behavior and Other Unfair

Trade Practices. —
The ERC shall promulgate Competition Rules prohibiting, and

specifying appropriate penalties and other remedies for, any contract,
combination or conspiracy that unreasonably restricts competition in
any market for electricity, or any conduct that constitutes an abuse
of market power or an attempted monopolization of any market for
electricity, including but not limited to the following:
(a) Fixing prices of products or services: Electric Power

Industry Participants that are competitors shall not enter into any
agreement or understanding, tacit or explicit, to fix, peg or stabilize
the price of any product or service. Price fixing shall be deemed
to include agreements on bids, price floors, price ceilings, pricing
formulas and resale prices, and agreements on credit or any other
terms of a transaction between a buyer and a seller.
(b) Fixing output of products or services: Electric Power

Industry Participants that are competitors shall not enter into
any agreement or understanding, tacit or explicit, to fix, limit or
otherwise determine their output of any product or service.
(c) Customer, Product, Service or Territorial Divisions:

Electric Power Industry Participants that are competitors shall not
enter into any agreement or understanding, tacit or explicit, as to
the customers or the geographic territories they will serve, or the
products or services they will sell.
(d) Tying: Electric Power Industry Participants shall not use

a position of market power to condition the sale of one product or
service on the purchase of another product or service. No Distribution
Utility shall make access to its Distribution System contingent upon
the purchase of generation, metering, billing or other services.
(e) Physical or Economic Withholding: Electric Power

Industry Participants shall not use physical operating practices or
bidding strategies that limit the market participation of a generation
2066
unit under conditions that will result in significant increases in

market prices.
(f) Discriminatory provision of regulated distribution or

transmission services: Regulated distribution and transmission
services shall be provided on a basis that is not unduly discriminatory.
Examples of unduly discriminatory behavior include, but not limited
to the following:
(i) A Distribution Utility or TRANSCO or its Buyer or

Concessionaire refuses to interconnect Generation Company, IPP
Administrator, or Supplier other than for reasons of system security
or reliability or reasonable financial or credit considerations pursuant
to the Grid or Distribution Codes or commission of acts constituting
grounds for suspension of the service under any applicable rule and
regulation.
(ii) A Distribution Utility or TRANSCO or its Buyer or

Concessionaire gives a Generation Company, IPP Administrator,
or Supplier, including without limitation any of the Distribution
Utility's Affiliates, any preference or advantage over any other
Generation Company, IPP Administrator, or Supplier in processing
a request for Transmission or Distribution of Electricity.
(iii) A Distribution Utility or TRANSCO or its Buyer or

Concessionaire gives a Generation Company, IPP Administrator,
or Supplier, including without limitation any of the Distribution
Utility's Affiliates, any preference or advantage in the dissemination
or disclosure of customer or transmission or Distribution System
information, and any such information that has not been made
available to all Electric Power Industry Participants at the same
time and in a non-discriminatory manner.
(iv) A Distribution Utility or TRANSCO or its Buyer or

Concessionaire provides any preference or advantage to any Supplier
in the disclosure of information about operational status and
availability of the Distribution System and transmission system.
(v) A Distribution Utility does not provide all regulated

services, and does not apply Distribution Wheeling Charges to any
Supplier that is not an Affiliate, in the same manner as it does for
2067
itself or its Affiliates. TRANSCO or its Buyer or Concessionaire

shall provide all regulated services and shall apply Transmission
Charges to any Electric Power Industry Participant in the same
manner as it does for PSALM or NPC.
(g) Misrepresentation or false advertising of a Distribution

Utility: A Distribution Utility or its Affiliate shall not state or imply
that any distribution service provided to an Affiliate is inherently
superior, solely on the basis of Affiliate's relationship with the
Distribution Utility, to that provided to any other Supplier.
(h) Cross-Subsidization: Consistent with Section 26 of the

Act, a Distribution Utility shall not use its revenues or resources
from regulated distribution services to reduce the cost or price of its
competitive services (generation or supply).
RULE 12
Retail Competition and Open Access
Pursuant to Section 31 of the Act, Retail Competition and

Open Access shall be implemented no later than three (3) years
from the effectivity of the Act.
The provision of open and non-discriminatory access to the

transmission system and Distribution Systems shall apply to the
following:
(a) WESM Participants;
(b) TRANSCO or its Buyer or Concessionaire;
(c) Distribution Utilities;
(d) EZs;
(e) Suppliers;
2068
(f) IPP Administrators;
(g) Market Operator; and
(h) End-users in Contestable Markets.
SECTION 3. Conditions for Declaring Initial Implementation

of Open Access. —
The ERC shall, after due notice and public hearing, declare
initial implementation of Open Access not later than three (3) years
from the effectivity of the Act, subject to the following conditions:
(a) Establishment of the WESM.
For this purpose, the "establishment" of the WESM shall be

deemed to have occurred upon the effectivity of the Market Rules by
the DOE and initial operation of the AGMO pursuant to Rule 9 on
the Wholesale Electricity Spot Market (WESM).
(b) Approval of unbundled Transmission and Distribution

Wheeling Charges.
The ERC shall approve the unbundled rates of NPC and

Distribution Utilities, which shall include the transmission and
wheeling charges, within one (1) year from the effectivity of the
Act.
(c) Initial implementation of the Cross Subsidy Removal

scheme.
For this purpose, initial implementation of the cross subsidy

removal scheme shall occur on the next billing period after the
issuance of ERC approval. The scheme for cross subsidy removal
shall include guidelines or a schedule for the removal of each type of
cross subsidy and may be altered, modified and/or amended by the
ERC pursuant to Rule 16 on Removal of Cross Subsidies.
(d) Privatization of at least seventy (70%) percent of the total

capacity of generating assets of NPC in Luzon and Visayas.
2069
(e) Transfer of the management and control of at least seventy

percent (70%) of the total energy output of power plants under
contract with NPC to the IPP Administrators.
SECTION 4. Specification of the Contestable Market for Open

Access. —
Upon the initial implementation of Open Access, the ERC

shall allow all electricity End-users with a monthly average peak
demand of at least one megawatt (1 MW) for the preceding twelve
(12) months to be the Contestable Market. Two (2) years thereafter,
the threshold level for the Contestable Market shall be reduced to
seven hundred fifty kilowatts (750 kW). At this level, Aggregators
shall be allowed to supply electricity to End-users whose aggregate
monthly average peak demand within a Contiguous Area is at least
seven hundred fifty kilowatts (750 kW). Subsequently and every
year thereafter, the ERC shall evaluate the performance of the
market. On the basis of such evaluation, it shall gradually reduce
the threshold level until it reaches the household demand level.
In the case of ECs, Retail Competition and Open Access shall be
implemented not earlier than five (5) years from the effectivity of
the Act. (Sec. 31 Last Par.)
RULE 13
Missionary Electrification
(a) Pursuant to Section 70 of the Act, the SPUG shall be

responsible for providing power generation and its associated power
delivery systems in areas that are not connected to the transmission
system.
(b) The Missionary Electrification function of SPUG shall

be funded from the revenues from sales in the missionary areas and
from the Universal Charge to be collected from all electricity End-
users as determined by the ERC.
(c) The DOE's Missionary Electrification Development Plan

(MEDP) shall include capital investment and operations regarding
capacity additions in existing missionary areas and the facilities
2070
to be provided in other areas not connected to the transmission

system.
(d) The DOE shall, no later than ninety (90) days from the
promulgation of these Rules, issue specific guidelines on how to
encourage the inflow of private capital and the manner whereby
other parties, including Distribution Utilities and qualified third
parties, as provided for in Section 23 and Section 59 of the Act, can
participate in the Missionary Electrification projects set forth in the
MEDP.
(e) The SPUG shall continue to endeavor to privatize its

power generation facilities and the necessary associated power
delivery systems.
This Rule shall apply to all entities and areas identified in the
MEDP.
SECTION 3. Obligations of SPUG. —
(a) SPUG shall be responsible for providing power

generation and its associate power delivery systems in areas that
are not connected to the Grid and cannot be serviced by Distribution
Utilities and other qualified third parties.
(b) SPUG shall periodically assess the requirements and

prospects for bringing its functions to commercial viability on an
area-by-area basis at the earliest possible time, including a program
to encourage private sector participation.
(c) Whenever feasible, SPUG shall utilize Renewable

Energy Resources.
(d) SPUG shall file for review and approval its unbundled
rates following Rule 15 on Unbundling of Rates.
(e) SPUG shall file a petition to the ERC with respect to

the Missionary Electrification portion of the Universal Charge as
prescribed in Rule 18 on Universal Charge.
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(f) PSALM shall ensure that SPUG conducts proper

monitoring, accounting and control of expenditures, and efficient
utilization of the Missionary Electrification funds from the Universal
Charge.
SECTION 4. Source of Funds. —
(a) The Missionary Electrification shall be funded from the

revenues from sales in missionary areas and from its appropriate
share in the Universal Charge.
(b) SPUG may also draw on other funding sources including

appropriations from Congress, the utilization of private capital,
multilateral aids or grants, Official Development Assistance (ODA)
Funds and others.
(c) SPUG shall source all the cost differentials between

the sales revenues and operating expense and capital expense for
expansion, rehabilitation and facilities for new areas of development
based on the approved MEDP from its share from the Universal
Charge and/or other sources as it may obtain.
(d) In accordance with DOE's MEDP, the proposed five-(5)

year annual budget for operating and capital expenditures of SPUG
shall be submitted to ERC.
SECTION 5. Reliability Improvement. —
(a) To improve systems reliability, the SPUG shall install

transmission systems in all qualified areas under the coverage of
SPUG. Priority will be given to areas showing big growth in its
electricity demand.
(b) SPUG shall also collect revenues in providing power

delivery and Ancillary Service to Generation Companies or
Distribution Utilities at a rate to be filed with and approved by
ERC. In the absence of such rate, SPUG shall use the applicable
major Grids' rate.
(c) SPUG shall cease providing Missionary Electrification

to areas interconnected to the transmission system.
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RULE 14
Provision of Electricity by Qualified Third Parties
Pursuant to Section 59 of the Act, the provision of electric

service in remote and Unviable Areas that the Distribution Utility
is unable to service for any reason shall be opened to other qualified
third parties. The provision of electricity in Unviable Areas by
qualified third parties shall be a regulated business.
This Rule shall apply to third parties qualified and authorized

by ERC in accordance with the Act to undertake the provision of
electric service in remote and Unviable Areas that a Distribution
Utility is unable to serve.
SECTION 3. Determination of Remote and Unviable

Areas. —
Every September, the DOE shall issue a declaration of all the

remote and Unviable Areas that cannot be served by a Distribution
Utility within the following three (3) years. The declaration shall
be consistent with the PDP and made in consultation with the NEA
and Distribution Utilities. The remote and Unviable Areas specified
in the declaration shall be open for participation by qualified third
parties.
SECTION 4. Determination of Qualified Third Parties. —
The DOE shall set criteria for determining qualified third

parties that may participate in providing electricity to remote and
Unviable Areas. These criteria may include financial, technical,
environmental, and other indices of performance.
The criteria shall give preference to parties that would

utilize least-cost new Renewable Energy Resources in providing
electricity.
SECTION 5. Rights and Obligations of Qualified Third

Parties. —
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(a) Any Distribution Utility that fails to provide electricity

to an Unviable Area shall be required by the ERC to enter into a
contract with a qualified third party to provide electric service in
such an Unviable Area.
(b) A qualified third party shall comply with all applicable

provisions of the Distribution Code, including the requirement to
obtain a COC for its Generation Facilities and other permits the
ERC may require.
(c) A qualified third party shall charge rates in Unviable

Areas according to ERC rules for cost recovery of Generation
Facilities and associated power delivery systems.
(d) A qualified third party shall submit annual financial

statements to ERC for determining the effectiveness of the approved
rate.
(e) A qualified third party shall report annually to DOE the

rate of electrification of its coverage areas.
SECTION 6. Obligations of the ERC . —
(a) The ERC shall set guidelines for the issuance of permits
to qualified third parties that serve a remote or unserved and
Unviable Area within the Distribution Utility's Franchise Area.
(b) The ERC shall set the rules in computing rates that allow
full cost recovery of the Generation Facilities and delivery systems
built to serve remote or unserved and Unviable Areas.
PART III
Electricity Rate and Charges
RULE 15
Unbundling of Rates
Consistent with Section 36 of the Act and Rule 10 on

Structural and Functional Unbundling of Electric Power Industry
Participants, this Rule on the Unbundling of Rates shall result
2074
in the identification and separation of the individual charge for

providing a specific electric service to any End-user for generation,
transmission, distribution, and supply. (Consistent with Sec. 36)
This Rule shall apply to all Electric Power Industry

Participants that are currently engaged or will be engaged in any of
the business activities as stated in Section 5 of the Act.
SECTION 3. Parameters for Unbundling Rates and Costs of

Service. —
(a) An Electric Power Industry Participant shall identify,

separate and unbundle its rates, charges, and costs in accordance
with Rule 10 on Structural and Functional Unbundling of Electric
Power Industry Participants.
(b) In the determination of eligible costs of service to be

charged to the End-users, the ERC shall establish the minimum
efficiency standards covering the technical, financial, and customer
service performance criteria including systems losses, and
interruption frequency rates parameters among others.
(c) The rate base of the TRANSCO or its Buyer or

Concessionaire or any Distribution Utility shall exclude management
inefficiencies, such as but not limited to cost of project delays not
due to any force majeure, and penalties and related interest during
construction and other disallowances to be determined by ERC.
(d) Interest expenses shall not be allowed as deductions

from permissible Return on Rate Base (RORB).
(e) TRANSCO or its Buyer or Concessionaire and Distribution

Utilities may directly or indirectly engage in any related business
which maximizes the utilization of their assets.
SECTION 4. Method of Rate Unbundling. —
The ERC shall prescribe the methodology for rate

unbundling.
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SECTION 5. Ratemaking Design and Methodology. —
(a) The ERC shall, in the public interest, establish and

enforce a methodology for setting transmission and distribution
wheeling rates and Retail Rates for the Captive Market of a
Distribution Utility, taking into account all relevant considerations,
including the efficiency or inefficiency of the regulated entities, as
well as the expansion or improvement of the Transmission facilities
pursuant to a plan approved by the ERC under Section 10 of Rule 6
on Transmission Sector, and the Distribution Utilities under Rule
7 on Distribution Sector. The rates must be such as to allow the
recovery of just and reasonable costs and a reasonable RORB to
enable the entity to operate viably. The ERC may adopt alternative
forms of internationally-accepted rate-setting methodology as it
may deem appropriate. The rate-setting methodology so adopted
and applied must ensure a reasonable price of electricity. The
rates prescribed shall be non-discriminatory and shall take into
consideration, among others, the franchise tax. To achieve this
objective and to ensure the complete removal of cross subsidies, the
cap on the recoverable rate of system losses prescribed in Section 10
of Republic Act No. 7832, is hereby amended and shall be replaced
by caps which shall be determined by the ERC based on load density,
sales mix, cost of service, delivery voltage and other technical
considerations it may promulgate. The ERC shall determine such
form of rate-setting methodology, which shall promote efficiency. In
case the rate-setting methodology used is RORB, it shall be subject
to the following guidelines:
(i) For purposes of determining the rate base, the TRANSCO

or its Buyer or Concessionaire or any Distribution Utility may be
allowed to revalue its eligible assets not more than once every three
(3) years by an independent appraisal company: Provided, however,
That ERC may give an exemption in case of unusual devaluation:
Provided, further, That the ERC shall exert efforts to minimize
price shocks in order to protect the consumers;
(ii) Interest expenses are not allowable deductions from

permissible RORB;
(iii) In determining eligible cost of services that will be

passed on to the End-users, the ERC shall establish minimum
2076
efficiency performance standards for the TRANSCO or its Buyer or

Concessionaire and Distribution Utilities including systems losses,
interruption frequency rates, and collection efficiency;
(iv) Further, in determining rate base, the TRANSCO or its

Buyer or Concessionaire or any Distribution Utility shall not be
allowed to include management inefficiencies like cost of project
delays not excused by force majeure, penalties and related interest
during construction applicable to these unexcused delays;
(v) Any significant operating costs or project investments

of the TRANSCO or its Buyer or Concessionaire and Distribution
Utilities which shall become part of the rate base shall be subject
to verification by the ERC to ensure that the contracting and
procurement of the equipment, assets and services have been
subjected to transparent and accepted industry procurement and
purchasing practices to protect the public interest; and
(vi) The interest incurred during construction may be

capitalized and included in the rate base upon commissioning of the
asset.
(b) The Retail Rates charged by Distribution Utilities for

the Supply of Electricity in their Captive Market shall be subject
to regulation by the ERC based on the principle of full recovery
of prudent and reasonable economic costs incurred, or such other
principles that will promote efficiency as may be determined by the
ERC.
Every Distribution Utility or Supplier to the Contestable

Market, whichever is applicable, shall identify and segregate in
its bills to End-users the components of the Retail Rate as follows:
generation, transmission, distribution, supply and other related
charges for electric service.
(c) In the case of isolated, remote and Unviable Areas

serviced by a qualified third party as defined in Rule 14 on Provision
of Electricity by Qualified Third Parties, the ERC shall set the rules
for rates computation and determination.
2077
(d) The ERC shall recognize the different cost structures in

serving isolated areas.
SECTION 6. Unbundled Rate Filing Requirements. —
(a) As required by the Act, NPC and Distribution Utilities

shall file within six (6) months from the effectivity of the Act for
revised rates with costs and other relevant accounts unbundled by
business activity.
(b) The ERC shall within six (6) months from the date of
submission of revised rates by the Distribution Utility, notify the
Distribution Utility of the action taken on the application.
(c) The rate filing petition shall commence with the

unbundling the cost components of the historical test year costs,
from which the new Retail Rates and unbundled rates or charges
are to be developed. The historical test year, for this purpose, shall
be the twelve (12) months ending 31 December 2000.
(d) Each rate filing petition for unbundled cost of service shall
contain detailed schedules, data, and other relevant information
deemed necessary by the ERC.
RULE 16
Removal of Cross Subsidies
Pursuant to Section 74 of the Act, cross subsidies within a

Grid, between Grids, and/or classes of customers shall be phased
out in a period not exceeding three (3) years from the establishment
by the ERC of a Universal Charge which shall be collected from all
electricity End-users. Such level of cross subsidies shall be made
transparent and identified separately in the billing statements
provided to End-users by the Suppliers.
This Rule shall apply to NPC, TRANSCO or its Buyer or

Concessionaire, Distribution Utilities and PSALM.
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SECTION 3. Calculation of Cross Subsidies. —
(a) The ERC may extend the period for the removal of cross
upon the public interest, particularly the residential End-user; or
on Distribution Utility. (Sec. 74 Par. 2)
(b) The cross subsidy between Grids in the rates of NPC

shall be calculated on a net basis for each Grid as the difference
between:
(i) The total revenues that would have been collected on the
Grid under the rates in effect during a historical test year that is
adjusted for differences between actual and forecast consumption
and other factors as ERC may specify; and
(ii) The total unbundled true cost of service on the Grid as

submitted in accordance with Rule 15 on Unbundling of Rates and
the rate filing requirements that the ERC may issue pursuant to
Rule 15, using the same historical test year.
(c) The cross subsidy within each Grid in the rates of NPC
shall be calculated on a net basis for each customer class within the
Grid as the difference between:
(i) The total revenues that would have been collected from
a customer class under the rates in effect during a historical test
year that is adjusted for differences between actual and forecast
consumption and other factors as ERC may specify; and
(ii) The total unbundled true cost of service for the same
customer class as submitted in accordance with Rule 15 on
Unbundling of Rates and the rate filing requirements that ERC
may issue pursuant to Rule 15, using the same historical test year.
(d) The cross subsidy between customer classes within

each Distribution Utility shall be calculated on a net basis for each
customer class as the difference between:
2079
(i) The total revenues that would have been collected from
a customer class under the rates in effect during a historical test
year that is adjusted for differences between actual and forecast
consumption and other factors as ERC may specify; and
(ii) The total unbundled true cost of service for the customer
class as submitted in accordance with Rule 15 on Unbundling of
Rates and the rate filing requirements that ERC may issue using
the same test year.
SECTION 4. Procedures for Handling Cross Subsidies. —
(a) Pending the complete removal of cross subsidies, each

subsidy rate level shall be shown as a separate item in customer
billing statements.
(b) The ERC shall establish a cross subsidy charge to account

for all forms of cross subsidies that remain during the phase out
period as described in Section 5 of this Rule, to be recovered from
all electricity End-users through the Universal Charge pursuant to
Rule 18 on the Universal Charge.
SECTION 5. Scheme for Phasing Out Cross Subsidies. —
(a) The ERC shall issue a scheme for phasing out all cross
subsidies, including subsidies within Grids, between Grids, and
between classes of customers. The phasing out period shall not
exceed three (3) years from the establishment of the Universal
Charge pursuant to Rule 18 on Universal Charge. The initial
implementation of the phase out scheme shall occur on the next
billing period after issuance of ERC approval.
(b) The phase out scheme shall be designed to mitigate

the effects of the removal of the cross subsidies. The ERC shall
determine which End-users shall continue to receive subsidies and
the level of subsidies such End-users shall receive during the phase
out period.
(c) Together with their filings of unbundled rates reflecting

the true costs of service, pursuant to Rule 15 on Unbundling of
Rates, NPC and the Distribution Utilities shall file with ERC their
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proposals for the removal of cross subsidies among the End-users

they serve to be considered by ERC in the formulation of the phase
out scheme.
(d) The ERC may extend the period for the removal of cross
upon the public interest, particularly the residential End-user; or
on a Distribution Utility. Distribution Utilities shall submit to ERC
such information as ERC may specify to help it determine if the
cross subsidy removal mechanism should be extended under this
provision.
(e) If ERC does not extend the period for removal of cross
subsidies, the cross subsidies between regions, within regions, and
between customer classes shall cease to exist at the end of the three
(3) year period from the establishment of the Universal Charge.
SECTION 6. Exemption from Cross Subsidy Removal for

Distribution Utilities. —
The threshold consumption levels and the Lifeline Rates

determined by the ERC shall be exempted from the prohibition
on cross subsidies between classes of customers of a Distribution
Utility for a period of ten (10) years, unless extended by law.
RULE 17
Stranded Debts and Contract Costs Recovery
Pursuant to Sections 32 and 33 of the Act, there are three (3)

types of stranded costs recoverable through the Universal Charge:
(a) Stranded Debts;
(b) Stranded Contract Costs of NPC; and
(c) Stranded Contract Costs of Eligible Contracts of

Distribution Utilities.
2081
SECTION 2. Scope of the Application. —
This Rule shall apply to NPC, PSALM and Distribution

Utilities with IPP contracts approved by the ERB as of 31 December
2000.
SECTION 3. Procedures and Methodology for Stranded Cost

Determination. —
(a) PSALM and any Distribution Utility that has an eligible

contract shall file with ERC their respective petitions for cost
recovery under the Universal Charge and include therewith the
methodology in determining stranded costs. The ERC shall review
the methodology submitted by PSALM and such Distribution Utility
to determine, fix, and approve the level of stranded costs.
(b) At the end of the first year of the implementation of

stranded cost recovery and every year thereafter, the ERC shall
conduct a review to determine whether there is an under- or over
recovery and adjust (true-up) the level of stranded cost recovery
charge accordingly. In determining whether there is an under-
or over recovery and in determining the stranded cost recovery
portion of the Universal Charge for the subsequent period, the ERC
shall base the calculation on the following information submitted
by the PSALM and the Distribution Utility which has an eligible
contract:
(i) a report of the amounts recovered for stranded costs

during the past year; and
(ii) revised stranded cost amounts based on current market

information.
SECTION 4. NPC Stranded Debt and Stranded Contract Cost

Recovery. —
(a) Consistent with Section 32 of the Act, the National

Government shall directly assume a portion of the financial
obligations of NPC transferred to PSALM in an amount not to
exceed Two Hundred Billion Pesos (P200,000,000,000.00).
2082
(b) The following guidelines shall govern the recovery by

the PSALM of the Stranded Debts and Stranded Contract Costs of
NPC:
(i) PSALM shall calculate the amount of the Stranded

Debts and Stranded Contract Costs of NPC that shall form part of
the Universal Charge to be determined, fixed, and approved by the
ERC and reviewed by the same body annually. In determining the
amount of Stranded Contract Costs of NPC, PSALM may include in
such calculation the principal amount and interest expenses of any
such debt raised by PSALM to finance the buy-out or buy-down of
any eligible IPP contract, i.e. contracts approved by the ERB as of
31 December 2000 as well as any other costs and expenses incurred
in connection with such buy-out or buy-down: Provided, That the
amount recoverable by PSALM from the Universal Charge fund
shall not exceed the estimated Stranded Contract Costs of such
eligible IPP Contract, assuming that such buy-out or buy-down
never occurred: Provided, further, That PSALM demonstrates to
the ERC's satisfaction that such buy-out or buy-down will benefit
electricity consumers by reducing that component of the Universal
Charge attributable to such IPP contract.
(ii) The ERC shall verify the reasonable amounts of claims

petitioned by PSALM and determine the manner and duration by
which full recovery of Stranded Debt and Stranded Contract Costs
of NPC is attained: Provided, That the duration for such recovery
shall not be shorter than fifteen (15) years nor longer than twenty-
five (25) years.
(iii) Any amount to be included for stranded cost recovery shall

be reflected as a separate item in the consumer billing statement.
The ERC shall monitor and ensure that there is a separate item in
the consumer billing statement for stranded cost recovery.
SECTION 5. Recovery of Stranded Contract Costs of Eligible

Contracts of Distribution Utilities. —
(a) Within one (1) year from the start of Retail Competition
and Open Access, a Distribution Utility that seeks to recover
stranded contract costs arising from its eligible contracts shall file
with the ERC a notice of such intent together with an estimated
2083
amount of such obligations. The Distribution Utility shall provide

all pertinent information as may be required by the ERC. Failure of
the Distribution Utility to file within the date specified shall mean
non-eligibility for such recovery.
(b) A Distribution Utility shall recover stranded contract

costs: Provided, however, That such costs of the IPPs of Distribution
Utilities are subject to review by ERC in order to determine fairness
and reasonableness in relation to the average price of land-based
IPP projects entered into by NPC at the time they were contracted.
The ERC shall take into consideration all factors that affect the total
cost of NPC IPP generation projects, including direct or indirect
subsidies or incentives provided by the Government.
(c) Any Distribution Utility which seeks to recover stranded

costs shall have the duty to mitigate its potential stranded costs by
exerting reasonable best efforts to:
(i) Reduce the costs of its existing eligible contracts with

IPPs to a level not exceeding the average buying price of other land-
based electric power generators; and
(ii) Submit to an annual earnings review by the ERC and

use its earnings above its authorized rate of return to reduce the
book value of contracts until the end of the stranded cost recovery
period.
(d) The Distribution Utility shall submit to the ERC, during

its filing for stranded contract cost recovery, its detailed plan and
strategy to mitigate stranded contract costs.
Other mitigating measures that are reasonably known and

generally accepted within the electric power industry shall be
utilized. The ERC shall not require the Distribution Utility to take
a loss to reduce stranded contract costs or divest assets, unless the
divestiture is imposed as a penalty as provided herein.
(e) Within three (3) months from the submission of the

application for stranded cost recovery by the relevant Distribution
Utilities, the ERC shall verify the reasonable amounts and
determine the manner and duration for the full recovery of the
2084
Stranded Contract Costs of Eligible Contracts of Distribution

Utilities: Provided, That the duration for such recovery shall not
be shorter than fifteen (15) years nor longer than twenty-five (25)
years. For this purpose, "full recovery of Stranded Contract Costs
of Eligible Contracts of Distribution Utilities" shall mean recovery
of Stranded Contract Costs of Eligible Contracts of Distribution
Utilities authorized by the ERC after its pertinent review. Any
amount to be included for the recovery of Stranded Contract Costs
of Eligible Contracts of Distribution Utilities shall be reflected as a
separate item in the consumer billing statement.
(f) In the case of an over-recovery, the ERC shall ensure

that any excess amount shall be remitted to the Special Trust
Fund (STF) created pursuant to Section 34 of the Act. A separate
account shall be created for this purpose that shall be held in trust
for any future claims of Distribution Utilities for the recovery of
their respective Stranded Contract Costs of Eligible Contracts of
Distribution Utilities. At the end of the stranded cost recovery
period, any remaining amount or balance in this account shall be
used to reduce the electricity rates to the End-users.
(g) A Distribution Utility, which has an eligible contract,

duly authorized by the ERC, shall submit to ERC quarterly reports
showing the amount of stranded contract costs recovered and the
balance remaining to be recovered from the Universal Charge.
Quarterly shall mean the calendar quarters of January 1 to

March 31 (first quarter), April 1 to June 30 (second quarter), July
1 to September 30 (third quarter), and October 1 to December 31
(fourth quarter). The relevant Distribution Utility shall submit to
the ERC the quarterly reports within thirty (30) days from the end
of each calendar quarter.
(h) Upon a finding by the ERC that a Distribution Utility

which seeks to recover stranded contract costs has failed to comply
with its mitigation obligation under Section 33 of the Act, the ERC
may not allow the recovery of stranded contract costs: Provided,
That if there is any fraud or misrepresentation by the Distribution
Utility, the ERC may impose appropriate penalties in accordance
with Section 46 of the Act.
2085
RULE 18
The Universal Charge
Within one (1) year from the effectivity of the Act, there shall
be a Universal Charge to be determined, fixed and approved by the
ERC that shall be imposed on all electricity End-users, including
self-generation entities.
This Rule shall apply to the following:
(a) Petitioners for availments from the Universal Charge.
(i) PSALM for the Stranded Debts and Stranded Contract

Costs of NPC;
(ii) Distribution Utilities with respect to their Stranded

Contract Costs of Eligible Contracts;
(iii) Missionary Electrification;
(iv) Qualified Generation Companies with respect to the

equalization of taxes and royalties between indigenous or Renewable
Energy Resources and imported fuels;
(v) NPC, with respect to the environmental charge of

P0.0025 per kilowatt-hour sales to be used for the rehabilitation
and management of watershed areas; and
(vi) NPC/PSALM and Distribution Utilities with respect to

the mitigation of the removal of cross subsidies.
(b) Electricity End-users such as but not limited to:
(i) All End-users of Distribution Utilities such as residential,

commercial, and industrial including government and/or public
buildings, irrigation systems, and special lightings;
2086
(ii) Directly connected End-users of NPC such as but not

limited to government agencies and institutions, and industrial
enterprises;
(iii) Persons using Self-Generation Facilities;
(iv) Locators, developers, operators and facilities operating

in EZs; and
(v) Other entities identified by the ERC pursuant to the

intent of the Act.
SECTION 3. Mitigation on the Removal of Cross

Subsidies. —
(a) Unbundled rates of the NPC and the Distribution Utilities

as approved by the ERC in accordance with Section 36 of the Act,
shall reflect the respective costs of providing service to End-users
without any type of cross subsidy. The removal of cross subsidies to
the End-users of Distribution Utilities will however be mitigated and
done gradually in accordance with Section 74 of the Act. ERC shall
issue a phase out scheme to gradually remove the cross subsidies.
Any amount of subsidy provided to End-users during the phase out
period shall be recovered through the Universal Charge.
(b) With respect to SPUG, rates for Missionary Electrification

shall be in accordance with Rule 15 on Unbundling of Rates.
SECTION 4. Procedures for Petitions Against the Universal

Charge. —
(a) For the first year after the effectivity of the Act, the
following rules shall apply:
(i) The petitioners identified in Section 2 of this Rule shall

file their availments from the Universal Charge with the ERC on or
before 15 March 2002 and submit all pertinent documents in support
of such availments made and the basis for their computation.
(ii) The ERC shall evaluate the petitions and thereafter

issue the corresponding order no later than 26 June 2002 which
shall prescribe the following:
2087
(1) The Universal Charge on a per kWh basis to be included

in the billing statements to the End-users;
(2) Breakdown of the applicable Universal Charge for each

of the intended purposes:
(a) Stranded Debts and Stranded Contract Costs of NPC;
(b) Missionary Electrification;
(c) Equalization of taxes and royalties between indigenous

or renewable sources of energy vis-a-vis imported energy fuels;
(d) Environmental Charge of P0.0025 per kilowatt-hour

sales for the rehabilitation and maintenance of watershed areas;
and
(e) Mitigation Fund for the removal of cross-subsidies of

NPC and Distribution Utilities.
(3) Period of disbursement by each of the beneficiaries as

well as submission of reportorial requirements prescribed by the
ERC.
(b) Petitions for availment under the Universal Charge for

the succeeding years shall be submitted to the ERC on or before
March 15 of every year.
(c) A Distribution Utility that seeks to recover Stranded

Contract Costs of its Eligible Contracts shall submit a petition for
availment under the Universal Charge to the ERC within one (1)
year from the start of Open Access. Within three (3) months from
the submission of the petition by such Distribution Utility, the ERC
shall verify the reasonable amounts and determine the manner and
duration for the full recovery thereof, as approved by the ERC.
(d) With respect to the equalization of taxes and royalties

applied to indigenous or renewable sources of energy, qualified
Generation Companies shall be entitled to make claims against
STF created for this purpose. The STF shall be constituted out of
the proceeds from the Universal Charge specified under Section 34
2088
of the Act: Provided, That said claims shall only be to the extent of
the additional cost or reduction in the cost of generating electricity.
For this purpose, qualified Generation Companies making said

claims shall submit a detailed statement of their sales and costs of
operation, including a breakdown of how their claims are estimated
and the impact thereof on generation rates, the corresponding
assumptions and justification therefor and such other information
as may be required by the PSALM.
Only those claims that meet the foregoing documentation

requirements shall be evaluated and acted upon by PSALM.
(e) Failure by any petitioner to submit its petition within the

periods specified above shall result in a forfeiture of such petition
for the period in question.
(f) In case of over- or under-recovery by beneficiaries, true-up

adjustments shall follow the rules and regulations to be prescribed
by the ERC, except as otherwise provided in these Rules.
SECTION 5. Collection of the Universal Charge. —
(a) The Universal Charge shall be a non-by passable charge

that shall be collected from all End-users on a monthly basis by
the Distribution Utilities or Suppliers in case of Contestable
Markets. Any End-user or self-generation entity not connected to a
Distribution Utility shall remit its corresponding Universal Charge
directly to the TRANSCO. Collections by the Distribution Utilities
shall be remitted to the PSALM on or before the fifteenth (15th) day
of the succeeding month, net of any amount due to the Distribution
Utility.
(b) Separate books of accounts shall be maintained by the

Distribution Utility and made available to the ERC for purposes of
monitoring, verifying and accounting of amounts collected from the
Universal Charge and remitted to the PSALM.
SECTION 6. Administration of the Universal Charge. —
(a) Pursuant to the last paragraph of Section 34 of the Act,

PSALM shall act as the administrator of the funds generated from
2089
the Universal Charge. For this purpose, the PSALM shall create
a STF to be established in the Bureau of Treasury (BTr) or in a
Government Financing Institution (GFI) that is acceptable to the
DOF. Separate STFs shall be established for each of the intended
purposes of the Universal Charge. Funds shall be disbursed in
an open and transparent manner and shall only be used for the
intended purposes specified in Section 3 of this Rule.
(b) All qualified availments shall be approved and certified

by the ERC. In this regard, PSALM, in consultation with the DOF,
shall promulgate, within one (1) year from the effectivity of the Act
and subject to the approval of the ERC, procedures and guidelines
that shall govern all remittances to and disbursements from the
STF.
(c) The PSALM shall transfer funds from the STF and shall
distribute to the beneficiaries on or before the twentieth (20th) day
of each month.
(d) The PSALM shall submit to the DOF and ERC a report on
the remittances and disbursements against the fund on a quarterly
basis.
(e) Separate Books of accounts shall be maintained by the

PSALM for over-recovery of the Distribution Utility stranded cost
component and made available to the ERC for purposes of monitoring
and accounting for sums collected from the Universal Charge.
(f) In the event that the total amount collected for the
Universal Charge is greater than the actual availments against the
Universal Charge, the PSALM shall retain the balance within the
STF to pay for periods where a shortfall occurs.
(g) In determining the amount which a Distribution Utility

can net off from its remittance of the Universal Charge to PSALM,
the Distribution Utility shall not discriminate in its own favor at
the expense of other beneficiaries in the event that actual collection
differ from expected collections based on the level of kilowatt-hour
sales used by ERC in setting the Universal Charge per kilowatt-
hour (kWh). In such cases, the Distribution Utility shall only retain
its proportionate share in the actual collection.
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SECTION 7. Deferment. —
All Self-Generation Facilities whether new, existing or under

construction shall not be covered by the imposition of Universal
Charge for a period of four (4) years from its imposition: Provided,
That, such Self-Generation Facilities shall register with the ERC
and PSALM.
SECTION 8. Fines and Penalties. —
(a) In cases where the TRANSCO or its Buyer or

Concessionaire or a Distribution Utility collects funds earmarked
for the Universal Charge but fails to remit the same to PSALM
on or before the fifteenth (15th) day of the succeeding month, the
ERC may impose the appropriate fines and penalties prescribed in
Section 46 of the Act including, but not limited to, assessed interest
charges.
(b) In cases where a Self-Generation Facility refuses to pay

the Universal Charge, the ERC may impose the appropriate fines
and penalties prescribed in Section 46 of the Act, including but not
limited to, assessed interest charges.
RULE 19
Mandated Residential Rebate
(a) The ERC shall monitor and ensure the implementation

of its Resolution No. 2001-04 issued on July 26, 2001 and any
amendments thereto. The ERC shall impose fines and penalties on
parties who fail to comply with said Resolution.
(b) The reduction shall be reflected as a separate item in the

consumer billing statement.
RULE 20
Lifeline Rate
Pursuant to Section 73 of the Act, a socialized pricing

mechanism called a Lifeline Rate for the Marginalized End-users
shall be set by the ERC.
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The provision of Lifeline Rate shall be applied to all

Marginalized End-users of all Distribution Utilities pursuant to the
Act. It is the responsibility of the ERC to monitor compliance to
specific guidelines it shall issue pursuant to the implementation of
Lifeline Rate.
SECTION 3. Application. —
(a) The Lifeline Rate shall be exempted from the cross

subsidy removal under the Act for a period of ten (10) years, unless
extended by law.
(b) Each Distribution Utility shall file a petition with the

ERC recommending the level of consumption (kWh per month) to be
qualified for the Lifeline Rate.
(c) The ERC shall determine and approve different levels of

consumption and cross-subsidy support for each Distribution Utility
or classification of Distribution Utilities.
PART IV
Privatization of National Power Corporation
RULE 21
Power Sector Assets and Liabilities Management Corporation
(PSALM)
SECTION 1. Creation of PSALM. —
Pursuant to Section 49 of the Act, a government-owned and

-controlled corporation known as the "Power Sector Assets and
Liabilities Management Corporation", hereinafter referred to as
the "PSALM Corp." or "PSALM," was created to take ownership of
all existing NPC generation assets, liabilities, IPP contracts, real
estate and all other disposable assets. All outstanding obligations
of the NPC arising from loans, issuances of bonds, securities and
other instruments of indebtedness shall be assumed by the PSALM,
within one hundred eighty (180) days from the approval of the Act.
2092
NPC and PSALM shall take such measures and execute such
documents to effect the transfer of the ownership and possession of
all the assets, rights, privileges, and liabilities required by the Act
to be transferred by NPC to PSALM.
SECTION 2. Purpose and Objective. —
The principal purpose of the PSALM is to manage the orderly

sale, disposition, and Privatization of NPC generation assets, real
estate and other disposable assets, and IPP contracts with the
objective of managing and liquidating all NPC financial obligations
and stranded contract costs in an optimal manner.
SECTION 3. Domicile. —
The PSALM shall have its principal office and place of business
within Metro Manila.
SECTION 4. Term of Existence. —
Unless otherwise provided by law, PSALM shall exist for a

period of twenty-five (25) years from the effectivity of the Act, and all
assets held by it, all moneys and properties belonging to it, and all
its liabilities outstanding upon the expiration of its term of existence
shall revert to and be assumed by the National Government. Upon
expiration of the term of PSALM, the administration of the STF
shall be transferred to the DOF or any of the DOF attached agencies
as designated by the DOF Secretary.
SECTION 5. Powers. —
PSALM shall, in the performance of its functions and for the

attainment of its objectives, have the following powers:
(a) To formulate and implement a program for the sale

and Privatization of the NPC assets and IPP contracts and the
management and liquidation of Stranded Debts and Stranded
Contract Costs of NPC, such liquidation to be completed within the
term of existence of the PSALM;
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(b) To take title to and possession of, administer and

conserve the assets transferred to it, including the execution
of bilateral contracts to sell power from undisposed assets and
contracts transferred by NPC;
(c) To sell or dispose the transferred assets at such price

and under such terms and conditions as it may deem necessary or
proper, subject to applicable laws, rules and regulations;
(d) To take title to and possession of, and assume all rights and
obligations of NPC under IPP contracts, and to appoint, after public
bidding in a transparent and open manner, qualified independent
entities who shall act as IPP Administrators in accordance with the
Act;
(e) To calculate the amount of the Stranded Debts and

Stranded Contract Costs of NPC which shall form part of the basis
of the ERC in the determination of the Universal Charge;
(f) To liquidate Stranded Contract Costs of NPC utilizing

proceeds from appropriations, sales and other property contributed
to it, including the proceeds from the Universal Charge;
(g) To adopt rules and regulations as may be necessary or

proper for the orderly conduct of its business or operations;
(h) To sue and be sued in its name;
(i) To appoint or hire, transfer, remove and fix the

compensation of its personnel and such advisors or other Persons
as may be necessary in the sale, Privatization and disposition of
NPC assets and IPP contracts: Provided, however, That PSALM
shall hire its own personnel only if absolutely necessary, and as far
as practicable, shall avail itself of the services of personnel detailed
from other government agencies;
(j) To own, hold, acquire, or lease real and personal

properties as may be necessary or required in the discharge of its
functions;
2094
(k) To borrow money and incur such liabilities, as may be

required to service all obligations transferred from NPC and loans
from ECs assumed from NEA in accordance with the relevant
sections of these Rules, including the issuance of bonds, securities or
other evidence of indebtedness utilizing its assets as collateral and/
or through the guarantees of the National Government: Provided,
That all such debts or borrowings shall have been paid off or settled
before the end of its corporate life;
(l) To restructure existing loans of the NPC;
(m) To collect, administer, and apply NPC's portion of the

Universal Charge;
(n) To issue other forms of financial instruments such

as warrants, options, convertibles and to create Special Purpose
Vehicles (SPVs) to maximize proceeds and value, as well as efficiently
manage its liabilities;
(o) To structure the sale, Privatization or disposition of NPC

assets and IPP Contracts and/or their energy output based on terms
and conditions which shall optimize the value and sale prices of said
assets;
(p) To create and administer STFs under Section 34 of the

Act and these Rules;
(q) To operate the generation assets, directly or through

NPC, prior to Privatization of such assets. Towards this end, while
PSALM operates the generation assets, it shall be considered a
Generation Company;
(r) To mitigate its potential stranded costs by making

reasonable best efforts to reduce the cost of existing contracts with
IPPs;
(s) To ensure that SPUG conduct proper monitoring,

accounting and control of expenditures, and efficient utilization
of the missionary electrification funds from the Universal Charge;
and
2095
(t) To do any act necessary or proper to carry out the

purpose for which it was created, including the formation of one
or more subsidiaries to maximize Privatization proceeds, enter
into compromise agreements, or take such other acts as may be
determined by the PSALM Board to be necessary, useful, incidental
or auxiliary to accomplish its purposes and objectives as specified in
the Act.
SECTION 6. PSALM Board of Directors. —
PSALM shall be administered, and its powers and functions

exercised, by a Board of Directors which shall be composed of the
Secretary of the DOF as the Chairman, and the Secretary of the
DOE, the Secretary of the DBM, the Director-General of the NEDA,
the Secretary of the DOJ, the Secretary of the DTI and the President
of the PSALM as ex-officio members thereof.
SECTION 7. Powers of PSALM Board. —
All the powers and functions of PSALM shall be vested in and

exercised by its Board of Directors.
SECTION 8. PSALM Board Meetings and Quorum. —
The Board of Directors shall meet regularly and as frequently

as may be necessary to enable it to discharge its functions and
responsibilities. The presence at a meeting of four (4) members shall
constitute a quorum, and the decision of the majority of three (3)
members present at a meeting where there is quorum shall be the
decision of the Board of Directors.
SECTION 9. Powers of the PSALM President. —
(a) The President of PSALM shall be appointed by the

President of the Philippines. In the absence of the Chairman and
the Vice-Chairman, the PSALM President shall preside over Board
meetings.
(b) The PSALM President shall be the Chief Executive

Officer of PSALM and shall have the following powers and duties:
2096
(i) To execute and administer the policies and measures

(ii) To oversee the preparation of the budget of PSALM;
(iii) To direct and supervise the operation and internal

administration of PSALM and, for this purpose, may delegate some
or any of his administrative responsibilities and duties to other
officers of the PSALM;
(iv) Subject to the guidelines and policies set up by the Board,

officials and employees of the PSALM; and for cause, to remove,
PSALM;
(v) To submit an annual report to the Board on the activities

and achievements of PSALM at the close of each fiscal year and upon
approval thereof, submit a copy to the President of the Philippines
and to such other agencies as may be required by law and under
these Rules;
(vi) To represent PSALM in all dealings and transactions

with other offices, agencies and instrumentalities of the National
Government and with all Persons and other entities, private or
(vii) To exercise such other powers and duties as may be

SECTION 10. Exemption from the Salary Standardization

Law. —
The salaries and benefits of employees in the PSALM shall

PSALM Board.
SECTION 11. Property of PSALM. —
The following funds, assets, contributions and other properties

shall constitute the property of the PSALM:
2097
(a) The generation assets, real estate, IPP Contracts, other

disposable assets of NPC, proceeds from the operation or disposition
of such assets and the residual assets from BOT, ROT, and other
variations thereof. The proceeds from the operation and disposition
of NPC assets shall include:
(i) Net profit of NPC;
(ii) Earning before interest, taxes, depreciation and

amortization of the Pulangui and Agus Complexes;
(iii) Net profit of TRANSCO;
(iv) Proceeds from the disposition and Privatization of

PSALM's generation, other disposable assets, and TRANSCO, net
of all transaction costs and fees associated with such disposition
and Privatization; and
(v) Net profit arising from the administration of IPPs.
(b) Transfers from the National Government;
(c) Proceeds from loans incurred to restructure or refinance

NPC's transferred liabilities: Provided, That all borrowings shall be
fully paid for or settled by the end of the life of the PSALM;
(d) Proceeds from the Universal Charge allocated for

Stranded Debts and Stranded Contract Costs of NPC;
(e) Official assistance, grants and donations from external

sources;
(f) Repayment by ECs of such ECs loans assumed by

PSALM. Such repayments must be made within five (5) years from
such assumption of loans by PSALM by ECs who have transferred
ownership or Control of its assets, franchise or operations pursuant
to Section 60 of the Act;
(g) Proceeds from insurance claims corresponding to assets

transferred to PSALM by NPC; and
2098
(h) Other sources of funds as may be determined by PSALM

necessary for the above-mentioned purposes.
SECTION 12. Claims Against PSALM. —
The following shall constitute the claims against PSALM:
(a) NPC liabilities transferred to PSALM;
(b) Transfers from the National Government;
(c) New loans, such as, but not limited to those in the form
of bonds, convertible instruments, warrants, leases and similar
structures;
(d) Obligations under IPP contracts transferred by NPC to

PSALM;
(e) Loans of ECs that are to be assumed by PSALM under

Section 60 of the Act; and
(f) Expenses for rehabilitation and maintenance of Agus

and Pulangui Complexes.
RULE 22
National Transmission Corporation (TRANSCO)
SECTION 1. Creation of TRANSCO. —
Pursuant to Section 8 of the Act, TRANSCO, which

shall be wholly owned by PSALM, has been created to assume
the transmission facilities of NPC, all other assets related to
transmission operations, including nationwide franchise of NPC
for the operation of the transmission system and the Grid, and to
assume the electrical transmission functions of the NPC, including
among others, the planning, construction and centralized Grid
operation and maintenance of high voltage transmission facilities,
Grid interconnections, ancillary and other allied facilities.
Pursuant to and in accordance with the requirements of the

Act, NPC, PSALM and TRANSCO shall take such measures and
2099
execute such documents to effect the transfer of the ownership and

possession of the transmission and subtransmission facilities of
NPC and all other assets related to transmission operations. Upon
such transfer, the nationwide franchise of NPC for the operation of
the transmission system and the Grid shall transfer from NPC to
TRANSCO.
SECTION 2. Transmission Ownership and Management. —
(a) For the purpose of Section 1 of this Rule, "all other assets"
related to transmission and subtransmission facilities shall include,
but not be limited, to the following:
(i) System operations facilities such as telecommunications

and Supervisory Control and Data Acquisition (SCADA) systems
including offices and laboratory buildings housing these equipment;
and
(ii) TRANSCO offices and real estate properties, vehicles,

laboratory and test equipment, spare parts and other physical
structures.
(b) The assets of NPC related to the transmission/

subtransmission function shall be transferred by NPC directly to
TRANSCO on or before 26 December 2001.
(c) Subtransmission Assets transferred to TRANSCO

shall be operated and maintained by TRANSCO or its Buyer or
Concessionaire, until their disposal to Qualified Distribution
Utilities.
SECTION 3. Corporate Powers of the TRANSCO. —
As a corporate entity, TRANSCO shall have the following

corporate powers:
(a) To have continuous succession under its corporate name

(b) To adopt and use a corporate seal and to change, alter or

modify the same, if necessary;
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(c) To sue and be sued;
(d) To enter into contracts, leases and execute any instrument

necessary or convenient for the purpose for which it is created;
(e) To borrow funds from any source, whether private or

public, foreign or domestic, and issue bonds and other evidence of
indebtedness: Provided, That in the case of the bond issues, it shall
be subject to the approval of the President of the Philippines upon
recommendation of the Secretary of Finance: Provided, further, That
foreign loans shall be obtained in accordance with existing laws,
rules and regulations of the Bangko Sentral ng Pilipinas (BSP);
(f) To pledge, grant a security interest in or otherwise

encumber its assets;
(g) To maintain a provident fund which consists of

contributions made by both the TRANSCO and its officials and
employees and their earnings for the payment of benefits to
such officials and employees or their heirs under such terms and
conditions as it may prescribe;
(h) To create subsidiaries for purposes such as the disposition

of Subtransmission Assets to Qualified Distribution Utilities and
the operation thereof prior to disposal;
(i) To do any act necessary or proper to carry out the purpose

for which it is created, or any act which, from time to time, may be
declared by the TRANSCO Board as necessary, useful, incidental or
auxiliary to accomplish its purposes and objectives;
(j) Generally, to exercise all the powers of a corporation

under the Corporation Code insofar as they are not inconsistent
with the Act; and
(k) The TRANSCO may exercise the power of eminent domain

on behalf of itself, the Buyer or Concessionaire or any successor-in-
interest thereto, subject to the requirements of the Constitution and
other laws. Except as provided in the Act, no Person, company or
entity other than TRANSCO shall own any transmission facilities.
2101
SECTION 4. TRANSCO Board of Directors. —
All the powers of the TRANSCO shall be vested in and

exercised by a Board of Directors. The Board shall be composed of
a Chairman and six (6) members. The Secretary of the DOF shall
be the ex-officio Chairman of the Board. The other members of
the TRANSCO Board shall include the Secretary of the DOE, the
Secretary of the DENR, the President of TRANSCO, and three (3)
members to be appointed by the President of the Philippines, each
representing Luzon, Visayas and Mindanao, one of whom shall be
the President of PSALM.
The members of the Board so appointed by the President of

the Philippines shall serve for a term of six (6) years, except that any
Person appointed to fill-in a vacancy shall serve only the unexpired
term of his/her predecessor in office. All members of the Board shall
be professionals of recognized competence and expertise in the fields
of engineering, finance, economics, law or business management.
No member of the Board or any of his relatives within the fourth
civil degree of consanguinity or affinity, legitimate or common law,
shall have any interest, either as investor, officer or director, in any
Generation Company or Distribution Utility or other entity engaged
in transmitting, generating and supplying electricity specified by
ERC.
SECTION 5. Powers and Duties of the Board. —
The following are the powers of the Board:
(a) To provide strategic direction for TRANSCO, and

formulate medium and long-term strategies pursuant to the vision,
mission and objectives of TRANSCO;
(b) To develop and adopt policies and measures for the

efficient and effective management and operation of TRANSCO,
including the formation of one or more subsidiaries;
(c) To organize, re-organize, and determine the

organizational structure and staffing pattern of TRANSCO; abolish
and create offices and positions; fix the number of its officers and
2102
employees; transfer and re-align such officers and personnel; and

fix their compensation, allowance, and benefits;
(d) To fix the compensation of the President of TRANSCO

and to appoint and fix the compensation of other corporate officers;
(e) For cause, to suspend or remove any corporate officer

appointed by the Board;
(f) To adopt and set guidelines for the employment of

personnel on the basis of merit, technical competence and moral
character;
(g) Any provision of the law to the contrary notwithstanding,

to write-off bad debts; and
(h) Other powers not inconsistent with the Act.
SECTION 6. Board Meetings. —
The Board shall meet as often as may be necessary upon

the call of the Chairman of the Board, or in his absence, the Vice-
Chairman, or in the latter's absence, by a majority of the Board
members.
SECTION 7. Board Per Diems and Allowances. —
The members of the Board shall receive a per diem for each
regular or special meeting of the Board actually attended by
them and, upon approval of the Secretary of the DOF, such other
allowances as the Board may prescribe.
SECTION 8. Quorum. —
The presence of at least four (4) members of the Board shall

constitute a quorum, which shall be necessary for the transaction
of any business. The affirmative vote of a majority of the members
present in a quorum shall be adequate for the approval of any
resolution, decision or order, except when the Board shall otherwise
agree that a greater vote is required.
2103
SECTION 9. Powers of the President of TRANSCO. —
(a) So long as TRANSCO remains wholly owned by PSALM,

the President of TRANSCO shall be appointed by the President of
the Philippines. In the absence of the Chairman and Vice-Chairman,
the President of TRANSCO shall preside over Board meetings.
(b) The President of TRANSCO shall be the Chief Executive

Officer of TRANSCO and shall have the following powers and
duties:
(i) To execute and administer the policies and measures

(ii) To oversee the preparation of the budget of TRANSCO;
(iii) To direct and supervise the operation and internal

administration of TRANSCO and, for this purpose, may delegate
other officers of TRANSCO;
(iv) Subject to the guidelines and policies set up by the Board,

officials and employees of TRANSCO; and for cause, to remove,
suspend or otherwise discipline any subordinate employee of
TRANSCO;
(v) To submit an annual report to the Board on the activities

and achievements of TRANSCO at the close of each fiscal year
Philippines and to such other agencies as may be required by law;
(vi) To represent TRANSCO in all dealings and transactions

with other offices, agencies, and instrumentalities of the National
Government and with all Persons and other entities, private or
(vii) To exercise such other powers and duties as may be

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SECTION 10. Exemption from the Salary Standardization

Law. —
The salaries and benefits of employees in the TRANSCO shall

TRANSCO Board.
SECTION 11. TRANSCO Privatization. —
(a) Within six (6) months from the effectivity of the Act,
the PSALM shall submit a Privatization plan for endorsement by
the Power Commission and the approval of the President of the
Philippines. The President of the Philippines thereafter shall direct
PSALM to award, in open competitive bidding, the transmission
facilities, including grid interconnections and Ancillary Services
to a qualified party either through an outright sale, a Concession
Contract or any other means not inconsistent with the objectives
of the Act. The Buyer or Concessionaire or any other successor-in-
interest to TRANSCO shall be responsible for the improvement,
expansion, operation or maintenance of the transmission assets and
the operation of any related businesses. PSALM and TRANSCO
shall secure a nationwide franchise for and in behalf of the Buyer or
Concessionaire. The award shall result in maximum present value of
proceeds to the National Government. In case a Concession Contract
is awarded, the Concessionaire shall have a contract period of
twenty-five (25) years, subject to review and renewal for a maximum
period of another twenty-five (25) years. Upon the expiration or
termination of the Concession Contract, the transmission facilities
and assets, including the nationwide franchise for the operation of
the transmission system and Grid shall revert to TRANSCO.
(b) In any case, the Buyer or Concessionaire or any other

successor-in-interest to TRANSCO shall comply with the Grid Code
and the TDP as approved. The sale agreement/Concession Contract
shall include, but not be limited to, the provision for performance
and financial guarantees or any other covenants that the National
Government may require. Failure to comply with such obligations
shall result in the imposition of appropriate sanctions or penalties
by the ERC.
2105
(c) In case of joint venture/consortium with foreign members/

participants of the Buyer or Concessionaire or any other successor-
in-interest to TRANSCO, a foreign participant shall be financially
and technically capable, with proven domestic and/or international
experience and expertise as a leading transmission system operator.
Such experience must be in a transmission system of comparable
capacity and coverage as the Philippines.
SECTION 12. Responsibilities of Buyer or Concessionaire. —
(a) This Rule shall apply to TRANSCO or its Buyer or

Concessionaire or any successor-in-interest thereto.
(b) The Buyer or Concessionaire or any successor-in-interest

thereto, shall:
(i) Be responsible for the improvement, expansion, operation

and/or maintenance of the Grid;
(ii) Comply with the Grid Code and the TDP as approved;
and
(iii) Comply with the key performance targets and standards

set by ERC, in terms of physical transmission system and the
management of the transmission activity.
(c) The performance indicators for reliability, security,

adequacy, integrity and stability shall include, but not limited to,
the following:
(i) Number of Interruption Events;
(ii) Sustained Average Interruption Frequency Index;
(iii) Momentary Average Interruption Frequency Index;
(iv) Sustained Average Interruption Duration Index;
(v) System Interruption Severity Index;
(vi) Frequency of tripping per 100 ckt-km;
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(vii) Average Forced Outage Duration;
(viii) Accumulated Time Error;
(ix) Frequency Limit Violation; and
(x) Voltage Limit Violations.
SECTION 13. Privatization of Subtransmission. —
(a) The subtransmission functions and assets of TRANSCO

shall be segregated from the transmission functions, assets and
liabilities for transparency and disposal: Provided, That the
Subtransmission Assets shall be operated and maintained by
TRANSCO or its Buyer or Concessionaire until their disposal
to Qualified Distribution Utilities which are in a position to take
over the responsibility for operating, maintaining, upgrading,
and expanding said assets. All transmission and subtransmission
related liabilities of NPC shall be transferred to and assumed by the
PSALM.
(b) TRANSCO shall negotiate with and thereafter transfer

such functions, assets, and associated liabilities to the Qualified
Distribution Utility or utilities connected to such subtransmission
facilities not later than two (2) years from the effectivity of the Act
or the start of Open Access, whichever comes earlier: Provided,
That in the case of ECs, the TRANSCO shall grant concessional
financing over a period of twenty (20) years: Provided, however,
That the installment payments to TRANSCO for the acquisition of
subtransmission facilities shall be given first priority by the ECs out
of the net income derived from such facilities. The TRANSCO shall
determine the disposal value of the Subtransmission Assets based
on the revenue potential of such assets. In case of disagreement
in valuation, procedures, ownership participation and other issues,
the ERC shall resolve such issues.
(c) The take over by a Distribution Utility of any

Subtransmission Asset shall not cause a diminution of service and
quality to the End-users. Where there are two (2) or more connected
Distribution Utilities, the consortium or juridical entity shall be
formed by and composed of all of them and thereafter shall be
2107
granted a franchise to operate the Subtransmission Assets by the

ERC.
The subscription rights of each Distribution Utility involved

shall be proportionate to its load requirements unless otherwise
agreed by such Distribution Utilities.
Aside from the PSALM, TRANSCO and connected Distribution

Utilities, no third party shall be allowed ownership or management
participation, in whole or in part, in such subtransmission entity.
RULE 23
Privatization of the Assets of NPC
Consistent with Section 47 of the Act, the PSALM shall

privatize the assets transferred to it from NPC in accordance
with these Rules. Within one hundred eighty (180) days from the
effectivity of the Act, PSALM shall submit a Privatization plan
for the endorsement by the Power Commission and the approval
of the President of the Philippines. This plan shall cover the total
Privatization of the transmission and generation assets, real estate,
and other disposable assets as well as the existing IPP contracts of
NPC, except for assets of SPUG. Upon approval of the Privatization
plan, PSALM shall implement the same.
The participation by Filipino citizens and corporations in the

purchase of NPC assets shall be encouraged.
SECTION 2. Scope of Privatization. —
(a) NPC Generation, Generation-Related, and Other

Assets.
Except for the assets of SPUG, NPC assets to be privatized

shall include:
(i) all generation assets and all generation-related

machineries and equipment;
2108
(ii) all real estate and the improvements made thereto; and
(iii) disposable assets such as facilities, properties, equipment

and other assets not essential to the operation of NPC.
To provide for an orderly disposition of these assets, NPC shall

provide PSALM an inventory of all these assets within one hundred
and twenty (120) days from the effectivity of the Act.
(b) NPC Transmission, Subtransmission, Interconnection

and Ancillary Assets.
The transmission, subtransmission, interconnection and

ancillary assets of NPC, as defined in Section 8 of the Act and
further detailed in Rule 6 on Transmission Sector and Rule 22 on
TRANSCO, shall be transferred by NPC directly to TRANSCO. For
this purpose, NPC shall submit a list of these assets to PSALM and
TRANSCO within one hundred and twenty (120) days from the
effectivity of the Act.
(c) IPP Contracts of NPC.
Consistent with Section 8 of this Rule, IPP Contracts of NPC

shall refer to generation capacities developed pursuant to Republic
Act No. 6957 (BOT Law), as amended by Republic Act No. 7718,
and any such generation asset whose construction was not financed
by NPC but whose output is bought by NPC under Purchase Power
Agreements (PPAs), Energy Conversion Agreements (ECAs) o r
any other similar contractual relationship.
SECTION 3. Privatization Objectives. —
The Privatization of the NPC assets intends to achieve the

following objectives:

country;

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to achieve greater operational and economic efficiency and enhance
the competitiveness of Philippine products in the global market;
(d) To enhance the inflow of private capital and broaden

the ownership base of the power generation, transmission and
distribution sectors;

public and private sector entities in the process of Restructuring
the electric power industry;

power;


Renewable Energy Resources in power generation in order to reduce
dependence on imported energy; and
(i) To ensure consumer protection and enhance the

competitive operation of the electricity market.
SECTION 4. Privatization Guidelines. —
(a) The Privatization value to the National Government of

the NPC generation assets, real estate, other disposable assets as
well as IPP contracts shall be optimized.
(b) The participation by Filipino citizens and corporations in

the purchase of NPC assets shall be encouraged. Equity or similar
instruments of participation by End-users or consumers must be
explored exhaustively.
In the case of foreign investors, at least seventy-five percent

(75%) of the funds used to acquire NPC-generation assets and
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IPP contracts shall be inwardly remitted and registered with the

(BSP).
(c) The NPC plants and/or its IPP contracts assigned to IPP
Administrators, its related assets and assigned liabilities, if any,
shall be grouped in a manner which shall promote the viability of
the resulting Generation Companies, ensure economic efficiency,
encourage competition, foster reasonable electricity rates and create
market appeal to optimize returns to the government from the sale
and disposition of such assets in a manner consistent with the
objectives of the Act. In the grouping of the generation assets and
IPP contracts of NPC, the following criteria shall be considered:
(i) A sufficient scale of operation and balance sheet strength

to promote the financial viability of the restructured units;
(ii) Broad geographical groupings to ensure efficiency of

operations but without the formation of regional companies or
consolidation of market power;
(iii) Portfolio of plants and IPP contracts to achieve

management and operational synergy without dominating any part
of the market or of the load curve; and
(iv) Such other factors as may be deemed beneficial to the best

interest of the National Government while ensuring attractiveness
to potential investors.
(d) All assets of NPC shall be sold in an open and transparent

manner through public bidding, and the same shall apply to the
disposition of IPP contracts;
(e) In cases of transfer of possession, Control, operation or

Privatization of multi-purpose hydro facilities, safeguards shall
be prescribed to ensure that the National Government may direct
water usage in cases of shortage to protect potable water, irrigation,
and all other requirements imbued with public interest. The rights
of NPC over such multi-purpose hydro facilities shall be transferred
to PSALM;
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(f) The Agus and the Pulangui complexes in Mindanao

shall be excluded from among the Generation Companies that will
be initially privatized. Their ownership shall be transferred to
the PSALM and both shall continue to be operated by the NPC.
Said complexes may be privatized not earlier than ten (10) years
from the effectivity of the Act, and, except for Agus III, shall not be
subject to BOT, Build-Rehabilitate-Operate-Transfer (BROT) and
other variations thereof pursuant to Republic Act No. 6957 (BOT
Law), as amended by Republic Act No. 7718. The Privatization
of Agus and Pulangui complexes shall be left to the discretion of
PSALM in consultation with Congress. PSALM, out of the earnings
in the operation of Agus and Pulangui complexes, shall ensure the
availability of adequate funds intended for the upkeep of facilities
to include funds for repairs, maintenance and expansion of existing
facilities;
(g) The steamfield assets and generation plants of each

geothermal complex shall not be sold separately. They shall be
combined and each geothermal complex shall be sold as one package
through public bidding. The geothermal complexes covered by this
requirement include, but not limited to, Tiwi-Makban, Leyte A and
B, Tongonan, Palinpinon, and Mt. Apo;
(h) The ownership of the Caliraya-Botokan-Kalayaan (CBK)

pump storage complex shall be transferred to PSALM and operated
by NPC on behalf of PSALM for a period of ten (10) years;
(i) Not later than three (3) years from the effectivity of
the Act, and in no case later than the initial implementation of
Open Access, at least seventy percent (70%) of the total capacity
of generation assets of NPC and of the total capacity of the power
plants under contract with NPC located in Luzon and Visayas shall
have been privatized: Provided, That any unsold capacity shall be
privatized not later than eight (8) years from the effectivity of
the Act;
(j) Except as otherwise provided in these Rules, all

appropriate existing authorizations, licenses and permits issued
by the National Government, including its departments, bureaus
and agencies, and LGUs to NPC shall automatically transfer to
PSALM;
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(k) NPC may generate and sell electricity only from the
undisposed generation assets and IPP contracts of PSALM and shall
not incur any new obligations to purchase power through bilateral
contracts with Generation Companies or other Suppliers; and
(l) The sale, transfer or disposition of NPC assets shall not

affect existing NPC contractual obligations.
SECTION 5. Elements of the Privatization Plan. —
The Privatization plan for NPC assets shall contain, among

others, the following principal elements:
(a) Structure, sequence, timing and terms of asset

disposition;
(b) Employee issues;
(c) Management of debt obligations;
(d) Management of IPP obligations, including appointment

of IPP Administrators in accordance with Section 51(c) of the Act;
(e) Options for the sale of other assets; and
(f) Overall timetable and progress milestones.
SECTION 6. Privatization of Hydroelectric Generation Plants.

—
(a) Consistent with Section 47(e) of the Act and Section 4(f)
of this Rule, the Privatization of hydro facilities of NPC shall cover
the power component including assignable long-term water rights
agreements for the use of water, which shall be passed onto and
respected by the buyers of the hydroelectric power plants.
(b) The National Water Resources Board (NWRB) shall

ensure that the allocation for irrigation, as indicated by the NIA
and requirements for domestic water supply as provided for by the
appropriate Local Water District(s) are recognized and provided
for in the water rights agreements. NPC or PSALM may also
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impose additional conditions in the shareholding agreement with

the winning bidders to ensure national security, including, but not
limited to, the use of water during drought or calamity.
(c) Consistent with Section 34(d) of the Act, the NPC

shall continue to be responsible for watershed rehabilitation and
management and shall be entitled to the environmental charge
equivalent to one-fourth of one centavo per kilowatt-hour sales
(P0.0025/kWh), which shall form part of the Universal Charge. This
environmental fund shall be used solely for watershed rehabilitation
and management and shall be managed by NPC under existing
arrangements. NPC shall submit an annual report to the DOE
detailing the progress of the watershed rehabilitation program.
(d) The NPC and PSALM or NIA, as the case may be,
shall continue to be responsible for the dam structure and all
other appurtenant structures necessary for the safe and reliable
operation of the hydropower plants. The NPC and PSALM or NIA,
as the case may be, shall enter into an operations and maintenance
agreement with the private operator of the power plant to cover the
dam structure and all other appurtenant facilities.
SECTION 7. Undisposed Generation Assets and IPP Contracts

of NPC . —
(a) NPC may generate and sell electricity only from the
undisposed generation assets and IPP contracts of PSALM; and
(b) NPC shall not incur any new obligations to purchase

power through bilateral contracts with Generation Companies or
other Suppliers.
SECTION 8. Privatization of IPP Contracts Assumed by

PSALM. —
(a) The IPP contracts assumed by PSALM shall be

privatized taking into consideration buy out provisions, Government
performance undertakings and possible bilateral renegotiations to
minimize the liabilities of NPC and the National Government.
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(b) Consistent with Section 75 of the Act, with respect to

IPP-related contracts, nothing in these Rules shall be construed
as:
(i) an implied waiver of any right, action or claim, against

any Person or entity, of NPC or the National Government arising
from or relating to any such contracts; or
(ii) a conferment of new or better rights to creditors and IPP

contractors in addition to subsisting rights granted by the NPC or
the National Government under existing contracts.
(c) PSALM shall ensure that the privatization of IPP

contracts assumed by it shall not cause an increase in the stranded
costs to be absorbed by the National Government and End-users.
SECTION 9. Management and Operation of Agus and

Pulangui Complexes. —
The Agus and Pulangui complexes shall be managed and

operated by NPC for PSALM as a separate business unit, and shall
have its own organization and book of accounts.
PART V
Other Provisions
RULE 24
Electric Power Crisis Provision
Upon the determination by the President of the Philippines

of an imminent shortage of the Supply of Electricity, Congress
may authorize, through a joint resolution, the establishment of
additional generation capacity under such terms and conditions as
it may approve.
RULE 25
Review of IPP Contracts
An inter-agency committee chaired by the Secretary of DOF,

with the Secretary of the DOJ and the Director General of the
NEDA as members thereof is hereby created upon the effectivity of
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the Act. The Committee shall immediately undertake a thorough

review of all IPP Contracts. In cases where such contracts are found
to have provisions which are grossly disadvantageous, or onerous
to the Government, the Committee shall, cause the appropriate
government agency to file an action under the arbitration clauses
provided in said contracts or initiate any appropriate action under
Philippine laws. The PSALM shall diligently seek to reduce stranded
costs, if any.
RULE 26
Renegotiation of Power Purchase and Energy
Conversion Agreements Between NPC and PNOC-EDC
(a) Pursuant to Section 69 of the Act, all power purchase and

energy conversion agreements between the PNOC-EDC and NPC,
including, but not limited to, the Palinpinon, Tongonan and Mt. Apo
Geothermal complexes, shall be reviewed by the ERC within three
(3) months from the effectivity of the Act.
(b) The ERC shall amend the terms of the agreements to

remove any hidden costs or extraordinary mark-ups in the cost of
power or steam above their true costs.
(c) The ERC shall ensure that all savings realized from the
reduction of said mark-ups shall be passed on to all End-users.
(d) All amended contracts shall be submitted to the Power

Commission for approval.
RULE 27
Royalties, Returns [Rentals] and
Tax Rates for Indigenous Energy Resources
The provisions of Section 79 of Commonwealth Act No. 137

(C.A. No. 137) and any law to the contrary notwithstanding, the
President of the Philippines shall reduce the royalties, returns
[rentals] and taxes collected for the exploitation of all indigenous
sources of energy, including but not limited to, natural gas and
geothermal steam, so as to effect parity of tax treatment with the
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existing rates for imported coal, crude oil, bunker fuel and other
imported fuels.
To this end, the DOF shall recommend to the President of the

Philippines the issuance of an Executive Order within thirty (30)
calendar days from the effectivity of these Rules.
To ensure lower rates for End-users, the ERC shall forthwith

reduce the rates of power from all indigenous sources of energy.
RULE 28
Environmental Protection
Pursuant to Section 65 of the Act, Electric Power Industry

Participants in the generation, distribution and transmission
sub-sectors of the industry shall comply with all environmental
laws, rules, regulations and standards promulgated by the
DENR including, in appropriate cases, the establishment of an
environmental guarantee fund.
RULE 29
Benefits to Host Communities
Pursuant to Section 66 of the Act, the obligations of Generation

Companies and energy resource developers to communities hosting
the Generation Facilities and/or energy resource development
projects as defined under Chapter II, Section 289 to 294 of the
Republic Act No. 7160 (Local Government Code) and Section 5
(i) of Republic Act No. 7638 (DOE Law) and their implementing
rules and regulations shall continue: Provided, That the obligations
mandated under Chapter II, Section 291 of Local Government Code,
shall apply to privately-owned corporations or entities utilizing the
national wealth of the locality.
A. Rules for the Benefits to Host Communities Pursuant to

Section 5(i) of Republic Act 7638
This Rule shall apply to Generation Facilities and/or

energy resource development projects located in all barangays,
municipalities, cities, provinces and regions.
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SECTION 2. Obligation to Provide Financial Benefits. —
The Generation Facilities and/or energy resource development

facilities, such as but not limited to the following, are required to
provide the financial benefits under Energy Regulations No. 1-94
(E.R. 1-94) of the DOE:
(a) Spin-off Facilities of NPC or their transferees, including

Generation Facilities owned by NPC transferred to PSALM and
subsequently privatized pursuant to the Act;
(b) Agus and Pulangui Complexes;
(c) Facilities owned and operated by NPC-SPUG;
(d) Facilities under BOT arrangement and other variants

with NPC (NPC IPPs), NPC-SPUG, NIA, PNOC-EDC and other
government agencies;
(e) Facilities under BOT arrangement and other variant

with Distribution Utilities (IPPs of Distribution Utilities);
(f) Facilities owned or operated by a Distribution Utility;
(g) Self-Generation Facilities;
(h) Facilities operating in EZs; and
(i) Integrated energy resource development and Generation

Facilities such as hydro, geothermal and coal.
SECTION 3. Beneficiaries. —
Direct benefits shall be provided to the host LGU, especially

the community and people affected while equitable preferential
benefits shall be provided to the host region. Host LGU or host
region shall be understood as follows:
(a) With respect to Generation Facilities, in the case of

power barges, the host LGU or region is that where the power barge
is moored; in all other cases, the host LGU or region is that where
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the Generation Facility is physically located. Generation Facilities

shall not include transmission lines and substations;
(b) With respect to energy resources:
(i) Coal. The host LGU or region is that where the producing
positive coal reserve is located, as delineated by detailed geophysical,
geological and exploration surveys.
(ii) Geothermal. The host LGU or region is that where

the producing geothermal reservoir is located as delineated by
geochemical, geophysical, and exploration surveys. "Producing
geothermal reservoir" refers to the subsurface geological environment
where the geothermal fluids accumulate and circulate, inclusive of
the production and re-injection/recharge zone.
(iii) Hydro. The host LGU or region is that where the

hydro reservoir is located as delineated by detailed topographic,
geological and geotechnical investigations, reservoir and dam
height optimization studies, and as delineated by detailed ground
surveys. "Hydro reservoir" refers to either a natural lake or an
artificial lake created by the impounding of stream flow, run-off and
subsurface water including but not limited to intakes, diversion
wires and transbasin underground tunnel which supplies water to
a dam. It also refers to where river or rivers supply/ies water to a
dam reservoir through a transbasin underground tunnel to generate
power.
(iv) Petroleum/Natural Gas. The host LGU or region is that

where the producing petroleum/natural gas reservoir is located,
as delineated by detailed geochemical, geophysical exploration
surveys.
SECTION 4. Nature of Benefits Provided under E.R. 1-94. —
(a) The Generation Company and/or energy resource

developer shall set aside one centavo per kilowatt-hour (P0.01/
kWh) of the total electricity sales as financial benefit of the host
communities of such Generation Facility, where applicable.
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(i) For a Generation Facility and/or energy resource located

in a non-highly urbanized city, the P0.01/kWh financial benefit shall
be allocated as follows:
(1) Fifty percent of one centavo per kilowatt-hour (P0.005/

kWh) of the total electricity sales shall be set aside as an electrification
fund (EF) to be applied in the following radiating order:
(a) Designated resettlement area/s;
(b) Host barangay/s;
(c) Host municipality/ies or city/ies;
(d) Host province/s;
(e) Host region/s; and
(f) Other areas as may be prioritized/determined by the

DOE.
(2) Twenty five percent of one centavo per kilowatt-hour

(P0.0025/kWh) of the total electricity sales as a development and
livelihood fund (DLF) to be applied in the following manner:
(a) Designated resettlement area/s - 5%
(b) Host barangay/s - 20%
(c) Host municipality/ies or city/ies - 35%
(d) Host province/s - 30%
(e) Host regions - 10%
In the absence of a designated resettlement area/s,

funds allocated for the resettlement shall form part of the host
barangay/s.
(3) Twenty five percent of one centavo per kilowatt-hour

(P0.0025/kWh) of the total electricity sales as a reforestation,
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watershed management, health and/or environment enhancement

fund (RWMHEEF) to be allocated in the following manner:
(c) Host municipality/ies or city/ies - 35%
(d) Host province/s - 30%
(e) Host region/s - 10%
In the absence of a designated resettlement area/s,

funds allocated for the resettlement shall form part of the host
barangay/s.
(ii) For a Generation Facility and/or energy resource located

within a highly urbanized city, the P0.01/kWh financial benefit
shall be allocated as follows:
(1) Seventy five percent of one centavo per kilowatt-

hour (P0.0075/kWh) of the total electricity sales of all Generation
Facilities located in a highly urbanized city shall be set aside into
one account as an EF to be applied in the following priority:
(a) Designated resettlement area/s;
(b) Host barangay/s;
(c) Host city/ies;
(d) Province/s nearest to the host city/ies;
(e) Region/s of the host city/ies;
(f) Host communities of other facilities with insufficient

electrification fund;
(g) Areas traversed by transmission lines and substations

or similar facilities; and
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(h) Other areas as may be prioritized/determined by the

DOE.
(2) Twelve and one-half percent of one centavo per kilowatt-

hour (P0.00125) as a DLF to be allocated in the following manner:
(c) Host city/ies - 60%
In the absence of designated resettlement area/s, funds allocated

for the resettlement shall form part of the host barangay/s.
(3) Twelve and one-half percent of one centavo per kilowatt-

hour (P0.00125) as a RWMHEEF to be allocated in the following
manner:
(c) Host city/ies - 60%
In the absence of designated resettlement area/s, funds allocated

for the resettlement shall form part of the host barangay/s.
(iii) In case of integrated hydroelectric generation projects

with cascading Generation Facilities, where the Generation Facilities
and energy resource are located in different municipalities/cities or
provinces, irrespective of its location, whether located in a highly
urbanized city or non-highly urbanized city, allocation of financial
benefits shall follow Section 4(a)(i), hereof. The host communities of
the Generation Facilities and energy resource development projects
shall equally divide said financial benefits. The host municipality/
city of the Generation Facility adjacent to the energy resource shall
in no case be a host to both said Generation Facility and energy
resource.
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(b) All interest earnings from EF, DLF, RWMHEEF shall be

set aside into one trust account to be utilized for the electrification
projects of the communities in the following order of priority:
(i) Direct host barangay/s, and host municipality/ies or city/

ies with insufficient accrued EF;
(ii) Areas traversed by transmission lines, and sub-stations

or similar facilities;
(iii) Areas not directly connected to the Grid or national

transmission system which include isolated or remote communities;
and
(iv) Other areas as may be prioritized/determined by the

DOE.
(c) The financial assistance advanced by the Generation

Company and energy resource developer during its pre-operation
stage or before the start of the commercial operations for the purpose
of securing favorable endorsement from the community and people
affected, after Republic Act 7638 (DOE Law) has become effective or
pursuant to this Rule, shall be credited by the Generation Company,
energy resource developer or their successors-in-interest against
the accrued financial benefits based on the following criteria:
(i) The projects to be funded under the advance financial

assistance should be approved by the DOE consistent with E.R.
1-94.
(ii) The total financial assistance to be amortized at a rate

of twenty percent (20%) from the accrued financial benefits shall be
based on the actual amount spent for the project/s validated by the
DOE.
(iii) Amortization of financial assistance shall commence

from the next quarter billing, after the DOE has issued a validated
report on the actual amount spent for the project/s.
SECTION 5. Establishment of Trust Accounts. —
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The DOE shall establish trust accounts specific for EF, DLF,
RWMHEEF in the name of the DOE and the Generation Facilities
or Generation Company and/or energy resource developer. For
purposes of said establishment, the Generation Company and/or
energy resource developer shall submit a report that contains the
following data:
(a) Actual generation, station/own service use, system loss,

and electricity sales in kilowatt-hour;
(b) Accrued benefits due to the host LGU and host region
derived from Section 5(a) hereof;
(c) Details of benefits and/or financial assistance advanced

to the host LGU and host region, if any; and
(d) Such other information, which the DOE may deem

necessary for review and audit purposes.
SECTION 6. Project Implementation and Approval. —
The evaluation and approval of project proposals/work

programs endorsed by the host LGU and host region through the
Generation Company and/or energy resource developer shall strictly
be guided by the following procedures:
(a) The Generation Company and/or energy resource

developer, through its designated Community Relations Officer
(COMREL) shall assist the host LGU and host region in the
preparation of annual work programs/project proposals qualified
by the DOE to be implemented in any given year. The amount of
financial benefits accruing to the pertinent funds in the immediate
preceding year shall be used as basis in the preparation of annual
work programs/project proposals. The said annual work programs/
project proposals shall be submitted by the Generation Company
and/or energy resource developer to the DOE not later than March
15 of every year.
(b) All work programs/project proposals for DLF and

RWMHEEF shall be implemented within one (1) year upon receipt of
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funds. Said work programs/project proposals shall be implemented,

supervised and administered by the concerned LGU.
(c) The Generation Company and/or energy resource

developer shall review the work programs/project proposals on
development, livelihood, reforestation, watershed management,
health and/or environment enhancement duly endorsed by the host
LGU and host region through a resolution passed by its Sanggunian
or Regional Development Council. In the case of official resettlement
area, work programs/project proposals may be endorsed by the
resettlement organization, association or cooperative duly certified
by the Generation Company and/or energy resource developer
and registered under the concerned government agencies. The
Generation Company and/or energy resource developer shall make
the appropriate endorsement of annual work programs/project
proposals to the DOE for further review and approval. The review
and approval of annual work programs/project proposals shall be
completed by DOE within twenty (20) working days upon receipt of
complete documentation. Thereafter, project implementation shall
proceed as prescribed under Sub-section (f)(i), hereof.
(d) For reforestation and watershed management projects,

work programs/project proposals should be coordinated and endorsed
by the DENR Regional Office or the watershed management
administrator in the area.
(e) For electrification programs, the Generation Company

and/or energy resource developer shall coordinate with the
concerned Distribution Utility in the development of said program
for the barangays energization and prioritization in any given year.
The annual electrification programs shall be directly forwarded to
DOE for review and evaluation. The NEA shall assist the ECs in
the preparation of documents such as but not limited to the staking
sheets or single line diagrams and cost estimates. Thereafter, project
implementation shall proceed as prescribed under Sub-section (f)
(ii), hereof. The electrification projects may be undertaken by the
Distribution Utility or the Generation Company and/or energy
resource developer or their accredited contractors, herein referred
to as project implementor.
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(f) Upon submission of complete documents of the work

programs/project proposals, project implementation shall proceed
in any of the following manner:
(i) For development, livelihood, reforestation, watershed

management, health and/or environment enhancement projects,
a Memorandum of Agreement (MOA) shall be entered into by and
among the DOE, Generation Company and/or energy resource
developer, and the concerned LGU to effect funds commitment and
project implementation. The DOE shall then make the necessary
fund allocation and shall forthwith release the project funds directly
to the concerned host LGU or host region within fifteen (15)
days upon submission of complete supporting documents pursuant
to the provisions in the MOA.
(ii) For electrification projects, a MOA shall be entered

into by and among the DOE, the concerned Distribution Utility/
project implementor, Generation Company and/or energy resource
developer to effect funds commitment and project implementation.
The DOE shall then make the necessary fund allocation and shall
forthwith release the funds to the franchised Distribution Utility/
project implementor within fifteen (15) days upon submission of
complete supporting documents pursuant to the provisions in the
MOA.
For projects to be undertaken by contract, initial release of

fund shall be equivalent to fifteen percent (15%) of the total approved
project cost. Subsequent release of fund balance shall be based on
the result of qualified lowest bid cost.
For projects to be undertaken by administration, total

approved project cost shall be released upon signing of the MOA.
(g) All funds disbursements shall follow government

accounting and auditing rules and regulations.
SECTION 7. Administration of Trust Accounts. —
(a) The administration of EF, DLF, RWMHEEF shall

be undertaken by the DOE. All funds administered by NPC with
regard to DLF and RWMHEEF shall be transferred to DOE for
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administration within one hundred twenty (120) days from the

effectivity of these Rules. Thereafter, all MOA entered into by DOE
and NPC on the establishment of trust accounts shall be amended
to reflect transfer of responsibilities to NPC successors, transferees
and/or assignees or IPPs.
(b) The obligation of the Generation Companies to DOE with

regard to the remittance of funds shall be settled in the following
manner:
(i) For NPC-IPPs, if applicable, to settle all obligations

before issuance of COC/registration certificate by ERC.
(ii) For NPC, if applicable, to settle all obligations before

Privatization/sale and transfer of IPP contracts to PSALM.
(iii) For IPPs of Distribution Utilities with an outstanding

financial obligation with the DOE pursuant to Department Circular
No. 2000-03-03 shall settle its account within one (1) year upon
effectivity of these Rules.
(iv) After thorough investigation, non-remittance of the

Generation Company and/or energy resource developer of the
financial benefits due to the host communities shall be a ground for
DOE's recommendation to ERC for appropriate action and reasonable
measures in accordance with ERC rules and regulations.
SECTION 8. Audit of Financial Benefits and Project

Monitoring. —
(a) The DOE shall review and audit the source of fund,
particularly on the total electricity sales of the Generation Facility
to determine the financial benefits due to the host LGUs and host
regions.
(b) The DOE shall conduct financial and technical audit

to monitor compliance by the LGU and region with regard to
the implementation of the projects. In the event of unjustified
disbursement of fund and non-completion or delay in the
implementation of projects by the LGU or region concerned and
the Distribution Utility/project implementor, the DOE shall defer
2127
the releases of funds and take appropriate reasonable measures

in accordance with any existing and future government rules and
regulations until such time that the LGU or region and franchised
Distribution Utility/project implementor would be able to justify
disbursement of funds to the satisfaction of the DOE or deputized/
resident auditor of the Commission on Audit (COA).
SECTION 9. Other Provisions. —
(a) The application of this Rule 27(A) shall take effect upon
effectivity of these Rules.
(b) Any provision in E.R. 1-94, its amendments and other

related issuances and their amendments that are inconsistent
with these Rules are hereby superseded, modified or amended
accordingly.
B. Rules for the Benefits to Host Communities Pursuant to

Chapter II, Sections 289 to 294 of the Local Government Code
The LGUs hosting the national wealth shall have an equitable

share in the proceeds derived from the utilization and development
of national wealth, including sharing the same with the inhabitants
by way of direct benefits.
SECTION 2. Amount of Share of Local Government Units. —
Any government agency or government-owned or controlled

corporation and private corporation or entities engaged in the
utilization and development of the national wealth are required
to provide share to the host LGUs, based on the preceding fiscal
year of the proceeds, based on the following formula, whichever will
produce a share higher for the LGU:
(a) One percent (1%) of the gross sales or receipts of the

preceding calendar year; or
(b) Forty percent (40%) of the national wealth taxes,

royalties, fees or charges derived by the government agency or
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government-owned and controlled corporation and privately-owned

corporation or entities.
SECTION 3. Nature of Benefits. —
(a) Eighty percent (80%) of the proceeds shall be applied

solely to lower the cost of electricity either through subsidy or non-
subsidy scheme or combination of both.
(i) Non-subsidy scheme may take the form but not limited to
electrification, technical upgrading and rehabilitation of distribution
lines to reduce electricity losses, use of energy saving devices, and
support of the infrastructure facilities servicing the needs of the
public which can all redound to the reduction of the electricity rate
of the area.
(ii) Subsidy scheme will be directly utilized to subsidize cost

of power used by the consumers. This may be applied with or without
ceiling or at graduated rates (per kWh per level of consumption) in
the following form which the host LGU may choose from.
(1) Subsidy per customer, an equal or predetermined level

or rate of subsidy per qualified customer:
(a) All consumer types;
(b) Residential consumer only; and
(c) Other preferred types of consumer combinations, such

as: commercial, industrial, public buildings, irrigation/communal
water system, streetlights, etc.
(2) Subsidy of power consumption, which amount of subsidy

depends on the magnitude of power consumption of qualified
consumers:
(a) All consumer types;
(b) Residential consumer only; and
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(c) Other preferred types of consumer combinations, such

as, commercial, industrial, public buildings, irrigation/communal
water system, streetlights, etc.
(b) Twenty percent (20%) of the proceeds shall be utilized for

the development and livelihood projects which shall be appropriated
by their respective Sanggunian.
SECTION 4. Allocation of Shares. —
The amount of share of the LGUs shall be distributed in the

following manner:
(a) For energy resource located in the province, share shall

be appropriated as follows:
(i) Host barangay - 35%
(ii) Host component city/municipality - 45%
(iii) Host province - 20%
(b) For energy resource located in a highly urbanized

or independent component city, share shall be appropriated as
follows:
(i) Host barangay - 35%
(ii) Host city - 65%
(c) For energy resource located in two (2) or more provinces,

or in two (2) or more municipalities/cities or two (2) or more
barangays, their respective shares shall be appropriated on the
basis of the following:
(i) population - seventy percent (70%); and
(ii) land area - thirty percent (30%)
Where the land area is the area of the host barangays found
within the technically delineated energy resource area and where the
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population refers to the population of host barangays found wholly

or partially within the technically delineated energy resource.
SECTION 5. Monitoring. —
(a) The Department of Interior and Local Government

(DILG) shall monitor the compliance of host LGUs. To assist in
the monitoring of compliance, all host LGUs of energy projects are
required to submit the following:
(i) The scheme of electricity rate reduction adopted by the

host LGU (with proper documentation) based on the prescription in
the DILG-DOE Joint Circular 95-01 dated 31 October 1995 at the
start of the use of fund or upon the amendment of scheme by the
respective LGU councils; and
(ii) Summary of transactions thirty (30) days after end of

each quarter.
The DILG shall furnish the DOE the above information within
fifteen (15) days from the date of the reporting period.
(b) The COA shall conduct yearly audit of the national

wealth proceeds consistent with its responsibility to examine all
accounts pertaining to uses of funds and property owned or held in
trust by the government or any of its agencies as mandated under
Section 2 of Presidential Decree No. 1445 of 1976.
(c) In the event of violation or non-compliance with the

provisions of the DILG-DOE Joint Circulars 95-01 and 98-01, and
other relevant issuances, the DILG may, upon prior notice and
hearing, order the project proponent the non-remittance of the
royalty payment to the host LGU concerned pending completion of
the investigation of the concerned LGU if the project proponent is
a GOCC; or notify the DBM regarding such violation and order the
non-release of the LGU shares if the project proponent is a private
company. The unremitted funds shall be deposited in a government
bank under escrow.
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RULE 30
NPC Offer of Transition Supply Contracts
Pursuant to Section 67 of the Act, NPC shall, within six (6)

months from the effectivity of the Act, file with the ERC for its
approval the transition supply contracts (TSCs) duly negotiated
with the Distribution Utilities.
This Rule shall apply to all Distribution Utilities.
SECTION 3. Terms and Conditions of the TSCs. —
(a) The TSCs shall contain the terms and conditions of supply
and a corresponding schedule of rates, consistent with the provision
of the Act, including adjustments and/or indexation formulas which
shall apply during the term of such contracts.
(b) The term of the TSCs shall not extend beyond one (1)
year from the introduction of Open Access.
(c) Such contracts shall be based on the projected demand

of the Distribution Utilities less any of their currently committed
quantities under eligible contracts, if any, as defined in Section 33
of the Act.
(d) The total generation capacity of such signed TSCs shall

not exceed the level of NPC owned, controlled, or committed capacity
as of the effectivity of the Act.
(e) The TSCs shall be assignable to the NPC successor

Generation Companies.
(f) Notwithstanding the provisions of Section 25 of the

Act, the rates charged by a Distribution Utility for the generation
component of the Supply of Electricity in the Retail Rate shall, for the
term of the TSCs, not exceed the TSC rates, as updated monthly.
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(g) The recovery of costs incurred by a Distribution Utility

for any generation component in excess of the TSC rates shall be
disallowed by the ERC except for eligible contracts and mandated
purchases from the WESM.
(h) The limitation on the recovery of generation component

costs by a Distribution Utility shall apply only to the equivalent
quality and quantity of electricity still available to the Distribution
Utility from NPC.
SECTION 4. TSCs Approval and Monitoring. —
(a) Within six (6) months from the date of submission of the
TSC by the NPC, the ERC shall notify NPC of their approval of the
rates contained therein.
(b) The ERC shall maintain a record of the contract terms

and rates offered by NPC.
(c) The ERC shall update monthly the rates using the
appropriate adjustment and/or indexation formula.
SECTION 5. Recovery of Generation Component by

Distribution Utility. —
Notwithstanding the provisions of Section 25 of the Act, the

rates charged by a Distribution Utility for the generation component
of the Supply of Electricity in its Retail Rates shall, for the term of
the TSC, not exceed the generation component of the TSC rates, as
updated monthly.
(a) Recovery of cost incurred by a Distribution Utility for

any generation component in excess of the TSC rates shall not
be allowed, except for eligible contracts approved by the ERC for
the recovery of Stranded Contract Costs of Eligible Contracts
of Distribution Utilities as provided in Section 33 of the Act and
mandated purchases from the WESM.
(b) The limitation on the recovery of generation component

costs by a Distribution Utility shall apply only to the equivalent
quality and quantity of electricity still available to the Distribution
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Utility from NPC. For purposes of the determination of equivalent

quality and quantity of electricity, the ERC shall consider, among
others, firm and non-firm capacities, standards specified in the
Grid and Distribution Codes, and other similar criteria as may be
determined by the ERC.
RULE 31
Debts of Electric Cooperatives (ECs)
Pursuant to Section 60 of the Act, all outstanding financial

obligations of ECs to NEA and other government agencies incurred
for the purpose of financing the Rural Electrification Program shall
be assumed by the PSALM in accordance with the program approved
by the President of the Philippines.
SECTION 2. Scope. —
This Rule shall cover all outstanding financial obligations

by the ECs to NEA and other government agencies, incurred as of
26 June 2001 for the purpose of financing the Rural Electrification
Program.
Financial obligation shall refer to the indebtedness, whether

through regular or restructured loans, liabilities, or amounts payable
by the ECs to NEA and other government agencies as of 26 June
2001, to finance their rural electrification projects, subject to the
terms and conditions of duly-executed loan and mortgage contracts
between NEA and/or other government agencies, as creditors and
the ECs, as debtors/borrowers.
SECTION 3. Condonation of Debts of ECs. —
From the effectivity of the Act, all outstanding financial

obligations of ECs to NEA and other government agencies incurred
for the purpose of financing the Rural Electrification Program shall
be assumed by the PSALM in accordance with the program approved
by the President of the Philippines within one (1) year from the
effectivity of the Act which shall be implemented and completed
within three (3) years from the effectivity of the Act.
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These debts shall include all outstanding financial obligations

incurred by the ECs for the purpose of financing the Rural
Electrification Program, exclusively utilized for capital expenditures
for the acquisition or construction, operation and maintenance,
and/or expansion and rehabilitation of distribution, generation and
Subtransmission Assets/facilities and pre-operating expenses for
newly- established ECs: Provided, however, That such outstanding
financial obligations shall include interest, surcharges and penalties
on ECs' Rural Electrification Loans, released from NEA and other
government agencies to ECs as of 26 June 2001; duly booked by
NEA, validated by COA, and confirmed by the ECs.
SECTION 4. Assumption of EC Loans by PSALM. —
PSALM shall assume all outstanding financial obligations

of the ECs to NEA and other government agencies incurred for
the purpose of financing the Rural Electrification Program; such
outstanding financial obligations of the ECs involving "Rural
Electrification Loans" shall be determined in accordance with
the program approved by the President of the Philippines.
Correspondingly, having assumed the ECs' obligations, the PSALM
shall repay NEA and the other government agencies, in accordance
with a prescribed amortization schedule agreed between the
parties.
The outstanding financial obligations from other government

agencies referred to in Section 60 of the Act shall include loans
contracted from the following:
(a) Development Bank of the Philippines (DBP);
(b) Land Bank of the Philippines (LBP);
(c) Asset Privatization Trust (APT) now Privatization and

Management Office (PMO);
(d) NPC, for loans on taken-over systems, excluding power

bills;
(e) DOE; and
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(f) LGUs.
Provided, however, That such loans were contracted in

accordance with NEA policies and with prior NEA authorization,
except for loans transferred to APT, now PMO.
SECTION 5. Transfer of Ownership or Control of Assets,

Franchise or Operation. —
Within five (5) years from the completed Condonation

of debt, any EC which shall transfer ownership or Control of its
assets, franchise or operations shall repay PSALM the total debts,
including accrued interest thereon: Provided, however, That the
ECs may enter into loan or financing agreements to allow flexibility
in sourcing funds and improvement and management system for
needed rehabilitation and modernization programs: Provided,
further, That it does not involve permanent transfer or Control of
the assets, franchise and operations: Provided, finally, That DOF
and NEA shall jointly issue the necessary guidelines to protect the
member-consumers of the ECs involved.
SECTION 6. Reduction in ECs' Rates. —
The ERC shall ensure a reduction in the rates of ECs

commensurate with the resulting savings due to the removal of the
amortization payments of their loans and for this purpose, NEA
shall assist the ECs in their rate formulation consistent with the
program approved by the President of the Philippines.
Nothing in this Rule however, shall mean that ECs are not
obliged to pay the NEA with respect to all outstanding financial
obligations assumed by PSALM, if the amortization cost component
of the EC's tariff is still collected from the consumers.
SECTION 7. Reporting, Accounting and Audit

Procedures. —
NEA shall have the responsibility for the accounting of all

outstanding financial obligations of ECs from NEA that will be
assumed by PSALM. Thereafter, NEA shall render reports and
submit the same to PSALM.
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PSALM shall have the right to conduct final audit of all the
outstanding financial obligations of ECs in accordance with existing
accounting and auditing rules and regulations, before the same can
be considered for final assumption. Likewise, PSALM shall submit
annual progress reports to the DOF on the status of ECs' loans that
were assumed and subsequently condoned.
RULE 32
Fiscal Prudence
(a) Pursuant to Section 64 of the Act, the creation of new

positions and the levels of or increases in salaries and all other
emoluments and benefits of TRANSCO and PSALM personnel shall
be subject to the approval of the President of the Philippines.
(b) Likewise, the compensation and all other emoluments

and benefits of the officials and members of the Board of TRANSCO
and PSALM shall be subject to the approval of the President of the
Philippines.
RULE 33
Separation Benefits
SECTION 1. General Statement on Coverage. —
This Rule shall apply to all employees in the National

Government service as of 26 June 2001 regardless of position,
designation or status, who are displaced or separated from the
service as a result of the Restructuring of the electricity industry
and Privatization of NPC assets: Provided, however, That the
coverage for casual or contractual employees shall be limited to
those whose appointments were approved or attested by the Civil
Service Commission (CSC).
This Rule shall apply to affected personnel of DOE, ERB, NEA

and NPC.
SECTION 3. Separation and Other Benefits. —
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(a) The separation benefit shall consist of either a separation

pay and other benefits granted in accordance with existing laws,
rules and regulations or a separation plan equivalent to one and
one half (1-1/2) months' salary for every year of service in the
government, whichever is higher: Provided, That the separated or
displaced employee has rendered at least one (1) year of service at
the time of effectivity of the Act.
(b) The following shall govern the application of Section 3(a)

of this Rule:
(i) With respect to NPC officials and employees, they

shall be considered legally terminated and shall be entitled to the
benefits or separation pay provided in Section 3(a) herein when the
restructuring plan as approved by the NPC Board shall have been
implemented.
(ii) With respect to NEA officials and employees, they

shall be considered legally terminated and shall be entitled to the
benefits or separation pay provided in Section 3(a) herein when a
restructuring of NEA is implemented pursuant to a law enacted by
Congress or pursuant to Section 5(a)(5) of Presidential Decree No.
269.
(iii) With respect to the affected Bureaus of the DOE, their

officials and employees shall be considered legally terminated
and shall be entitled to the benefits or separation pay provided in
Section 3(a) herein when the re-organizational plan shall have been
implemented as a result of the Restructuring of the electric power
industry.
(c) The governing board or authority of the entities

enumerated in Section 3(b) hereof shall have the sole prerogative
to hire the separated employees as new employees who start their
service anew for such positions and for such compensation as may be
determined by such board or authority pursuant to its restructuring
program. Those who avail of the foregoing privileges shall start their
government service anew if absorbed by any government agency or
any government-owned successor company.
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(d) In no case shall there be any diminution of benefits

under the separation plan until the full implementation of the
Restructuring of the electric power industry and the Privatization
of NPC assets in accordance with the approved Restructuring and
Privatization schedule.
(e) For this purpose, "Salary," as a rule, refers to the basic pay
including the thirteenth (13th) month pay received by an employee
pursuant to his appointment, excluding per diems, bonuses, overtime
pay, honoraria, allowances and any other emoluments received in
addition to the basic pay under existing laws.
(f) Likewise, "Separation" or "Displacement" refers to the

severance of employment of any official or employee, who is neither
qualified under existing laws, rules and regulations nor has opted
to retire under existing laws, as a result of the Restructuring of the
electric power industry or Privatization of NPC assets pursuant to
the Act.
SECTION 4. Funding. —
Funds necessary to cover the separation pay under this Rule

shall be provided either by the Government Service Insurance
System (GSIS) or from the corporate funds of the NEA or the NPC,
as the case may be; and in the case of the DOE and the ERB, by the
GSIS or from the general fund, as the case may be.
The Buyer or Concessionaire or the successor company shall

not be liable for the payment of the separation pay.
SECTION 5. Preferential Rights of Employees. —
Displaced or separated personnel as a result of the

Restructuring of the electric power industry and Privatization of
NPC assets shall be given preference in the hiring of manpower
requirements of the newly-created offices or the privatized
companies: Provided, That the displaced or separated personnel
meet the prescribed qualifications. With respect to employees who
are not retained by NPC, the government, through the Department
of Labor and Employment (DOLE), shall endeavor to implement re-
training; job counselling, and job placement programs.
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SECTION 6. Implementation. —
The DOE, NEA, and NPC, shall issue guidelines applicable

to their respective employees to implement this Rule within ninety
(90) days from effectivity of these Rules: Provided, That in the case
of ERC, the independent quasi-judicial body created under the Act,
the manner of, and timetable for, implementation of its organization
shall be governed by Section 38 and Section 39 of the Act.
RULE 34
Education and Protection of End-Users
Consistent with the declared policy that the State shall

protect the public interest as it is affected by the rates and services
of electric utilities and other providers of electric power, and
pursuant to Section 76 of the Act, the public shall be educated on
the Restructuring of the electric power industry and Privatization
of NPC.
SECTION 2. Consumer Education. —
The DOE shall undertake, in coordination with the ERC,

NPC, NEA and the Department of Education (DepEd), DTI, Office
of the Press Secretary (OPS) — Philippine Information Agency
(PIA), the academe, and the non-government organizations and
consumer groups or associations, continuing information, education
and communication program for consumers. This shall include, but
not be limited to, the following:
(a) Industry Restructuring and NPC Privatization;
(b) Implementation of Retail Competition and Open Access

and their impact on End-users and on the proper use of electric power.
It shall include the existence of competitive electricity suppliers,
choice of competitive electricity services, regulated transmission
and distribution services, systems reliability, aggregation, market,
itemized billing, Stranded Cost, uniform disclosure requirements,
low income bill payment, energy conservation and safety measures,
among other topics; and
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(c) Implementation of these Rules.
SECTION 3. Consumer Protection. —
The ERC shall ensure consumer choice and promote consumer

interests. It shall issue the appropriate guidelines and mechanisms
to handle the following:
(a) Speedy resolution of consumer complaints;
(b) Creation of a permanent consumer complaint desk at

ERC and in all electric utilities and other providers of electric power
to oversee the promotion of consumer interests; and
(c) Dissemination of rate-related resolutions, including

posting in the ERC website and the publication of all notices
of hearings to be conducted by the ERC for the purpose of fixing
rates or fees at least twice for two (2) successive weeks in two (2)
newspapers of nationwide circulation.
RULE 35
Fines and Penalties
Pursuant to Section 46 of the Act, the following are the fines

and penalties:
(a) The fines and penalties that shall be imposed by the ERC
for any violation of or non-compliance with the Act or these Rules
shall range from a minimum of Fifty Thousand Pesos (P50,000.00)
to a maximum of Fifty Million Pesos (P50,000,000.00).
(b) Any Person who is found guilty of any of the prohibited

acts pursuant to Section 45 of the Act shall suffer the penalty
of prision mayor and a fine ranging from Ten Thousand Pesos
(P10,000.00) to Ten Million Pesos (P10,000,000.00), or both, at the
discretion of the court.
(c) The members of the Board of Directors of the

juridical companies participating in or covered in the Generation
Companies, the Distribution Utilities, the TRANSCO or its Buyer
or Concessionaire or Supplier who violate the provisions of the Act
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may be fined by an amount not exceeding double the amount of

damages caused by the offender or by imprisonment from one (1)
year or two (2) years or both at the discretion of the court. This Rule
shall apply to the members of the Board who knowingly or by neglect
allows the commission or omission under the law.
(d) If the offender is a government official or employee,

he shall, in addition, be dismissed from the government service
with prejudice to reinstatement and with perpetual or temporary
disqualification from holding any elective or appointive office.
(e) If the offender is an alien, he may, in addition to the

penalties prescribed, be deported without further proceedings after
service of sentence.
(f) Any case which involves question of fact shall be

appealable to the Court of Appeals and those which involve question
of law shall be directly appealable to the Supreme Court.
(g) The administrative sanction that may be imposed by the

ERC shall be without prejudice to the filing of a criminal action, if
warranted.
(h) To ensure compliance with the Act, the penalty of prision

correccional or a fine ranging from Five Thousand Pesos (P5,000.00)
to Five Million Pesos (P5,000,000.00), or both, at the discretion of
the court, shall be imposed on any Person, including, but not limited
to, the president, member of the board, chief executive officer or
chief operating officer of the corporation, partnership, or any other
entity involved, found guilty of violating or refusing to comply with
any provision of the Act or these Rules, other than those provided
herein. (Sec. 46 Par. 8
(i) Any party to an administrative proceeding may, at any

time, make an offer to the ERC, conditionally or otherwise, for a
consented decree, voluntary compliance or desistance and other
settlement of the case. The offer and any or all of the ultimate facts
upon which the offer is based shall be considered for settlement
purposes only and shall not be used as evidence against any
party for any other purpose and shall not constitute an admission
by the party making the offer of any violation of the laws, rules,
2142
regulations, orders and resolutions of the ERC, nor as a waiver to

file any warranted criminal actions.
(j) In addition, Congress may, upon recommendation of the

DOE and/or ERC, revoke such franchise or privilege granted to the
party who violated the provisions of the Act.
PART VI
Final Provisions
RULE 36
Separability Clause
Should any provision herein be subsequently declared

unconstitutional, the same shall not affect the validity or the legality
of the other provisions.
RULE 37
Effectivity
These Rules shall take effect on the fifteenth (15th) day from
the date of its publication in the Official Gazette or in at least two
(2) newspapers of general circulation.
Approved February 27, 2002, Fort Bonifacio, Taguig, Metro

Manila by the Joint Congressional Power Commission.
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AN ACT TO DIRECT THE USE OF BIOFUELS, ESTABLISHING

FOR THIS PURPOSE THE BIOFUEL PROGRA M,
APPROPRIATING FUNDS THEREFOR, AND FOR OTHER
PURPOSES

SECTION 1. Short Title - This act shall be known as the

"Biofuels Act of 2006".
SEC. 2. Declaration of Policy - It is hereby declared the policy

of the State to reduce dependence on imported fuels with due regard
to the protection of public health, the environment, and the natural
ecosystems consistent with the country's sustainable economic
growth that would expand opportunities for livelihood by mandating
the use of biofuels as a measure to:
a) Develop and utilize indigenous renewable and

sustainably-sourced clean energy sources to reduce dependence on
imported oil.
b) Mitigate toxic and greenhouse gas (GSG) emissions;
c) increase rural employment and income; and
d) Ensure the availability of alternative and renewable

clean energy without any detriment to the natural ecosystem,
biodiversity and food reserves of the country.
SEC. 3. Definition of terms - As used in this act, the following

term shall be taken to means as follows:
a) AFTA - shall refer to the ASIAN free trade agreement

initiated by the Association of South East Asian Nation;
b) Alternative Fuel Vehicles/Engines - shall refer to vehicle/

engines that use alternative fuels such as biodiesel, bioethanol,
2144
natural gas, electricity, hydrogen and automotive LPG instead of

gasoline and diesel;
c) Bioethanol fuel - shall refer to ethanol (C2H3OH) produce

from feedback and other biomass.
d) Biodiesel - shall refer to Fatty Acid Methyl Ester (FAME)

or mono-alkyl ester delivered from vegetable oils, or animal fats
and other biomass-derived oils that shall be technically proven
and approved by the DOE for use in diesel engines, with quality
specifications in accordance with the Philippine National Standards
(PNS)
e) Bioethanol fuel - shall refer to the hydrous and anhydrous

bioethanol suitably denatured for use as motor fuel with quality
specifications in accordance with the PNS;
f) Biofuel - shall refer to the bioethanol and biodiesel and

other fuels made from biomass and primary used for motive, thermal
and power generation, with quality specifications in accordance with
PNS;
g) Biomass - shall refer to any organic matter, particularly

cellulosic or ligno-cellulosic matter, which is available on a renewable
or recurring basis, including trees, crops and associated residues,
plant fiber, poultry litter and other animal wastes, industrial wastes
and biodegradable component of solid waste;
h) DA - shall refer to the Department of Agriculture created

under Executive Order No. 116, as amended;
i) Diesel - shall refer to the refined petroleum distillate,

which may contain small amount of hydrocarbon or non-hydrocarbon
additives to improve ignition quality or other characteristic, suitable
for compression ignition engine and other suitable types of engines
with quality specifications in accordance with the PNS;
j) DENR - shall refer to the Department of Environment and

Natural Resources created under Executive No. 192, as amended;
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k) DOE - shall refer to the Department of Energy created

under Republic Act No. 7638, as amended;
l) DOLE - shall refer to the Department of Labor and

Employment created under Executive Order No. 126, as amended;
m) DOF - shall refer to the Department of Finance created

under Administrative Orders No. 127 and 127-A;
n) DOST - shall refer to the Department of Science and

Technology created under Republic Act No. 2067
o) DOTC - shall refer to the Department of Transportation

and Communication created under Executive Order No. 125-A, as
amended;
p) DTI - shall refer to the Department of Trade and Industry

created under Executive Order No. 133;
q) Feedstock - shall refer to the organic sources such as

molasses, sugarcane, cassava, coconut, jatropha, sweet sorghum or
other biomass used in the production of biofuels;
r) Gasoline – shall refer to volatile mixture of liquid

hydrocarbon, generally containing small amounts of additives
suitable for use as fuel in spark-ignition internal combustion engines
with quality specifications in accordance with the PNS;
s) Motor fuel - shall refer to all volatile and inflammable

liquids and gas produced, blended or compounded for the purpose
of, or which are suitable or practicable for, operating motor vehicle;
t) MTBE - shall refer to Methyl Tertiary Butyl Ether;
u) NBB or Board - shall refer to the National Biofuel Board

created under Section 8 of this Act ;
v) Oil Company - shall refer to any entity that distributes

and sells petroleum fuel products;
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w) Oxygenate - shall refer to substances, which, when added

to gasoline, increase the amount of oxygen in that gasoline blend;
x) PNS – shall refer to the Philippine National Standard;

consistent with section 26 of R.A. No. 8749 otherwise known as the
'Philippine Clean Air Act of 1999;
y) Renewable Energy Sources - shall refer to energy sources

that do not have an upper limit on the total quantity to be used.
Such resources are renewable on a regular basis; and
z) WTO - shall refer to the World Trade Organization.
SEC. 4. Phasing Out of the Use of Harmful Gasoline Additives

and/or Oxygenates. – Within six months from affectivity of this Act,
the DOE, according to duly accepted international standards, shall
gradually phase out the use of harmful gasoline additives such as,
but not limited to MTBE.
SEC. 5. Mandatory Use of Biofuels. – Pursuant to the above

policy, it is hereby mandated that all liquid fuels for motors and
engines sold in the Philippines shall contain locally-sourced biofuels
components as follows:
5.1 Within two years from the effectivity of this Act, at least
five percent (5%) bioethanol shall comprise the annual total volume
of gasoline fuel actually sold and distributed by each and every oil
company in the country; subject to requirement that all bioethanol
blended gasoline shall contain a minimum of five percent (5%)
bioethanol fuel by volume Provided, that the ethanol blend conforms
to PNS.
5.2 Within four years from the effectivity of this Act, the NBB
created under this Act is empowered to determine the feasibility
and thereafter recommend to DOE to mandate a minimum of ten
percent (10%) blend of bioethanol by volume into all gasoline fuel
distributed and sold by each and every oil company in the country.
In the event of supply shortage of locally-produced bioethanol

during the four–year period, oil companies shall be allowed to
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import bioethanol but only to the extent of the shortage as may be

determined by NBB.
5.3 Within three months from the effectivity of this Act, a

minimum of one percent (1%) biodiesel by volume shall be blended
into all diesel engine fuels sold in the country: Provided, That the
biodiesel blend conforms to PNS for biodiesel.
Within two years from the effectivity of this Act, the NBB
created under this Act is empowered to determine the feasibility
and thereafter recommend to DOE to mandate a minimum of two
percent (2%) blend of biodiesel by volume which may be increased
taking into account considerations including but not limited
to domestic supply and availability of locally-sourced biodiesel
component.
SEC. 6. Incentive Scheme – To encourage investments in the

production, distribution and use of locally-produced biofuels at
and above the minimum mandated blends, and without prejudice
to enjoying applicable incentives and benefits under existing laws,
rules and regulations, the following additional incentives are hereby
provided under this Act.
a) Specific tax
The specific tax on local or imported biofuels component,

per liter of volume shall be zero (0). The gasoline and diesel fuel
component, shall remain subject to the prevailing specific tax rate.
b) Value Added Tax
The sale of raw material used in the production of biofuels

such as, but not limited to, coconut, jatropha, sugarcane, cassava,
corn, and sweet sorghum shall be exempt from the value added
tax.
c) Water Effluents
All water effluents, such as but not limited to distillery slops

from the production of biofuels used as liquid fertilizer and for other
2148
agricultural purposes are considered "reuse", and are therefore,

exempt from wastewater charges under the system provided under
section 13 of R.A No. 9275, also known as the Philippine Clean
Water Act: Provided, however, That such application shall be in
accordance with the guidelines issued pursuant to R.A. No. 9275,
subject to the monitoring and evaluation by DENR and approved
by DA.
d) Financial Assistance
Government financial institutions, such as the Development

Bank of the Philippines, Land Bank of the Philippines, Quedancor
and other government institutions providing financial services shall,
in accordance with and to the extent by the enabling provisions of
their respective charters or applicable laws, accord high priority
to extend financing to Filipino citizens or entities, at least sixty
percent (60%) of the capital stock of which belongs to citizens of
the Philippines that shall engage in activities involving production
storage, handling and transport of biofuel feedstock, including the
blending of biofuels with petroleum, as certified by the DOE.
SEC. 7. Powers and Functions of the DOE. – In addition to

its existing powers and functions, the DOE is hereby mandated to
take appropriate and necessary actions to implement the provisions
of this Act. In pursuance thereof, it shall within three months from
effectivity of this Act:
a) Formulate the implementing rules and regulations

under Section 15 of this Act;
b) Prepare the Philippines Biofuel program consistent with

the Philippine Energy Plan and taking into consideration the DOE's
existing biofuels program;
c) Establish technical fuel quality standards for biofuels

and biofuel-blended gasoline and diesel which comply with the
PNS.
d) Establish guidelines for the transport, storage and

handling of biofuels;
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e) Impose fines and penalties against persons or entities

found to have committed any of the prohibited acts under Section 12
(b) to (e) of this Act;
f) Stop the sale of biofuels and biofuel-blended gasoline and

diesel that are not in conformity with the specifications provided for
under Section 5 of this Act, the PNS and corresponding issuances of
the Department; and
g) Conduct an information campaign to promote the use of

biofuels.
SEC. 8. Creation of the National Biofuel Board (NBB) – The

National Biofuel Board is hereby created. It shall be composed of
the Secretary of the DOE as chairman and the Secretaries of the
DTI, DOST, DA, DOF, DOLE, and the Administrators of the PCA,
and the SRA, as members.
The DOE Secretary, in his capacity as Chairperson, shall,

within one month from the effectivity of this Act, convene the
NBB.
The Board shall be assisted by a Technical Secretariat

attached to the Office of the Secretary of the DOE. It shall be headed
by a Director to be appointed by the Board. The number of staff of
the Technical Secretariat and the corresponding positions shall be
determined by the Board, subject to approval by the Department of
Budget and Management (DBM) and existing civil services rules
and regulations.
SEC. 9. Powers and Functions of the NBB. – The NBB shall

have the following powers and functions:
a) Monitor the implementation of, and evaluate for further

expansion, the National Biofuel Program (NBP) prepared by the
DOE pursuant to Section 7 (b) of this Act;
b) Monitor the supply and utilization of biofuels and biofuel-

blends and recommend appropriate measures in cases of shortage
of feedstock supply for approval of the Secretary of DOE. For this
purpose:
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1. The NBB is empowered to require all entities engaged

in the production, blending and distribution of biofuels to submit
reports of their actual and projected sales and inventory of biofuels,
in a format to be prescribed for this purpose; and
2. The NBB shall determine availability of locally-sourced

biofuels and recommend to DOE the appropriate level or percentage
of locally–sourced biofuels to the total annual volume of gasoline
and diesel sold and distributed in the country.
c) Review and recommend to DOE the adjustment in the

minimum mandated biofuel blends subject to the availability of
locally–sourced biofuels: Provided, That the minimum blend may
be decreased only within the first four years from the effectivity of
this Act. Thereafter, the minimum blends of the five percent (5%)
and two percent (2%) for bioethanol and biodiesel respectively, shall
not be decreased;
d) Recommend to DOE a program that will ensure the

availability of alternative fuel technology for vehicles, engine and
parts in consonance with the mandated minimum biofuel-blends,
and to maximize the utilization of biofuels including other biofuels;
e) Recommend to DOE the use of biofuel–blends in air

transport taking into account safety and technical viability; and
f) Recommend specific actions to be executed by the

DOE and other appropriate government agencies concerning the
implementation of the NBP, including its economic, technical,
environment, and social impact.
SEC. 10. Security of Domestic Sugar Supply. - Any provision

of this Act to the contrary notwithstanding, the SRA, pursuant to
its mandate, shall, at all times, ensure that the supply of sugar is
sufficient to meet the domestic demand and that the price of sugar
is stable.
To this end, the SRA shall recommend and the proper agencies
shall undertake the importation of sugar whenever necessary and
shall make appropriate adjustments to the minimum access volume
parameters for sugar in the Tariff and Custom Code.
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SEC. 11. Role of Government Agencies. – To ensure the effective

implementation of the NBP, concerned agencies shall perform the
following functions:
a) The DOF shall monitor the production and importation

of biofuels through the Bureau of Internal Revenue (BIR) and the
Bureau of Customs (BOC);
b) The DOST and the DA shall coordinate in identifying

and developing viable feedstock for the production of biofuels;
c) The DOST, through the Philippine Council for Industry

and Energy Research and Development (PCIERD), shall develop
and implement a research and development program supporting
a sustainable improvement in biofuel production and utilization
technology. It shall also publish and promote related technologies
developed locally and abroad;
d) The DA through its relevant agencies shall:
(1) Within three months from effectivity of this Act, develop

a national program for the production of crops for use as feedstock
supply. For this purpose, the Administrators of the SRA and the
PCA, and other DA-attached agencies shall, within their authority
develop and implement policies supporting the Philippine Biofuel
Program and submit the same to the Secretary of the DA for
consideration;
(2) Ensure increased productivity and sustainable supply of

biofuel feedstocks. It shall institute a program that would guarantee
that a sufficient and reliable supply of feedstocks is allocated for
biofuel production; and
(3) Publish information on available and suitable areas for

cultivation and production of such crops.
e) The DOLE shall:
(1) Promote gainful livelihood opportunities and facilitate

productive employment through effective employment services and
regulation;
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(2) Ensure the access of workers to productive resources

and social protection coverage; and
(3) Recommend plans, policies and programs that will

enhance the social impact of the NBP.
f) The Tariff Commission, in coordination with the

appropriate government agencies, shall create and classify a tariff
line for biofuels and biofuel-blends in consideration of WTO and
AFTA agreements; and
g) The local government units (LGU) shall assist the DOE

in monitoring the distribution sale in use of biofuels and biofuel-
blends
SEC. 12. Prohibited Acts. The following acts shall be

prohibited:
a) Diversion of biofuels, whether locally produced or

imported, to purposes other than those envisioned in this Act;
b) Sale of biofuel–blended gasoline or diesel that fails to

comply with the minimum biofuel–blend by volume in violation of
the requirement under Section 5 of this Act;
c) Distribution, sale and use of automotive fuel containing

harmful additives such as, but not limited to, MTBE at such
concentration exceeding the limits to be determined by the NBB.
d) Noncompliance with the established guidelines of the

PNS and DOE adopted for the implementation of this Act; and
e) False labeling of gasoline, diesel, biofuels and biofuel-

blended gasoline and diesel.
SEC. 13. Penal Provisions. - Any person, who willfully aids or

abets in the commission of a crime prohibited herein or who causes
the commission of any such act by another shall be liable in the
same manner as the principal.
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In the case of association, partnerships or corporations, the

penalty shall be imposed on the partner, president, chief operating
officer, chief executive officer, directors or officers, responsible for
the violation.
The commission of an act enumerated in Section 12, upon

conviction thereof, shall suffer the penalty of one year to five years
imprisonment and a fine ranging from a minimum of One million
pesos (P 1,000,000.00) to Five million pesos (P 5,000,000.00).
In addition, the DOE shall confiscate any amount of such

products that fail to comply with the requirements of Sections 4 & 5
of this Act, and implementing issuance of the DOE. The DOE shall
determine the appropriate process and the manner of disposal and
utilization of the confiscated products. The DOE is also empowered
to stop and suspend the operation of businesses for refusal to comply
with any order or instruction of the DOE Secretary in the exercise of
his functions under this Act.
Further, the DOE is empowered to impose administrative

fines and penalties for any violation of the provisions of this Act,
implementing rules and regulations and other issuance relative to
this Act.
SEC. 14. Appropriations. - Such sums as may be necessary

for the initial implementation of this Act shall be taken from the
current appropriations of the DOE. Thereafter, the fund necessary
to carry out provisions of this Act shall be included in the annual
General Appropriation Act.
SEC. 15. Implementing Rules and Regulations (IRR). - The

DOE, in consultation with the NBB, the stakeholders and the other
agencies concerned, shall within three months from affectivity of
this Act, promulgated the IRR of this Act: Provided, That prior
to its effectively, the draft of the IRR shall be posted at the DOE
website for at least one month, and shall be published in at least
two newspapers of general circulation.
SEC. 16. Congressional Oversight Committee. - Upon

effectivity of this Act, a Congressional Committee, hereinafter
referred to as the Biofuels Oversight Committee, is hereby
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constituted. The biofuels oversight committee shall be compose of

fourteen (14) members, with the Chairmen of the Committees on
Energy of both Houses of Congress as co-chairmen. The Chairmen
of the Committee on Agriculture and Trade and Industry shall be
ex-officio members. An additional four members from each House,
to be designated by the Senate President and Speaker of the House
of Representatives, respectively. The minority shall be entitled to
pro-rata representation but shall have at least one representative
in the Biofuel Oversight Committee.
SEC. 17. Benefits of Biofuel Workers. - This Act shall not in

any way result in the forfeiture or diminution of existing benefits
enjoyed by the sugar workers as prescribed under the R.A. No. 6982,
or the Sugar Amelioration Act of 1991. In case sugarcane shall be
used as feedstock.
The NBB shall establish a mechanism similar to that provided

under the Sugar Amelioration Act of 1991 for the benefit of other
biofuel workers.
SEC. 18. Special Clause. - This act shall not be interpreted as

prejudicial to clean development mechanism (CDM) projects that
cause carbon dioxide (CO2) and greenhouse gasses (GHG) emission
reductions by means of biofuel use.
SEC. 19. Repealing Clause. - The provision of Section 148 (d)

of R.A. No. 8424, otherwise known as Tax Reform Act. of 1997, and
all other laws, presidential decrees or issuance, executive orders,
presidential proclamations. rules and regulations or part thereof
inconsistent with the provisions of this Act, are hereby repealed,
modified or amended accordingly.
SEC. 20. Separability Clause. - If any provision of this Act is

declared unconstitutional in the same shall not affect the validity
and effectivity of the other provision hereof.
SEC. 21. Effectivity. - This act shall effect fifteen (15) day after
publication in at least two newspapers of general circulation.
APPROVED, January 12, 2007.
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DEPARTMENT CIRCULAR NO. 2007-05-0006

Pursuant to Republic Act No. 9367, otherwise known as the

Biofuels Act of 2006, the Department of Energy, in consultation
with National Biofuels Board, appropriate government agencies,
and other stakeholders, hereby issues, adopts and promulgates the
following implementing rules and regulations.
Rule 1. General Provisions
Section 1. Title, Purpose, and Scope.
1.1 This Department Circular shall be known as the Implementing

Rules and Regulations (IRR) of Republic Act No. 9367, otherwise
known as the Biofuels Act of 2006 and referred to as the “Act” in this
IRR.
1.2 It shall cover the production, blending, storage, handling,

transportation, distribution, use, and sale of biofuels, biofuel-blends,
and biofuel feedstock in the Philippines.
1.3 Further, it clarifies specific provisions of the Act and the

roles and functions of the different government agencies and their
relationship with the National Biofuels Board.
Section 2. Declaration of Policy.
It is hereby declared the policy of the State to reduce

dependence on imported fuels with due regard to the protection of
public health, the environment, and natural ecosystems consistent
with the country’s sustainable economic growth that would expand
opportunities for livelihood by mandating the use of biofuels as a
measure to:
a) develop and utilize indigenous renewable and sustainably-

sourced clean energy sources to reduce dependence on imported
oil;
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b) mitigate toxic and greenhouse gas (GHG) emissions;
c) increase rural employment and income; and
d) ensure the availability of alternative and renewable clean

energy without any detriment to the natural ecosystem, biodiversity
and food reserves of the country.
Section 3. Definition of Terms.
3.1 As used in the Biofuels Act of 2006 and this Implementing

Rules and Regulations (IRR), the following terms shall be defined
as follows:
a) Act – shall refer to the Biofuels Act of 2006;
b) AFTA – shall refer to the ASEAN Free Trade Agreement

initiated by the Association of Southeast Asian Nations;
c) Alternative Fuel Vehicles/Engines – shall refer to vehicles/

engines that use alternative fuels such as biodiesel, bioethanol,
natural gas, electricity, hydrogen, and automotive LPG, instead of
gasoline and diesel;
d) Bioethanol – shall refer to ethanol (C2H5OH) produced from

feedstock and other biomass;
e) Biodiesel – shall refer to Fatty Acid Methyl Ester (FAME) or

mono-alkyl esters derived from vegetable oils or animal fats and other
biomass-derived oils that shall be technically proven and approved
by the DOE for use in diesel engines with quality specifications in
accordance with the Philippine National Standards (PNS);
f) Bioethanol Fuel – shall refer to hydrous or anhydrous

bioethanol suitably denatured for use as motor fuel, with quality
specifications in accordance with the PNS;
g) Biofuel – shall refer to bioethanol and biodiesel and other fuels

made from biomass and primarily used for motive, thermal and
power generation with quality specifications in accordance with the
PNS;
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h) Biofuel blends – shall refer to gasoline or diesel that has been

blended with biofuels such as, but not limited to, bioethanol and
biodiesel;
i) Biomass – shall refer to any organic matter, particularly

cellulosic or ligno-cellulosic matter, which is available on a renewable
or recurring basis, including trees, crops and associated residues,
plant fiber, poultry litter and other animal wastes, industrial
wastes, and the biodegradable component of solid waste;
j) DA – shall refer to the Department of Agriculture created

under Executive Order No. 116, as amended;
k) DENR – shall refer to the Department of Environment and

Natural Resources created under Executive Order No. 192, as
amended;
l) Diesel – shall refer to refined petroleum distillate, which may

contain small amounts of hydrocarbon or non-hydrocarbon additives
to improve ignition quality or other characteristics, suitable for
compression ignition engine and other suitable types of engines
with quality specifications in compliance with the PNS;
m) DOE – shall refer to the Department of Energy created under

Republic Act No. 7638, as amended;
n) DOF – shall refer to the Department of Finance created under

Administrative Order Nos. 127 and 127-A;
o) DOLE – shall refer to the Department of Labor and Employment

created under Executive Order No. 126, as amended;
p) DOST – shall refer to the Department of Science and Technology

created under Republic Act No. 2067;
q) DOTC – shall refer to the Department of Transportation and

Communications created under Executive Order No. 125-A, as
amended;
r) DTI – shall refer to the Department of Trade and Industry

crated under Executive Order No. 133;
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s) Feedstock – shall refer to organic sources such as molasses,

sugarcane, cassava, coconut, jatropha, sweet sorghum or other
biomass used in the production of biofuels;
t) Gasoline – shall refer to volatile mixture of hydrocarbon,

generally containing small amounts of additives, suitable for use
as a fuel in spark-combustion engine with quality specifications in
compliance with the PNS;
u) Locally-sourced biofuels – shall refer to biofuels derived

from feedstocks grown/planted harvested and processed in the
Philippines;
v) Motor Fuel – shall refer to all volatile and inflammable liquids

and gas produced, blended or compounded for the purpose of, or
which are suitable or practicable for, operating motor vehicles;
w) MTBE – shall refer to Methyl Tertiary Butyl Ether;
x) National Biofuels Program/Philippine Biofuel Program – shall

refer to the program which the DOE is mandated to formulate under
Section 7 of the Act;
y) NBB or Board – shall refer to the National Biofuels Board,

created under Section 8 of the Act;
z) Oil Company – shall refer to any entity that distributes and

sells petroleum fuel products;
aa) Oxygenate – shall refer to substances which, when added to

gasoline, increases the amount of oxygen in that gasoline blend;
bb) PCA – shall refer to the Philippine Coconut Authority created

under P.D. 232 as amended by Presidential Decrees 961 and 1468;
cc) Petroleum Depot or Terminal – shall refer to the supply point

of petroleum products (or bulk storage facilities) operated by oil
companies;
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dd) PNS – shall refer to the Philippine National Standards

consistent with Section 26 of R.A. No. 8749 otherwise known as the
“Philippine Clean Air Act of 1999”;
ee) Renewable Energy Sources – shall refer to energy sources that

do not have an upper limit on the total quantity to be used. Such
resources are renewable on a regular basis, and whose renewal rate
is relatively rapid to consider availability over an indefinite period
of time;
ff) SRA – shall refer to Sugar Regulatory Administration created

under Executive Order No. 18, s. 1986;
gg) Sugarcane industry – shall refer to the industry that integrates

the agricultural production systems of growing sugarcane into the
processing of the same into sugar, ethanol and other products with
the consequent production of by-products including but not limited
to bagasse, filter cake, and molasses. The sugarcane industry also
covers the processing and manufacture of any of the by-products
(bagasse, filter cake, molasses and others) into other value-added
products or commodities; and
hh) WTO – shall refer to the World Trade Organization.
3.2 All other terms not covered in the Act or in this IRR shall be
defined by concerned government agencies in the exercise of their
respective regulatory and/or policy formulating functions.
Rule 2. Operation of the Mandate
Section 4. Phasing Out of the Use of Harmful Gasoline

Additives and/or Oxygenates
4.1 Pursuant to Section 4 of the Act, the DOE shall gradually phase
out the use of harmful gasoline additives and/or oxygenates, such as,
but not limited to MTBE, according to duly accepted international
standards.
4.2 The DOE, in consultation with the concerned government

agencies and stakeholders, shall issue the appropriate department
circular for the purpose within six (6) months from the effectivity of
the Act.
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Section 5. Mandatory Use of Biofuels.
Pursuant to Section 5 of the Act, all liquid fuels for motor vehicles
shall contain locally-sourced biofuels components as follows:
5.1 Bioethanol
a) Within two (2) years from the effectivity of the Act,

at least five percent (5%) bioethanol shall comprise
the annual total volume of gasoline fuel actually sold
and distributed by each and every oil company in the
country, subject to the requirement that all bioethanol
blended gasoline shall contain a minimum five percent
(5%) bioethanol fuel by volume: Provided, That the
bioethanol blend conforms to the PNS.
b) Within four (4) years from the effectivity of the Act, the
NBB created under Section 8 of the Act is empowered to
determine the feasibility and thereafter recommend to
the DOE to mandate a minimum of ten percent (10%)
blend of bioethanol by volume into all gasoline fuel
distributed and sold by each and every oil company in
the country: Provided, That the same conforms to the
PNS.
5.2 Biodiesel
a) Within three (3) months from the effectivity of the Act,

a minimum of one percent (1%) biodiesel by volume
shall be blended into all diesel fuels sold in the country:
Provided, That the biodiesel blend conforms to the PNS.
b) Within two (2) years from the effectivity of the Act, the
NBB is empowered to determine the feasibility and
thereafter recommend to DOE to mandate a minimum of
two percent (2%) blend of biodiesel by volume which may
be increased after taking into account considerations
including, but not limited to, domestic supply and
availability of locally-sourced biodiesel component.
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5.3 Other Biofuels
In the event that fuels derived from biomass other than bioethanol
and biodiesel are developed pursuant to the Act as technically
validated by the DOST, the DOE shall issue, upon consultation with
the entities concerned and upon the recommendation of the NBB,
the appropriate department circular to promote the utilization of
such fuels and provide the appropriate initiatives consistent with
the provisions of the Act: Provided, That the appropriate PNS for
such fuel is established and complied with.
5.4 The DOE shall issue, in consultation with the concerned

government agencies and entities, further guidelines relative
to the above provisions which shall include among others,
the standards and reportorial requirements to be complied
with. The issuance of these further guidelines shall not be
a condition precedent to the implementation of the above
provisions.
Section 6. Importation in case of supply shortage of

locally-produced bioethanol.
6.1 Pursuant to Section 5.2 of the Act, in the event of a supply

shortage of locally-produced bioethanol during the first four-
year period of implementation of the Act, as may be confirmed
by the NBB, oil companies shall be allowed to import bioethanol
to the extent of the shortage as may be determined by the
NBB.
6.2 Prior to the importation of bioethanol due to a supply shortage,

the importing oil company may apply for the issuance of a DOE
Certification to the effect that the bioethanol to be imported
shall be used for the National Biofuels Program.
6.3 The DOE Certification may be used by the oil company to avail
itself of reduced tariff on bioethanol pursuant to Executive
Order No. 449.
6.4 The issuance of the DOE Certification shall be made in

accordance with existing DOE guidelines.
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Section 7. Incentives under the Act.
7.1 To encourage investments in the production, distribution, and

use of locally-produced biofuels at and above the minimum
mandated blends, and without prejudice to enjoying applicable
incentives and benefits under existing laws, rules, regulations,
the following additional incentives are hereby provided:
a) Specific Tax. The specific tax on local or imported

biofuels component of the blend per liter of volume shall
be zero. For the purpose of availing of a zero specific tax,
local or imported bioethanol shall be suitably denatured
into bioethanol fuel in accordance with existing revenue
regulations. The gasoline and diesel fuel component
shall remain subject to the prevailing specific tax rates.
b) Value Added Tax. The sale of raw material used in the

production of biofuels such as but not limited to, coconut,
jathropha, sugarcane, cassava, corn, and sweet sorghum
shall be exempt from the value added tax.
The tax incentive provided under Items (a) and (b) of

this Section shall be subject to rules and regulations
promulgated by the DOF.
c) Water Effluents. All water effluents, such as but not

limited to distillery slops from the production of biofuels
used as liquid fertilizer and other agricultural purposes
are considered “reuse” and are therefore, exempt
from wastewater charges under the system provided
under Section 13 of R.A. 9275, otherwise known as
the Philippine Clean Water Act: Provided, however,
That such application shall be in accordance with the
guidelines issued pursuant to R.A. 9275, subject to the
monitoring and evaluation by the DENR and approved
by the DA; and
d) Financial Assistance. Government financial

institutions, such as the Development Bank of the
Philippines, Land Bank of the Philippines, Quedancor,
and other government institutions providing financial
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services shall, in accordance with and to the extent

allowed by the enabling provisions of their respective
charters or applicable laws, accord high priority to extend
financing to Filipino citizens or entities, at least sixty
per cent (60%) of the capital stock of which belongs to
citizens of the Philippines that shall engage in activities
involving production, storage, handling, and transport
of biofuel and biofuel feedstock, including blending of
biofuels with petroleum, as certified by the DOE.
7.2 The appropriate government agencies shall issue the necessary

guidelines for the availment of such incentives.
Rule 3. The National Biofuels Board
Section 8. Creation and Organizational Structure of the

National Biofuels Board.
8.1 Pursuant to Section 8 of the Act, the National Biofuels Board

(NBB) is created and shall be composed of the Secretary of the
DOE, as Chairman, and the Secretaries of the DTI, DOST,
DA, DOF, DOLE, and the Administrators of the PCA and
SRA, as members.
a) The Secretary of the DOE, as the Chairman, shall be

assisted by a duly designated Undersecretary who shall
as act as his alternate; and
b) The member Secretaries and Administrators may assign

alternate representatives who must be occupying at
least the level of Assistant Secretary: Provided, That
only the Department Secretaries/Administrators shall
sign official documents and issuances of the NBB.
8.2 The NBB shall create a Technical Secretariat which shall

provide for the administrative, policy, and technical services
of the Board.
8.3 The NBB shall determine the appropriate compensation/

remuneration of the members and the Technical Secretariat
staff and personnel in accordance with existing laws, rules
2164
and regulations, and shall make appropriate requests and

representations with the Office of the President and the DBM
for the allocation and appropriation of funds necessary to
effectively perform its duties and functions.
Section 9. Meetings of the NBB.
Regular meetings of the NBB shall be held at least once every

quarter on a date and in a place fixed by the Board.
Section 10. Powers and Functions of the NBB.
Pursuant to Section 9 of the Act, the NBB shall have the following
powers and functions:
a) Monitor the implementation of, and evaluate for further

expansion, the National Biofuels Program prepared by the
DOE pursuant to Section 7 (b) of the Act;
b) Monitor the supply and utilization of biofuels and biofuel-

blends and recommend appropriate measures in cases of
shortage of feedstock supply for approval by the Secretary of
DOE. For this purpose:
i. The NBB is empowered to require all entities

engaged in the production, blending and distribution of
biofuels to submit reports of their actual and projected sales
and inventory of biofuels in a format to be prescribed for this
purpose;
ii. The NBB shall determine the availability of locally

sourced biofuels and recommend to the DOE the appropriate
level or percentage of locally sourced biofuels to the annual
volume of gasoline and diesel sold and distributed in the
country.
iii. To ensure an adequate supply of bioethanol, the

NBB shall recommend to the DOE the amount of bioethanol
that may be imported at any given time by DOE-certified oil
companies in the event of shortage of supply of locally-sourced
ethanol during the first four years from the effectivity of the
Act.
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c) Review and recommend to the DOE the adjustment in the

minimum mandated biofuel blends subject to the availability
of locally-sourced biofuels: Provided, That the minimum blend
may be decreased only within the first four (4) years from
the effectivity of the Act. Thereafter, the minimum blends
of five percent (5%) and two percent (2%) for bioethanol and
biodiesel, respectively, shall not be decreased.
In determining the availability of locally-produced biofuels,

the NBB may take into account the factors such as, but not
limited to, shortage in the supply of biofuels and feedstock
and constraints or difficulties in the distribution of biofuel
blends.
d) Recommend to the DOE a program that will ensure that

availability of alternative fuel technology for vehicles, engines
and parts in consonance with the mandated minimum biofuel-
blends, and to maximize the utilization of biofuels, including
other biofuels;
e) Recommend to the DOE the use of biofuel-blends in air

transport taking into account safety and technical viability;
f) Recommend specific activity to be executed by the DOE

and other appropriate government agencies concerning the
implementation of the NBP, including its economic, technical,
environment and social impact; and
g) Exercise such other powers and functions as may be necessary

or incidental to attain the objectives of the Act.
Section 11. The Technical Secretariat.
Pursuant to Section 8 of the Act, the NBB shall be assisted by a

Technical Secretariat attached to the Office of the Secretary of the
DOE.
a) Composition. The Technical Secretariat shall be headed by

a Director to be appointed by the NBB. The number of staff
of the Technical Secretariat and corresponding positions shall
be determined by the NBB subject to existing civil service
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rules and regulations and the approval of the Department of

Budget and Management.
b) Functions and responsibilities. The Technical Secretariat

shall have the following functions and responsibilities:
i. Provide administrative and general support service

to the NBB in collecting, securing, and processing pertinent
information/data from all entities engaged in the production,
blending and distribution of biofuels and biofuel blends,
including, but not limited to, actual and projected sales and
inventory and data on the availability of locally-sourced
biofuels;
ii. Provide all members of the NBB appropriate

information/data on appropriate vehicle technologies,
including air transportation, in consonance with the mandated
minimum biofuel blends;
iii. Monitor and coordinate with all government

entities in the performance of their respective functions and
responsibilities in the implementation of the National Biofuels
Program;
iv. Identify issues, concerns and/or barriers on the

implementation of the National Biofuels Program, including
the mandated minimum biofuel blends, and propose
measures/solutions to address the same, in coordination with
all stakeholders of the biofuel industry; and
v. Perform such other functions as may be directed by

the NBB.
c) Creation of an Interim Technical Secretariat. Within

one (1) month from the effectivity of this IRR, the NBB shall
designate an interim technical secretariat to be known as
the NBB-Project Management Office (NBB-PMO) to hold
office for a period of one (1) year or until such time that the
organization of the Technical Secretariat is completed, subject
to existing rules and regulations of the Department of Budget
and Management and the Civil Service Commission. Prior
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to the organization of the NBB-PMO, the Energy Utilization

Management Bureau of the DOE shall serve as the Technical
Secretariat to the NBB; and
The NBB-PMO staff and personnel shall be provided with

appropriate compensation and remuneration in accordance
with existing rules and regulations of the Department of
Budget and Management and the Civil Service Commission.
Rule 4. Role of the Department of Energy

and Other Government Agencies
Section 12. The Department of Energy.
Pursuant to Section 7 of the Act, the DOE is mandated to take

appropriate and necessary actions to implement the provisions of the
Act, in addition to its existing powers and functions. In pursuance
hereof, it shall, within three (3) months from the effectivity of the
Act:
a) Prepare the National Biofuels Program consistent with the

Philippine Energy Plan and taking into consideration the
DOE’s existing biofuels program and the programs of other
government agencies, such as, but not limited to, the feedstock
supply program of the DA, PCA and SRA technology research
and development program of the DOST, and the vehicle
development program of the DTI;
b) Establish technical and fuel quality standards for biofuels

and biofuel-blended gasoline and diesel which comply with
the PNS;
c) Establish the guidelines for the transport, storage and

handling of biofuels and biofuel-blends;
d) Accredit producers and distributors of biofuels and developers/

owners of biofuel production facilities following DOE’s
accreditation guidelines;
e) Endorse qualified biofuel producers to the Board of Investments

for the availment of appropriate fiscal incentives;
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f) Conduct regular monitoring, announced or unannounced

inspections sampling and laboratory testing of biofuels in all
biofuel production facilities and feedstock production areas,
and biofuel-blended gasoline and diesel in all blending/
storage/distribution facilities and retail stations;
g) Stop the sale of biofuels and biofuel-blended gasoline and diesel

that are not in conformity with the specifications provided
for under Section 5 of the Act, the PNS and corresponding
issuances of the Department;
h) Impose fines and penalties against persons or entities found

to have committed any of the acts under Section 12 (b) to (e) of
the Act;
i) Conduct various research and development activities and

studies on biofuels, biofuel-blended gasoline and diesel, and/
or other biomass-derived fuels for use in motors and engines,
including air transport, and other vehicle technologies;
j) Provide laboratory support services to other government

entities and the private sector in the conduct of research and
development activities on biofuels, biofuel-blends, and other
biomass-derived fuels;
k) Formulate guidelines for the importation of biofuels, taking

into consideration relevant existing rules and regulations
issued by the DOE and other government agencies; and
l) Conduct, in coordination with biofuel stakeholders, information

campaign to promote the use of biofuels.
Section 13. The Department of Finance.
The DOF shall monitor, in coordination with other concerned

government agencies, the production and importation of biofuels
through the Bureau of Internal Revenue (BIR) and the Bureau of
Customs (BOC).
The DOF shall promulgate the rules and regulations necessary to

implement its mandate under the Act.
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Section 14. The Department of Science and Technology.
The DOST shall:
a) Coordinate with the DA in identifying and developing viable

feedstock for the production of biofuels;
b) Develop and implement, through the Philippine Council for

Industry and Energy Research and Development (PCIERD), a
research and development program supporting a sustainable
improvement in biofuel production and utilization technology.
For this purpose, the DOST shall establish a network of
academic and research institutions; and
c) Publish and promote related technologies developed locally

and abroad.
Section 15. The Department of Agriculture.
The DA, through its relevant agencies, shall have the following
functions and responsibilities:
a) Coordinate with the DOST in identifying and developing

viable and quality feedstock, including production and primary
postharvest processing technologies for biofuels;
b) Within three (3) months from the effectivity of the Act, develop
a national program for the production of crops for use as
feedstock supply. For this purpose, the administrators of the
SRA and the PCA, and other related DA agencies, within their
authority, shall develop and implement policies in support
of the National Biofuels Program and submit the same for
consideration and approval by the Secretary of the DA;
c) Ensure increased productivity and sustainable supply of

biofuel feedstocks. The DA shall institute a program that
would guarantee that a sufficient and reliable supply of
feedstocks is allocated for biofuel production;
d) Publish information on available and suitable areas for

cultivation and production of biofuel crops, available and
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accessible technologies, sources of planting materials, and

financial assistance;
e) In cooperation with SRA, PCA, other attached agencies, and

bureaus, shall undertake the identification and publication of
potential areas suitable for the expansion and production of
raw materials as feedstocks for biofuels;
f) Undertake biofuel feedstock research and development which

may include identifying new feedstock, developing high
yielding varieties, and developing new processing technologies
in cooperation with public and private research agencies, and
international research institutes; and
g) Promulgate such necessary rules and regulations necessary

to implement its mandate under the Act.
Section 16. The Sugar Regulatory Administration.
Pursuant to its mandate under Executive Order No. 18 and the Act,
the SRA shall:
a) at all times ensure that the supply of sugar is sufficient to

meet the domestic demand and that the price of sugar is
stable; and
b) together with the DA, PCA, and other DA-attached agencies,

develop and implement policies supporting the National
Biofuels Program and submit the same to the Secretary of the
DA for consideration.
Section 17. The Philippine Coconut Authority.
Pursuant to its mandate to formulate and adopt a general program

of development for the coconut and other palm oil industry in its
all aspects, under PD 1468, Article II, Section (3) (a), the PCA shall
develop, implement policies within the coconut industry in support
of the National Biofuels Program.
To this end, the PCA shall:
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a) Review and assess the policies, projects and activities of all

other government agencies related to the National Biofuels
Program and integrate/adopt them into the National Coconut
Industry Development Program;
b) Develop, formulate, and implement a massive nationwide

rehabilitation, planting, and replanting program using high-
yielding coconut varieties including the strengthening of its
organization, manpower and capabilities to fully support the
National Biofuels Program;
c) Formulate and implement the necessary regulatory

measures to ensure the availability, sufficiency, quality, and
sustainability of the supply of coconut raw materials for the
National Biofuels Program;
d) Require the accreditation/registration of reputable and

credible oil mills who shall supply the coconut oil (CNO)
requirements of coco biodiesel producers;
e) Formulate industry policies and regulations which shall

include the retention of CNO volume to support the required
minimum of one percent (1%), and later on two percent (2%),
coconut methyl ester (CME) of the biodiesel blends which may
be increased later upon the recommendation of the NBB;
f) Explore and expand the domestic and foreign markets of

coconut biofuel products and by-products; and
g) Seek funds for its sustainable operation and continuous

support for the National Biodiesel component program.
Section 18. The Department of Labor and Employment.
The DOLE shall:
a) Promote gainful livelihood opportunities and facilitate

productive employment through effective employment services
and regulation;
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b) Ensure the access of workers to productive resources and

social protection coverage;
c) Recommend policies, plans, and programs that will enhance

the social impact of the National Biofuels Program; and
d) Promulgate such necessary rules and regulations necessary

to implement its mandate under the Act.
Section 19. The Department of Trade and Industry.
19.1 Pursuant to the State’s policy of protecting public health

through, among others, the reduction of toxic and greenhouse
gas emissions, the DTI shall formulate and implement, in
coordination with the DOTC and the DENR, a national motor
vehicle inspection and maintenance program as a measure to
substantially reduce emissions from motor vehicles pursuant
to Art. 4, Section 21 (d) of R.A. 8749, otherwise known as the
Philippine Clean Air Act of 1999.
19.2 Pursuant to its program under existing laws, the DTI shall
promote the development of an alternative fuel technology
for vehicles, engines and parts in consonance with the
requirements of the mandated minimum biofuel-blends.
Section 20. The Tariff Commission.
The Tariff Commission, in coordination with the appropriate

government agencies, shall create and classify a tariff line for
biofuels and biofuel-blends in consideration of WTO and AFTA
agreements.
Section 21. The Local Government Units.
The Local Government Units shall assist the DOE in monitoring

the distribution, sale and use of biofuels and biofuel-blends by:
a) Ensuring strict implementation of local permitting

requirements applicable to businesses engaged in the
distribution and sale of biofuel and biofuel blends;
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b) Ordering the closure of any business engaged in the distribution

and sale of biofuel and biofuel blends found to be operating
without the necessary permits and licenses;
c) Reporting to the DOE violations of the Act being committed

by any person involved in the distribution, sale, and use of
biofuels and biofuel blends;
d) Revoking local permits previously issued to business entities

found to have violated pertinent rules and regulations of the
DOE and other concerned government agencies, upon the
recommendation of the DOE or other concerned agency, as
the case may be.
Rule 5. Role of the Players in the Biofuels Industry.
Section 22. Oil Companies.
22.1 Blending of Biofuels. Blending of biodiesel shall and

bioethanol with diesel and gasoline fuels, respectively, shall be
undertaken by the oil companies using appropriate blending
methodologies at their respective refineries, depots or blending
facilities prior to the sale of biofuel-blends to consumers/
end-users: Provided, That blending methodologies shall be
in accordance with duly accepted international standards as
well as the guidelines issued by the DOE for this purpose:
Provided, further, That oil companies shall ensure compliance
of the biofuel blends with the PNS.
22.2 Supply and Distribution. To ensure compliance of

the minimum mandated biofuel blends with the PNS, oil
companies shall observe the following guidelines, in addition
to what may be prescribed by the DOE under subsequent
issuances:
a) Supply of biofuels shall be sourced only from biofuel

producers accredited by the DOE. The procurement of
biofuels may be covered by biofuels supply contracts or
agreements;
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b) Ensure proper logistics and application of appropriate

technologies in blending, handling, transporting, and
distributing biofuel blends; and
c) Observe proper diligence in the supervision of company-

operated, dealer-owned, or dealer-operated retail service
stations carrying their brand in order to ensure that the
quality and integrity of PNS-compliant biofuels shall be
maintained.
22.3 Supply Shortage. In the event of supply shortage of locally-

produced bioethanol during the first four-year period from
the effectivity of the Act, oil companies may apply for the
issuance of a certification to import bioethanol from the DOE
in accordance with existing guidelines.
22.4 Reportorial Requirements. For proper monitoring of the

compliance by oil companies with this IRR, each oil company
shall submit to the DOE the following reports:
a) Performance Compliance Report. Every oil company

shall submit on an annual basis a Performance
Compliance Report containing its compliance plan with
the mandated biofuel blends as well as other information
that may be required by the DOE. Such report shall be
duly certified and signed under oath by an authorized
responsible officer of the oil company who shall attest to
the veracity and accuracy of its contents.
b) Periodic Reports. The oil companies shall likewise

submit periodic reports as may be required by the DOE.
Section 23. Biofuel Producers.
23.1 Accreditation of Biofuels Producers.
a) Any individual or entity intending to engage in the

production of biofuels shall apply for accreditation
as a biofuel producer with the DOE. The DOE, in
consultation with the stakeholders, shall issue the
appropriate guidelines for this purpose, which shall
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indicate the requirements for quality assurance, quality

management system, and analogous quality production
standards.
b) Pending the issuance of these guidelines, only those

biofuel producers who have existing accreditation or have
been issued a permanent Certificate of Fuel Additive
Registration (CFAR) and who have pending applications
for accreditation pursuant to Memorandum Circular No.
55 shall be allowed to produce and sell biofuels.
23.2 All biofuels producers, in addition to what may be required by

the DOE under subsequent guidelines shall:
a) Register their distributors with the DOE;
b) Ensure proper logistics and application or appropriate

technologies in handling biofuels;
c) Submit to the DOE the following data and information:
i. Monthly production, sales and inventory of

biofuels;
ii. Monthly report on projected production, sales

and inventory of biofuels;
iii. Report on the application of technologies in

the production, handling, storage and distribution of
biofuels; and
iv. Such other data and information as may be

required by the DOE and/or the NBB.
d) Maintain a minimum inventory of biofuels equivalent

to its average monthly sales to meet the minimum
mandate;
e) Conduct and/or support local research and development

to improve biofuels feedstock productivity; and
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f) Report to DOE the weekly price of biofuels.
Section 24. Importer End-Users. End-users who are direct

importers of diesel or gasoline shall also be subject to the required
use of the mandated biofuel blend. To determine their compliance,
such entities shall submit the following reports, in addition to what
may be required by the DOE under subsequent guidelines:
a) Monthly report to the DOE of its importation and

consumption of gasoline/diesel; and
b) Monthly report on the purchase and consumption of

biofuels and biofuel blends.
Rule 6. Standards for Biofuel and Biofuel Blends
Section 25. Quality Standards. All biofuels and biofuel blends

that qualify under the Act shall be limited to those compliant with
the PNS.
Facilities for the production, handling, distribution and storage of

biofuels and biofuel blends shall likewise conform to standards and
guidelines set by the DOE.
Section 26. Quality Assurance. All biofuels producers shall

assure compliance with quality standards in accordance with the
following guidelines, in addition to what may be required by the
DOE under subsequent issuances:
a) All biofuel deliveries must be accompanied by a Certificate

of Quality to be issued by the distributor/supplier indicating
the properties of the delivered biofuels, which must be in
compliance with the PNS;
b) Biofuels packaged in individual containers shall be

appropriately labeled and shall contain information such as
DOE CFAR number, batch manufacturing date, and expiry
date in accordance with the guidelines that will be issued by
the DOE; and
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c) Biofuel producers shall establish management systems

covering quality assurance, environmental management and
occupational health and safety standards in accordance with
the accreditation guidelines to be issued by the DOE.
Rule 7. Security of Domestic Sugar and Feedstock Supply
Section 27. Security of Domestic Sugar Supply.
27.1 The SRA shall develop and implement policies within the
sugarcane industry in support of the National Biofuels
Program. It shall form a consultative body within the sugarcane
industry to undertake the initiatives stated herein.
27.2 Towards this end, the SRA shall formulate the necessary
guidelines in ensuring the supply of sugar is sufficient to meet
the domestic demand and that the price of sugar is stable.
a) The SRA shall ensure full utilization of sugarcane and

adequate supply of sugar in the domestic market and
for other requirements. To this end, it shall conduct a
periodic assessment of the domestic sugar supply and
demand situation, and report the same to the NBB on
a regular basis: Provided, That in case of shortage of
locally produced bioethanol, the SRA in consultation
with stakeholders, shall initiate appropriate action to
increase local production and propose measures to the
NBB to address the supply shortage.
b) The SRA shall develop appropriate schemes to facilitate

orderly allocation of sugarcane for both sugar and
ethanol. For this purpose, it shall report to the NBB
the supply and demand situation of sugarcane and shall
require regular submission of prescribed reports from
bioethanol producers.
The SRA, pursuant to its existing mandate, shall formulate the

issuances consistent with its existing sugar classification functions,
to effect an appropriate system of classification and allocation in
terms of sugar and sugar equivalent.
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Section 28. Security of Domestic Biofuels Feedstock

Supply.
Pursuant to Section 11, paragraph (d) (2) of the Act, the DA shall
ensure increased productivity and sustainable supply of biofuels
feedstocks. Towards this end, the DA in consultation with PCA,
SRA, and other entities concerned, shall develop and implement
appropriate programs and guidelines in order to ensure a reliable
supply of biofuel feedstocks.
Rule 8. Development of Social Amelioration and Welfare

Program for Workers in the Production of Biofuels
Section 29. Objectives of the Program. A Social Amelioration

and Welfare Program (“Program”) similar to that of the Sugar
Administration Act of 1991 or R.A. 6982, shall be developed for the
following objectives:
a) Promote gainful livelihood opportunities;
b) Facilitate productive employment through effective

employment services and regulation; and
c) Ensure the access of workers to productive resources and

social protection coverage.
Section 30. Coverage. The program shall cover all rank and file
employees of biofuel plants, workers and farmers engaged in the
production of crops used as feedstocks in biofuels.
Section 31. Components of the Program. The program shall

provide basic benefits and assistance that will augment the income
and improve the standard of living of workers engaged in the
production of biofuels. It may consist of, among others:
a) training and education assistance;
b) livelihood assistance;
c) social protection and welfare benefits; and
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d) distribution of financial benefits.
Section 32. Establishment of Guidelines and Mechanisms.
Pursuant to Section 17 of the Act, the NBB shall formulate and

issue, through the appropriate NBB member agency/ies, the
guidelines covering or governing the mechanisms, management and
monitoring of the Program, similar to that prescribed under R.A.
6982 or the Sugar Amelioration Act of 1991.
However, the Act and this IRR shall not in any way result in the
forfeiture or diminution of existing benefits enjoyed by the sugar
workers as prescribed in the Sugar Amelioration Act, in case
sugarcane shall be used as feedstock.
Rule 9. Prohibited Acts, Penal and Administrative

Provisions
Section 33. Prohibited Acts. Any person or entity found in

violation of any provision of the Act and this IRR shall be subject
to appropriate criminal, civil, and /or administrative sanctions
as provided herein and other existing applicable laws, rules and
regulations.
Under Section 12 of the Act, the following shall be prohibited:
a) Diversion of biofuels, whether locally produced or imported, to

purposes other than those envisioned in the Act;
b) Sale of biofuel-blended gasoline or diesel that fails to comply

with the minimum biofuel-blend by volume in violation of the
requirement under Section 5 of the Act;
c) Distribution, sale, and use of automotive fuel containing

harmful additives such as, but not limited to, MTBE at such
concentration exceeding the limits to be determined by the
NBB;
d) Non-compliance with the established guidelines of the PNS

and DOE adopted for the implementation of the Act; and
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e) False labelling of gasoline, diesel, biofuels, and biofuel-blended

gasoline and diesel.
Section 34. Penal Provisions.
34.1 In accordance with Section 13 of the Act, any person, who

wilfully aids or abets in the commission of a crime prohibited
in the Act, or who causes the commission of any such act by
another shall be liable in the same manner as the principal;
34.2 In the case of association, partnership or corporations, the

penalty shall be imposed on the partner, president, chief
operating officer, chief executive officer, directors or officers,
responsible for the violation; and
34.3 The commission of an act enumerated in Section 12 of the Act,

upon conviction thereof, shall suffer the penalty of one year to
five years imprisonment and a fine ranging from One Million
(P 1,000,000) to Five Million pesos (P 5,000,000).
Section 35. Administrative Liability.
35.1 Without prejudice to incurring criminal liability, any person

who commits any of the prohibited acts under Section 12
(b) to (e) of the Act, this IRR and other issuances relative
to the implementation of the Act shall likewise be subject
to administrative fines and penalties, in accordance with a
schedule of administrative fines and penalties to be issued by
the DOE.
For avoidance of doubt, administrative actions initiated

pursuant to this Section shall be separate and independent
from any criminal actions that may arise for violations of
Section 12 of the Act.
35.2 In addition to imposing fines and penalties, the DOE shall be

authorized to:
a) Confiscate any amount of such products that shall comply

with the requirements of Sections 4 and 5 of the Act and
implementing issuances of the DOE;
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b) Determine the appropriate process and the manner of

disposal of the confiscated products; and
c) Stop and suspend the operation of businesses for refusal

to comply with any order or instruction of the DOE
Secretary in the exercise of his functions under the Act.
Section 36. Administrative Procedures.
36.1 The DOE may initiate, motu propio, or upon the filing of
any complaint for the violation of any prohibited act under
Section 12 (b) to (e) of the Act, the IRR or related issuances, an
administrative proceeding against any such person or entity.
In the exercise thereof, the DOE may commence such hearing
or inquiry by an order to show cause, setting forth the grounds
for such order.
36.2 The administrative proceeding shall be conducted before the

DOE to determine the culpability of alleged offenders and
to determine the applicable penalties. The administrative
proceedings under this IRR shall be governed by the existing
rules of practice and procedure before the DOE.
Rule 10. Other Provisions
Section 37. Congressional Oversight Committee.
37.1 Pursuant to Section 16 of the Act, a Congressional Oversight

Committee, called the Biofuel Oversight Committee, is hereby
constituted with fourteen (14) members, with the Chairpersons
of the Committees on Energy of both Houses of Congress as
co-chairpersons.
37.2 The Chairpersons of the Committees on Agriculture and

on Trade and Industry in each chamber shall be ex-officio
members of the Biofuels Oversight Committee.
37.3 The Senate President and the Speaker of the House of

Representatives shall each designate four members from their
respective chambers to sit in the Biofuels Oversight Committee.
In designating such four members, the minority in each
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chamber shall be entitled to pro-rata representation provided

that at the very least, they shall have one representative in
the Biofuels Oversight Committee.
Section 38. Appropriations. Funds necessary to finance

the activities of concerned government agencies as provided in
the Act and in this IRR shall be included in the annual General
Appropriations Act.
Section 39. Special Clause. The Act and the IRR shall not be
interpreted as prejudicial to clean development mechanism (CDM)
projects that cause carbon dioxide (CO2) and greenhouse gases
(GHG) emission reductions of biofuels use.
Section 40. Village Level and/or Community-Based Facilities.

The promotion and utilization of biofuels for household and
community equipment for lighting, cooking, farming, post-harvest
processing, off-road operations, and other analogous uses shall be
included as part of the National Biofuels Program in accordance
with the government policy under the Act.
Section 41. Separability Clause. If any provision of this IRR is

declared unconstitutional, the same shall not affect the validity and
effectivity of the other provisions thereof.
Section 42. Effectivity. This IRR shall take effect fifteen (15)
days after its publication in two newspapers of general circulation.
Signed this 17th day of May 2007 at the DOE, Energy Center,
Merritt Road, Fort Bonifacio, Taguig City, Metro Manila.
RAPHAEL P.M. LOTILLA

Secretary of Energy
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AN ACT PROMOTING THE DEVELOPMENT, UTILIZATION

AND COMMERCIALIZATION OF RENEWABLE ENERGY
RESOURCES AND FOR OTHER PURPOSES

CHAPTER I
TITLE AND DECLARATION OF POLICIES

"Renewable Energy Act of 2008". It shall hereinafter be referred to
as the "Act".
SEC. 2. Declaration of Policies. - It is hereby declared the

policy of the State to:
(a) Accelerate the exploration and development of renewable

energy resources such as, but not limited to, biomass, solar, wind,
hydro, geothermal and ocean energy sources, including hybrid
systems, to achieve energy self-reliance, through the adoption of
sustainable energy development strategies to reduce the country's
dependence on fossil fuels and thereby minimize the country's
exposure to price fluctuations in the international markets, the
effects of which spiral down to almost all sectors of the economy;
(b) Increase the utilization of renewable energy by

institutionalizing the development of national and local capabilities
in the use of renewable energy systems, and promoting its efficient
and cost-effective commercial application by providing fiscal and
non-fiscal incentives;
(c) Encourage the development and utilization of renewable

energy resources as tools to effectively prevent or reduce harmful
emissions and thereby balance the goals of economic growth and
development with the protection of health and the environment;
and
2184
(d) Establish the necessary infrastructure and mechanism

to carry out the mandates specified in this Act and other existing
laws.
SEC. 3. Scope. - This Act shall establish the framework for

the accelerated development and advancement of renewable energy
resources, and the development of a strategic program to increase
its utilization.
SEC. 4. Definition of Terms. - As used in this Act, the following

terms are herein defined:
(a) "Biomass energy systems" refer to energy systems which

use biomass resources to produce heat, steam, mechanical power or
electricity through either thermochemical, biochemical or physico-
chemical processes, or through such other technologies which shall
comply with prescribed environmental standards pursuant to this
Act;
(b) "Biomass resources" refer to non-fossilized, biodegradable

organic material originating from naturally occurring or cultured
plants, animals and micro-organisms, including agricultural
products, by-products and residues such as, but not limited to,
biofuels except corn, soya beans and rice but including sugarcane and
coconut, rice hulls, rice straws, coconut husks and shells, corn cobs,
corn stovers, bagasse, biodegradable organic fractions of industrial
and municipal wastes that can be used in bioconversion process
and other processes, as well as gases and liquids recovered from the
decomposition and/or extraction of non-fossilized and biodegradable
organic materials;
(c) "Board of Investments" (BOI) refers to an attached

agency of the Department of Trade and Industry created under
Republic Act No. 5186, as amended;
(d) "Co-generation systems" refer to facilities which produce

electrical and/or mechanical energy and forms of useful thermal
energy such as heat or steam which are used for industrial,
of energy;
2185
(e) "Department of Energy" (DOE) refers to the government

agency created pursuant to Republic Act No. 7638 whose functions
are expanded in Republic Act No. 9136 and further expanded in this
Act;
(f) "Department of Environment and Natural Resources"

(DENR) refers to the government agency created pursuant to
Executive Order No. 192;
(g) "Department of Finance" (DOF) refers to the government

agency created pursuant to Executive Order No. 127, as amended;
(h) "Department of Science and Technology" (DOST) refers

to the government agency created pursuant to Executive Order No.
128;
(i) "Department of Trade and Industry" (DTI) refers to the

(j) "Distributed generation" refers to a system of small

generation entities supplying directly to the distribution grid, any
one of which shall not exceed one hundred kilowatts (100 kW) in
capacity;
(k) "Distribution of Electricity" refers to the conveyance of

electricity by a Distribution Utility through its distribution system
pursuant to the provision of Republic Act No. 9136;
(l) "Distribution Utility" (DU) refers to any electric

cooperative, private corporation, government-owned utility or
existing local government unit which has an exclusive franchise to
operate a distribution system in accordance with its franchise and
Republic Act No. 9136;
(m) "Electric Power Industry Reform Act of 2001" or Republic

Act No. 9136 refers to the law mandating the restructuring of the
electric power sector and the privatization of the National Power
Corporation;
(n) "Energy Regulatory Commission" (ERC) refers to the

independent quasi-judicial regulatory agency created pursuant to
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(o) "Generation Company" refers to any person or entity

electricity;
(p) "Generation Facility" refers to a facility for the production

of electricity and/or thermal energy such as, but not limited to,
steam, hot or cold water;
(q) "Geothermal energy" as used herein and in the context

of this Act, shall be considered renewable and the provisions of
this Act is therefore applicable thereto if geothermal energy, as a
mineral resource, is produced through: (1) natural recharge, where
the water is replenished by rainfall and the heat is continuously
produced inside the earth; and/or (2) enhanced recharge, where hot
water used in the geothermal process is re-injected into the ground
to produce more steam as well as to provide additional recharge to
the convection system;
(r) "Geothermal Energy Systems" refer to machines or other

equipment that converts geothermal energy into useful power;
(s) "Geothermal Resources" refer to mineral resources,

classified as renewable energy resource, in the form of: (i) all products
of geothermal processes, embracing indigenous steam, hot water,
and hot brines; (ii) steam and other gases, hot water, and hot brines
resulting from water, gas, or other fluids artificially introduced
into geothermal formations; (iii) heat or associated energy found in
geothermal formations; and (iv) any by-product derived from them;
(t) "Government Share" refers to the amount due the

National Government and Local Government Units from the
exploitation, development, and utilization of naturally-occurring
renewable energy resources such as geothermal, wind, solar, ocean
and hydro excluding biomass;
(u) "Green Energy Option" refers to the mechanism to

empower end-users to choose renewable energy in meeting their
energy requirements;
(v) "Grid" refers to the high voltage backbone system

of interconnected transmission lines, substations, and related
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facilities, located in each of Luzon, Visayas, and Mindanao, or

as may otherwise be determined by the ERC in accordance with
(w) "Hybrid Systems" refer to any power or energy generation

facility which makes use of two or more types of technologies
utilizing both conventional and/or renewable fuel sources, such as,
but not limited to, integrated solar/wind systems, biomass/fossil
fuel systems, hydro/fossil fuel systems, integrated solar/biomass
systems, integrated wind/fossil fuel systems, with a minimum of ten
(10) megawatts or ten percent (10%) of the annual energy output
provided by the RE component;
(x) "Hydroelectric Power Systems" or "Hydropower Systems"

refer to water-based energy systems which produce electricity by
utilizing the kinetic energy of falling or running water to turn a
turbine generator;
(y) "Hydroelectric Power Development" or "Hydropower

Development" refers to the construction and installation of a
hydroelectric power-generating plant and its auxiliary facilities,
such as diversion structure, headrace, penstock, substation,
transmission, and machine shop, among others;
(z) "Hydroelectric Power Resources" or "Hydropower

Resources" refer to water resources found technically feasible for
development of hydropower projects which include rivers, lakes,
waterfalls, irrigation canals, springs, ponds, and other water
bodies;
(aa) "Local government share" refers to the amount due

the LGUs from the exploitation, development and utilization of
naturally-occurring renewable energy resources;
(bb) "Micro-scale Project" refers to an RE project with capacity

not exceeding one hundred (100) kilowatts;
(cc) "Missionary Electrification" refers to the provision of

basic electricity service in unviable areas with the aim of bringing
the operations in these areas to viability levels;
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(dd) "National government share" refers to the amount due

the national government from the exploitation, development and
utilization of naturally-occurring renewable energy resources;
(ee) "National Power Corporation" (NPC) refers to the

amended by Republic Act No. 9136;
(ff) "National Transmission Corporation" (TRANSCO)

refers to the corporation created pursuant to Republic Act No. 9136
responsible for the planning, construction, and centralized operation
and maintenance of high voltage transmission facilities, including
grid interconnection and ancillary services;
(gg) "Net Metering" refers to a system, appropriate for

distributed generation, in which a distribution grid user has a two-
way connection to the grid and is only charged for his net electricity
consumption and is credited for any overall contribution to the
electricity grid;
(hh) "Non-power applications" refer to renewable energy

systems or facilities that produce mechanical energy, combustible
products such as methane gas, or forms of useful thermal energy
such as heat or steam, that are not used for electricity generation,
but for applications such as, but not limited to, industrial/commercial
cooling, and fuel for cooking and transport;
(ii) "Ocean Energy Systems" refer to energy systems which

convert ocean or tidal current, ocean thermal gradient or wave
energy into electrical or mechanical energy;
(jj) "Off-Grid Systems" refer to electrical systems not

connected to the wires and related facilities of the On-Grid Systems
of the Philippines;
(kk) "On-Grid System" refers to electrical systems composed

of interconnected transmission lines, distribution lines, substations,
and related facilities for the purpose of conveyance of bulk power on
the grid of the Philippines;
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(ll) "Philippine Electricity Market Corporation" (PEMC)

refers to the Corporation incorporated upon the initiative of the
DOE composed of all Wholesale Electricity Spot Market (WESM)
Members and whose Board of Directors will be the PEM Board;
(mm) "Philippine National Oil Company" (PNOC) refers to

the government agency created pursuant to Presidential Decree No.
334, as amended;
(nn) "Power applications" refer to renewable energy systems

or facilities that produce electricity;
(oo) "Registered RE Developer" refers to a RE Developer duly

registered with the DOE;
(pp) "Renewable Energy (Systems) Developers" or "RE

Developers" refer to individual/s or a group of individuals formed in
accordance with existing Philippine Laws engaged in the exploration,
development and utilization of RE resources and actual operation of
RE systems/facilities;
(qq) "Renewable Energy Market" (REM) refers to the market

where the trading of the RE certificates equivalent to an amount of
power generated from RE resources is made;
(rr) "Renewable Energy Policy Framework" (REPF) refers to

the long-term policy developed by the DOE which identifies among
others, the goals and targets for the development and utilization of
renewable energy in the country;
(ss) "Renewable Portfolio Standards" refer to a market-based

policy that requires electricity suppliers to source an agreed portion
of their energy supply from eligible RE resources;
(tt) "Renewable Energy Service (Operating) Contract (RE

Contract) " refers to the service agreement between the Government,
through the DOE, and RE Developer over a period in which the
RE Developer has the exclusive right to a particular RE area for
exploration and development. The RE Contract shall be divided into
two (2) stages: the pre-development stage and the development/
commercial stage. The preliminary assessment and feasibility study
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up to financial closing shall refer to the pre-development stage. The

construction and installation of facilities up to operation phase shall
refer to the development stage;
(uu) "Renewable Energy Resources" (RE Resources) refer to

energy resources that do not have an upper limit on the total quantity
to be used. Such resources are renewable on a regular basis, and
whose renewal rate is relatively rapid to consider availability over
an indefinite period of time. These include, among others, biomass,
solar, wind, geothermal, ocean energy, and hydropower conforming
with internationally accepted norms and standards on dams, and
other emerging renewable energy technologies;
(vv) "Renewable Energy Systems" (RE Systems) refer to

energy systems which convert RE resources into useful energy
forms, like electrical, mechanical, etc.;
(ww) "Rural Electrification" refers to the delivery of

basic electricity services, consisting of power generation, sub-
transmission, and/or extension of associated power delivery system
that would bring about important social and economic benefits to
the countryside;
(xx) "Solar Energy" refers to the energy derived from solar

radiation that can be converted into useful thermal or electrical
energy;
(yy) "Solar Energy Systems" refer to energy systems which

convert solar energy into thermal or electrical energy;
(zz) "Small Power Utilities Group" (SPUG) refers to the

functional unit of the NPC mandated under Republic Act No. 9136
to pursue missionary electrification function;
(aaa) "Supplier" refers to any person or entity authorized by

the ERC to sell, broker, market or aggregate electricity to the end-
users;
(bbb) "Transmission of Electricity" refers to the conveyance of

electric power through transmission lines as defined under Republic
Act No. 9136 by TRANSCO or its buyer/concessionaire in accordance
with its franchise and Republic Act No. 9136;
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(ccc) "Wind Energy" refers to the energy that can be derived

from wind that is converted into useful electrical or mechanical
energy;
(ddd)"Wind Energy Systems" refer to the machines or other

related equipment that convert wind energy into useful electrical or
mechanical energy;
(eee) "Wholesale Electricity Spot Market" (WESM) refers to

the wholesale electricity spot market created pursuant to Republic
Act No. 9136;
CHAPTER II
Organization
SEC. 5. Lead Agency. - The DOE shall be the lead agency

mandated to implement the provisions of this Act.
CHAPTER III
ON-GRID RENEWABLE ENERGY DEVELOPMENT
SEC. 6. Renewable Portfolio Standard (RPS). - All stakeholders

in the electric power industry shall contribute to the growth of the
renewable energy industry of the country. Towards this end, the
National Renewable Energy Board (NREB), created under Section
27 of this Act, shall set the minimum percentage of generation from
eligible renewable energy resources and determine to which sector
RPS shall be imposed on a per grid basis within one (1) year from
the effectivity of this Act.
SEC. 7. Feed-In Tariff System. - To accelerate the development

of emerging renewable energy resources, a feed-in tariff system for
electricity produced from wind, solar, ocean, run-of-river hydropower
and biomass is hereby mandated. Towards this end, the ERC in
consultation with the National Renewable Energy Board (NREB)
created under Section 27 of this Act shall formulate and promulgate
feed-in tariff system rules within one (1) year upon the effectivity of
this Act which shall include, but not limited to the following:
(a) Priority connections to the grid for electricity generated

from emerging renewable energy resources such as wind, solar,
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ocean, run-of-river hydropower and biomass power plants within

the territory of the Philippines;
(b) The priority purchase and transmission of, and payment

for, such electricity by the grid system operators;
(c) Determine the fixed tariff to be paid to electricity

produced from each type of emerging renewable energy and the
mandated number of years for the application of these rates, which
shall not be less than twelve (12) years;
(d) The feed-in tariff to be set shall be applied to the emerging

renewable energy to be used in compliance with the renewable
portfolio standard as provided for in this Act and in accordance with
the RPS rules that will be established by the DOE.
SEC. 8. Renewable Energy Market (REM). - To facilitate

compliance with Section 6 of this Act, the DOE shall establish the
REM and shall direct PEMC to implement changes to the WESM
Rules in order to incorporate the rules specific to the operation of
the REM under the WESM.
The PEMC shall, under the supervision of the DOE, establish

a Renewable Energy Registrar within one (1) year from the
effectivity of this Act and shall issue, keep and verify RE Certificates
corresponding to energy generated from eligible RE facilities. Such
certificates will be used for compliance with the RPS. For this
purpose, a transaction fee, equal to half of what PEMC currently
charges regular WESM players, may be imposed by PEMC.
SEC. 9. Green Energy Option. - The DOE shall establish a

Green Energy Option program which provides end-users the option
to choose RE resources as their sources of energy. In consultation
with the NREB, the DOE shall promulgate the appropriate
implementing rules and regulations which are necessary, incidental
or convenient to achieve the objectives set forth herein.
Upon the determination of the DOE of its technical viability

and consistent with the requirements of the green energy option
program, end users may directly contract from RE facilities
their energy requirements distributed through their respective
distribution utilities.
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Consistent herewith, TRANSCO or its successors-in-interest,

DUs, PEMC and all relevant parties are hereby mandated to
provide the mechanisms for the physical connection and commercial
arrangements necessary to ensure the success of the Green Energy
Option. The end-user who will enroll under the energy option
program should be informed by way of its monthly electric bill, how
much of its monthly energy consumption and generation charge is
provided by RE facilities.
SEC. 10. Net-metering for Renewable Energy. - Subject to

technical considerations and without discrimination and upon
request by distribution end-users, the distribution utilities shall
enter into net-metering agreements with qualified end-users who
will be installing RE system.
The ERC, in consultation with the NREB and the electric

power industry participants, shall establish net metering
interconnection standards and pricing methodology and other
commercial arrangements necessary to ensure success of the net-
metering for renewable energy program within one (1) year upon
The distribution utility shall be entitled to any Renewable

Energy Certificate resulting from net-metering arrangement with
the qualified end-user who is using an RE resource to provide energy
and the distribution utility shall be able to use this RE certificate in
compliance with its obligations under RPS.
The DOE, ERC, TRANSCO or its successors-in-interest, DUs,

PEMC and all relevant parties are hereby mandated to provide
the mechanisms for the physical connection and commercial
arrangements necessary to ensure the success of the Net-metering
for Renewable Energy program, consistent with the Grid and
Distribution Codes.
SEC. 11. Transmission and Distribution System Development.

- TRANSCO or its successors-in-interest or its buyer/concessionaire
and all DUs, shall include the required connection facilities for
RE-based power facilities in the Transmission and Distribution
Development Plans: Provided, That such facilities are approved by
the DOE. The connection facilities of RE power plants, including the
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extension of transmission and distribution lines, shall be subject

only to ancillary services covering such connections.
CHAPTER IV
OFF-GRID RENEWABLE ENERGY DEVELOPMENT
SEC. 12. Off-Grid Areas. - Within one (1) year from the
effectivity of this Act, NPC-SPUG or its successors-in-interest and/or
qualified third parties in off-grid areas shall, in the performance of
its mandate to provide missionary electrification, source a minimum
percentage of its total annual generation upon recommendation of
the NREB from available RE resources in the area concerned, as
may be determined by the DOE.
As used in this Act, successors-in-interest refer to entities

deemed technically and financially capable to serve/take over
existing NPC-SPUG areas.
Eligible RE generation in off-grid and missionary areas shall

be eligible for the provision of RE Certificates defined in Section 8
of this Act. In the event there are no viable RE resources in the off-
grid and missionary areas, the relevant electricity supplier in the
off-grid and missionary areas shall still be obligated under Section
6 of this Act.
CHAPTER V
GOVERNMENT SHARE
SEC. 13. Government Share. - The government share on

existing and new RE development projects shall be equal to one
percent (1%) of the gross income of RE resource developers resulting
from the sale of renewable energy produced and such other income
incidental to and arising from the renewable energy generation,
transmission, and sale of electric power except for indigenous
geothermal energy, which shall be at one and a half percent (1.5%)
of gross income.
To further promote the development of RE projects, the

government hereby waives its share from the proceeds of micro-scale
projects for communal purposes and non-commercial operations,
which are not greater than one hundred (100) kilowatts.
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CHAPTER VI
ENVIRONMENTAL COMPLIANCE
SEC. 14. Compliance with Environmental Regulations. - All RE

explorations, development, utilization, and RE systems operations
shall be conducted in accordance with existing environmental
regulations as prescribed by the DENR and/or any other concerned
government agency.
CHAPTER VII
GENERAL INCENTIVES
SEC. 15. Incentives for Renewable Energy Projects and

Activities. - RE developers of renewable energy facilities, including
hybrid systems, in proportion to and to the extent of the RE
component, for both power and non-power applications, as duly
certified by the DOE, in consultation with the BOI, shall be entitled
to the following incentives:
(a) Income Tax Holiday (ITH) - For the first seven (7) years
of its commercial operations, the duly registered RE developer shall
be exempt from income taxes levied by the national government.
Additional investments in the project shall be entitled to

additional income tax exemption on the income attributable to the
investment: Provided, That the discovery and development of new
RE resource shall be treated as a new investment and shall therefore
be entitled to a fresh package of incentives: Provided, further, That
the entitlement period for additional investments shall not be more
than three (3) times the period of the initial availment of the ITH.
(b) Duty-free Importation of RE Machinery, Equipment

and Materials - Within the first ten (10) years upon the issuance
of a certification of an RE developer, the importation of machinery
and equipment, and materials and parts thereof, including control
and communication equipment, shall not be subject to tariff duties:
Provided, however, That the said machinery, equipment, materials
and parts are directly and actually needed and used exclusively
in the RE facilities for transformation into energy and delivery of
energy to the point of use and covered by shipping documents in the
name of the duly registered operator to whom the shipment will be
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directly delivered by customs authorities: Provided, further, That

endorsement of the DOE is obtained before the importation of such
machinery, equipment, materials and parts are made.
Endorsement of the DOE must be secured before any sale,

transfer or disposition of the imported capital equipment, machinery
or spare parts is made: Provided, That if such sale, transfer or
disposition is made within the ten (10)-year period from the date of
importation, any of the following conditions must be present:
(i) If made to another RE developer enjoying tax and duty

exemption on imported capital equipment;
(ii) If made to a non-RE developer, upon payment of any

taxes and duties due on the net book value of the capital equipment
to be sold;
(iii) Exportation of the used capital equipment, machinery,

spare parts or source documents or those required for RE
development; and
(iv) For reasons of proven technical obsolescence.
When the aforementioned sale, transfer or disposition is made

under any of the conditions provided for in the foregoing paragraphs
after ten (10) years from the date of importation, the sale, transfer
or disposition shall no longer be subject to the payment of taxes and
duties;
(c) Special Realty Tax Rates on Equipment and Machinery.

- Any law to the contrary notwithstanding, realty and other taxes
on civil works, equipment, machinery, and other improvements of
a Registered RE Developer actually and exclusively used for RE
facilities shall not exceed one and a half percent (1.5%) of their
original cost less accumulated normal depreciation or net book
value: Provided, That in case of an integrated resource development
and generation facility as provided under Republic Act No. 9136,
the real property tax shall only be imposed on the power plant;
(d) Net Operating Loss Carry-Over (NOLCO). - The NOLCO

of the RE Developer during the first three (3) years from the start
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of commercial operation which had not been previously offset as

deduction from gross income shall be carried over as a deduction
from gross income for the next seven (7) consecutive taxable years
immediately following the year of such loss: Provided, however, That
operating loss resulting from the availment of incentives provided
for in this Act shall not be entitled to NOLCO;
(e) Corporate Tax Rate. - After seven (7) years of income tax
holiday, all RE Developers shall pay a corporate tax of ten percent
(10%) on its net taxable income as defined in the National Internal
Revenue Act of 1997, as amended by Republic Act No. 9337. Provided,
That the RE Developer shall pass on the savings to the end-users in
the form of lower power rates.
(f) Accelerated Depreciation. - If, and only if, an RE

project fails to receive an ITH before full operation, it may apply
for Accelerated Depreciation in its tax books and be taxed based
on such: Provided, That if it applies for Accelerated Depreciation,
the project or its expansions shall no longer be eligible for an ITH.
Accelerated depreciation of plant, machinery, and equipment
that are reasonably needed and actually used for the exploration,
development and utilization of RE resources may be depreciated
using a rate not exceeding twice the rate which would have been
used had the annual allowance been computed in accordance
with the rules and regulations prescribed by the Secretary of the
Department of Finance and the provisions of the National Internal
Revenue Code (NIRC) of 1997, as amended. Any of the following
methods of accelerated depreciation may be adopted:
i) Declining balance method; and

ii) Sum-of-the years digit method
(g) Zero Percent Value-Added Tax Rate. - The sale of fuel

or power generated from renewable sources of energy such as, but
not limited to, biomass, solar, wind, hydropower, geothermal, ocean
energy and other emerging energy sources using technologies such
as fuel cells and hydrogen fuels, shall be subject to zero percent (0%)
value-added tax (VAT), pursuant to the National Internal Revenue
Code (NIRC) of 1997, as amended by Republic Act No. 9337.
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All RE Developers shall be entitled to zero-rated value

added tax on its purchases of local supply of goods, properties and
services needed for the development, construction and installation
of its plant facilities.This provision shall also apply to the whole
process of exploring and developing renewable energy sources up to
its conversion into power, including but not limited to the services
performed by subcontractors and/or contractors.
(h) Cash Incentive of Renewable Energy Developers

for Missionary Electrification. - A renewable energy developer,
established after the effectivity of this Act, shall be entitled to a
cash generation-based incentive per kilowatt hour rate generated,
equivalent to fifty percent (50%) of the universal charge for power
needed to service missionary areas where it operates the same,
to be chargeable against the universal charge for missionary
electrification;
(i) Tax Exemption of Carbon Credits. - All proceeds from

the sale of carbon emission credits shall be exempt from any and all
taxes;
(j) Tax Credit on Domestic Capital Equipment and Services.

- A tax credit equivalent to one hundred percent (100%) of the value
of the value-added tax and custom duties that would have been paid
on the RE machinery, equipment, materials and parts had these
items been imported shall be given to an RE operating contract
holder who purchases machinery, equipment, materials, and parts
from a domestic manufacturer for purposes set forth in this Act:
Provided, That prior approval by the DOE was obtained by the
local manufacturer: Provided, further, That the acquisition of such
machinery, equipment, materials, and parts shall be made within
the validity of the RE operating contract.
SEC. 16. Environmental Compliance Certificate (ECC). -

Notwithstanding Section 17 (b) (3) (iii) of Republic Act No. 7160,
it would be sufficient for the renewable energy developer to
secure the Environmental Compliance Certificate (ECC) from the
corresponding regional office of the DENR.
SEC. 17. Exemption from the Universal Charge. - Power

and electricity generated through the RES for the generator's own
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consumption and/or for free distribution in the off-grid areas shall

be exempted from the payment of the universal charge provided for
under Section 34 of Republic Act No. 9136.
SEC. 18. Payment of Transmission Charges. - A registered

renewable energy developer producing power and electricity from
an intermittent RE resource may opt to pay the transmission and
wheeling charges of TRANSCO or its successors-in-interest on a per
kilowatt-hour basis at a cost equivalent to the average per kilowatt-
hour rate of all other electricity transmitted through the grid.
SEC. 19. Hybrid and Cogeneration Systems. - The tax

exemptions and/or incentives provided for in Section 15 of this
Act shall be availed of by registered RE Developer of hybrid and
cogeneration systems utilizing both RE sources and conventional
energy: Provided, however, That the tax exemptions and incentives
shall apply only to the equipment, machinery and/or devices utilizing
RE resources.
SEC. 20. Intermittent RE Resources. - TRANSCO or its

successors-in-interest, in consultation with stakeholders, shall
determine the maximum penetration limit of the Intermittent RE-
based power plants to the Grid, through technical and economic
analysis. Qualified and registered RE generating units with
intermittent RE resources shall be considered "must dispatch" based
on available energy and shall enjoy the benefit of priority dispatch.
All provisions under the WESM Rules, Distribution and Grid Codes
which do not allow "must dispatch" status for intermittent RE
resources shall be deemed amended or modified. The PEMC and
TRANSCO or its successors-in-interest shall implement technical
mitigation and improvements in the system in order to ensure safety
and reliability of electricity transmission.
As used in this Act, RE generating unit with intermittent RE

resources refers to a RE generating unit or group of units connected
to a common connection point whose RE energy resource is location-
specific naturally difficult to precisely predict the availability of
RE energy resource thereby making the energy generated variable,
unpredictable and irregular and the availability of the resource
inherently uncontrollable, which include plants utilizing wind,
solar, run-of-river hydro or ocean energy.
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SEC. 21. Incentives for RE Commercialization. - All

manufacturers, fabricators and suppliers of locally-produced RE
equipment and components duly recognized and accredited by
the DOE, in consultation with DOST, DOF and DTI, shall, upon
registration with the BOI, be entitled to the privileges set forth
under this section.
Consistent with Article 7, Item (20) of EO No. 226, the

registration with the BOI, as provided for in Section 15 and Section
21 of this Act, shall be carried out through an agreement and an
administrative arrangement between the BOI and the DOE, with
the end-view of facilitating the registration of qualified RE facilities
based on the implementing rules and regulations that will be
developed by DOE. It is further mandated that the applications for
registration will be positively acted upon by BOI on the basis of the
accreditation issued by DOE.
The Renewable Energy Sector is hereby declared a priority

investment sector that will regularly form part of the country's
Investment Priority Plan, unless declared otherwise by law. As
such, all entities duly accredited by the DOE under this Act shall be
entitled to all the incentives provided herein.
(a) Tax and Duty-free Importation of Components, Parts

and Materials. - All shipments necessary for the manufacture and/
or fabrication of RE equipment and components shall be exempted
from importation tariff and duties and value added tax: Provided,
however, That the said components, parts and materials are: (i) not
manufactured domestically in reasonable quantity and quality at
competitive prices; (ii) directly and actually needed and shall be
used exclusively in the manufacture/fabrication of RE equipment;
and (iii) covered by shipping documents in the name of the duly
registered manufacturer/fabricator to whom the shipment will be
directly delivered by customs authorities: Provided, further,
That prior approval of the DOE was obtained before the

importation of such components, parts and materials;
(b) Tax Credit on Domestic Capital Components, Parts

and Materials. - A tax credit equivalent to one hundred percent
(100%) of the amount of the value-added tax and customs duties
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that would have been paid on the components, parts and materials
had these items been imported shall be given to an RE equipment
manufacturer, fabricator, and supplier duly recognized and
accredited by the DOE who purchases RE components, parts and
materials from a domestic manufacturer: Provided, That such
components, and parts are directly needed and shall be used
exclusively by the RE manufacturer, fabricator and supplier for the
manufacture, fabrication and sale of the RE equipment: Provided,
further, That prior approval by the DOE was obtained by the local
manufacturer;
(c) Income Tax Holiday and Exemption. - For seven (7)

years starting from the date of recognition/accreditation, an RE
manufacturer, fabricator and supplier of RE equipment shall be fully
exempt from income taxes levied by the National Government on
net income derived only from the sale of RE equipment, machinery,
parts and services; and
(d) Zero-rated value added tax transactions - All

manufacturers, fabricators and suppliers of locally produced
renewable energy equipment shall be subject to zero-rated value
added tax on its transactions with local suppliers of goods, properties
and services.
SEC. 22. Incentives for Farmers Engaged in the Plantation

of Biomass Resources. - For a period of ten (10) years after the
effectivity of this Act, all individuals and entities engaged in the
plantation of crops and trees used as biomass resources such as but
not limited to jatropha, coconut, and sugarcane, as certified by the
Department of Energy, shall be entitled to duty-free importation
and be exempted from Value-Added Tax (VAT) on all types of
agricultural inputs, equipment and machinery such as, but not
limited to, fertilizer, insecticide, pesticide, tractor, trailers, trucks,
farm implements and machinery, harvesters, threshers, hybrid
seeds, genetic materials, sprayers, packaging machinery and
materials, bulk handling facilities, such as conveyors and mini-
loaders, weighing scales, harvesting equipment, and spare parts of
all agricultural equipment.
SEC. 23. Tax Rebate for Purchase of RE Components. - To

encourage the adoption of RE technologies, the DOF, in consultation
2202
with DOST, DOE, and DTI, shall provide rebates for all or part
of the tax paid for the purchase of RE equipment for residential,
industrial, or community use. The DOF shall also prescribe the
appropriate period for granting the tax rebates.
SEC. 24. Period of Grant of Fiscal Incentives. - The fiscal

incentives granted under Section 15 of this Act shall apply to all RE
capacities upon the effectivity of this Act. The National Renewable
Energy Board, in coordination with the Department of Energy,
shall submit a yearly report on the implementation of this Act to
the Philippine Congress, through the Joint Congressional Power
Commission, every January of each year following the period in
review, indicating among others, the progress of RE development in
the country and the benefits and impact generated by the development
and utilization of its renewable energy resources in the context of
its energy security and climate change imperatives. This shall serve
as basis for the Joint Congressional Power Commission review of
the incentives as provided for in this Act towards ensuring the full
development of the country's RE capacities under a rationalized
market and incentives scheme.
SEC. 25. Registration of RE Developers and local manufacturers,

fabricators and suppliers of locally-produced renewable energy
equipment. - RE Developers and local manufacturers, fabricators
and suppliers of locally-produced renewable energy equipment shall
register with the Department of Energy, through the Renewable
Energy Management Bureau. Upon registration, a certification shall
be issued to each RE Developer and local manufacturer, fabricator
and supplier of locally-produced renewable energy equipment to
serve as the basis of their entitlement to incentives provided under
Chapter VII of this Act.
SEC. 26. Certification from the Department of Energy. - All

certifications required to qualify RE developers to avail of the
incentives provided for under this Act shall be issued by the DOE
through the Renewable Energy Management Bureau.
The Department of Energy, through the Renewable Energy

Management Bureau shall issue said certification fifteen (15) days
upon request of the renewable energy developer or manufacturer,
fabricator or supplier. Provided, That the certification issued by
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the Department of Energy shall be without prejudice to any further

requirements that may be imposed by the concerned agencies of the
government charged with the administration of the fiscal incentives
abovementioned.
CHAPTER VIII
GENERAL PROVISIONS
SEC. 27. Creation of the National Renewable Energy Board

(NREB). - The NREB is hereby created. It shall be composed of
a Chairman and one (1) representative each from the following
agencies: DOE, DTI, DOF, DENR, NPC, TRANSCO or its
successors-in-interest, PNOC and PEMC who shall be designated
by their respective secretaries on a permanent basis; and one (1)
representative each from the following sectors: RE Developers,
Government Financial Institutions (GFIs), private distribution
utilities, electric cooperatives, electricity suppliers and non-
governmental organizations, duly endorsed by their respective
industry associations and all to be appointed by the President of the
Republic of the Philippines.
The Chairman shall, within one (1) month from the effectivity
of this Act, convene the NREB.
The NREB shall be assisted by a Technical Secretariat from

the Renewable Energy Management Bureau of the DOE, created
under Section 32 hereof, and shall directly report to the Office of
the Secretary or the Undersecretary of the Department, as the case
maybe, on matters pertaining to the activities of the NREB. The
number of staff of the Technical Secretariat and the creation of
corresponding positions necessary to complement and/or augment
the existing plantilla of the REMB shall be determined by the Board,
subject to approval by the Department of Budget and Management
(DBM) and to existing civil service rules and regulations.
The NREB shall have the following powers and functions:
(a) Evaluate and recommend to the DOE the mandated RPS

and minimum RE generation capacities in off-grid areas, as it deems
appropriate;
2204
(b) Recommend specific actions to facilitate the

implementation of the National Renewable Energy Program
(NREP) to be executed by the DOE and other appropriate agencies
of government and to ensure that there shall be no overlapping and
redundant functions within the national government departments
and agencies concerned;
(c) Monitor and review the implementation of the NREP,

including compliance with the RPS and minimum RE generation
capacities in off-grid areas;
(d) Oversee and monitor the utilization of the Renewable

Energy Trust Fund created pursuant to Section 28 of this Act and
administered by the DOE; and
(e) Perform such other functions, as may be necessary, to

attain the objectives of this Act.
SEC. 28. Renewable Energy Trust Fund (RETF). - A

Renewable Energy Trust Fund is hereby established to enhance the
development and greater utilization of renewable energy. It shall be
administered by the DOE as a special account in any of the GFIs.
The RETF shall be exclusively used to:
(a) Finance the research, development, demonstration, and

promotion of the widespread and productive use of RE systems for
power and non-power applications, as well as to provide funding for
R & D institutions engaged in renewable energy studies undertaken
jointly through public-private sector partnership, including provision
for scholarship and fellowship for energy studies;
(b) Support the development and operation of new RE

resources to improve their competitiveness in the market: Provided,
That the grant thereof shall be done through a competitive and
transparent manner;
(c) Conduct nationwide resource and market assessment

studies for the power and non-power applications of renewable
energy systems;
2205
(d) Propagate RE knowledge by accrediting, tapping,

training, and providing benefits to institutions, entities and
organizations which can extend the promotion and dissemination of
RE benefits to the national and local levels; and
(e) Fund such other activities necessary or incidental to

the attainment of the objectives of this Act. Use of the fund may
be through grants, loans, equity investments, loan guarantees,
insurance, counterpart fund or such other financial arrangements
necessary for the attainment of the objectives of this Act: Provided,
That the use or allocation thereof shall, as far as practicable, be
done through a competitive and transparent manner.
The RETF shall be funded from:
(a) Proceeds from the emission fees collected from all

generating facilities consistent with Republic Act No. 8749 or the
Philippine Clean Air Act;
(b) One and 1/2 percent (1.5%) of the net annual income of
the Philippine Charity Sweepstakes Office;
(c) One and 1/2 percent (1.5%) of the net annual income of
the Philippine Amusement and Gaming Corporation;
(d) One and 1/2 percent (1.5%) of the net annual dividends
remitted to the National Treasury of the Philippine National Oil
Company and its subsidiaries;
(e) Contributions, grants and donations: Provided, That all

contributions, grants and donations made to the RETF shall be tax
deductible subject to the provisions of the National Internal Revenue
Code. Towards this end, the BIR shall assist the DOE in formulating
the Rules and Regulations to implement this provision;
(f) One and 1/2 percent (1.5%) of the proceeds of the

Government share collected from the development and use of
indigenous non-renewable energy resources;
(g) Any revenue generated from the utilization of the RETF;

and
2206
(h) Proceeds from the fines and penalties imposed under

this Act.
SEC. 29. Financial Assistance Program. - Government financial

institutions such as the Development Bank of the Philippines (DBP),
Land Bank of the Philippines (LBP), Phil-Exim Bank and other
government financial institutions shall, in accordance with and to
the extent allowed by the enabling provisions of their respective
charters or applicable laws, provide preferential financial packages
for the development, utilization and commercialization of RE
projects as duly recommended and endorsed by the DOE.
SEC. 30. Adoption of Waste-To-Energy Technologies. - The

DOE shall, where practicable, encourage the adoption of waste-to-
energy facilities such as, but not limited to, biogas systems. The
DOE shall, in coordination with the DENR, ensure compliance with
this provision.
As used in this Act, waste-to-energy technologies shall refer to

systems which convert to biodegradable materials such as, but not
limited to, animal manure or agricultural waste, into useful energy
through processes such as anaerobic digestion, fermentation and
gasification, among others, subject to the provisions and intent of
Republic Act No. 8749 (Clean Air Act of 1999) and Republic Act No.
9003 (Ecological Solid Waste Management Act of 2000).
Sec. 31. Incentives for RE Host Communities/LGUs. - Eighty

percent (80%) of the share from royalty and/or government share of
RE host communities/LGUs from RE projects and activities shall be
used directly to subsidize the electricity consumption of end users
in the RE host communities/LGUs whose monthly consumption do
not exceed one hundred (100) kwh. The subsidy may be in the form
of rebates, refunds and/or any other forms as may be determined by
DOE, DOF and ERC, in coordination with NREB.
The DOE, DOF and ERC, in coordination with the NREB and
in consultation with the distribution utilities shall promulgate the
mechanisms to implement this provision within six months from
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SEC. 32. Creation of the Renewable Energy Management

Bureau. - For the purpose of implementing the provisions of this
Act, a Renewable Energy Management Bureau (REMB) under the
DOE is hereby established, and the existing Renewable Energy
Management Division of the Energy Utilization Management
Bureau of the DOE, whose plantilla shall form the nucleus of REMB,
is hereby dissolved. The organizational structure and staffing
complement of the REMB shall be determined by the Secretary
of the DOE, in consultation with the Department of Budget and
Management, in accordance with existing civil service rules and
regulations. The budgetary requirements necessary for the creation
of the REMB shall be taken from the current appropriations of the
DOE. Thereafter, the funding for the REMB shall be included in the
annual General Appropriations Act.
The REMB shall have the following powers and functions:
(a) Implement policies, plans and programs related to

the accelerated development, transformation, utilization and
commercialization of renewable energy resources and technologies;
(b) Develop and maintain a centralized, comprehensive and

unified data and information base on renewable energy resources
to ensure the efficient evaluation, analysis, and dissemination of
data and information on renewable energy resources, development,
utilization, demand and technology application;
(c) Promote the commercialization/application of renewable

energy resources including new and emerging technologies for
efficient and economical transformation, conversion, processing,
marketing and distribution to end users;
(d) Conduct technical research, socio-economic and

environmental impact studies of renewable energy projects for the
development of sustainable renewable energy systems;
(e) Supervise and monitor activities of government and

private companies and entities on renewable energy resources
development and utilization to ensure compliance with existing
rules, regulations, guidelines and standards;
2208
(f) Provide information, consultation and technical training

and advisory services to developers, practitioners and entities
involved in renewable energy technology and develop renewable
energy technology development strategies; and
(g) Perform other functions that may be necessary for the

effective implementation of this Act and the accelerated development
and utilization of the renewable energy resources in the country.
CHAPTER IX
FINAL PROVISIONS
SEC. 33. Implementing Rules and Regulations (IRR). - Within

six (6) months from the effectivity of this Act, the DOE shall, in
consultation with the Senate and House Committees on Energy,
relevant government agencies and RE stakeholders, promulgate the
IRR of this Act.
SEC. 34. Congressional Oversight. - Upon the effectivity of

this Act, the Joint Congressional Power Commission created under
Section 62 of Republic Act No. 9136, otherwise known as the "Electric
Power Industry Reform Act of 2001" shall exercise oversight powers
over the implementation of this Act.
SEC. 35. Prohibited Acts. - The following acts shall be

prohibited:
(a) Non-compliance or violation of the RPS rules;
(b) Willful refusal to undertake net metering arrangements

with qualified distribution grid users;
(c) Falsification or tampering of public documents or official

records to avail of the fiscal and non-fiscal incentives provided under
this Act;
(d) Failure and willful refusal to issue the single certificate

referred to in Section 26 of this Act; and
(e) Non-compliance with the established guidelines that

DOE will adopt for the implementation of this Act.
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SEC. 36. Penalty Clause. - Any person who willfully commits

any of the prohibited acts enumerated under this Act, shall be
imposed with the penalties provided herein. Any person, who
willfully aids or abets the commission of a crime prohibited herein
or who causes the commission of any such act by another shall be
liable in the same manner as the principal.
In the case of association, partnership or corporations, the

penalty shall be imposed on the partner, president, chief operating
officer, chief executive officer, directors or officers responsible for
the violation.
The commission of any prohibited acts provided for under

Section 35, upon conviction thereof, shall suffer the penalty of
imprisonment of from one (1) year to five (5) years, or a fine ranging
from a minimum of One Hundred Thousand Pesos (P100,000.00) to
One Hundred Million Pesos (P100,000,000.00), or twice the amount
of damages caused or costs avoided for non-compliance, whichever
is higher, or both upon the discretion of the court.
The DOE is further empowered to impose administrative fines

and penalties for any violation of the provisions of this Act, its IRR
and other issuances relative to this Act.
This is without prejudice to the penalties provided for under

existing environmental regulations prescribed by the DENR and/or
any other concerned government agency.
SEC. 37. Appropriations. - Such sums as may be necessary

for the initial implementation of this Act shall be taken from the
current appropriations of the DOE. Thereafter, the fund necessary
to carry out the provisions of this Act shall be included in the annual
General Appropriations Act.
SEC. 38. Separability Clause. - If any provision of this Act

is held invalid unconstitutional, the remainder of the Act or the
provision not otherwise affected shall remain valid and subsisting.
SEC. 39. Repealing Clause. - Any law, presidential decree or

issuance, executive order, letter of instruction, administrative rule
2210
or regulation contrary to or inconsistent with the provisions of this

Act is hereby repealed, modified or amended accordingly.
Consistent with the foregoing paragraph and Section 13 of this

Act, Section 1 of Presidential Decree No. 1442 or the Geothermal
Resources Exploration and Development Act, insofar as the
exploration of geothermal resources by the government, and Section
10 (1) of Republic Act No. 7156 otherwise known as the "Mini-Hydro
Electric Power Incentive Act", insofar as the special privilege tax
rate of two percent (2%) are hereby repealed, modified or amended
accordingly.
SEC. 40. Effectivity Clause. - This Act shall take effect fifteen
(15) days after its publication in at least two (2) newspapers of
APPROVED, December 16, 2008.
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DEPARTMENT CIRCULAR No. DC2009-05-0008
RULES AND REGULATIONS IMPLEMENTING THE

REPUBLIC ACT No. 9513
Pursuant to Section 33 of Republic Act No. 9513, otherwise

known as The Renewable Energy Act of 2008, the Department of
Energy, in consultation with the Senate and House of Representatives
Committees on Energy, the National Renewable Energy Board,
relevant government agencies and all RE stakeholders, hereby
issues, adopts and promulgates the following implementing rules
and regulations.
PART I. GENERAL PROVISIONS
RULE 1. TITLE DECLARATION OF POLICIES AND

DEFINITION OF TERMS
SECTION 1. Title and Scope
This Department Circular shall be known as the “Implementing

Rules and Regulations (IRR) of Republic Act No. 9513,” otherwise
known as the “Renewable Energy Act of 2008, and hereinafter
referred to as the “Act” in this IRR.
The scope of this IRR is to provide rules and regulations, and

guidelines for the:
(a) Exploration, development, utilization and

commercialization of renewable energy resources such as
biomass, solar, wind, hydropower, geothermal and ocean
energy sources, including application of hybrid systems
and other emerging renewable energy technologies
in the Philippines for the generation, transmission,
distribution, sale and use of electricity, and fuel generated
from renewable energy resources;
(b) Establishment of the framework for the accelerated

sustainable development and advancement of renewable
2212
energy resources, and the development of a strategic

program to increase its utilization;
(c) Clarification of specific provisions of the Act and the

responsibilities and functions of various government
agencies, institutions, government-owned and controlled
corporations and local government units, the private
sector and other stakeholders, and their relationships
with the National Renewable Energy Board (NREB);
and
(4) Direction and support for existing and new renewable

energy developers and manufactures, fabricators
and suppliers of locally-produced renewable energy
equipment.
SEC. 2. Declaration of Policies
It is hereby declared the policy of the State to
(a) Accelerate the exploration and development of renewable

energy resources such as, but not limited to, biomass, solar, wind,
hydro, geothermal and ocean energy sources, including hybrid
systems, to achieve energy self-reliance, through the adoption of
sustainable energy development strategies to reduce the country’s
dependence on fossil fuels and thereby minimize the country’s
exposure to price fluctuations in the international markets, the
effects of which spiral down to almost all sectors of the economy;
(b) Increase the utilization of renewable energy by institutionalizing

the development of national and local capabilities in the use of
renewable energy systems, and promoting its efficient and cost
effective commercial application by providing fiscal and non fiscal
incentives;
(c) Encourage the sustainable development and utilization of

renewable energy resources as tools to effectively prevent or reduce
harmful emissions and thereby balance the goals of economic
growth and development with the protection of health, safety and
the environment;
2213
(d) the full development and use of renewable energy as a tool to

address the cross-cutting issues of gender, poverty, and economic
development; and
(e) Establish the necessary infrastructure and mechanism to carry

out the mandates specified in the Act and other existing relevant
and related laws.
SEC. 3. Definition of Terms
As used in these rules, the following terms shall be defined as

follows:
(a) “Ancillary Services” refers to support services which are

necessary to support the transmission capacity and transmission of
energy from resources to loads towards maintaining power quality,
reliability and security of the grid through frequency regulating and
contingency reserves, reactive power support, black start capability,
and other services as may be determined by the Energy Regulatory
Commission (ERC)
(b) “Biomass energy systems” refer to energy systems which

use biomass resources to produce heat, steam, mechanical power
or electricity through either thermochemical, biochemical or
physicochemical processes, or through such other technologies which
shall comply with prescribed environmental standards pursuant to
this Act;
(c) “Biomass Resources” refer to non-fossilized, biodegradable

organic material originating from naturally occurring or cultured
plants, animals and micro-organisms, including agricultural
products, by-products and residues such as, but not limited to,
biofuels except corn, soya beans and rice but including sugarcane and
coconut, rice hulls, rice straws, coconut husks and shells, corn cobs,
corn stovers, bagasse, biodegradable organic fractions of industrial
and municipal wastes that can be used in bioconversion process
and other processes, as well as gases and liquids recovered from the
decomposition and/or extraction of non-fossilized and biodegradable
organic materials;
2214
(d) “Board of Investments” (BOI) refers to an attached agency

of the Department of Trade and Industry created under Republic
Act No. 5186, as amended;
(e) “Co-generation systems” refer to facilities which produce

energy such as heat or steam which are used for industrial,
of energy;
(f) “Department of Energy” (DOE) refers to the government

agency created pursuant to Republic Act No. 7638 whose functions
are expanded in Republic Act No. 9136 and further expanded in the
Act;
(g) “Department of Environment and Natural Resources”

(DENR) refers to the government agency created pursuant to
Executive Order No. 192;
(h) “Department of Finance” (DOF) refers to the government

agency created pursuant to Executive Order No. 127, as amended;
(i) “Department of Science and Technology” (DOST) refers

to the government agency created pursuant to Executive Order No.
128;
(j) “Department of Trade and Industry” (DTI) refers to the

(k) “Distributed Generation” refers to a system of small

generation entities supplying directly to the distribution grid, any
one of which shall not exceed 100 kw in capacity;
(l) “Distribution of Electricity” refers to the conveyance of

electricity by a Distribution Utility through its distribution system
pursuant to the provision of Republic Act No. 9136;
(m) “Distribution Utility” (DU) refers to any electric cooperative,

private corporation, government-owned utility or existing local
government unit which has an exclusive franchise to operate a
2215
distribution system in accordance with its franchise and Republic

Act No. 9136 otherwise referred to as (DU);
(n) “Electric Power Industry Reform Act (EPIRA) of 2001” or

Republic Act No. 9136 refers to the law mandating the restructuring
of the electric power sector and the privatization of the NPC
otherwise known as “EPIRA”;
(o) “Energy Regulatory Commission” (ERC) refers to the

independent quasi-judicial regulatory agency created pursuant to
(p) “Generation Company” refers to any person or entity

electricity;
(q) “Generation Facility” refers to a facility for the production of

electricity and/or thermal energy such as, but not limited to, steam,
hot or cold water;
(r) “Geothermal energy” as used herein and in the context of

the Act, shall be considered renewable and the provisions of the
Act is therefore applicable thereto if geothermal energy, as a
mineral resource, is produced through: (1) natural recharge, where
the water is replenished by rainfall and the heat is continuously
produced inside the earth; and/or (2) enhanced recharge, where hot
water used in the geothermal process is re-injected into the ground
to produce more steam as well as to provide additional recharge to
the convection system;
(s) “Geothermal Energy Systems” refer to machines or other

equipment that converts geothermal energy into useful power;
(t) “Geothermal Resources” refers to mineral resources,

classified as renewable energy resource, in the form of: (i) all products
of geothermal processes, embracing indigenous steam, hot water,
and hot brines; (ii) steam and other gases, hot water, and hot brines
resulting from water, gas, or other fluids artificially introduced
into geothermal formations; (iii) heat or associated energy found in
geothermal formations; and (iv) any by-product derived from them;
2216
(u) “Government Share” refers to the amount due the National

Government and Local Government Units from the exploitation,
development, and utilization of naturally-occurring renewable
energy resources such as geothermal, wind, solar, ocean and hydro
excluding biomass;
(v) “Green Energy Option” refers to the mechanism to empower

end-users to choose renewable energy in meeting their energy
requirements;
(w) “Grid” refers to the high voltage backbone system of

interconnected transmission lines, substations, and related
facilities, located in each of Luzon, Visayas, and Mindanao, or
as may otherwise be determined by the ERC in accordance with
(x) “Host LGU” refers to the local government unit where the
energy resource and/or energy generating facility is located
(y) “Hybrid Systems” refer to any power or energy generation

facility which makes use of two or more types of technologies
utilizing both conventional and/or renewable fuel sources, such as,
but not limited to, integrated solar/wind systems, biomass/fossil
fuel systems, hydro/fossil fuel systems, integrated solar/biomass
systems, integrated wind/fossil fuel systems, with a minimum of
ten (10) megawatts or ten percent (10% of the annual energy output
provided by the RE component;
(z) “Hydroelectric Power Development or Hydropower

Development” refers to the construction and installation of a
hydroelectric power-generating plant and its auxiliary facilities,
such as diversion structure, headrace, penstock, substation,
transmission, and machine shop, among others;
(aa) “Hydroelectric Power Resources or Hydropower

Resources” refer to water resources found technically feasible for
development of hydropower projects which include rivers, lakes,
waterfalls, irrigation canals, springs, ponds, and other water
bodies;
2217
(bb) “Hydroelectric Power Systems or Hydropower Systems”

refer to water-based energy systems which produce electricity by
utilizing the kinetic energy of falling or running water to turn a
turbine generator;
(cc) “ Local Government” refers to the political subdivisions

established by or in accordance with the Philippine Constitution
pursuant to Executive Order No. 292 or Republic Act No. 7160,
which include the province, city, municipality and barangay;
(dd) “Local government share” refers to the amount due the

local government units (LGUs) from the exploitation, development
and utilization of naturally occurring renewable energy resources;
(ee) “Micro-scale Project” refers to an RE project with capacity

not exceeding one hundred kilowatts (100kW);
(ff) “Missionary Electrification” refers to the provision of basic

electricity service in unviable areas with the aim of bringing the
operations in these areas to viability levels;
(gg) “National Government” refers to the entire machinery of

the central government, as distinguished from the different forms
of local governments pursuant to Executive Order No. 292 or the
Administrative Code of 1987;
(hh) “National government share” refers to the amount due

the national government from the exploitation, development and
utilization of naturally-occurring renewable energy resources;
(ii) “National Power Corporation” (NPC) refers to the

amended by Republic Act No. 9136;
(jj) “National Transmission Corporation” (TRANSCO)

refers to the corporation created pursuant to Republic Act No. 9136
responsible for the planning, construction, and centralized operation
and maintenance of high voltage transmission facilities, including
grid interconnection and ancillary services;
2218
(kk) “Net Metering” refers to a system, appropriate for distributed

generation, in which a distribution grid user has a two-way connection
to the grid and is only charged for his net electricity consumption
and is credited for any overall contribution to the electricity grid;
(ll) “Non-power applications” refer to renewable energy systems

or facilities that produce mechanical energy, combustible products
such as methane gas, or forms of useful thermal energy such as
heat or steam, that are not used for electricity generation, but for
applications such as, but not limited to, industrial/commercial
cooling, and fuel for cooking and transport;
(mm) “Ocean Energy Systems” refer to energy systems which

convert ocean or tidal current, ocean thermal gradient or wave
energy into electrical or mechanical energy;
(nn) “Off-Grid Systems” refer to electrical systems not connected

to the wires and related facilities of the On-Grid Systems of the
Philippines;
(oo) “On-Grid System” refers to electrical systems composed of

interconnected transmission lines, distribution lines, substations,
and related facilities for the purpose of conveyance of bulk power on
the Grid of the Philippines;
(pp) “Philippine Electricity Market Corporation” (PEMC)

refers to the corporation incorporated upon the initiative of the DOE
composed of all WESM Members and whose Board of Directors will
be the PEM Board;
(qq) “Philippine National Oil Company” (PNOC) refers to the

government agency created pursuant to Presidential Decree No.
334, as amended;
(rr) “Power Applications” refer to renewable energy systems or

facilities that produce electricity;
(ss) “Registered RE Developer” refers to a RE Developer duly

registered with the DOE;
2219
(tt) “ Renewable Energy (RE) Certificate” refers to a certificate

issued by the RE Registrar to electric power industry participants
showing the energy sourced, produced, and sold or used, RE
certificates may be traded in the RE Market in complying with the
RPS;
(uu) “Renewable Energy (Systems) Developers or RE

Developers” refers to individual/s or juridical entity created,
registered and/or authorized to operate in the Philippines in
accordance with existing Philippine laws and engaged in the
exploration, development and utilization of RE resources and actual
operation of RE systems/ facilities. It shall include existing entities
engaged in the exploration, development and/or utilization of RE
resources, or the generation of electricity from RE resources, or
both;
(vv) “Renewable Energy Market” (REM) refers to the market

where the trading of the RE certificates equivalent to an amount of
power generated from RE resources is made;
(ww) “Renewable Energy Policy Framework” (REPF) refers to

the long-term policy developed by the DOE which identifies among
others, the goals and targets for the development and utilization of
renewable energy in the country;
(xx) “Renewable Energy (RE) Registrar” refers to an entity

that issues, keeps and verifies RE certificates corresponding to
energy generated from eligible RE facilities and sold to or used by
end-users;
(yy) “Renewable Energy Service (Operating) Contract

(RE Contract)” refers to the service agreement between the
Government, thru the DOE, and RE Developer over a period in which
the RE Developer has the exclusive right to a particular RE area
for exploration and development. The RE Contract shall be divided
into two (2) stages: the pre-development stage and the development/
commercial stage. The preliminary assessment and feasibility study
up to financial closing shall refer to the pre-development stage. The
construction and installation of facilities up to operation phase shall
refer to the development stage;
2220
(zz) “Renewable Energy Resources” (RE Resources) refer to

energy resources that do not have an upper limit on the total quantity
to be used. Such resources are renewable on a regular basis, and
whose renewal rate is relatively rapid to consider availability over
an indefinite period of time. These include, among others, biomass,
solar, wind, geothermal, ocean energy, and hydropower conforming
with internationally accepted norms and standards on dams, and
other emerging renewable energy technologies;
(aaa) “Renewable Energy Systems” (RE Systems) refer to energy

systems which convert RE resources into useful energy forms, like
electrical, mechanical, etc.;
(bbb) “Renewable Portfolio Standards”(RPS) refer to a market-

based policy that requires electricity suppliers to source an agreed
portion of their energy supply from eligible RE resources;
(ccc) “Rural Electrification” refers to the delivery of basic electricity

services, consisting of power generation, sub-transmission, and/
or extension of associated power delivery system that would bring
about important social and economic benefits to the countryside;
(ddd)“Solar Energy” refers to the energy derived from solar

radiation that can be converted into useful thermal or electrical
energy;
(eee) “Solar Energy Systems” refer to energy systems which

convert solar energy into thermal or electrical energy;
(fff) “Small Power Utilities Group” (SPUG) refers to the

functional unit of the NPC mandated under Republic Act No. 9136
to pursue missionary electrification function;
(ggg) “Supplier” refers to any person or entity authorized by the

ERC to sell, broker, market or aggregate electricity to the end-
users;
(hhh) “Transmission of Electricity” refers to the conveyance of

electric power through transmission lines as defined under Republic
Act No. 9136 by TRANSCO or its buyer/concessionaire in accordance
with its franchise and Republic Act No. 9136;
2221
(iii) “Wind Energy” refers to the energy that can be derived from
wind that is converted into useful electrical or mechanical energy;
(jjj) “Wind Energy Systems” refer to the machines or other

related equipment that convert wind energy into useful electrical or
mechanical energy;
(kkk) “Wholesale Electricity Spot Market” (WESM) refers to

the wholesale electricity spot market created pursuant to Republic
Act No. 9136;
PART II. RENEWABLE ENERGY INDUSTRY OPERATIONS

AND DEVELOPMENT AND OPERATIONS
RULE 2. RENEWABLE ENERGY POLICY MECHANISM
SEC. 4. Renewable Portfolio Standards
The Renewable Portfolio Standards (RPS) is a policy which places

an obligation on electric power industry participants such as
generators, distribution utilities, or suppliers to source or produce
a specified fraction of their electricity from eligible RE Resources as
may be determined by NREB.
(a) Purpose: The purpose of the RPS is to contribute to the

growth of the renewable energy industry by diversifying
energy supply and to help address environmental
concerns of the country by reducing greenhouse gas
emissions.
(b) Mandate: RPS shall be imposed on the electric power

industry participants, serving on-grid areas, on a per
grid basis, as may be determined by the NREB.
(c) Formulation of RPS Rules: The NREB shall, in

consultation with appropriate government agencies
and in accordance with the National Renewable Energy
Program (NREP), set the minimum percentage of
generation from eligible RE Resources based on the
sustainability of the RE Resources, the available capacity
of the relevant grids, the available RE Resources within
2222
the specific grid and such other relevant parameters.

The NREB shall, within one (1) year from the effectivity
of the Act, determine to which sector the RPS shall be
imposed on a per grid basis, in accordance with the
NREP.
Upon the recommendation of the NREB, the DOE shall,

within six (6) months from the effectivity of this IRR,
formulate and promulgate the RPS Rules which shall
include, but not be limited to, the following:
(1) Types of RE Resources, and identification and cert

ification of generating facilities using said resources
that shall be required to comply with the RPS
obligations;
(2) Yearly minimum RPS requirements upon the

establishment of the RPS Rules;
(3) Annual minimum incremental percentage of

electricity sold by each RPS mandated electricity
industry participant which is required to be sourced
from the eligible RE Resources and which shall, in
no case, be less than one percent (1%) of its annual
energy demand over the next ten (10) years;
(4.) Technical feasibility and stability of the transmission

and/or distribution grid systems; and
(5) Means of compliance by RPS mandated electricity

industry participants of the minimum percentage
set by the government to meet the RPS requirements
including direct generation from eligible RE
Resources, contracting the energy sourced from
eligible RE Resources, or trading in the REM.
SEC. 5. Feed-in Tariff (FiT) System
The Feed-in Tariff System is a scheme that involves the obligation on

the part of electric power industry participants to source electricity
from RE generation at a guaranteed fixed price applicable for a
2223
given period of time, which shall in no case be less than twelve (12)
years, to be determined by the ERC.
(a) Purpose: This system shall be adopted to accelerate the

development of emerging RE Resources through a fixed
tariff mechanism.
(b) Mandate: A FiT system shall be mandated for wind,

solar, ocean, run of river hydropower, and biomass
energy resources.
(c) Guidelines Governing the FiT System:
(1) Priority connections to the grid for electricity

generated from emerging renewable energy resources
such as wind, solar, ocean, run-of-river hydropower
and biomass power plants within the territory of the
Philippines;
(2) The priority purchase and transmission of, and

payment for, such electricity by the grid system
operators;
(3) Determine the fixed tariff to be paid to electricity

produced from each type of emerging renewable
energy and the mandated number of years for the
application of these rates, which shall not be less
than twelve (12) years;
(4) Application of the FiT to the emerging RE Resources

to be used in compliance with the RPS. Only
electricity generated from wind, solar, ocean, run-of-
river hydropower, and biomass power plants covered
under the RPS, shall enjoy the FiT; and
(5) Other rules and mechanisms that are deemed

appropriate and necessary by the ERC, in consultation
with the NREB, for the full implementation of the
FiT system.
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Within one (1) year from the effectivity of the Act, the ERC shall,
in consultation with the NREB formulate and promulgate the FiT
system rules.
SEC. 6. Green Energy Option Program
The Green Energy Option Program is a mechanism to be established

by the DOE which shall provide end-users the option to choose RE
Resources as their source of energy.
Within six (6) months from the effectivity of this IRR, the DOE
shall in consultation with the NREB, promulgate the appropriate
implementing rules and regulations which are necessary incidental,
or convenient to achieve the objectives of the Green Energy Option
program.
The ERC shall within six (6) months from the effectivity of this IRR
issue the necessary regulatory framework to effect and achieve the
objectives of the Green Energy Option program.
The TRANSCO, its concessionaire, or its successors-in-interest,

distribution utilities (DUs), PEMC and all revelant parties are
hereby mandated to provide the mechanisms for the physical
connection and commercial arrangement necessary to ensure the
success of the Green Energy Option program.
Any end-user who shall enrol under the Green Energy Option
program shall be informed, by way of its monthly electric bill, how
much of its monthly energy consumption and generation charge is
provided by RE facilities.
SEC. 7. Net-Metering for Renewable Energy
Net-Metering is a consumer-based renewable energy incentive

scheme wherein electric power generated by an end user from an
eligible on-site RE generating facility and delivered to the local
distribution grid may be used to offset electric energy provided by
the DU to the end-user during the applicable period.
(a) Purpose: The Net-Metering program shall be

implemented to encourage end-users to participate in renewable
electricity generation.
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(b) Mandate: Upon request by distribution end-user, the DUs

shall, without discrimination, enter into Net-Metering agreements
with qualified end user who will be installing an RE System, subject
to technical and economic considerations, such as the DU’s metering
technical standards for the RE System.
As used in this IRR, “Qualified End-users” refers to critics that

generate electric power from an eligible on-site RE generating
facility, such as, but not limited to, house or office building with
photovoltaic system that can be connected to the grid, for the purpose
of entering into a Net-Metering agreement.
Within one (1) year from the effectivity of the Act, the ERC shall,
in consultation which the NREB and the electric power industry
participants, establish net-metering interconnection standards,
pricing methodology, and other commercial arrangement necessary
to ensure the success of the Net-Metering for the RE program.
The DU shall be entitled to any RE Certificate resulting from the

Net-Metering arrangements with the qualified end-user who is
using an RE Resource to provide energy. Such RE Certificate shall
be credited in compliance with the obligations of the DUs under the
RPS.
The DOE, ERC, TRANSCO, its concessionaire or its successor in

interest, DUs, PEMC and all relevant parties are hereby mandated
to provide the necessary mechanisms for the physical connection,
consistent with the Grid and Distribution Codes, and commercial
arrangement, necessary to ensure the success of the Net-Metering
for the RE program.
SEC. 8. Transmission and Distribution System Development
The TRANSCO, its concessionaire or its successor-in-interest, and

all DUs, shall:
(a) Include the required connection facilities for RE-based

power facilities in the Transmission and Distribution
Development Plans, subject to the approval by the DOE;
and
2226
(b) Effect connection of RE-based power facilities with the

transmission or distribution system upon receipt of a
formal notice of the approval by the DOE and the start
of the commercial operations of such RE-based power
facilities.
The connection facilities of RE power plants, including any extension

of transmission and distribution lines, shall be subject only to
ancillary services covering such connections, pursuant to the ERC
Rules and Guidelines on Open Access Transmission Services.
The ERC shall, in consultation with the NREB, TRANSCO, its

concessionaire or its successors-in-interest, provide the mechanism
for the recovery of the cost of these connection facilities.
SEC.9. Adoption of Waste-to-Energy Technologies
The DOE shall, where practicable, encourage the adoption of waste-

to-energy facilities such as, but not limited to, biogas systems.
The DOE shall, in coordination with the DENR, ensure compliance

with this provision.
As used in this IRR, “Waste-to-Energy Technologies” shall refer

to systems which convert biodegradable materials such as, but not
limited to animal manure or agricultural waste, into useful energy
through processes such as anaerobic digestion, fermentation and
gasification, among others, subject to the provisions and intent of
Republic Act No. 8749 (Clean Air Act of 1999) and Republic Act No.
9803 (Ecological Solid Waste Management Act of 2000).
RULE 3. RENEWABLE ENERGY MARKET
SEC.10. Creation of the Renewable Energy Market
To expedite compliance with the establishment of the RPS, the

DOE shall establish the Renewable Energy Market (REM). The
REM shall be a sub-market of the WESM where the trading of RE
Certificates may be made.
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The DOE shall, within six (6) months from the effectively of this
IRR, establish the framework that will govern the operation of the
REM. The PEMC shall, within one (1) year from the effectivity of
the Act, implement changes to incorporate the rules specific to the
operation of the REM under the WESM.
SEC.11. Establishment of the Renewable Energy Registrar
Under the supervision of the DOE, the PEMC shall, within one (1)
year from effectivity of the Act, establish and operate the Renewable
Energy Registrar and shall issue, keep, and verify RE Certificates
corresponding to energy generated from the eligible RE facilities.
Such RE Certificates shall be credited in compliance with any

obligations under the RPS. For this purpose, the PEMC may impose
a transaction fee equal to half of what the PEMC currently charges
regular WESM players.
RULE 4. OFF-GRID DEVELOPMENT
SEC.12. Off-Grid Renewable Energy Development
Within one (1) year from the effectively of the Act, the NPC-SPUG
or its successors-in-interest DUs concerned, and/or qualified third
parties in off-grid areas shall, in the performance of its mandate to
provide missionary electrification, source a minimum percentage of
its total annual generation from available RE Resources in the area
concerned as may be determined by the DOE, upon recommendation
of the NREB.
Eligible RE generation in off-grid and missionary areas shall be

entitled to issuance of RE Certificates pursuant to Chapter III,
Section 8 of the Act and Rule 3, Section 11, of this IRR. In the event
that there is no viable RE Resource in the off-grid and missionary
areas, the relevant supplier in off-grid and missionary areas shall
still be obligated to comply with the RPS requirements provided
under Chapter III, Section 6 of the Act and Rule 2, Section 4, of this
IRR.
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PART III. INCENTIVES FOR RENEWABLE ENERGY

PROJECTS AND ACTIVITIES
RULE 5. GENERAL INCENTIVES AND PRIVILEGES FOR

RENEWABLE ENERGY DEVELOPMENT
SEC.13. Fiscal Incentives for Renewable Energy Projects

and Activities
DOE-certified existing and new RE Developers of RH facilities,

including Hybrid Systems, in proportion to and to the extent of the
RE component, for both Power and Non-Power Applications, shall
be entitled to the following incentives:
A. Income Tax Holiday (ITH)
(1) Period of Availment – The duly registered RE Developer

shall be fully exempt from income taxes levied by the
National Government for the period as follows:
(a) Existing RE Projects – seven (7) years from the start of

commercial operations;
All RE Developers that acquire, operate and/or

administer existing RE facilities that were or have been
in commercial operation for more than seven (7) years,
upon the effectivity of the Act, shall not be entitled to
ITH, except for any additional investment.
(b) New investment in RE Resources seven (7) years from

the start of commercial operations resulting from new
investment; and
(c) Additional investment in the RE Project — not more than

three (3) times the period of the initial availment by the
existing or new RE project or covering new or additional
investment.
The maximum period within which an RE Developer

may be entitled to an ITH shall be twenty-one (21)
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years, inclusive of the initial 7-year ITH for its new and
additional investment in a specific RE facility.
(2) Entitlement of New and Additional Investment

subject to prior approval by the DOE
(a) New Investment –RE Developers undertaking discovery

and development of new RE Resource distinct from
their registered operations may qualify as new projects,
subject to the setting up of separate books of accounts.
In such cases, a fresh package of ITH from the start of
commercial operations shall apply.
(b) Additional Investment – The ITH for additional

investment in an existing RE project shall be applied only
to the income attributable to the additional investment.
Additional investment any cover investment for

improvements, modernization, or rehabilitation duly
registered with the DOE, which may or may not result
in increased capacity, subject to the conditions to be
determined by the DOE, such as, but not limited to, the
following:
(i) Identification of the phases/stages of production

scheduled for modernization/rehabilitations; and
(ii) Improvements such as reduced production/

operational costs, increased production/operational
efficiency, and better product quality of the RE
facilities.
B. Exemption from Duties on RE Machinery, Equipment,

and Materials
Within the first ten (10) years from the issuance of a Certificate of
Registrations to an RE Developers, the importation of machinery
and equipment, shall be exempt from tariff duties.
(1) Conditions for Duty-Free Importation An RE Developer

may import machinery and equipment materials and
2230
parts thereof exempt from the payment of any and

all tariff duties due thereon subject to the following
conditions:
(a) The machinery and equipment are directly and

actually needed and will be used exclusively in the
RE facilities for the transformation of and delivery
of energy to the point of use;
(b) The importation of materials and spare parts shall be

restricted only to component materials and parts for
the specific machinery and/or equipment authorized
to be imported;
(c) The kind of capital machinery and equipment to be

imported must be in accordance with the approved
work and financial program of the RE facilities; and
(d) Such importation shall be covered by shipping

documents in the name of the duly registered RE
Developer/operator to whom the shipment will be
directly delivered by customs authorities.
(2) Sale or Disposition of Capital Equipment Any sale,

transfer, assignment, donation, or other modes of disposition
of originally imported capital equipment/machinery including
materials and spare parts, brought into the RE facilities of the RE
Developer which availed of duty free importation within ten (10)
years from the date of importation shall require prior endorsement
of the DOE. Such endorsement shall be granted only if any of the
following conditions is present:
(a) If made to another RE Developer enjoying tax and duty

exemption on imported capital equipment;
(b) If made to a non-RE Developer, upon payment of any

taxes and duties due on the net book value of the capital
equipment to be sold;
(c) Exportation of the used capital equipment, machinery,

spare parts or source documents or those required for
RE development; and
2231
(d) For reasons of proven technical obsolescence as may be

determined by the DOE.
When the aforementioned sale, transfer, or disposition

is made under any of the conditions provided for in the
foregoing paragraphs after ten (10) years from the date
of importation, the sale, transfer, or disposition shall
require prior endorsement by the DOE and shall no
longer be subject to the payment of taxes and duties.
Within six (6) months from the issuance of this IRR, the DOE/
Bureau of Customs (BOC) and the Bureau of Internal Revenue
(BIR) shall in consultation with the DOE, formulate the necessary
mechanisms/guidelines to implement this provision.
C. Special Realty Tax Rates on Equipment and Machinery
Realty and other taxes on civil works, equipment, machinery, and

other improvements by the registered RE Developer actually and
exclusively used for RE facilities shall not exceed one and a half
percent (1.5%) of their original costs less accumulated normal
depreciation or net book value: Provide, That in the case of an
integrated RE resource development and Generation Facility as
provided under Republic Act No. 9136, the real property tax shall
be imposed only on the power plant.
As used in this IRR, “Original Cost” shall refer to (1) the tangible cost
of construction of the power plant component, or of any improvement
thereon, regardless of any subsequent transfer of ownership of such
power plants; or (2) the assessed value prevailing at the time the
Act took into effort or at the time of the completion of the power
plant project after the effectively of the Act, as the case may be, and
in any case assessed at a maximum level of eight percent (80%),
whichever is lower.
“Net Book Value” shall refer to the amount determined by applying

normal depreciation on the original cost based on the estimated
useful life.
2232
D. Net Operating Loss Carry-Over (NOLCO)
The NOLCO of the RE Developer during the first three (3) years
from the start of commercial operation shall be carried over as a
deduction from gross income for the next seven (7) consecutive
taxable years immediately following the year of such loss, subject to
the following conditions:
(a) The NOLCO had been previously offset as a deduction

from gross income; and
(b) The loss should be a result from the operation and not
from the availment of incentives provided for in the Act.
E. Corporate Tax Rate
After availment of the ITH, all Registered RE Development shall

pay a corporate tax of ten percent (10%) on their net taxable income
as defined in the National Internal Revenue Code (NIRC) of 1997,
as amended by Republic Act No. 9337: Provided, That the RE
Developers shall pass on the savings to the end-users in the form of
lower power rates.
All RE Developers that acquire, operate, and/or administer existing

RE facilities that were or have been in commercial operation for
more than seven (7) years, upon the effectivity of the Act, shall
pay a corporate tax rate of 10% on their net taxable income upon
registration with the DOE.
Towards this end, the ERC shall, in coordination with the DOE,
determine the appropriate mechanism to implement the power rate
reduction.
(a) DOE Technical Study – Pursuant to Section 15 (e) of

the Act, the DOE shall conduct a technical study on the appropriate
mechanisms to determine the savings actually realized directly on
account of this incentive.
(b) Scope – The mechanisms shall be applied on RE

development projects and bilateral supply agreements in commercial
operation as of the effectively of the Act.
2233
(c) Guidelines –In developing the mechanisms to implement

the power rate reduction under the preceding paragraph, the DOE
shall take into account the following:
(i) preservation of the purpose of Section 15 (c) of the

Act;
(ii) non-erosion of the competitive nature of the

generation sector of the electric power industry
under the Section 6 of the EPIRA;
(iii) due consideration of the income tax regimes applicable

to different RE Developers under existing or
applicable laws, rules, and government undertakings
or obligations under existing agreements; and
(iv) application of the various forms by which the savings

may be implemented including, but not limited to,
value-added services that reduce the DU’s cost of
service translating to lower retail rates and discount
that are required by regulations of the ERC to be
passed through in the retail rate to end-user.
(d) Determination of Savings - The DOE shall, in

coordination with the NREB, determine as to whether
or not savings are actually realized with respect to each
RE Developer. In such case, the extent thereof shall be
determined in accordance with the pass-on mechanism
as may be appropriate based on the results of the DOE
Technical Study. In case where the RE Developer charges
generation rates that are lower than that of a non RE
facility, savings are deemed to have been passed on but
only to the extent of the relevant supply contract.
The DOE and the RE Developer may also provide for

the appropriate mechanism in determining the savings
in the RE Service/ Operating Contract. The DOE and
the NREB shall, where necessary, coordinate with the
ERC for the purpose of implementing the applicable
mechanism.
2234
F Accelerated Depreciation
If an RE project fails to receive an ITH before full operation, the RE

Developer may apply for accelerated depreciation in its tax books
and be taxed on the basis of the same.
If an RE Developer applies for accelerated depreciation, the project

or its expansions shall no longer be eligible to avail of the ITH.
Plant, machinery and equipment that are reasonably needed and

actually used for the exploration, development and utilization of RE
Resources may be depreciated using a rate not exceeding twice the
rate which would have been used had the annual allowance been
computed in accordance with the rules and regulations prescribed
by the DOE and the provisions of the NIRC of 1997, as amended.
Any of the following methods of accelerated depreciation may be
adopted:
(a) Declining balance method; and
(b) Sum-of-the years digit method
G. Zero Percent Value-Added Tax Rate
The following transaction/activities shall be subject to zero percent

(0%) value-added tax (VAT), pursuant to the National Internal
Revenue Code (NIRC) of 1997, as amended by Republic Act No.
9337:
(a) Sale of fuel from RE sources or power generated from

renewable sources of energy such as, but not limited to
biomass, solar, wind, hydropower, geothermal, ocean
energy, and other emerging energy sources using
technologies such as fuel cells and hydrogen fuels;
(b) Purchase of local goods, properties and services needed

for the development construction, and installation of the
plant facilities of the RE Developers; and
(c) Whole process of exploration and development of RE

sources up to its conversion into power, including, but
2235
not limited to, the services performed by subcontractors

and/or contractors.
H Tax Exemption of Carbon Credits
All proceeds from the sale of carbon emission credits shall be exempt
from any and all taxes.
I. Tax Credit on Domestic Capital Equipment and

Services Related to the Installation of Equipment and
Machinery
A tax credit equivalent to one hundred percent (100%) of the value

of the value-added tax (VAT) and customs duties that would have
been paid on the RE machinery, equipment, materials and parts
had these items been imported shall be given to a registered RE
Developer who purchases machinery, equipment, materials, and
parts from a domestic manufacturer, fabricator or supplier subject
to the following conditions:
(a) That the said equipment, machinery, and spare parts

are reasonably needed and shall be used exclusively by
the Registered RE Developer in its registered activity;
(b) That the purchase of such equipment, machinery, and

spare parts is made from an accredited or recognized
domestic source, in which case, prior approval by the
DOE should be obtained by the local manufacturer,
fabricator, or supplier; and
(c) That the acquisition of such machinery, equipment,

materials, and parts shall be made within the validity of
the RE Service/Operating Contract.
Within six (6) months from the effectivity of this IRR, the BIR
shall, in coordination with the DOE, promulgate a revenue
regulation governing the granting of tax credit on domestic capital
equipment.
Any sale, transfer, assignment, donation, or other mode of disposition

of machinery, equipment, materials, and parts purchased from
2236
domestic source, if made within ten (10) years from the date of
acquisition, shall require prior DOE approval.
SEC. 14. Hybrid and Co-generation Systems
The tax exemption and/or incentives provided for in Section 13 and

item 10, Section 17 of this IRR shall be availed of by a registered
RE Developer of hybrid and cogeneration systems utilizing both RE
sources and conventional energy. However, the tax exemptions and
incentives for hybrid and cogeneration systems shall apply only to
the equipment, machinery, and/or devices utilizing RE Resources.
SEC.15. Incentives for RE Commercialization
All manufacturers, fabricators, and suppliers of locally-produced

RE equipment and components shall be entitled to the privileges
set forth below:
A. Tax and Duty-free Importation of Components, Parts,

and Materials
All shipments necessary for the manufacture and/or fabrication of

RE equipment and components shall be exempted from importation
tariff and duties and value-added tax (VAT): Provided, That the
said components, parts, and materials are:
(1) Nor manufactured domestically in reasonable quantity

and quality at competitive prices;
(2) Directly and actually needed and shall be used exclusively

in the manufacture/ fabricator of RE equipment; and
(3) Covered by shipping documents in the name of the

duly registered manufacturer/ fabricator to whom
the shipment will be directly delivered by customs
authorities.
Prior approval of the DOE shall be required before the importation

of such components, parts and materials.
2237
B. Tax Credit on Domestic Capital Components, Parts, and

Materials
A tax credit equivalent to one hundred percent (100%) of the amount

of the value added tax (VAT) and customs duties that would have
been paid on the components, parts, and materials had these items
been imported shall be given to an RE equipment manufacturer,
fabricator, and supplier who purchases RE components, parts
and materials from a domestic manufacturer: Provided, That
such components and parts are directly needed and shall be used
exclusively by the RE manufacturer, fabricator, and supplier for the
manufacture, fabrication and sale of the RE equipment Provided,
further, that prior approval by the DOE was obtained by the local
manufacturer.
C. Income Tax Holiday and Exemption
For seven (7) years starting from the date of recognition/ accreditation
provided under the Section 18 of this IRR, an RE manufacturer,
fabricator, and supplier of RE equipment shall be fully exempt from
income taxes levied by the National Government on net income
derived only from the sale of RE equipment, machinery, parts, and
services.
D. Zero-Rated Value-Added Tax Transaction
All manufacturers, fabricator, and suppliers of locally-produced RE

equipment shall be subject to zero-rated value-added tax on their
transaction with local suppliers of goods, properties, and services.
SEC.16. Incentives for Farmers Engaged in the Plantation of

Biomass Resources
All individuals and entities engaged in the plantation of crops

and trees used as Biomass Resources shall be entitled to duty-
free importation and exemption from payment of value-added tax
(VAT) on all types of agricultural inputs, equipment, and machinery
within ten (10) years from the effectivity of the Act, subject to the
certification by the DOE and the following conditions:
2238
That the crops and trees such as, but not limited to, jarropha,
coconut, and sugarcane shall be actually utilized for the production
of Biomass Resources; and
That the agricultural inputs, equipment and machinery such

as, but not limited to, fertilizer, insecticides, pesticides, tractors,
trailer, truck, farm implements and machinery, harvester, threshers,
hybrid seeds, generic material, sprayers, packaging machinery
materials, bulk handling facilities, such a conveyors and mini-
loaders, weighing scales, harvesting equipment, and spare parts of
all agricultural equipment shall be used actually and primarily for
the production of said Biomass Resources.
SEC. 17. Other Incentives and Privileges
A. Tax Rebate for Purchase of RE Components
To encourage the adoption of RE technologies, the DOE shall, in

consultation with DOST, DOE, and DTI, provide rebates for all or
part of the tax paid for the purchase of RE equipment for residential,
industrial, or community use. For this purpose, the DOE shall
within one (1) year from the effectivity of the Act, also prescribe the
procedure, mechanism, and appropriate period for granting the tax
rebates.
B. Financial Assistance Program
Government financial institutions (GFIs) such as the Development

Bank of the Philippines (DBP), Land Bank of the Philippines, (LBP),
Philippines Exim Bank and other shall, in accordance with and to
the extent allowed by the enabling provisions of their respective
charters or applicable laws, provide preferential financial packages
for the development, utilization, and commercialization of RE
projects that are duly recommended and endorsed by the DOE.
The concerned GFIs shall within six (6) months from the effectively
of this IRR, formulate programs to implement the provision on the
grant of preferential financial packages for RE projects.
2239
C. Exemption from the Universal Charge
As used in this IRR, “Universal Charge” refers to the charge, if any,

imposed for the recovery of the stranded cost and other purposes
pursuant to Section 34 of Republic Act No. 9136.
All consumers shall be exempted from paying the Universal Charge

under the following circumstances:
(1) If the power or electricity generated through the RE

System is consumed by the generators themselves; and/
or
(2) If the power or electricity through the RE System is

distributed free of charge in the off-grid areas.
D. Cash Incentive of Renewable Energy Developers for

Missionary Electrification
An RE Developer registered pursuant to Section 15 of the Act

and Section 18 of this IRR, shall be entitled to a cash generation-
based incentive per kilowatt-hour rate generated, equivalent to
fifty percent (50%) of the universal charge for the power needed to
service missionary areas where it operates the same, to chargeable
against the universal charge for Missionary Electrification. This
provision shall apply to RE capacities for Missionary Electrification
undertaken upon effectivity of the Act.
Within six (6) months from the issuance of this IRR, the ERC shall, in
coordination with the DOE, develop a mechanism to implement the
provision granting cash incentive to RE Developers for Missionary
Electrification.
E. Payment of Transmission Charges
A registered RE Developer producing power and electricity from

an intermittent RE Resource may opt to pay the transmission and
wheeling charges of TRANSCO, its concessionaire or its successor-
in-interest on a per kilowatt-hour basis at a cost equivalent to the
average per kilowatt hour rate of all other electricity transmitted
through the Grid.
2240
F. Priority and Must Dispatch for Intermittent RE

Resource
Qualified and registered RE generating units with intermittent RE

Resources shall be considered “must dispatch” based on available
energy and shall enjoy the benefit of priority dispatch.
TRANSCO or its successor-in-internet shall, in consultation with

stakeholders, determine, through technical and economic analysis,
the maximum penetration limit if the intermittent RE based power
plants to the Grid.
The PEMC and TRANSCO or its successor-in-interest shall

implement technical mitigation and improvements in the system in
order to ensure safety and reliability of electricity transmission.
“RE generating units with intermittent RE Resources”

refers to an RE generating unit or group of units connected to a
common connection point whose RE Resource is location-specific,
naturally difficult to precisely predict the availability of the RE
Resource thereby making energy generated variable, unpredictable
and irregular, and the availability of the resource inherently
uncontrollable, which include plants utilizing wind, solar, run-of-
river hydropower, or ocean energy.
All provisions under the WESM rules, Distribution and Grid Codes
which do not allow “must dispatch” status for intermittent RE
Resources shall be deemed amended or modified.
SEC. 18. Conditions for Availment of Incentives and Other

Privileges
A. Registration/Accreditation with the DOE
For purposes of entitlement to the incentives and privileges under

the Act, existing and new RE Developers, and manufacturers,
fabricators, and suppliers of locally-produced RE equipment shall
register with the DOE, through the Renewable Energy Management
Bureau (REMB). The following certifications shall be issued:
2241
(1) DOE Certificate of Registration –issued to an RE

Developers holding a valid RE Service/Operating
Contract.
For existing RE projects, the new RE Service/Operating

Contract shall preterminate and replace the existing
Service Contract that the RE Developer has executed
with the DOE subject to the Transitory Provision in Rule
13, Section 39.
The DOE Certificate of Registration shall be issued

immediately upon award of an RE Service/Operating
Contract covering an existing or new RE project or upon
approval of additional investment.
Any investment added to existing RE projects shall be

subject to prior approval by the DOE.
(2) DOE Certificate of Accreditation –issued to RE

manufacturers, fabricators, and suppliers of locally-
produced RE equipment, upon submission of necessary
requirements to be determined by the DOE, in
coordination with the DTI.
B. Registration with the Board of Investments (BOI)
The RE sector is hereby declared a priority investment sector that

will regularly from part of the country’s Investment Priority Plan
(IPP), unless declared otherwise by laws.
To qualify for the availment for the incentives under Sections 13

and 15 of this IRR, RE Developers, and manufacturers, fabricators,
and suppliers of locally-produced RE equipment, shall register with
the BOI.
The registration with the BOI shall be carried out through an

agreement and an administrative arrangement between the BOI
and the DOE, with the end-view of facilitating the registration of
qualified RE facilities. The applications for registration shall be
favourably acted upon immediately by the BOI, on the basis of the
certification issued by the DOE.
2242
C. Certificate of Endorsement by the DOE
RE Developers, and manufacturers, fabricators, and suppliers of

locally produced RE equipment shall be qualified to avail of the
incentives provided for in the Act only after securing a Certificate of
Endorsement from the DOE, through the REMB, on per transaction
basis.
The DOE, through the REMB, shall issue said certification within
fifteen (15) days upon request of the RE Developer or manufacturer,
fabricator, and supplier; Provided, That the certification issued by
the DOE, shall be without prejudice to any further requirements
that may be imposed by the government agencies tasked with the
administration of the fiscal incentives mentioned under Rule 5 of
this IRR.
For this purpose, the DOE shall, within six (6) months from the
effectively of this IRR, issue guidelines on the procedures and
requirements for the availment of incentives based on specific
criteria, such as, but not limited to:
(1) Compliance with Obligations –The RE Developer

or manufacturers, fabricators, and suppliers of locally
produced RE equipment shall observe and abide by the
provisions of the Act, this IRR, the applicable provisions
of existing Philippine laws, and take adequate measures
to ensure that its obligations thereunder as well as those
of its officers are faithfully discharged;
(2) Compliance with Directives – The RE Developer or

manufacturers, fabricators, and suppliers of locally-
produced RE equipment shall comply with the directives
and circulars which the DOE may issue from time to
time in pursuance of its powers under the Act;
(3) Compliance with Pre-Registration/Registration

Conditions – the RE Developer or manufactures,
fabricators, and supplier of locally-produced RE
equipment shall comply with all the pre-registration and
registration conditions as required by the DOE;
2243
(4) Compliance with Reportorial Requirements –An RE

Developer shall maintain distinct and separate books of
accounts for its operations inside the RE facilities and
shall submit technical , financial and other operational
report/documents to DOE on or before their respective
due dates; and
(5) Remittance of Government Shares and Payment of

Applicable Financial Obligations –An RE Developer
shall observe timely remittance of Government Share and
payment applicable fees and other financial obligation to
the DOE.
RE Developers or manufacturers, fabricators, and suppliers of locally-

produced RE equipment who comply with the above requirements
shall be deemed in good standing and shall therefore be qualified to
avail of the incentives as provided for in the Act and this IRR.
D. Revenue Regulations
Within six (6) months from the effectivity of this IRR, the BIR shall,
in coordination with DOE, DOE, BOC, BOI and other concerned
government agencies, promulgate revenue regulations governing
the grant of fiscal incentives.
PART IV. REGULATORY FRAMEWORK FOR THE

RENEWABLE ENERGY INDUSTRY AND GOVERNMENT
SHARE\
RULE 6. REGULATORY FRAMEWORK FOR THE

RENEWABLE ENERGY INDUSTRY
SEC. 19. Renewable Energy Service/Operating Contract
A. State Ownership of All Forces of Potential Energy
All forces of potential energy and other natural resources are owned
by the State and shall be alienated. These include potential energy
sources such as kinetic energy from water, marine current and wind;
thermal energy from solar, ocean, geothermal and biomass.
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B. Parties to a Service/Operating Contract
The exploration development, production, and utilization of natural

resources shall be under the full control and supervision of the
State.
The State may directly undertake such activities, or it may enter into
co production, joint venture or co-production sharing agreements
with Filipino citizens or corporations or associations at least sixty
percent (60%) of whose capital is owned by Filipinos. Foreign RE
Developers may also be allowed to undertaken RE development
through an RE Service/Operating Contract with the government,
subject to Article XII, Section 2 of the Philippine Constitution.
C. Guidelines on Award of RE Service/Operating Contract
In compliance with this Constitutional mandate, the DOE shall,

within one (1) month from the issuance of this IRR, formulate and
promulgate the regulatory framework containing the guidelines
governing a transparent and competitive system of awarding RE
Service/Operating Contracts from pre-development to development/
commercial stage, among others.
RE sectors which are developing or utilizing non-naturally occurring

resources such as, but not limited to, biomass, biogas, methane
capture and other waste-to-energy technologies, shall be covered by
an RE Operating Contract which shall take into consideration the
peculiar conditions and realities attendant to such sector: Provided,
That the biomass sector shall be covered by an RE Operating Contract
wherein the biomass developer commits to develop, construct,
install, commission, and operate an RE generating facility subject
to the terms and conditions as specified therein.
D. Compliance with Existing Laws
The regulatory framework for the award of an RE Service/Operating

Contract will take into consideration existing related laws on the
exploration, development and utilization of RE Resources such as:
(1) RA No. 7160, otherwise known as the “Local Government

Code”, on the necessity of prior and periodic consultations
2245
with the local government units before any RE exploration

activity is conducted within their respective jurisdiction.
Existing projects shall be considered complaint with this
requirement;
(2) RA No. 8371, otherwise known as the “Indigenous People

Rights Act”; and
(3) Existing environmental laws and regulations as

prescribed by the DENR and/or any other concerned
government agency, including compliance with the
Environmental Impact Assessment (EIA) System.
An Environmental Compliance Certificate (ECC) from the

appropriate regional office of the DENR would be sufficient to
comply with the Act and this IRR.
RULE 7. GOVERNMENT SHARE
SEC. 20. Government Share
A. Government Share in General
The Government Share on existing and new RE development

projects shall be equal to one percent (1%) of the gross income of RE
Developers except for indigenous geothermal energy, which shall
be at one and a half percent (1.5%)of gross income of the preceding
fiscal year.
For purposes of determining the government share, the gross income

of RE Developers shall include the proceeds resulting from the sale
of RE produced and such other income incidental to and arising
from RE generation, transmission, and sale of electric power.
As used in this IRR, “Gross Income” derived from business shall be

equipment to gross sale less sales returns, discounts and allowances,
and cost of goods sold, consistent with Section 27, Paragraph A(7) of
the NIRC of 1997, as amended by Republic Act No. 9337.
“Cost of Goods Sold” shall include all business expenses directly

incurred to produce the merchandise to bring them to their present
2246
location and use, consistent with Section 27, Paragraph A(7) of the
NIRC of 1997, as amended by Republic Act No. 9337.
Except for government-owned and controlled corporation, the

Government Share shall be distributed as follows:
(1) National Government –60%
(2) Local Government –40%
B. Share from Geothermal Energy Resources
(1) For an integrated geothermal operation, the Government

Share of one and a half percent (1.5%) shall be based on
the Gross Income from the sale of electricity generated
from geothermal energy. The Cost of Goods Sold shall be
the direct cost of the generation of electricity.
(2) For steamfield development and production only, the

Government Share of one and a half percent (1.5%)
shall be based on the Gross Income from the sale of the
geothermal steam. The Cost of Goods Sold shall be the
direct cost of the geothermal steam production.
(3) For geothermal power plant operation only, the

Government Share of one and a half percent (1.5%) shall
be based on the Gross Income from the sale of electricity
generated from geothermal energy. The Cost of Goods
Sold shall be the direct cost of electricity generated from
geothermal energy and the direct cost of the geothermal
steam.
C. Local Government Share
In accordance with Section 292 of Republic Act No. 7160, the

allocation and distribution of the local government share be as
follows:
(1) Where the natural resources are located in the

provinces:
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(i) Province –Twenty percent (20%)
(ii) Component city/municipality –Forty five percent

(45%); and
(iii) Barangay –Thirty-five percent (35%)
(2) Where the natural resources are located in two (2) or more
provinces, or in two (2) or more component cities or municipalities
or in two (2) or more Barangays, their respective shares shall be
computed on the basis of:
(i) Population –Seventy percent (70%); and
(ii) Land area –Thirty percent (30%)
(3) Where the natural resources are located in a highly

urbanized or independent component city:
(i) City –Sixty-five percent (65%); and
(ii) Barangay –Thirty-five percent (35%)
(4) Where the natural resources are located in such two (2)
or more cities, the allocation of shares shall be based on
the formula on population and land area as specified in
paragraph (2) of this Section.
D. Remittance of the Share of Local Government Units
In accordance with the Section 286 and 293 of Republic Act No.
7160, as amended, the share of local government units from the
utilization and development of national wealth shall be released,
without need of any further action, directly to the provincial, city,
municipal or barangay treasurer, as the case may be on a quarterly
basis within five (5) days after the end of each quarter , and which
shall not be subject to any lien or holdback that may be imposed by
the National Government for whatever purpose.
2248
E Exceptions on Government Share
No government share shall be collected from the following:
(1) Proceeds from the development of Biomass Resources;

and
(2) Proceeds of micro-scale projects for communal purposes

and non-commercial operations, such as community-based RE
projects, which are not greater than one hundred kilowatts
(100kW).
SEC. 21. RE Host Communities/LGUs
A. Determination of RE Host Communities/LGUs
The LGUs hosting the energy resources and/or energy generating

facility shall have an equitable share in the proceeds derived from
the development and utilization of energy resource and sale of
electric power. For the purposes of this IRR, Host LGU shall refer
to the following:
(1) With respect to integrated energy generating facilities,

the host LGU is where the energy-generating facilities
and energy resources are located. The LGU shall be
entitled to a share based on the sale of electric power.
(2) With respect to energy resources, the host LGU is where

the renewable energy resources are located as delineated
by geophysical and exploration surveys. The LGU shall
be entitled to a share based on the sale of renewable
energy produced by the RE Development, and
(3) With respect to non-integrated generating facilities,

the host LGU is where the energy generating facility is
located. The LGU shall be entitled to a share based on
the sale of electric power of the generating facility.
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B. Incentives to RE Hose Communities/LHUs
Based on Section 280 to 294 of Republic Act No. 7160, the benefits/
incentives provided herein, shall be allocated to the Host LGUs
defined in the preceding paragraph as follows:
(1) Eighty percent (80%) of the local government share

from RE projects and activities shall be used directly to
subsidize the electricity consumption of end-users in the
RE host communities/LGUs whose monthly consumption
does not exceed one hundred kilowatt-hours (100kWh);
Provided, That excess funds shall after serving the end-
users, referred to in the preceding paragraph, be used to
subsidize the electricity consumption of consumers of the
same class in the host city, municipality or the province,
as the case may be;
(2) The subsidy may be in the form of rebates, refunds, and/

or any other form as may be determined by the DOE,
DOF, and ERC, in coordination with the NREB. Within
six (6) months from the effectivity of the Act, the DOE,
DOF, and ERC shall, in coordination with the NREB and
in consultation with the Dis, promulgate the mechanism
to implement this provision; and
(3) Twenty percent (20%) of the local government share

shall be utilized to finance local government livelihood
projects which shall be appropriated by their respective
Sanggunian, pursuant to Section 294 of Republic Act No.
7160.
PART V. ORGANIZATION AND RENEWABLE ENERGY

TRUST FUND
RULE 8. THE ROLE OF THE DEPARTMENT OF ENERGY
SEC. 22. Lead Agency
The DOE shall be the lead agency mandated to implement the

provisions of the Act and this IRR. In pursuance thereof and in
addition to its functions provided for under existing laws, the DOE
shall:
2250
(a) Promulgate the RPS Rules;
(b) Establish the REM and direct the PEMC to implement

changes in order to incorporate the rules specific to the
operation of the REM under the WESM;
(c) Supervise the establishment of the RE Registrar by the

PEMC;
(d) Promulgate the appropriate implementing rules and

regulations necessary to achieve the objectives of the
Green Energy Option program;
(e) Determine the minimum percentage of generation which

may be sourced form available RE Resources of the NPC-
SPUG or its successors-in-interest and/or qualified third
parties in off-grid areas;
(f) Issue certification to RE Developers, local manufacturers,

fabricators, and suppliers of locally-produced RE
equipment to serve as basis for their entitlement to
incentives, as provided for in the Act;
(g) Formulate and implement the NREP together with

relevant government agencies;
(h) Administer the Renewable Energy Trust Fund (RETF)

as a special account in any of the government financial
institutions identified under Section 29 of the Act;
(i) Recommend and endorse RE projects applying for

financial assistance with government financial
institutions pursuant to Section 29 of the Act;
(j) Encourage the adoption of waste-to-energy technologies

pursuant to Section 30 of the Act;
(k) Determine the mechanisms in the grant of subsidy to

electric consumers of Host LGUs, together with DOE,
ERC, and NREB; and
2251
(l) Perform such other functions as may be necessary, to

attain the objectives of the Act.
RULE 9. NATIONAL RENEWABLE ENERGY BOARD
SEC. 23. Creation of the NREB
Pursuant to Section 27 of the Act, the National Renewable Energy

Board (NREB) is created and shall be composed of a Chairman, and
one (1) representative each from the following agencies: DOE, DTI,
DOF, DENR, NPC, TRANSCO, or its successors-in-interest, PNOC
and PEMC, who shall be designated by their respective secretaries
on a permanent basis; and one (1) representative each from the
following sectors; RE Developers, Government Financial Institutions
(GFIs), private distribution utilities, electric cooperatives, electricity
suppliers, and non-governmental organizations, duly endorsed by
their respective industry associations and all to be appointed by the
President of the Republic of the Philippines.
The members of the Board and their alternates must be of proven

integrity and probity, with a working knowledge and understanding
of the RE industry, and occupying the position of at least Director
and Manager for government agencies and private entities,
respectively.
The NREB shall act as a collegial body primarily tasked

with recommending policies to the DOE and monitoring the
implementation of the Act. As such, its private sector members shall
not be required to divest. However, to avoid conflict of interest, the
NREB shall adopt its own Code of Ethics that shall be observed by
all its members.
SEC. 24. Meetings of the NREB
Regular meetings of the NREB shall be held at least once every

quarter on a date and in a place fixed by the Board. Special meetings
may also be called by the Chairman or by a majority vote of the
Board, as necessary.
Representatives of other government agencies and private entities

such as, but not limited to, the Department of Science and Technology
2252
(DOST), Department of Agriculture (DA), National Water Resources

Board (NWRB), National Commission for Indigenous Peoples
(NCIP), National Electrification Administration (NEA), National
Research Council of the Philippines (NCRP), and the academe may
be invited by the NREB as resource persons.
SEC. 25. Remuneration
The NREB shall determine the appropriate compensation/

remuneration of its members in accordance with existing laws,
rules and regulations, and shall make the necessary requests and
representations with the Department of Budget and Management
(DMB) for the allocation and appropriation of funds necessary to
effectively perform its duties and functions.
SEC. 26. Technical Secretariat
The NREB shall be assisted by a Technical Secretariat from the

REMB. The Technical Secretariat shall report directly to the Office
of the Secretary or the Undersecretary of the Department, as the
case may be, on matters pertaining to the activities of the NREB.
The number of staff of the Technical Secretariat and the creation of
corresponding positions necessary to complement and/or augment
the existing plantilla of the REMB shall be determined by the Board,
subject to existing civil service rules and regulations and approval
by the DBM for the allocation and appropriation of funds necessary
to effectively perform its duties and functions.
SEC. 27. Powers and Functions
The NREB shall have the following powers and functions:
(a) Evaluate and recommend to the DOE the mandated RPS

and minimum RE generation capacities in off-grid areas,
as it deems appropriate;
(b) Recommend specific actions to facilitate the

implementation of the NREP to be executed by the DOE
and/or other appropriate agencies of government and to
ensure that there shall be no overlapping and redundant
functions within the national government departments
and agencies concerned;
2253
(c) Monitor and review the implementation of the NREP,

including compliance with the RPS and minimum RE
generation capacities in off-grid areas;
(d) Oversee and monitor the utilization of the Renewable

Energy Trust Fund (RETF) established pursuant to
Section 28 of the Act and administered by the DOE;
(e) Cause the establishment of a one-stop facilitation scheme

to accelerate implementation of RE projects; and
(f) Perform such other functions, as may be necessary, to

attain the objectives of the Act.
RULE 10. RENEWABLE ENERGY MANAGEMENT

BUREAU
SEC. 28. Creation of the REMB
To effectively implement the provisions of the Act, a Renewable

Energy Management Bureau (REMB) shall be established under
the DOE pursuant to Section 32 of the Act.
To facilitate the application for registration/accreditation of RE

Developers, REMB Desks shall be created in the field offices of the
DOE in Luzon, Visayas, and Mindanao, pursuant to Section 2(a)
and (b) of the Act.
The existing plantilla of the Renewable Energy Management

Division (REMD) of the Energy Utilization Management Bureau
(EUMB) of the DOE shall form the Nucleus of REMB to perform the
duties, functions, and responsibilities of the said bureau. For this
purpose, the existing REMD is hereby dissolved.
SEC. 29. Organizational Structure
Within six (6) months from effectivity of this IRR, the DOE through
the Office of the Secretary shall determine the REMB organization
structure and staffing pattern/staffing complement, in consultation
with the DBM, and subject to existing civil service rules and
regulations.
2254
SEC. 30. Budget
The funds necessary for the creation of the REMB shall be taken from
the current appropriations of the DOE. Thereafter, the budget for
the REMB shall be included in the annual General Appropriations
Act (GAA).
SEC. 31. Powers and Functions of the REMB
The REMB shall have the following powers and functions:
(a) Develop, formulate and implement policies, plans

and programs such as the NREP, to accelerate
the development, transformation, utilization, and
commercialization of RE Resources and technologies;
(b) Develop and maintain a comprehensive, centralized

and unified data and information base on RE Resources
to ensure the efficient evaluation, analysis and
dissemination of data and information on RE Resources,
development, utilization, demand, and technology
application;
(c) Promote the commercialization/application of RE

Resources including new and emerging technologies for
the efficient and economical transformation, conversion,
processing, marketing and distribution to end-users;
(d) Conduct technical research, socio-economic, and

environmental impact studies of RE projects for the
development of sustainable RE Systems;
(e) Continue to strengthen the Affiliated Renewable Energy

Centers (ARECs) nationwide;
(f) Create a unified database of RE projects for monitoring

and planning purposes;
(g) Supervise and monitor activities of government and

private companies and entities on RE Resources
2255
development and utilization to ensure compliance with

existing rules, regulations, guidelines and standards;
(h) Provide information, consultation, technical training,

and advisory services to RE Developers, practitioners,
and critics involved in RE technology, and formulate RE
technology development strategies including, but not
limited to, standards and guidelines;
(i) Develop and implement an information, education, and

communication (IEC) program to heighten awareness of
and appreciation by all stakeholders of the RE industry;
(j) Evaluate, process, approve and issue RE Service/

Operating Contracts, permits, certifications, and/or
accreditations as provided for in the Act and this IRR;
(k) Monitor and evaluate the implementation of the NREP

to determine the need to expand the same; and
(l) Perform other functions that may be necessary for the

effective implementation of the Act and the accelerated
development and utilization of the RE Resources in the
country.
RULE 11. RENEWABLE ENERGY TRUST FUND
SEC. 32. Exclusive Fund Administration
Pursuant to Section 28 of the Act, the RETF is hereby established

to enhance the development and greater utilization of renewable
energy. It shall be administered by the DOE as a special account in
any of the GFIs. The RETF shall be used exclusively to:
(a) Finance the research, development, demonstration, and

promotion of the widespread and productive use of the
RE Systems for Power and Non-Power Applications;
(b) Provide funding to qualified research and development

institutions engaged in renewable energy studies
undertaken jointly through public-private sector
2256
partnership, including provision for scholarship and

fellowship for energy studies;
(c) Support the development and operation of new RE

Resources to improve their competitiveness, in the
market: Provided, That the grant thereof shall be done
through a competitive and transparent manner;
(d) Conduct nationwide resource and market assessment

studies for the Power and Non-Power Applications of RE
Systems;
(e) Propagate RE knowledge by accrediting, tapping,

training, and providing benefits to institutions, entities,
and organizations which can help widen the promotion
and reach of RE benefits at the national and local levels;
and
(f) Fund such other activities necessary or incidental to the

attainment of the objectives of the Act.
SEC. 33. Fund Utilization
The funds may be used through grants, loans, equity investments,

loan guarantees, insurance, counterpart fund or such other financial
arrangements necessary for the attainment of the objectives of the
Act: Provided, That the use or allocation thereof shall be, as far as
practicable, done through a competitive and transparent manner.
SEC. 34. Sources of Funds
The RETF shall be funded from:
(a) Proceeds from the emission fees collected from all

generating facilities consistent with Republic Act No.
8749 or the Philippine Clean Air Act;
(b) One and a half percent (1.5%) of the net annual income
of the Philippine Charity Sweepstake Office (PCSO);
2257
(c) One and a half percent (1.5%) of the net annual income
of the Philippine Amusement and Gaming corporation
(PAGCOR);
(d) One and a half percent (1.5%) of the net annual dividends
remitted to the National Treasury by the Philippine
National Oil Company (PNOC) and its subsidiaries;
(e) Contributions, grants and donations: Provided, That all

contributions, grants and donations made to the RETF
shall be tax deductible subject to the provisions of the
NIRC. To ensure this goal, the BIR shall assist the DOE
in formulating the rules and regulations to implement
this provision;
(f) One and a half percent (1.5%) of the proceeds of the

Government Share collected from the development and
use of indigenous non-RE Resources;
(g) Any revenue generated from the utilization of the RETF;

and
(h) Proceeds from fines and penalties imposed under the

Act.
For this purpose, the DOE, PCSO, PAGCOR, DENR, and DBM shall,
within six (6) months from the approval of this IRR, formulate the
necessary mechanism for the transmittal of the Fund to the DOE.
Furthermore, the DOE shall, within six (6) months from the approval
of this IRR formulate the guidelines to ensure the competitive and
transparent utilization of the fund.
PART VI. PROHIBITED ACTS, PENAL, AND

ADMINISTRATIVE PROVISIONS
RULE 12. PROHIBITED ACTS AND SANCTIONS
SEC. 35. Prohibited Acts
Pursuant to Section 35 of the At, any person or entity found in

violation of any of the following shall be subject to the appropriate
2258
criminal, civil, and/or administrative sanctions as provided in this

IRR and other existing applicable laws, rules and regulations;
(a) Non-compliance with or violation of the RPS rules;
(b) Willful refusal to undertake Net-Metering arrangements

with qualified distribution grid users;
(c) Falsification or tampering of public documents or official

records to avail of the fiscal and non-fiscal incentives
provided under the Act;
(d) Failure and wilful refusal to issue the certificate referred

to in Section 26 of the Ace; and
(e) Non-compliance with the established guidelines that the

DOE adopted for the implementation of the Act.
SEC. 36. Administrative Liability
Without prejudice to incurring criminal liability, any person who

wilfully commits any of the prohibited acts and violates other
issuance relative to the implementation of the Act shall be subject
to the following administrative fines and penalties;
(a) The DOE may impose a penalty ranging from Reprimand

to Revocation of License with corresponding fine
ranging from a minimum of One Hundred Thousand
Pesos (P100,00.00) to Five Hundred Thousand Pesos
(P500,00.00) depending on the gravity for the following
offenses:
(1) Non-compliance or violation of the RPS rules;
(2) Willful refusal to undertake Net-Metering

arrangements with qualified distribution grid users;
and
(3) Non-compliance with the established guidelines that

the DOE adopted for the implementation of the Act.
2259
(b) The DOE may revoke the license, permit, certification,

endorsement or accreditation, terminate RE Service/
Operating Contract and/or impose a fine ranging from a
minimum of One Hundred Thousand Pesos (P100,000.00)
to Five Hundred Thousand Pesos (P500,000.00) on any
person or entity found to have committed the falsification
or tampering of public documents or official records to
avail of the fiscal and non-fiscal incentives, pursuant to
Section 35 (c) of the Act.
This is without prejudice to the penalties provided for under

existing environmental regulations prescribed by the DENR and/or
any other concerned government agency.
Any employee of the DOE who shall fail or wilfully refuse to issue
the certificate pursuant to Section 26 of the Act shall be given a
warning for the first offense, and meted the penalty of reprimand
for the second offense, and suspension for the third offense.
SEC. 37. Administrative Procedures
The DOE may initiate, motu propio or upon filing of any complaint,
an administrative proceeding against any person or entity who
commits any of the prohibited acts under Section 35 of the Act,
Section 35 of the IRR, or other related issuances. In the exercise
thereof, the DOE may commence such hearing or inquiry by an
order to show cause, setting forth the grounds for such order.
The administrative proceedings will be conducted to determine

culpability of offenders and the applicable penalties in accordance
with existing “Rules and Procedures Before the DOE.”
Administrative actions initiated pursuant to this section shall be

separate and independent from any criminal actions that may arise
for violations of this Act.
SEC. 38. Criminal Liability
In accordance with Section 36 of the Act, any person who wilfully

aids or abets the commission of a crime prohibited herein or who
2260
causes the commission of any such ac by another shall be liable in

the same manner as the principal.
In the case of associations, partnerships, or corporations, the penalty

shall be imposed on the partner, president, chief operating officer,
chief executive, directors or officers responsible for the violation.
The perpetrators of any of the prohibited acts provided for under

Section 35 of the Act, upon conviction thereof, shall suffer the
penalty of imprisonment of from one (1) year to five (5) years, or
a fine ranging from a minimum of One Hundred Thousand Pesos
(P100,000.00) to One Hundred Million Pesos (P100,000.00), or twice
the amount of damages caused or costs avoided for non-compliance,
whichever is higher, or both upon the discretion of the court.
PART VII. FINAL PROVISIONS
RULES 13. TRANSITORY AND OTHER PROVISIONS
SEC. 39. Transitory Provisions
Benefits or incentives extended to RE Developers, and manufacturers,

fabricators, and suppliers of locally produced RE equipment under
existing laws not amended or withdrawn under this Act shall remain
in full force and effect. No provision of the Act shall be taken as
to diminish any right vested by virtue of existing laws, contracts,
or agreements. However, in order to qualify for the availment of
the incentives provided under Chapter VII of the Act and this IRR,
the RE Developer, and manufacturers, fabricators, and suppliers
of locally-produced RE equipment shall be required to secure a
certificate of registration or accreditation with the DOE.
The fiscal incentives granted under Section 15 of the Act shall apply
to all RE capacities upon the effectivity of the Act.
Pending the issuance of other necessary guidelines, the grant of

provisional certificates of registration by the DOE shall be valid and
effective.
2261
SEC. 40. Reportorial Requirements
The DOE shall, in coordination with the NREB, submit a yearly

report on the implementation of the Act to the Philippine Congress,
through the Joint congressional Power Commission (JCPC), every
January for each year following the period in review, indicating
among others, the progress of RE development in the country and the
benefits and impact generated by the development and utilization
of renewable energy resources in the context of energy security and
climate change imperatives.
This shall serve as basis for the JCPC’s review of the incentives as
provided for in the Act towards ensuring the full development of the
country’s RE capacities under a rationalized market and incentives
scheme.
SEC. 41. Congressional Oversight
Upon the effectivity of the Act, the JCPC, created under Section 62
of Republic Act No. 9136, shall exercise oversight power over the
implementation of the Act.
SEC. 42. Appropriations
Funds necessary to finance the activities of concerned government

agencies, as provided in the Act and this IRR, shall be included in
the annual General Appropriations Act.
SEC. 43. Separability Clause
If any provision of this IRR is declared unconstitutional, the

remainder of the Act or the provision not otherwise affected, shall
remain valid and subsisting.
SEC. 44. Repealing Clause
Any law, presidential decree or issuance, executive order, letter

of instruction, administrative rule or regulation contrary to or
inconsistent with the provisions of the Act and this IRR is hereby
repealed, modified, or amended accordingly.
2262
Section 1 of Presidential Decree NO. 1442 or the Geothermal

Resources Exploration and Development Act, insofar as the
exploration of geothermal resources by the government, and Section
10 (1) of Republic Act No. 7156, otherwise known as the “Mini-Hydro
Electric Power Incentive Act”, insofar as the special privilege tax
rate of two percent (2%), are hereby repealed, modified or amended
accordingly.
SEC. 45. Effectivity
This IRR shall take effect fifteen (15) days after its publication in at
least two (2) newspapers of general circulation.
Signed this 25th of May 2009 at the Department of

Energy, Energy Center, Merritt Road, Fort Bonifacio, Taguig City,
Metro Manila.
ANGELO T. REYES
Secretary
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AN ACT STRENGTHENING THE NATIONAL ELECTRIFICATION

ADMINISTRATION, FURTHER AMENDING FOR
THE PURPOSE PRESIDENTIAL DECREENO. 269, AS
AMENDED, OTHERWISE KNOWN AS THE “NATIONAL
ELECTRIFICATION ADMINISTRATION DECREE”

CHAPTER I
POLICY AND DEFINITIONS
SECTION 1. This Act shall be known as the “National

Electrification Administration Reform Act of 2013”.
SEC. 2. Section 2 of Presidential Decree No. 269, as amended,

is hereby further amended to read as follows:
“SEC. 2. Declaration of National Policy. – It is hereby declared

the policy of the State to:
“(a) promote the sustainable development in the rural areas

through rural electrification;
“(b) empower and strengthen the National Electrification

Administration (NEA) to pursue the electrification program
and bring electricity, through the electric cooperatives as its
implementing arm, to the countryside even in missionary or
economically unviable areas;
“(c) empower and enable electric cooperatives to cope with

the changes brought about by the restructuring of the electric
power industry pursuant to Republic Act No. 9136, otherwise
known as the “Electric Power Industry Reform Act of 2001.”
SEC. 3. A new section is hereby inserted under Presidential

Decree No. 269, as amended, to be designated as Section 2-A, to
read as follows:
2264
“SEC. 2-A. Scope. – This Act shall establish a framework

for introducing structural reforms in the NEA and the electric
cooperatives.”
SEC. 4. Five (5) new paragraphs, to be designated as

paragraphs (s), (t), (u), (v) and (w), are hereby inserted under Section
3 of Presidential Decree No. 269, as amended, to read as follows:
“SEC. 3. Definitions. – As used in this Decree, the following

words or terms shall have the following meanings, unless a different
meaning clearly appears from the context:
“x x x
“(s) ‘CDA’ shall refer to the Cooperative Development

Authority created under Republic Act No. 6939, as amended.
“(t) ‘DOE’ shall refer to the Department of Energy created

under Republic Act No. 7638, as amended.
“(u) ‘Electric cooperative’ shall refer to an electric distribution

utility organized and registered pursuant to Presidential Decree No.
269, as amended, Republic Act No. 9520, and other related laws.
“(v) ‘EPIRA’ shall refer to Republic Act No. 9136 or the

‘Electric Power Industry Reform Act of 2001'.
“(w) ‘ERC’ shall refer to the Energy Regulatory Commission

created under Section 38 of Republic Act No. 9136.”
CHAPTER II
THE NATIONAL ELECTRIFICATION ADMINISTRATION
SEC. 5. Section 4 of Presidential Decree No. 269, as amended,

is hereby further amended to read as follows:
“SEC. 4. Powers, Functions and Privileges of the National

Electrification Administration. – To strengthen the electric
2265
cooperatives, help them become economically viable and prepare

them for the implementation of retail competition and open access
pursuant to Section 31 of the EPIRA, the NEA is authorized and
empowered to:
“(a) have a continuous succession under its corporate name

“(b) adopt and use a seal and alter it at its pleasure;
“(c) sue and be sued in any court: Provided, That the NEA
shall, unless it consents otherwise, be immune to suits for
acts ex delicti;
“(d) make contracts of every name and nature and execute

all instruments necessary or convenient for the carrying on of
its business;
“(e) supervise the management and operations of all electric

cooperatives;
“(f) exercise step-in rights as herein defined;
“(g) provide institutional, financial and technical assistance

to electric cooperatives upon request of the electric
cooperatives;
“(h) pursue the total electrification of the country through

the electric cooperatives by way of enhancing distribution
development and, in case of missionary areas, shall be done
in coordination with the National Power Corporation – Small
Power Utilities Group (NPC-SPUG) which shall be responsible
for the generation and transmission requirements, as
necessary;
“(i) devote all returns from its capital investments to attain

the objectives of this Act;
“(j) ensure the economic and financial viability and operation

of all electric cooperatives;
2266
“(k) restructure ailing electric cooperatives with the end in

view of making them economically and financially viable;
“(l) develop, set and enforce institutional and governance

standards for the efficient operation of electric cooperatives
such as, but not limited to, the observance of appropriate
procurement procedure, including transparent and
competitive bidding. Such standards shall he enforced through
a mechanism of incentives and disincentives to complying and
non-complying electric cooperatives, respectively;
“(m) formulate and impose administrative sanctions and

penalties and when warranted, file criminal cases against
those who are found in violation of any of the provisions of
this Act and its implementing rules and regulations (IRR);
“(n) serve as guarantor to qualified electric cooperatives in

their transactions with various parties such as, but not limited
to, co-signing in power supply contracts;
“(o) grant loans to electric cooperatives, for the construction

or acquisition, operation and maintenance of subtransmission
and distribution facilities and all related properties,
equipment, machinery, fixtures, and materials for the purpose
of supplying area coverage service, and thereafter to grant
loans for the restoration, improvement or enlargement of
such facilities or for such other purposes as may be deemed
necessary;
“(p) subject to the prior approval and/or opinion of the

Monetary Board, borrow funds from any source, private
or government, foreign or domestic, and secure the lenders
thereof by pledging, sharing or subordinating one or more of
the NEA’s own loan securities;
“(q) exercise primary and exclusive jurisdiction in the

adjudication of complaints against electric cooperative officers,
election disputes and all matters relating to the effective
implementation of the provisions of this Act;
“(r) as a quasi-judicial agency, deputize local law enforcement

agencies to enforce or implement its orders or decisions, with
2267
the power to cite for contempt any party or witness to any case
before it for contumacious conduct; and
“(s) exercise such powers and do such things as may be

necessary to carry out the business and purposes for which
the NEA was established, or which from time to time may be
declared by the Board of Administrators as necessary, useful,
incidental or auxiliary to accomplish such purposes.
“For this purpose, the authorized capital stock of the NEA is

hereby increased to Twenty-five billion pesos (P25,000,000,000.00)
divided into two hundred fifty million (250,000,000) shares with a
par value of One hundred pesos (P100.00).”
SEC. 6. A new section, to be designated as Section 4-A, is

hereby inserted under Presidential Decree No. 269, as amended to
read as follows:
“SEC. 4-A. Supervisory Powers of the NEA Over Electric

Cooperatives. – In the exercise of its power of supervision over
electric cooperatives, the NEA shall have the following powers:
“(a) issue orders, rules and regulations, motu proprio or upon

petition of third parties, to conduct investigations, referenda
and other similar actions on all matters affecting the electric
cooperatives;
“(b) issue preventive or disciplinary measures including, but

not limited to, suspension or removal and replacement of any
or all of the members of the board of directors and officers
of the electric cooperative, as the NEA may deem fit and
necessary and to take any other remedial measures as the
law or any agreement or arrangement with NEA may provide,
to attain the objectives of this Act: and
“(c) appoint independent board of directors in the electric

cooperative.
“The NEA shall, in the exercise of its supervisory and

disciplinary powers under this Act, strictly observe due process of
law.”
2268
SEC. 7. A new section, to be designated as Section 4-B, is

hereby inserted under Presidential Decree No. 269, as amended, to
read as follows:
“SEC. 4-B. Step-in Rights in Cases of Ailing Cooperatives.

– The NEA shall immediately step-in and take over from its
Board the operations of any ailing electric cooperative. Within a
reasonable period after take-over, the NEA may convert the ailing
cooperative to either a stock cooperative registered with the CDA
or a stock corporation registered with the Securities and Exchange
Commission (SEC).
“The NEA, shall in determining the propriety of the conversion,

be guided by the ability of the member-consumers of said electric
cooperative to pay for their shares in the stock cooperative or stock
corporation.
“The NEA may appoint or assign third persons to the Board

of the electric cooperative until the NEA decides that the election
of a new board of directors to manage the electric cooperative is
necessary. The NEA may create a management team for the
purpose.
“The NEA shall, in the exercise of its step-in rights under this
Act, strictly observe due process of law. The step-in rights may only
be exercised by the NEA in case of failure of-the electric cooperative
to meet operational and financial standards set by the NEA or in
other analogous instances set forth in the IRR of this Act.”
SEC. 8. A new section, to be designated as Section 4-C, is

hereby inserted under Presidential Decree No. 269, as amended, to
read as follows:
“SEC. 4-C. Injunction or Temporary Restraining Order. – No

injunction or temporary restraining order shall be issued against
the implementation of any order, ruling or decision of the NEA,
except by the Court of Appeals, and only upon the posting of a bond
sufficient to cover the liabilities and expenditures arising during the
pendency of the writ or injunction or temporary restraining order:
Provided, That the injunction shall only be effective for a period not
exceeding sixty (60) days.”
2269
CHAPTER III
ELECTRIC COOPERATIVES
SEC. 9. Section 16, paragraph (j) of Presidential Decree No.

269, as amended, is hereby further amended to read as follows:
“SEC. 16. Powers. – A cooperative is hereby vested with

all powers necessary or convenient for the accomplishment of its
corporate purpose and capable of being delegated by the President
or the National Assembly when it comes into existence; and no
enumeration of particular powers hereby granted shall be construed
to impair any general grant of power herein contained, nor to limit
any such grant to a power or powers of the same class as those so
enumerated. Such powers shall include, but not be limited to, the
power:
“x x x
“(j) To construct, acquire, own, operate and maintain electric

subtransmission and distribution lines along, upon, under
and across publicly owned lands and public thoroughfares,
including, without limitation, all roads, highways, streets,
alleys, bridges and causeways. In the event of the need of
such lands and thoroughfares for the primary purpose of
the government, the electric cooperative shall be properly
compensated;
“(j-1) To construct, acquire, own, operate and maintain

generating facilities within its franchise area. In pursuance
thereof, where an electric cooperative participates in a bid on
an existing NPC-SPUG generating facility, its qualified bid
shall be given preference m case of a tie: Provided, however,
That in cases where there is no other qualified bidder, the
lone bid shall remain as valid basis for the determination of
the final award subject to the following conditions:
“(a) bid offer is not lower than the valuation of the assets
using Commission on Audit (COA) rules and regulations;
“(b) electric cooperative is prepared to fully take over the

generation function of the area from the NPC-SPUG; and
2270
“(c) electric cooperative submits its graduation program from

the Universal Charge for Missionary Electrification (UC-ME)
subsidy.
“x x x.”
SEC. 10. A new section, to be designated as Section 26-A of

Presidential Decree No. 269, as amended, is hereby inserted to read
as follows:
“SEC. 26-A. Independence of the Board of Directors and

Officers of Electric Cooperatives. – To ensure the long-term business
and economic viability of electric cooperatives, the management,
operations and strategic planning of electric cooperatives shall, as
much as practicable, be insulated from local politics.
“Towards this end, no person shall be elected or appointed

as an officer or be eligible to run as a board member of an electric
cooperative if:
“(a) such person or his or her spouse holds any public office;
“(b) such person or his or her spouse has been a candidate in

the last preceding local or national elections;
“(c) such person has been convicted by final judgment of a

crime involving moral turpitude;
“(d) such person has been terminated for cause from public
office or private employment;
“(e) such person is related to any member of the electric

cooperative board of directors, general manager and
department managers within the fourth civil degree of
consanguinity or affinity;
“(f) such person is a representative of a juridical person;

and
“(g) such person is employed by or financially interested in a

competing enterprise or a business selling electric energy or
2271
electrical hardware to the cooperative or doing business with

the cooperative, including the use or rental of poles.”
SEC. 11. A new section, to be designated as Section 26-B, is

hereby inserted under Presidential Decree No. 269, as amended to
read as follows:
“SEC. 26-B. Fit and Proper Rule. – To ensure that the

management and operations of electric cooperatives are carried out
with due regard to its economic viability, the NEA shall prescribe,
pass upon and review the qualifications and disqualifications
of individuals appointed or elected to electric cooperatives and
disqualify those found unfit.
“A candidate’s integrity, experience, education, competence

and probity shall be considered in determining whether he or she
shall be fit and proper to become a director or officer of the electric
cooperative.
“For this purpose, the minimum qualifications of a director or

officer of the electric cooperative shall be as follows:
“(a) He or she is a Filipino citizen;
“(b) He or she is a graduate of a four (4)-year course;
“(c) He or she is between twenty-one (21) and seventy (70)

years old, on the date of election;
“(d) He or she is of good moral character;
“(e) He or she is a member of the electric cooperative in

good standing for the last five (5) years immediately preceding the
election or appointment;
“(f) He or she is an actual resident and consumer in the

district that he or she seeks to represent for at least two (2) years
immediately preceding the election; and
“(g) He or she has attended at least two (2) Annual General

Membership Assemblies (AGMA) for the last five (5) years
immediately preceding the election or appointment.
2272
“The NEA may, after due notice to the board of directors and
officers of the electric cooperative, disqualify, suspend or remove
any director or officer, who commits any act which renders him
unfit for the position.”
SEC. 12. Section 32 of Presidential Decree No. 269, as

amended, is hereby further amended to read as follows:
“SEC. 32. Registration of All Electric Cooperatives. – All

electric cooperatives may choose to remain as a non-stock, non-
profit cooperative or convert into and register as: (a) a stock
cooperative under the CDA; or (b) a stock corporation under the
SEC, in accordance with the guidelines to be included in the IRR of
this Act.
“Such choice shall carry with it the attendant requirements

of compliance with the laws and regulatory guidelines governing
the respective government agencies having jurisdiction over their
registration.
“Regardless of the choice made, the NEA shall have the

authority over electric cooperatives, whether stock or non-stock,
to require the submission of reportorial requirements as may be
necessary relative to their operations as electric distribution utilities
including, but not limited to:
“(a) Monthly Financial and Statistical Report (MFSR)
“(b) monthly separate MFSR. Monthly Engineering Report

(MER) and barangay and sitio electrification report for electric
cooperatives on grid with isolated area/s served by NPC-SPUG;
“(c) monthly status of barangay and sitio energization and

house connections;
“(d) monthly Institutional Services Department (ISD)

report;
“(e) monthly Performance Standard Monitoring Report

(PSMR);
“(f) monthly summary of complaints received and acted

upon;
2273
“(g) monthly report on compliance with the Grid and

Distribution Code:
“(h) Monthly Engineering Report (MER);
“(i) quarterly report on power supply contracts;
“(j) annual work plan;
“(k) annual Distribution Development Plan (DDP);
“(l) five (5)-year investment plan submitted annually;
“(m) annual Cash Operating Budget (COB);
“(n) audited financial statements;
“(o) annual Collective Bargaining Agreement (CBA) or

Collective Negotiation Agreement (CNA); and
“(p) copy of Capital Expenditure (CAPEX) and Operating

Expenditure (OPEX) plans.
“Likewise, the supervisory and oversight functions of the

NEA, as may be detailed in this Act and its IRR, shall be applicable
to both stock and non-stock cooperatives.
“Electric cooperatives which register with the CDA shall

continue to enjoy the benefits under this Act.
“Existing electric cooperatives may likewise opt to register as

stock corporations with the SEC: Provided, however, That electric
cooperatives registered with the SEC shall no longer enjoy the
incentives provided for in this Act.
“Despite the registration of the electric cooperatives under

the CDA or the SEC, the NEA shall retain its supervisory and
disciplinary power over them in the conduct of its operation as
electric distribution utilities.”
SEC. 13. A new section, to be designated as Section 32-A, of

as follows:
2274
“SEC. 32-A. Incentives of Electric Cooperatives. – Consistent

with the declared policy of this Act, electric cooperatives which
comply with the financial and operational standards set by the NEA
shall enjoy the following incentives:
“(a) To be entitled to congressional allocations, grants,

subsidies and other financial assistance for rural
electrification;
“(b) To receive all subsidies, grants and other assistance

which shall form part of the donated capital and funds of the
electric cooperatives, and as such, it shall not be sold, traded
nor divided into share holdings at any time. These donated
capital and funds shall be appraised and valued for the
sole purpose of determining the equity participation of the
members: Provided, That in case of dissolution or conversion
of the electric cooperative, said donated capital and funds
shall be subject to escheat; and
“(c) To avail of the preferential rights granted to cooperatives

under Republic Act No. 7160, otherwise known as the ‘Local
Government Code of 1991', and other related laws.
“As a further incentive, the NEA may prioritize the grant

of incentives in favor of electric cooperatives that are managed
effectively and efficiently and comply consistently with its mandates
and directives.”
CHAPTER IV
FINAL PROVISIONS
SEC. 14. A new section, to be designated as Section 64-A, of

as follows:
“SEC. 64-A. Penalties. – Any person who willfully violates any

rule or regulation promulgated pursuant to the authority granted
in this Act shall, upon conviction, be punished by a fine of not less
than Fifty thousand pesos (P50,000.00) but not more than Five
hundred thousand pesos (P500,000.00) or by imprisonment of not
less than six (6) months but not more than one (1) year, or both,
2275
at the discretion of the court: Provided, That if the violation is

committed by a juridical person, the penalty herein prescribed shall
be imposed upon the official and/or employee thereof responsible for
the violation: Provided, further, That if the violation is committed by
a government official or employee, including those in government-
owned or -controlled corporations, such person shall, in addition
to the penalty provided herein, be subjected to administrative
disciplinary action.”
SEC. 15. A new section, to be designated as Section 64-B of

as follows:
“SEC. 64-B. Congressional Oversight. – Upon the effectivity of

this Act, the Joint Congressional Power Commission created under
Section 62 of Republic Act No. 9136 shall exercise oversight powers
over the implementation of this Act.”
SEC. 16. Implementing Rules and Regulations. – Within

sixty (60) days from the effectivity of this Act, the DOE shall, in
coordination with the NEA and the CDA, and in consultation with
the electric cooperatives, issue such rules and regulations as may be
necessary to implement this Act.
SEC. 17. Separability Clause. – If any provision of this Act

is declared invalid or unconstitutional, the other provisions not
affected thereby shall remain valid and subsisting.
SEC. 18. Repealing Clause. – Article 132(3) of Republic Act

No. 9520 and Section 30 of Republic Act No. 9136 (EPIRA) on NEA’s
authorized capital stock are hereby repealed. Any other provision of
law, presidential decree, executive order, or rules and regulations
inconsistent with the provisions of this Act or with the rules and
regulations issued pursuant thereto are hereby repealed or modified
accordingly.
SEC. 19. Effectivity. – This Act shall take effect on the fifteenth
(15th) day following its publication in at least two (2) newspapers of
APPROVED, May 07, 2013.
2276
DEPARTMENT CIRCULAR NO. DC 2013-07-0015

PRESCRIBING THE IMPLEMENTING RULES
AND REGULATIONS OF REPUBLIC ACT NO.
10531, OTHERWISE KNOWN AS THE “NATIONAL
ELECTRIFICATION ADMINISTRATION REFORM
ACT OF 2013”
Pursuant to Section 16 of Republic Act No. 10531, otherwise

known as the “National Electrification Administration Reform Act
of 2013,” hereinafter referred to as the “Act,” the Department of
Energy (DOE), in coordination with the National Electrification
Administration (NEA) and Cooperative Development Authority
(CDA) and in consultation with the Electric Cooperatives (ECs), the
electric power industry participants, relevant government agencies,
non-government organizations and other stakeholders, hereby
issues, adopts and promulgates the following rules and regulations
implementing the provisions of the Act.
RULE I.
GENERAL PROVISIONS,
TITLE AND SCOPE, DECLARATION OF POLICY

AND DEFINITION OF TERMS
Section 1. Title. These rules and regulations shall be referred to as

the “Implementing Rules and Regulations (IRR) of the Act.”
Section 2. Scope. This IRR shall provide the framework for the
implementation of the structural reforms of the NEA and the ECs
in pursuit of the country’s total electrification in an accelerated and
sustainable manner and such other objectives of the Act.
Section 3. Declaration of Policy. It is hereby declared the policy

of the State to:
a) Promote the sustainable development in the rural areas

through rural electrification;
2277
b) Empower and strengthen the NEA to pursue the

electrification program and bring electricity, through the
ECs as its implementing arm, to the countryside even in
missionary or economically unviable areas; and
c) Empower and enable the ECs to cope with the changes

brought about by the restructuring of the electric power
industry pursuant to Republic Act No. 9136, otherwise
known as the “Electric Power Industry Reform Act of
2001” or “EPIRA.”
Section 4. Definition of Terms. For the purpose of this IRR, the

following terms are defined as follows:
a) “Act” refers to Republic Act No. 10531, otherwise known

as the “National Electrification Administration Reform
Act of 2013;”
b) “Barangay” refers to the basic political unit as defined

under Republic Act No. 7160, otherwise known as the
“Local Government Code of 1991;”
c) “Cooperative Code” refers to Republic Act No. 9520,

otherwise known as the “Philippine Cooperative Code of
2008;”
d) “Cooperative Development Authority” or “CDA” refers to

the government entity created under Republic Act No.
6939;”
e) “Corporation Code” refers to Batas Pambansa Bilang

68, otherwise known as the “Corporation Code of the
Philippines;”
f) “Department of Energy” or “DOE” refers to the

Government agency created pursuant to Republic Act
No. 7638 whose expanded functions are provided in the
EPIRA and Republic Act No. 9513 otherwise known as
the “Renewable Energy Act of 2008;”
2278
g) “Electric Cooperative” or “EC” refers to an electric

distribution utility organized and registered pursuant to
Presidential Decree No. PD) 269, as amended, Republic
Act No. 9520, and other related laws;
h) “Energy Regulatory Commission” or “ERC” refers to

the independent quasi-judicial regulatory body created
under the EPIRA;
i) “EPIRA” refers to Republic Act No. 9136, otherwise

known as the “Electric Power Industry Reform Act of
2001;”
j) “Generating Facility” refers to a facility for the production

of electricity;
k) “Grid” refers to the high voltage backbone system of

interconnected transmission lines, substations and
related facilities, located in each of Luzon, Visayas,
Mindanao, or as may otherwise be determined by the
ERC in accordance with Section 45 of the EPIRA;
l) “Missionary Electrification” refers to the provision

of basic electricity service in unviable areas with the
ultimate aim to bringing the operations of these areas to
viability levels;
m) “National Electrification Administration” or “NEA”

refers to the Government agency created under PD 269,
as amended by PD 1645 and Republic Act No. 10531
with additional mandate set forth in the EPIRA;
n) “Securities and Exchange Commission” or “SEC” refers

to the Government agency created under Commonwealth
Act No. 83, as amended;
o) “Small Power Utilities Group” or “SPUG” refers to the

functional unit of National Power Corporation NPC)
created to pursue missionary electrification;
2279
p) “Stock Cooperative” refers to an autonomous and duly

registered association of persons, with a common bond
of interest, who have voluntarily joined together to
achieve their social, economic, and cultural needs and
aspirations by making equitable contributions to the
capital required and accepting a fair share of the risk
and benefits of the undertakings in accordance with the
universally accepted cooperative principles as defined
under Republic Act No. 9520; and
q) “Stock Corporation” refers to an artificial being created

by operation of law, with capital stock divided into
shares, and authorized to distribute to its Shareholders’
dividends out of its surplus profits, having the right of
succession and the powers, attributes and properties
expressly authorized by law or incident to its existence.
RULE II.
THE NATIONAL ELECTRIFICATION ADMINISTRATION
Section 5. Powers, Functions and Privileges of the NEA. The

supervisory and oversight functions of the NEA, as detailed in the
Act and this IRR, shall be applicable to both stock and non-stock
ECs.
Pursuant to Section 4 of PD 269, as amended by the Act, the NEA, in

order to strengthen the ECs, shall help them become economically
viable and prepare them for the implementation of retail competition
and open access pursuant to Sections 31 of the EPIRA, is authorized
and empowered to:
a) Have a continuous succession under its corporate name

b) Adopt and use a seal and alter it at its pleasure;
c) Sue and be sued in any court: Provided, That the NEA

shall, unless it consents otherwise, be immune to suits
for acts ex delicti;
2280
d) Make contracts of every name and nature and execute

all instruments necessary or convenient for the carrying
on of its business;
e) Supervise the management and operations of all ECs;
f) Exercise step-in rights as defined in Rule IV of this

IRR;
g) Provide institutional, financial and technical assistance

to ECs upon request of the ECs;
h) Pursue the total electrification of the country through the

ECs by way of enhancing distribution development and,
in case of missionary areas, shall be done in coordination
with the NPC-SPUG which shall be responsible for
the generation of and transmission requirements, as
necessary;
i) Devote all returns from its capital investments to attain

the objectives of the Act;
j) Ensure the economic and financial viability and operation

of all ECs;
k) Restructure ailing ECs with the end in view of making

them economically and financially viable;
l) Develop, set and enforce institutional and governance

standards for the efficient operation of ECs such as, but
not limited to, the observance of appropriate procurement
procedure, including transparent and competitive
bidding. Such standards shall be enforced through a
mechanism of incentives and disincentives to complying
and non-complying ECs, respectively;
m) Formulate and impose administrative sanctions and

penalties and when warranted, file criminal cases
against those who are found in violation of any of the
provisions of the Act and this IRR;
2281
n) Serve as guarantor to qualified ECs in their transactions

with various parties such as, but not limited to, co-
signing in power supply contracts. For this purpose a
guarantee fund shall be established which will come
from the equity releases based on the NEA’s authorized
capital stock under Section 5 of this Act;
o) Grant loans to ECs, for the construction or acquisition,

operation and maintenance of sub-transmission
and distribution facilities and all related properties,
equipment, machinery, fixtures, and materials for the
purpose of supplying area coverage service, and thereafter
to grant loans for the restoration, improvement or
enlargement of such facilities or for such other purposes
as may be deemed necessary;
p) Subject to the prior approval and/or opinion of the

Monetary Board, borrow funds from any source, private
or government, foreign or domestic, and secure the
lenders thereof by pledging, sharing or subordinating
one or more of the NEA’s own loan securities;
q) Exercise primary and exclusive jurisdiction in the

adjudication of complaints against EC officers, election
disputes and all matters relating to the effective
implementation of the provisions of the Act;
r) As a quasi-judicial agency, deputize local law enforcement

agencies to enforce or implement its orders or decisions,
with the power to cite for contempt any party or witness
to any case before it for contumacious conduct; and
s) Exercise such powers and do such things as may be

necessary to carry out the business and purposes for
which the NEA was established, or which from time to
time may be declared by the Board of Administrators as
necessary, useful, incidental or auxiliary to accomplish
such purposes.
The NEA shall ensure that all ECs comply with the timely submission
of the reportorial requirements set forth in this IRR. For this
2282
purpose, the NEA shall prepare monthly and quarterly assessment

reports on the abovementioned information. Said reports shall be
submitted by the NEA to the DOE and the Joint Congressional
Power Commission (JCPC) together with its recommended policies
to attain the objectives of the Act.
For this purpose, the authorized capital stock of the NEA is hereby
increased to Twenty-five billion pesos (P25,000,000,000.00) divided
into two hundred fifty million (250,000,000) shares with a par value
of One hundred pesos (P100.00).
Section 6. Supervisory Powers of the NEA over the ECs.

Pursuant to Section 4-A of PD 269, as amended by the Act, in the
exercise of its power of supervision over the ECs, the NEA shall
have the following additional powers:
a) Issue orders, rules and regulations, motu propio or

upon petition of third parties, to conduct investigations,
referenda and other similar actions on all matters
affecting the ECs;
b) Issue preventive or disciplinary measures including, but

not limited to suspensions or removal and replacement
of any or all of the members of the board of directors
and officers of the ECs, as the NEA may deem fit and
necessary and to take any other remedial measures as
the law or any agreement or arrangement with the NEA
may provide, to attain the objectives of the Act; and
c) Appoint independent board of directors in the EC.
The NEA shall, in the exercise of its supervisory and disciplinary

powers under the Act, strictly observe due process of law.
Section 7. Jurisdiction of the NEA over Administrative Cases.

The NEA in the exercise of its quasi-judicial functions, shall have
primary and exclusive jurisdiction over the following administrative
cases:
a) Cases involving complaints against the EC Officers,

including those cases or investigation and other similar
2283
actions arising from the NEA’s exercise of its motu

propio powers as provided in Section 6 of this Act. For
the purpose of this section, the EC officers referred to
shall be the following:
i. Members of the Board of Directors;
ii. General Manager;
iii. Department Managers;
iv. Sub-Office Area Managers;
v. Members of the Bids and Awards Committee; or
vi. Other designated/responsible officers with functions

or rank equivalent to any one of those enumerated
above.
b) Election disputes involving any elective officer of an

EC; and
c) Cases or disputes involving any matter relating to the

effective implementation of the provisions of this Act.
Section 8. Step-in Rights in Cases of Ailing ECs. Consistent

with Section 4-B of PD 269, as amended by the Act and Rule IV of
this IRR, the NEA shall be guided by the following:
a) The NEA shall immediately step-in and take over from

its Board the operations of any ailing EC. Within one
hundred eighty (180) days after takeover, the NEA
may convert the ailing EC to either a stock cooperative
registered with the CDA or a stock corporation registered
with the SEC;
b) The NEA shall, in determining the propriety of the

conversion, be guided by the ability of the member-
consumers of said EC to pay for their shares in the stock
cooperative or stock corporation; and
2284
c) The NEA may appoint or assign third persons to

the Board of the EC until the NEA decides that the
election of a new board of directors to manage the EC is
necessary. The NEA may create a management team for
the purpose: Provided, That the NEA shall call for the
election of a new set of board of directors within ninety
(90) days from the exercise of the step-in rights.
Section 9. Injunction or Temporary Restraining Order.

Pursuant to PD 269, as amended by Section 3, 5 and 7 of PD 1645 and
further amended by the Act, no injunction or temporary restraining
order shall be issued against the implementation of any order, ruling
or decision of the NEA, whether in the exercise of its quasi-judicial,
rule-making, supervisory powers or oversight functions, except by
the Court of Appeals, and only upon the posting of a bond sufficient
to cover the liabilities and expenditures arising during the pendency
of the writ or injunction or temporary restraining order: Provided,
That the injunction shall only be effective for a period not exceeding
sixty (60) days.
RULE III.
THE ELECTRIC COOPERATIVES
Section 10. Mandates, Powers, Functions and Privileges of

ECs. In addition to the mandates, powers, functions and privileges
accorded to ECs under the EPIRA and its IRRs, and pursuant to
Section 16(j) of PD 269, as amended by the Act, the ECs are hereby
empowered to:
a) To construct, acquire, own, operate and maintain

electric sub-transmission and distribution lines along,
upon, under and across publicly owned lands and public
thoroughfares, including, without limitation, all roads,
highways, streets, alleys, bridges and causeways. In the
event of the need to such lands and thoroughfares for
the primary purpose of the government, the EC shall be
properly compensated.
For this purpose, the DOE and the Department of Public

Works and Highways (DPWH) shall, within one hundred
2285
eighty (180) days from the effectivity of this IRR, issue

implementing rules and regulations to carry out the
preceding section, consistent with the issuances of the
ERC on cost recovery;
b) To engage in power generation within its franchise area.

For the purpose of clarity, the EC shall ensure the quality
of electricity service consistent with the standards
provided in the EPIRA and its IRR, the Philippine
Grid Code, the Philippine Distribution Code, and other
relevant laws and standards including environmental,
health and safety standards. The engagement of any
EC in the power generation business shall contribute
to greater efficiency and lower cost of operations as a
distribution utility. In the exercise of its mandate, any
EC may engage in power generation business through
any of the following:
i. Construction of embedded generating facility in

accordance with the cross ownership and market
share limitations and standards set forth in the
EPIRA and its IRRs, as well as health, safety and
environmental clearances from the appropriate
government agencies under existing laws.
ii. Acquisition of an existing generating facility from:
1) Privately-owned generation facility;
2) Government owned generating facility in the

main grid;
3) For NPC-SPUG areas, an EC may participate

in a bid on an existing NPC-SPUG generating
facility and its qualified bid shall be given
preference in case of a tie: Provided, however,
That in cases where there is no other qualified
bidder, the lone bid shall remain as valid basis
for the determination of the final award subject
to the following conditions:
2286
A. bid offer is not lower than the valuation of

the assets using Commission on Audit (COA)
rules and regulations;
B EC is prepared to fully take over the

generation function of the area from the
NPC-SPUG. For this purpose, the NEA and
the EC concerned shall, in consultation with
the NPS-SPUG, prescribe the parameters
from which the full takeover date shall be
determined.
The full takeover date refers to the date

where the EC shall assume the ownership,
operation and maintenance of the generating
facility.
In the exercise of its oversight function over

ECs, the NEA shall ensure that such takeover
shall not adversely affect the viability of the
EC as a distribution utility and shall redound
to better services and least-cost supply for its
captive market; and
C. EC submits its graduation program from

the Universal Charge for Missionary
Electrification (UC-ME) subsidy.
For this purpose, the DOE shall, in consultation

with the ERC, develop a graduation policy for
the availment of the UC-ME subsidy.
iii. Generate electricity through lease and/or rental

of a generating facility for purposes of supplying
its franchise area requirement in the least cost
manner.
Any EC that opts to engage in power generation

business shall include such plan and activities in
its annual Distribution Utility Development Plan
2287
(DDP), duly approved and endorsed by the NEA.
The EC shall submit a monthly report on the

operations and performance of its generating facility/
ies to the DOE, the ERC, and the NEA not later than
the 15th of the succeeding month.
c) Explore the option of forming a consortium or partnership

among ECs, which have contiguous franchise areas
or share a common sub-transmission line, in order to
become financially and technically capable to engage in
the business of generation of electricity supply.
Section 11. Registration of ECs. Pursuant to Section 32 of PD 269,

as amended by the Act, the following shall govern the registration
of ECs:
a) All ECs may choose to remain as a non-stock, non-profit

cooperative or convert into and register as:
i. Stock cooperative under the CDA; or
ii. Stock corporation under the SEC, in accordance with

the guidelines in this IRR.
Such choice shall carry with it the attendant

requirements of compliance with the laws and
regulatory guidelines governing the respective
government agencies having jurisdiction over their
registration.
b) Regardless of the choice made, the NEA shall have

the authority over the ECs, whether stock or non-
stock.
i. Monthly Financial and Statistical Report (MFSR);
ii. Monthly status of barangay and sitio energization

and house connections;
2288
iii. Monthly Institutional Services Department (ISD)

Report;
iv. Monthly Performance Standard Monitoring Report

(PSMR);
v. Monthly summary of complaints received and acted

upon;
vi. Monthly report on compliance with the Philippine

Grid and Distribution Codes;
vii. Monthly Engineering Report;
viii.Quarterly report on power supply contracts;
ix. Annual work plan;
x. Annual Distribution Development Plan (DDP);
xi. Five (5) – year investment plan submitted annually;
xii. Annual Cash Operating budget (COB);
xiii. Audited financial statements;
xiv. Collective Bargaining Agreement (CBA) or Collective

Negotiation Agreement (CNA); and
xv. Copy of Capital Expenditure (CapEx) and Operating

Expenditure (OpEx) plans; and
xvi. For ECs on grid with isolated area/s served by

the NPC-SPUG, separate submission of MFSR,
Monthly Engineering Report and barangay and sitio
electrification report.
c) In the event that an EC opts to register with the CDA it

shall continue to enjoy the benefits provided for under
the Act,
2289
d) Existing ECs may likewise opt to register as stock

corporations with the SEC: Provided, however, That
ECs registered with the SEC shall no longer enjoy the
incentives provided for in the Act;
e) Despite the registration of the ECs under the CDA

or the SEC, the NEA shall retain its supervisory and
disciplinary power over them in the conduct of its
operation as electric distribution utilities.
Section 12. Governance Structure of ECs. In compliance with

Section 26 of PD 269, as amended by the Act, the independence of
the Board of Directors and Officers of ECs is hereby prescribed.
To ensure the long-term business and economic viability of ECs,

the management operations and strategic planning of ECs shall, as
much as practicable, be insulated from local politics.
Section 13. Board of Directors. The Board of Directors is the

collegial body composed of representatives elected form each district
to promulgate policies, rules and regulations necessary for the viable
operation of the EC and the exercise of its corporate power.
Section 14. Qualifications of a Director and Officer. Pursuant

to Section 26-B of PD 269, as amended by the Act, a candidate’s
integrity, experience, education, competence and probity shall be
considered in determining whether he/she shall be fit and proper
to become a director or officer of the EC. For this purpose, the
minimum qualifications of a director or officer of the EC shall be as
follows:
a) He or she is a Filipino citizen;
b) He or she is a graduate of a four (4)-year course;
c) He or she should at least be twenty-one (21) years old and

not over seventy (70) years old on the date of election;
d) He or she is of good moral character;
2290
For purposes of this IRR, good moral character may be

established with the submission of a certificate issued by
any of the following:
i. Barangay where the candidate resides;
ii. National Bureau of Investigation;
iii. Philippine National Police; or
iv. Leader of the religious sect where the candidate is

affiliated.
e) He or she is a member of the EC in good standing for the

last five (5) years immediately preceding the election or
appointment and shall continue to be a member in good
standing during his or her incumbency;
For purposes of this IRR, a member of good standing

shall mean that said member:
i. must have no unsettled or outstanding obligations

to the cooperative during his membership in the
cooperative whether personal or through commercial
or industrial connections of which he or she is the
owner/co-owner;
An unsettled or outstanding obligation is an account

which has not been paid within seven (7) days after
the due date. For incumbent member of the Board
who will seek re-election, unsettled or outstanding
obligation includes power bills, cash advances,
disallowances (including NEA audit findings) and
materials and equipment issuances. At any given
time during his membership in the cooperative,
he or she must be totally free of any unsettled or
outstanding indebtedness and/or disallowances with
the EC.
ii. has not been apprehended for electric pilferage;
2291
A mere apprehension of electric pilferage by the EC,

even without conviction for such offense by any court,
shall be a valid ground for disqualification. The word
“apprehension” should be taken in the strict context
as used in Republic Act No. 7832, otherwise known as
“Anti-Electricity and Electric Transmission Lines or
Materials Pilferage Act of 1994,” which means that a
person is caught in flagrante delicto for violating the
provision of the said Act;
iii. has not been removed for cause as director or an

employee from any EC;
In general, removal or termination of service from

the EC is caused by a grave offense or violation/s of
policies, rules and regulations. A former director or
employee with a record of termination/removal for
cause from public office or for just cause as defined in
Article 282 of the Labor Code as amended, shall not
be qualified to be elected or appointed as director of
an EC.
f) He or she is an actual resident and consumer in the

district that he or she seeks to represent for at least two
(2) years immediately preceding the election; and
g) He or she has attended at least two (2) Annual General

Membership Assemblies (AGMA) for the last five (5) years
immediately preceding the election or appointment.
Section 15. Disqualifications of a Director and Officer.

Pursuant to Section 26-B of PD 269, as amended by the Act, any
person shall be ineligible to be elected or be appointed as member of
the board of directors or officers of an EC if:
a) Such person or his or her spouse holds any public office.

For the purpose of disqualification, a person holding an
elective position or an appointive position with a salary
grade of sixteen (SG16) or higher or its equivalent shall
not be eligible to be elected as member of the Board of
Directors or Officers of an EC;
2292
b) Such person or his or her spouse has been a candidate in

the last preceding local or national elections;
c) Such person has been convicted by final judgment of a

crime involving moral turpitude;
d) Such person has been terminated from public office/

government employment or private employment for just
cause as defined in Article 282 of the Labor Code;
For this purpose, termination from public office shall

mean removal;
e) Such person is related within the fourth civil degree of

consanguinity or affinity to any member of the EC Board
of Directors, Department Manager, NEA-appointed
Project Supervisor (PS) or Acting General Manager
(AGM) and its equivalent or higher position; and
f) Such person is employed by or has financial interest

in a competing enterprise or a business selling electric
energy or electrical hardware to the cooperative or doing
business with the EC including but not limited to, the
use or rental of poles.
For purposes of this IRR, “doing business” shall refer

to the transactions related to the core or main line of
business of the EC, which is conveyance of electricity
through its distribution facilities.
Section 16. Continuing Qualification Requirement. To ensure

that the management and operations of the ECs are carried out
with due regard to its economic viability, the NEA shall prescribe,
pass upon and review the qualifications and disqualifications
of individuals appointed or elected as EC director or officer and
disqualify those found unfit.
An EC director or officer, in order to remain as such, must continue

to possess all the qualifications and none of the disqualifications
throughout his/her term or tenure of office.
2293
The foregoing continuing qualifications shall not apply to the

following:
a) General Manager; and
b) Project Supervisor and/or independent Director.
Section 17. Suspension or Removal of a Director or Officer.

The NEA may, after due notice to the Board of Directors and Officers
of the EC, disqualify, suspend or remove any Director or Officer,
who commits any act which renders him or her unfit for the position
in accordance with the standards of Sections 26-A and 26-B of PD
269, as amended by the Act.
The proceedings herein may be undertaken motu propio or through

a complaint initiated against the Director or Officer.
Section 18. Incentives of ECs. Consistent with Section 32-A of PD

269, as amended by the Act, ECs which comply with the financial
and operational standards set by the NEA shall enjoy the following
incentives:
a) To be entitled to congressional allocations, grants,

subsidies and other financial assistance for rural
electrification: Provided, That the subsidy shall not
include the UC-ME provided for in Section 34(b) of the
EPIRA;
b) To receive all subsidies, grants and other assistance

which shall form part of the donated capital and funds
of the EC: Provided, That such donated capital and
funds shall not be sold, traded nor divided into share
holdings at any time. These donated capital and funds
shall be appraised and valued for the sole purpose of
determining the equity participation of the members:
Provided, That in case of dissolution or conversion of
the EC, said donated capital and funds shall be subject
to escheal; and
c) To avail of the preferential rights granted to cooperatives

under Republic Act No. 7160, otherwise known as the
2294
“Local Government Code of 1991,” and other related

laws. For this purpose, the DOE and the Department
of Finance (DOF) through the Bureau of the Local
Government-Finance (BLGF) shall draft within one
hundred eighty (180) days from the effectivity of this
IRR, the applicable guidelines for this purpose.
As a further incentive, the NEA may prioritize the grant of incentives

in favor of the ECs that are managed effectively and efficiently and
comply consistently with its mandates and directives.
RULE IV
NEA STEP-IN RIGHTS
Section 19. Obligations of NEA. To carry out its expanded

mandate and to ensure that the ECs are financially viable and able
to meet the operational and financial standards and take preventive
measures, the NEA shall have the following obligations:
a) To develop standards and protocols for the efficient

operations of the ECs which shall consider the
following:
i. Observance of appropriate procurement procedures,

including transparent and competitive bidding;
ii. Financial, Operational, Institutional and Governance

Standards;
iii. Incentives for compliant ECs including options for

conversion to stock cooperative under the CDA or
stock corporation under the SEC;
iv. Fines and Penalties for non-compliant ECs;
v. Timelines and Procedures for Enforcement and

Monitoring;
vi. Audit; and
2295
vii. Reportorial Requirements for the ECs as set forth in

this IRR.
b) To develop financial and operational parameters to serve

as triggers for intervention of the NEA in the EC operations at least
one (1) year prior to being categorized as ailing EC: Provided, That
the obligations as set forth in paragraphs (a) and (b) of this section,
shall be developed within sixty (60) days from the issuance of this
IRR and shall be approved by the DOE: Provided, further, That
subsequent amendments thereto shall likewise be approved by the
DOE;
c) To evaluate and categorize ECs based on standards set

with due consideration to the ailing ECs;
d) To enforce performance standards and submit quarterly

compliance report to the DOE and JCPC which shall include summary
of compliance to key performance standards and recommendation
for rehabilitation or takeover in case of ailing ECs.
e) To protect the interest of the member-consumers and

the public in general, the NEA shall have the right to intervene to
ensure rehabilitation, financial turn-around and viability of ailing
ECs;
f) To create a NEA rehabilitation team to assist the

ailing ECs improve its financial and technical conditions. The
rehabilitation team shall, among others:
i. Monitor list and status of ailing ECs;
ii. Recommend action plans for the recovery of the ailing

EC which may include the following:
1. Convert ailing EC to either stock cooperative

registered with the CDA or stock corporation
registered with the SEC: Provided, That such
conversion shall be guided by the ability of
the member-consumers of said EC to pay for
their shares in the stock cooperative or stock
corporation;
2296
2. Appoint or assign third persons to the Board of

the EC until the NEA decides that the election
of a new board of directors to manage the EC is
necessary. The NEA may create a management
team for the purpose; and
3. Provide for the settlement of outstanding

obligations with generating companies and power
suppliers/sources of electricity, the TransCo or
its Concessionaire and related creditors, if any.
In the exercise of its step-in rights, the NEA shall

strictly observe due process of law.
iii. Recommend alternative options to ensure the

rehabilitation of the ailing EC which may include
private sector participation; and
iv. Prepare a report on the implementation of the

rehabilitation plan for submission to the DOE and
JCPC.
Section 20. Ailing ECs. In accordance with the standards set under
this IRR, the NEA may declare an EC as an “Ailing EC” when such
EC falls under any of the following circumstances:
a) Has negative Net Worth for the last three (3) years. For
this purpose, “Negative Net Worth” shall mean as the
financial condition of an EC in which its liabilities are
greater than its assets:
b) Has accumulated ninety (90) days arrearages in power

supply purchases from generating companies and power
suppliers/sources of electricity, and the transmission
charges by the TransCo or its Concessionaire;
c) Unable to provide electric service due to technical and/

or financial inefficiencies including, but not limited
to, high systems loss, low collection efficiency, below
standard current ratio, operating loss, huge liabilities
2297
and/or institutional problems such as governance and

non-adherence to NEA and EC policies;
d) Unable to efficiently perform its electric distribution

utility obligations or continue in business due to
organizational, external and internal factors;
e) When an EC has failed to meet other operational

standards established by NEA; and
f) Unable to set up or continuously support its Wholesale

Electricity Spot Market prudential requirements.
The NFA shall, within sixty (60) days from the effectivity of this
IRR, submit a set of standards to determine the classification of
the ECs guided by the parameters of this IRR: Provided, That the
NEA shall classify the ECs based on the standards mentioned in the
preceding sentence: Provided further, That the classification shall
serve as the baseline and/or benchmark of the particular EC.
Section 21. NEA’s Exercise of Step-In Rights. The NEA shall

immediately exercise its step-in rights over an ailing EC through
the following:
a) Appoint or assign a PS or AGM or assign third persons

to the Board of the EC until the NEA decides that the election of a
new Board of Directors to lead the EC is necessary. The NEA may
also create a Management Team for the purpose.
b) In case of organizational and/or internal conflicts as

provided under circumstances in this IRR, the NEA shall give
the CDA or other appropriate government agency where the EC
is legally registered, the opportunity to resolve or take remedial
measures without prejudice to the exercise of its step-in rights.
c) May enter into partnership with a qualified private

sector investor, under any of the following frameworks:
i. Joint Venture;
ii. Investment Management Contract;

2298
iii. Management Contract;
iv. Operations and Maintenance Contract;
v. Special Equipment and Materials Lease Agreement;
vi. Concession;
vii. Merger and Consolidation; and
viii.Other variants deemed applicable to the EC.
For this purpose, the NEA is hereby constituted as the

agent of the concerned EC.
d) If within a reasonable period, not exceeding one hundred

eighty (180) days from its takeover, the NEA determines
that such EC is unable to continue its operation in the
ordinary course of business, it may:
i. Initiate structural reforms such as conversion of the

ailing EC to either a Stock Cooperative registered
with the CDA or a stock corporation registered with
the SEC; or
ii. Institute appropriate legal actions such as Extra-

judicial Foreclosure and Insolvency (Voluntary/
Involuntary and Bankruptcy proceedings, without
prejudice to the right of the creditors.
RULE V.
CONVERSION OF ELECTRIC COOPERATIVES
Section 22. Conversion of ECs. Consistent with Section 32 of PD

269, as amended by the Act, any EC may choose to remain as a non-
stock, non-profit cooperative or, in accordance with the conversion
guidelines set in this IRR, convert into and register as:
a) A stock cooperative under the CDA; or
2299
b) A stock corporation under the SEC.
Section 23. Conversion Guidelines. The NEA shall, in determining

the propriety of the conversion, be guided by the ability of the
member-consumers of the said EC to pay for their shares in the
stock cooperative or stock corporation. Specifically, the conversion
shall adhere to the following:
a) Compliance by the EC to the standards to be set by NEA

pursuant to this IRR;
b) ECs conduct, in coordination with the NEA, of a massive

information-education and communication (IEC)
campaign in the district level within the ECs coverage
area, on the importance of the Act and the IRR including
rights, duties and obligations of an EC whether stock
or non-stock, incentives and disincentives, options and
effects of the ECs’ conversion and the authority and
responsibilities of NEA over the ECs.
c) ECs conduct of consultation with its bona fide member-

consumers on whether to convert or not, through series
of district meetings, which shall be undertaken in the
following manner:
i. Simultaneously, where the meeting or consultations

are held on the same day at various venues (barangay),
or
ii. Sequentially, where the meetings or consultations

are held one after the other in different venues
(barangays).
d) In the conduct of consultations, the EC shall comply with

the following:
i. Notice of Membership Meeting. At least ten (10)

days before the scheduled consultation/meeting,
all the bona fide member-consumers in the district
shall be notified through print and broadcast media.
2300
In addition, the complete information on the said

meeting/consultation shall be mailed or delivered to
the addresses of the member-consumers. Likewise,
the said notice shall be posted in strategic places
within the distrit;
ii. Master list of Voters. A sanitized master list

of bona fide member-consumers entitled to vote in
each district shall be prepared by the EC through
its Institutional Services Department or equivalent
department. Such list shall be the basis for
determining the attendance or turn out of voters
in each meeting held, whether simultaneous or
sequential;
iii. Required Number of Votes for Conversion. The

approval of at least a simple majority, or fifty per
centum (50%) plus one (1), of all members entitled to
vote of the EC, shall be considered a valid decision
for conversion;
iv. Voting System. Each bona fide member-consumer

shall be entitled to one (1) vote. The voting shall be
done through secret balloting, and no proxy voting
shall be allowed; and
v. Over-all Decision. The final decision on the issue

on conversion, on whether or not the EC will convert,
will be based on the majority decision, as culled from
the result of the general assembly, or the cumulative
result of the district meetings, as the case may be:
Provided, That the conduct of referendum may only
be conducted ten (10) years from the last conducted
referendum.
Section 24. Conversion Requirements. In addition to the

provisions of Republic Act No. 9520 and Batas Pambansa Bilang
68, the ECs must comply with the provisions of Sec. 7(c)(i) of Rule 7
of the IRR of the EPIRA.
2301
Section 25. Conversion Procedure and/or Mechanics. The

following shall guide the mechanics and/or procedures for the
conversion provided in the preceding sections:
a) The Board of Directors shall pass a Resolution scheduling

the district/s date/s, venue/s and time of the assembly/
meetings. Likewise, the Board of Directors shall
appropriate the corresponding budget for the program/
activities;
b) The concerned departments, spearheaded by the EC’s

Institutional Services Department shall prepare and
execute the requirements set under the said resolution;
c) In not less than twenty five (25) days before the General
Assembly or District Meetings, the Institutional Services
Department or its equivalent department shall prepare
the Sanitized Master list of Voters in alphabetical
order and classified according to barangays to facilitate
registration and voting;
d) The Board Members of the concerned district shall be

responsible for ensuring the success of the assembly/
referendum/meeting in the said district. Likewise, he
shall preside in the district assembly meeting/s;
e) There shall be a determination of attendance where only

the bona fide member-consumers whose names are listed
in the sanitized master list of voters prepared by the EC
shall be allowed to vote;
f) Where meetings are held simultaneously, as defined in

this section, the total number of votes shall be determined
on a cumulative basis;
g) Where meetings are held sequentially, as defined in this

section, the same procedure shall be followed;
h) For all the meetings conducted regardless of the

Procedure/Mechanics applied, the Presiding Officer shall
2302
introduce and present to the assembly the issued related

to conversion, such as the following:
i. Historical profile of the EC;
ii. The advantages/disadvantages of each of the three

options;
iii. Open Forum;
iv. Casting of votes;
v. Declaration of the results of voting by the Presiding

Officer, and
vi. Adjournment.
i) Documentation Requirements:
i. Preparation of the minutes of meeting indicating the

highlights, particularly the over-all decision of the
bona fide member-consumers wither to convert or
not;
ii. Regardless of the results of the voting, a Certificate

of Membership Decision to convert or not, indicating
the over-all decisions of the bona fide member-
consumers of the EC and certifying, the truthfulness
and veracity of the statements therein, shall be
executed and attested on behalf of the EC by its
Board President or Board Vice-President.
For the purpose of the foregoing, a bona fide member-consumer

shall refer to a person who is a member-consumer in good standing
who has met all the requirements, set within the context of the ECs
by-laws and has been listed/included in the Master list of voters,
to have voting rights, under the one-member, one vote policy of the
EC.
Within one hundred eighty (180) days from the effectivity of this
IRR, the NEA shall cause the conduct of referenda of all remaining
2303
non-stock ECs and the ECs shall have decided and issued a Board
Resolution on options to:
a) Remain as non-stock, non-profit EC;
b) Convert into stock cooperative under the CDA; or
c) Convert into stock corporation under the SEC.
For monitoring purposes, the NEA shall submit to the DOE a

quarterly report detailing the progress of the registration.
RULE VI.
TOTAL ELECRIFICATION
In pursuit of the total electrification of the country, the NEA and

all ECs shall electrify all remaining unelectrified households. In
the case of missionary areas, the same shall be done in coordination
with the NPC-SPUG which shall be responsible for the generation
and transmission requirements, as necessary.
Section 26. Total Electrification Plan. Towards this end, the

NEA shall, in consultation with the ECs or with NPC-SPUG, in
case of missionary areas, develop within ninety (90) days from the
effectivity of this IRR, a Total Electrification Plan (herein referred
to as the Plan), which will detail among others:
a) Time bound targets for the attainment of the individual

electrification program in each of the ECs’ franchise
areas. For this purpose, the ECs are encouraged to adopt
appropriate and least-cost technology;
b) Financial requirements and sources of funds for project

implementation; and
c) Work program and schedules.
The NEA shall update and submit the plan to the DOE, every
fifteenth (15th) of March of each year: Provided, That such Plan shall
be approved by the DOE, for implementation by the NEA and the
2304
ECs: Provided further, That the ERC shall provide the necessary
regulatory support in recognizing the cost associated in providing
missionary electrification.
RULE VII.
FINAL PROVISIONS
Section 27. Supervisory Powers of the DOE over the NEA.
Consistent with Section 58 of EPIRA, the NEA shall continue to

be under the supervision of the DOE, and shall comply with all
reportorial requirements under this IRR and as may be deemed
necessary by the DOE.
Section 28. Penalties. Pursuant to Section 14 of the Act, any person

who willfully violates any rule or regulation promulgated pursuant
to the authority granted in this IRR shall, upon conviction, be
punished by a fine of not less than fifty thousand pesos (P50,000.00)
but not more than five hundred thousand pesos (P500,000.00) or
by imprisonment of not less than six (6) months but not more than
one (1) year, or both, at the discretion of the court: Provided, That if
the violation is committed by a juridical person, the penalty herein
prescribed shall be imposed upon the official and/or employee thereof
responsible for the violation: Provided, further, That if the violation
is committed by a government official or employee, including those
in government-owned or controlled corporations, such person
shall, in addition to the penalty provided herein, be subjected to
administrative disciplinary action.
Section 29. Congressional Oversight. To enhance the

effectiveness of the JCPC in the exercise of its oversight function
over the implementation of the Act, the Board of Administrators
shall submit to the JCPC a semi-annual report on the initiatives
and activities on rural electrification, including the supervision
of the NEA over the ECs in the performance of their franchise
obligations.
Section 30. Transitory Clause. Pursuant to the objectives of the

Act of strengthening the ECs, the NEA shall, upon the instruction
2305
of the DOE exercise the step-in rights for ailing ECs identified by
the DOE, pending the issuance of the standards set forth in Rule IV
Section 20, of this IRR: Provided, That the NEA’s exercise of step-
in rights under this section shall be governed by Section 4-B of PD
269, as amended by the Act: Provided, further, That the NEA shall
takeover and exercise the powers provided in the Act over ECs that
may be identified by the DOE as urgent and necessary to ensure
public safety, security and welfare, such as but not limited to, the
imminent threat of disconnection of electricity supply.
Section 31. Separability Clause. If any provision of this IRR

is declared invalid or unconstitutional, the other provisions not
affected thereby shall remain valid and subsisting.
Section 32. Effectivity. This IRR shall take effect fifteen (15) days
from its publication in at least two newspapers of general circulation
and shall remain in effect until otherwise revoked.
Issued in Energy Center, Bonifacio Global City, Taguig City on July

26, 2013
CARLOS JERICHO L. PETILLA

Secretary
2306
PRESIDENTIAL DECREE NO. 972
PROMULGATING AN ACT TO PROMOTE AN ACCELERATED

EXPLORATION, DEVELOPMENT, EXPLOITATION,
PRODUCTION AND UTILIZATION OF COAL
WHEREAS, the increasing cost of imported crude oil imposes

an unduly heavy demand on the country’s international reserves
thereby making it imperative for the government to pursue actively
the exploration, development and exploitation of indigenous energy
resources;
WHEREAS, while coal has been identified as a fossil fuel

known to exist in mineable quantities in the country which could
provide a viable energy source for some vital industries, large tracts
of coalbearing lands have not been explored and mined in a manner
and to an extent adequate to meet the needs of the economy;
WHEREAS, the proliferation of fragmented coal permits

and leases has prevented, or deterred, the adequate and speedy
exploration, development, exploitation and production of indigenous
coal resources;
WHEREAS, to develop, achieve and implement a well-planned,

systematic and meaningful exploration, development, exploitation
and production of local coal resources, participation of the private
sector with sufficient capital, technical and managerial resources
must be encouraged and the technical and financial capabilities of
the coal industry upgraded;
WHEREAS, hand in hand with an accelerated coal exploration,

development, exploitation and production program, it is essential
that the market for domestic coal production be developed by granting
incentives to prospective coal users to convert their facilities for coal
utilization;
WHEREAS, to realize the above, it is necessary to amend and/

or supplement existing legislation relating to coal;
2307
WHEREAS, Article XVII, Section 12 of the Constitution of

the Philippines provides in part that when the national interest so
requires, the incumbent President of the Philippines or the interim
Prime Minister may review all contracts, concessions, permits
or other forms of privileges for the exploration, development,
exploitation or utilization of natural resources entered into, granted,
issued or acquired before the ratification of the Constitution;
NOW, THEREFORE, I, FERDINAND E. MARCOS, by virtue

of the powers vested in me by the Constitution of the Philippines,
do hereby decree and declare as part of the law of the land the
following:
SECTION 1. Short Title. – This Act shall be known and may

be cited as “The Coal Development Act of 1976.”
SEC. 2. Declaration of Policy. – It is hereby declared to be

the policy of the state to immediately accelerate the exploration,
development, exploitation production and utilization of the
country’s coal resources. A coal development program is therefore
promulgated and established by this Decree.
SEC. 3. Coal Development Program. – The country shall be

divided into coal regions and exploration and exploitation programs
shall be instituted and implemented pursuant to this Decree.
These programs shall be geared towards the promotion and

development of the necessary technical and financial capability
to undertake a work program to effectively explore exploit coal
resources.
In recognition, however, of the social constraints that may be

encountered in effecting the establishment of coal units in regions
where there is high concentration of small coal miners, a special coal
program shall be formulated and implemented in coordination with
the appropriate government agency/agencies to meet the particular
needs of such regions.
SEC. 4. Government to Undertake Coal Exploration

Development and Production. – The Government, through the Energy
Development Board, its successors or assigns, shall undertake by
2308
itself the active exploration, development and production of coal

resources. It may also execute coal operating contracts as hereafter
defined. The active exploration and exploitation of coal resources
by the Government or through coal operating contracts may cover
public lands, any unreserved or unappropriated coal bearing lands,
claims located and recorded by private parties areas covered by
valid and subsisting coal revocable permits, coal leases and other
existing rights granted by the Government for the exploration
and exploitation of coal lands, government mineral reservations,
coal areas/mines whose leases or permits are presently owned or
operated or held by government-owned or controlled corporations
and coal mineable areas operated or held by government agencies.
SEC. 5. Blocking System. – The Energy Development Board

shall establish coal regions delimiting its extent and boundaries
after taking into consideration the various coal bearing lands of the
Philippines. Each coal region shall be divided into meridional blocks
or quadrangles of two minutes (2’) of latitude and one and one-half
minutes (1-1/2) of longitude, each block containing an area of one
thousand (1,000) hectares, more or less, the boundaries thereof to
coincide with the full two minutes and one and one-half minutes of
latitude and longitude, respectively, based on the Philippine Coast
and Geodetic Survey Map, scale of 1:50,000.
SEC. 6. Coal Contract Area. – In conformity with the

blocking system herein established, the Energy Development Board
shall determine in each coal region what areas, are available for
coal operating contracts. In opening such contract area, the Energy
Development Board may resort to either of the following alternative
procedures:
a) By offering an area or areas for bids, specifying the minimum

requirements and conditions in accordance with this Decree;
or
b) By negotiating with a qualified party for a coal operating

contract under the terms and conditions provided in this
Decree.
No person shall be entitled to more than fifteen (15) blocks of

coal lands in any one coal region.
2309
SEC. 7. Existing Permittees/Leaseholders. – All valid and

subsisting holders of coal revocable permits, coal leases and other
existing rights granted by the government for the exploration and
exploitation of coal lands or the operators thereof duly approved by
the appropriate government agency, shall be given preference in
the grant of coal operating contract over the area covered by their
permits, leases or other rights subjects to their compliance with the
following conditions and guidelines:
a) Those whose areas fall within a block as described in Section

5 hereof shall organize or consolidate themselves into a coal
unit, singly or jointly with valid and subsisting holders of coal
revocable permits, coal leases and other existing coal rights
or the duly approved operator thereof, of contiguous blocks:
Provided, that a coal unit shall not be entitled to more than
fifteen (15) blocks of coal lands in any one coal region.
b) Consolidation of areas into coal unit which shall require

approval by the Energy Development Board must be completed
within a period of six (6) months from the effectivity of this
Decree.
c) In order to qualify for consolidation into coal units, permittees,

leaseholders or operators must have complied with the
requirements of their existing permits, leases and/or rights as
defined under existing laws, rules and regulations.
d) Members of the coal unit shall agree on the form, terms and
extent of participation of its individual members. All holders
of valid and subsisting coal revocable permits, coal leases
and other existing rights granted by the government for the
exploration, development and exploitation of coal lands shall
be given percentage interest in the unit or payments out of
production under such terms and conditions as may be agreed
upon by the members of the unit and approved by the Energy
Development Board.
e) A coal unit shall enter into a coal operating contract as

hereafter provided within six (6) months from its formation.
Coal revocable permits, coal leases and other existing rights

granted by the government for the exploration and exploitation of
2310
coal lands shall be deemed automatically cancelled and the area

covered thereby shall revert back to the State for failure of the
holders or the qualified operators thereof for any cause whatsoever
to consolidate their areas into coal units or secure a coal operating
contract within the period specified in this section.
SEC. 8. Coal Operating Contract. – Each coal operating

contract herein authorized shall, subject to the approval of the
President, be executed by the Energy Development Board.
In a coal operating contract, service, technology and financing

are furnished by the operator for which it shall be entitled to the
stipulated fee and reimbursement of operating expenses. Accordingly,
the operator must be technically competent and financially capable
as determined by the Energy Development Board to undertake the
coal operations as required in the contract.
SEC. 9. Obligations of Operator in Coal Operating Contract.

– The operator under a coal operating contract shall undertake,
manage and execute the coal operations which shall include:
a) The examination and investigation of lands supposed to

contain coal, by detailed surface geologic mapping, core
drilling, trenching, test pitting and other appropriate means,
for the purpose of probing the presence of coal deposits and
the extent thereof;
b) Steps necessary to reach the coal deposit so that it can be

mined, including but not limited to shaft sinking and
tunnelling; and
c) The extraction and utilization of coal deposits.
The Government shall oversee the management of operation

contemplated in the coal operating contract and in this connection,
shall require the operator to:
a) Provide all the necessary service and technology;
b) Provide the requisite financing;
2311
c) Perform the work obligations and program prescribed in the

coal operating contract which shall not be less than those
prescribed in this Decree;
d) Operate the area on behalf of the Government in accordance

with good coal mining practices using modern methods
appropriate for the geological conditions of the area to enable
maximum economic production of coal, avoiding hazards to
life, health and property, avoiding pollution of air, land and
waters, and pursuant to an efficient and economic program of
operation;
e) Furnish the Energy Development Board promptly with all

information, data and reports which it may require;
f) Maintain detailed technical records and account of its

expenditures;
g) Conform the regulations regarding, among others, safety

demarcation of agreement acreage and work areas, non-
interference with the rights of the other petroleum, mineral
and natural resources operators;
h) Maintain all necessary equipment in good order and allow

access to these as well as to the exploration, development and
production sites and operations to inspectors authorized by
the Energy Development Board;
i) Allow representatives authorized by the Energy Development

Board full access to their accounts, books and records for tax
and other fiscal purposes;
On the other hand, the Energy Development Board shall:
a) On behalf of the Government, reimburse the operator for all

operating expenses not exceeding seventy per cent (70%) of
the gross proceeds from production in any year: Provided,
that if in any year, the operating expenses exceed seventy per
cent (70%) of the gross proceeds from production, then the
unrecovered expenses shall be recovered from the operation
of succeeding years. Operating expenses means the total
2312
expenditures for coal operation incurred by the operator as

provided in a coal operating contract;
b) Pay the operator a fee, the net amount of which shall not
exceed forty per cent (40%) of the balance of the gross income
after deducting all operating expenses;
c) Reimburse operating expenses and pay the operator’s fee in

such form and manner as provided for in the coal operating
contract.
SEC. 10. Additional Fee. – All valid and subsisting holders of

coal revocable permits, coal leases and other existing rights granted
by the government for the exploration and exploitation of coal
lands or the duly qualified operators thereof who have organized
their area into a coal unit may, subject to conditions imposed by
the Energy Development Board, be granted in the coal operating
contract, in addition to the face provided in Paragraph 2 of Section
9, a special allowance, the amount of which shall not exceed thirty
per cent (30%) of the balance of the gross income after deducting all
operating expenses.
Coal operating contracts entered into with Philippine citizens

or corporations except those already covered under the preceding
paragraph, shall be granted a special allowance, the amount of
which shall not exceed twenty per cent (20%) of the balance of the
gross income after deducting all operating expenses: Provided, that
coal operating contracts in which Philippine citizens or corporations
have a minimum participating interest of fifteen per cent (15%) in
the contract area, may subject to reasonable conditions imposed by
the Energy Development Board, be granted a special allowance not
exceeding ten per cent (10%) of the balance of the gross income after
deducting all operating expenses.
For the purpose of this section, a Philippine corporation

means a corporation organized under Philippine laws at least sixty
per cent (60%) of the capital of which, including the voting shares,
is owned and held by citizens of the Philippines.
SEC. 11. Minimum Terms and Conditions. – In addition

to those elsewhere provided in this Decree, every coal operating
2313
contract executed in pursuance hereof shall contain the following

minimum terms and conditions:
a) Every operator shall be obliged to spend in direct prosecution

of exploration work not less than the amounts provided for
in the coal operating contract and these amounts shall not
be less than the total obtained by multiplying the number of
coal blocks or fraction thereof covered by the contract by One
Million Pesos (P 1,000,000.00) per block annually, Provided,
that if the area or a portion thereof is suitable for open pit
mining as determined jointly by the operator and the Energy
Development Board, the minimum expenditure requirement
herein provided may be reduced up to Two Hundred Thousand
Pesos (P 200,000.00) per block annually. From the time
coal reserves in commercial quantity have been determined
jointly by the operator and the Energy Development Board,
the operator shall undertake development and production
of the contract area within the period agreed upon in the
contract and shall be obliged to spend in the development
and production of the contract area an amount which shall
be determined by negotiation between the operator and the
Energy Development Board taking into account factors such
as measured reserves, quality of coal, mining method and
location and accessibility to market; Provided, further, that if
during any contract year the operator shall spend more than
the amount of money required to be spent, the excess may be
credited against the money required to be spent by the operator
during the succeeding years, except excess expenditures for
exploration cannot be credited against financial commitment
for development and production; Provided, further, that
should the operator fail to comply with the work obligations
provided for in the coal operating contract, it shall pay to the
Government the amount it should have spent but did not in
direct prosecution of its work obligations; Provided, finally,
that except in case of open pit mining, the operator shall drill
at least thirty (30) holes per blocks and a minimum footage of
exploratory holes before the end of the exploration period as
may be specified in the coal operating contract.
b) The exploration period under every coal operating contract

shall be for two (2) years. If the operator has complied with
2314
its exploration work obligations, the exploration period may

be extended for another two (2) years. The coal operating
contract shall lapse unless coal of commercial quantity is
measured during the exploration period or at the end thereof
in any area covered by the coal operating contract. If coal of
commercial quantity is measured, the coal operating contract
shall remain in force for development and production during
the balance of the exploration period and/or for an additional
period ranging from ten (10) to twenty (20) years, thereafter
renewable for a series of three (3)-year periods not exceeding
twelve (12) years under such terms and conditions as may be
agreed upon by the parties.
c) All materials, equipment, plants and other installations

erected or placed on the exploration and/or production area
of a movable nature by the operator shall become properties
of the Energy Development Board if not removed therefrom
within one (1) year after the termination of the coal operating
contract.
d) The operator shall be subject to the provisions of laws of

general application relating to labor, health, safety and
ecology insofar as they are not in conflict with the provisions
otherwise contained in this Decree.
SEC. 12. Full Disclosure of Interest in Coal Operating

Contract. – Interest held in the coal operating contract by domestic
mining companies and/or the latter’s stockholders may be allowed to
any extent after full disclosure thereof and approved by the Energy
Development Board.
SEC. 13. Arbitration. – The Energy Development Board may

stipulate in a coal operating contract executed under this Decree that
disputes in the implementation thereof between the Government
and the operator may be settled by arbitration.
SEC. 14. Performance Guarantee. – In order to guarantee

compliance with the obligations of the operator executed under
this Decree, the operator shall post a bond or other guarantee of
sufficient amount in favor of the Government and with surety or
sureties satisfactory to the Energy Development Board, conditioned
2315
upon the faithful performance by the operator of any or all of the

obligations under and pursuant to said coal operating contracts.
SEC. 15. Transfer and Assignment. – The rights and obligations

under a coal operating contract executed under this Decree shall not
be transferred or assigned without the prior approval of the Energy
Development Board; Provided, that such transfer or assignment
may be made only to a qualified person possessing the resources
and capability to continue the mining operation of the coal operating
contract and that the operator has complied with all the obligations
of the coal operating contract.
SEC. 16. Incentives to Operators. – The provisions of any

law to the contrary notwithstanding, a contract executed under
this Decree may provide that the operator shall have the following
incentives:
(a) Exemption from all taxes except income tax;
(b) Exemption from payment of tariff duties and compensating

tax on importation of machinery and equipment and spare
parts and materials required for the coal operations subject to
the following conditions:
1) that machinery, equipment, spare parts and materials

of comparable price and quality are not manufactured in
the Philippines;
2) that the same are directly and actually needed and will
be used exclusively by the operator in its operation or in
operation for it by a contractor;
3) that they are covered by shipping documents in the name

of the operator to whom the shipment will be delivered
directly by the customs authorities; and
4) that prior approval of the Energy Development Board

was obtained by the operator before the importation of
such machinery, equipment, spare parts and materials,
which approval shall not be unreasonably withheld;
Provided, however, that the operator or its contractor
2316
may not sell, transfer, or dispose of the machinery,

equipment, spare parts and materials without the
prior approval of the Energy Development Board and
payment of taxes and duties thereon: Provided, further,
that should the operator or its contractor sell, transfer,
or dispose of these machinery, equipment, spare parts
or materials without the prior approval of the Energy
Development Board, it shall pay twice the amount of
the taxes and duties thereon; Provided, finally, that the
Energy Development Board shall allow and approve the
sale, transfer or disposition of the said items without tax
if made:
(a) to another operator under a coal operating contract;
(b) for reasons of technical obsolescence; or
(c) for purposes of replacement to improve and/or expand

the operation under the coal operating contract.
c) Accelerated Depreciation. At the option of the taxpayer and

in accordance with the procedures established by the Bureau
of Internal Revenue, fixed assets owned by the coal units in
the performance of its coal operating contract may be:
1) Depreciated to the extent of not more than twice as fast

as normal rate of depreciation or depreciated at normal
rate of depreciation if expected life is ten (10) years or
less; or
2) Depreciated over any number of years between five (5)

years and expected life if the latter is more than ten
(10) years, and the depreciation thereon allowed as
a deduction from taxable income; Provided, that the
taxpayer notifies the Bureau of Internal Revenue at the
beginning of the depreciation period which depreciation
rate allowed by this section will be used by it.
d) Foreign Loans and Contracts. The right to remit at the

prevailing exchange rate at the time of remittance of such sum
as may be necessary to cover principal and interest of foreign
2317
loans and foreign obligations arising from technological

assistance contracts relating to the performance of the coal
operating contract, subject to Central Bank regulations.
e) Preference in Grant of Government Loans. Government

financial institutions such as the Development Bank of the
Philippines, the Philippine National Bank, the Government
Service Insurance System, the Social Security System,
the Land Bank of the Philippines and other government
institutions as are now engaged or may hereafter engage in
financing on investment operations shall, in accordance with
and to the extent allowed by the enabling provisions of their
respective charters or applicable laws, accord high priority to
applications for financial assistance submitted by operators
in the performance of coal operating contracts, whether such
financial assistance be in the form of equity participation in
preferred, common or preferred convertible shares of stock,
or in loans and guarantee, and shall facilitate the processing
thereof and the release of the funds therefore. However,
financial assistance under this paragraph shall be extended
only to operators which are Philippine Nationals as the term
is defined under Republic Act No. 5186, as amended.
f) Entry upon the sole approval of the Energy Development

Board which shall not be unreasonably withheld of alien
technical and specialized personnel (including the immediate
members of their families) who may exercise their profession
only for the operation of the operator as prescribed in its
coal operating contract with the government under this
Decree; Provided, that if the employment or connection of
any such alien with the operator ceases, the applicable laws
and regulations on immigration shall apply to him and his
immediate family; Provided, further, that Filipinos shall be
given preference to positions for which they have adequate
training; and; Provided, finally, that the operator shall adopt
and implement a training program for Filipinos along technical
or specialized lines, which program shall be reported to the
Energy Development Board.
SEC. 17. Incentives to Coal Users. – The following incentives

shall be granted to enterprises/industries which will convert their
2318
existing oil fired plants facilities to make the same adaptable for
coal burning:
a) Tax Exemption on Imported Capital Equipment. Within seven

(7) years from the date of approval of the plan for conversion
of existing oil fired plants and facilities to make the same
adaptable for coal burning, the importation of machinery and
equipment, and spare parts shipped with such machinery
and equipment necessary to implement their program of
conversion shall not be subject to tariff and customs duties and
compensating tax; Provided, that said machinery, equipment
and spare parts are:
1) Not manufactured in the Philippines in reasonable

quantity and quality at reasonable prices;
2) Directly and actually needed and will be used exclusively

in the implementation of the conversion of existing plants
to coal burning;
3) Covered by shipping documents in the name of the

enterprise to whom the shipment will be delivered
directly by customs authorities;
4) Prior approval, before importation of such machinery,

equipment and spare parts was obtained. If imported
machinery, equipment and spare parts are sold,
transferred or otherwise disposed of without the
required prior approval, the importer shall pay twice the
amount of the tax and duty thereon. However, the sale,
transfer or disposition of the said items shall be allowed
and approved without tax and duty if made to another
company for use in:
a) Converting its existing plants to coal burning subject

to the same conditions and limitations as herein
provided;
b) For reasons of technical obsolescence; or
c) For replacement of equipment to improve and/or

expand the operations of the enterprise.
2319
For replacement of modernization of existing facilities

of subject enterprises/industries which will be utilized
partly or entirely in the conversion of coal burning, in
lieu of an exemption from payment of tariff duties and
taxes, it shall be granted deferment in the payment of
such taxes and duties for a period of not exceeding ten
(10) years after posting the appropriate bond as may be
required by the Secretary of Finance.
b) Tax Credit on Domestic Capital Equipment. Within seven

(7) years from the date of approval of the plan for conversion
of existing oil fired plants, and facilities to make the same
adaptable for coal burning, a tax credit equivalent to one
hundred per cent (100%) of the value of the compensating tax
and customs duties that would have been paid on machinery,
equipment and spare parts necessary to implement the
program of conversion had these items been imported, shall
be given to the industry with a program of conversion to coal
burning that purchases said machinery, equipment and spare
parts from a domestic manufacturer; Provided,
(1) That said machinery, equipment and spare parts are

directly and actually needed and will be used exclusively
in the implementation of the conversion of its existing
plants to coal burning;
(2) That the prior approval was obtained for the purchase
of the machinery, equipment and spare parts. If
the machinery, equipment and spare parts are sold,
transferred or otherwise disposed of without the required
prior government approval, the purchaser shall pay
twice the amount of the tax credit given to it. However,
the sale, transfer or disposition of the said items shall be
allowed and approved without tax if made:
(a) To another company for use in its approved program

of conversion to coal burning subject to the same
conditions and limitations as herein provided;
(b) For reasons of technical obsolescence; or
2320
(c) For purposes of replacement to improve and/or

expand the operation of the enterprise.
c) Net Operating Loss Carry Over. A net operating loss

incurred in any of the first ten (10) years after the start of
the implementation of the coal conversion program may be
carried over as a deduction from taxable income for the six
(6) years immediately following the year of such loss. The
entire amount of the loss shall be carried over to the first of
the (6) taxable years following the loss, and any portion of
such loss which exceeds the taxable income of such first year
shall be deducted in like manner from the taxable income of
the next remaining five (5) years. The net operating loss shall
be computed in accordance with the provision of the National
Internal Revenue Code, any provision of this Decree to the
contrary notwithstanding, except that income not taxable
either in whole or in part under this or other laws shall be
included in the gross income.
d) Capital Gains Tax Exemption. Exemption from income tax

on the proceeds of the gains realized from the sale, disposition
or transfer of capital assets which are sold or disposed of as
a result of the conversion of facilities to a coal burning plant;
Provided, that such sale, disposition or transfer are registered
with the Bureau of Internal Revenue; Provided, however, that
the gains realized from the subject sale, disposition or transfer
of capital assets are invested in new issues of capital stock
of an enterprise registered under the Investment Incentives
Act, as amended, and other allied incentives laws: Provided,
further, That the shares of stock representing the investment
are not disposed of, transferred, assigned, or conveyed for a
period of seven (7) years from the date the investment was
made; and; Provided, finally, that if such shares of stock are
disposed of within the said period of seven (7) years, all taxes
due on the gains realized from the original transfer, sale, or
disposition of the capital assets shall become immediately due
and payable.
e) Accelerated Depreciation. At the option of the taxpayer and

in accordance with the procedure established by the Bureau
2321
of Internal Revenue, fixed assets used by the industry in

carrying out the program of conversion to coal burning may
be:
1) Depreciated to the extent of not more than twice as fast

as normal rate of depreciation or depreciated at normal
rate of depreciation if expected life is ten (10) years or
less; or
2) Depreciated over any number of years between five (5)

years and expected life if the latter is more than ten
(10) years, and the depreciation thereon allowed as
a deduction from taxable income; Provided, that the
taxpayer notifies the Bureau of Internal Revenue at the
beginning of the depreciation period which depreciation
rate allowed by this section will be used by it.
f) Foreign Loans and Contracts. The right to remit at the

prevailing exchange rate at the time of remittance such
sum as may be necessary to cover interest and principal of
foreign loan and foreign obligations arising from technological
assistance contracts relating to the implementation of the
program of conversion to coal burning subject to Central Bank
regulation.
g) Preference in Grant of Government Loans. Government

financial institutions such as the Development Bank of the
Philippines, the Philippine National Bank, the Government
Service Insurance System, the Social Security System, the
Land Bank of the Philippines and such other government
institutions as are now engaged or may hereafter engage in
financing of investment operations shall, in accordance with
and to the extent allowed by the enabling provisions of their
respective charters or applicable laws, accord high priority to
application for financial assistance submitted by enterprises/
industries requiring funding to implement the program of
conversion to coal burning, whether such financial assistance
be in the form of equity participation in preferred, common or
preferred convertible shares of stock, or in loans and guarantee,
and shall facilitate the processing thereof and the release of
the funds therefor. However, financial assistance shall be
2322
extended only under this paragraph to industry converting

to coal burning which is a Philippine National as this term is
defined under Republic Act No. 5186, as amended.
The foregoing incentives to enterprises/industries which will

convert their existing oil fired plants and facilities to make the same
adaptable for coal burning shall be administered and implemented
by the Board of Investments created under Republic Act No. 5186,
also known as the Investment Incentives Act, as amended. The
Board of Investments shall have the power to process and approved,
under such terms and conditions as it may deem necessary, plans
for conversion to coal burning and applications for availment of the
foregoing incentives. It shall promulgate such rules and regulations
as may be necessary to implement the intent and provisions of this
section.
SEC. 18. Implementing Agency. – Except as otherwise

provided in Section 17 hereof, the Energy Development Board,
created pursuant to Presidential Decree No. 910, in addition to
the powers, duties and functions under existing laws, shall be
charged with carrying out the provisions of this Decree and shall
be vested with the authority to promulgate rules and regulations
implementing thereof.
SEC. 19. Separability Clause. – Should any provision of this

Decree be held unconstitutional, no other provision hereof shall be
affected thereby.
SEC. 20. Repealing Clause. – The provisions of Presidential

Decree No. 463, otherwise known as the “Mineral Resources
Development Decree of 1974” and other laws insofar as they deal,
relate or affect the exploration, exploitation and administration
of coal lands are hereby repealed. Furthermore, all laws, decree,
executive orders, administrative orders, rules, and regulations,
or parts thereof in conflict or inconsistent with any provision of
this Decree are hereby repealed, revoked, modified or amended
accordingly.
SEC. 21. Effectivity. – This Decree shall take effect

immediately upon approval.
2323
DONE in the City of Manila, this 28th day of July, in the year
of Our Lord, nineteen hundred and seventy-six.
(Sgd.) FERDINAND E. MARCOS

President of the Philippines
By the President:
(Sgd.) JACOBO C. CLAVE

Presidential Executive Assistant
2324

PRESIDENTIAL DECREE NO. 972, OTHERWISE
KNOWN AS THE “COAL DEVELOPMENT ACT OF 1976”
Pursuant to the Presidential Decree No. 972, otherwise known

and cited as the “Coal Development Act of 1976”, the following rules
and regulations to implement the intent and provisions of the Act
are hereby promulgated:
I. Registration
A. Coverage and Period. – All holders of coal permits, leases,

locations, patents, mining grants or concessions, applications and
other existing rights granted by the government for the exploration,
development and exploitation of coal lands and/or the duly
authorized operators thereof shall register their permits, leases,
locations, patents, mining grants or concessions, applications and
other rights with the Energy Development Board within thirty (30)
days from the date hereof.
B. Requirement of Registration. – The registration

contemplated in Paragraph A hereof shall require the
accomplishment and submission to the Energy Development Board
of the attached EDB Form No. 11 (Information Sheet, Attachment
“A”). The Information Sheet and all accompanying annexes and
exhibits shall be verified (under oath) by the holder of the permit,
lease, patent, location, concession or grant and application in
cases of an individual or by a responsible officer thereof in cases of
partnership, corporations or cooperatives. The Information Sheet
shall serve as the basis for the evaluation of the status and work
performance of the holders or operators to determine compliance
with the requirements of their existing permits, leases, locations,
grants, patents, concessions, applications and other rights under
laws, rules and regulations then in force.
C. Effect of Failure to Register. – Failure to comply with the

registration required herein shall be deemed to constitute a waiver
of rights and shall result in automatic cancellation or termination
of holder’s or operator’s right in any coal permit, lease, location,
patent, mining grant or concession, application and other rights.
2325
D. Place of Filing. – The Information Sheet and all

accompanying annexes and exhibits shall be filed with the offices
of the Energy Development Board at the Philippine National
Petroleum Center, Merrit Road, Fort Bonifacio, Rizal or at the
Energy Development Board Cebu Office situated at barrio Opao,
Mandaue City.
I. Blocking System
A. Coal Regions. – The following coal regions in the

Philippines (see attached map, Attachment “b”) are hereby
established:
1. Cagayan Region
2. Ilocos Region
3. Central Luzon Region
4. Bondoc Peninsula Region
5. Bicol Region
6. Catanduanes Region
7. Samar-Leyte Region
8. Cebu Region
9. Negros Region
10. Panay Region including Semirara Island
11. Mindoro Region
12. Agusan-Davao Region
13. Surigao Region
14. Cotabato Region
15. Zamboanga Regions
Additional coal regions may be established by the Energy

Development Board when attendant circumstances justify and
warrant it.
B. Guidelines on Use of the Blocking System
1. Each of the above coal regions is divided into meridional

blocks or quadrangles of two minutes (2’) of latitude and one and
one-half minutes (1-1/2’) of longitude, each block containing an area
of one thousand (1,000) hectares, more or less. The boundaries of
the block must coincide with the defined latitude and longitude in
2326
the Energy Development Board Coal Blocking Maps (Scale 1:50,000)

plotted on the Coast and Geodetic Survey maps.
2. This blocking system shall apply to areas being organized

and consolidated into a coal unit as well as free areas. No person,
partnership or corporation shall be entitled to more than fifteen (15)
blocks of coal land in any one coal region.
3. A coal unit shall conform to the blocking system as

closely as possible with its final configuration arrived at by both
the permittee/leaseholder/applicant and the Energy Development
Board but always subject to the final approval of the latter.
4. Any specific problem that may arise which is not

presently covered by these guidelines will be considered on a case-
to-case basis, e.g., inability to conform to the blocking system due to
position of adjoining coal units, etc.
5. The ground survey for locating the coal blocks herein

established shall be done by the Energy Development Board at the
expense of the permittee/leaseholder/applicant or by the latter when
so authorized by the Energy Development Board. The corners of
each block shall be marked by appropriate survey monuments. The
survey plans shall be submitted to the Energy Development Board
for verification and approval within one (1) year from the effective
date of the coal operating contract, a requirement which shall be
included as one of the obligations of the operator in coal operating
contract.
6. Maps pertinent to the blocking system may be purchased

at P 50.00 per sheet at the Energy Development Board Office at the
Philippine National Petroleum Center, Merritt Road, Fort Bonifacio,
Rizal. The Energy Development Board maintains exclusive rights
over the printing and sale of these maps and no map or any portion
thereof may be reproduced without the permission of the Board.
7. These maps are considered official maps and shall form

part of the official application paper that an applicant for a coal
operating submits to the Board.
2327
III. Survey of Coal Blocks
A. Period of Survey. – Within one (1) year from the effective

date of the coal operating contract, the operator shall conduct the
survey of the coal blocks which constitute the coal contract area
of the coal operating contract. The survey shall be conducted in
accordance with the regulations hereunder provided.
B. Documents to Accompany Application for a Coal

Operating Contract Necessary for Survey of Coal Blocks. – The
following documents shall be submitted upon filing of the application
for a coal operating contract:
1. A notarized survey service contract executed by and

between the applicant and a duly licensed geodetic engineer which
shall stipulate, among others, the following:
a) The names of the contracting parties.
b) The coal sought to be surveyed.
c) The consideration or contract price and mode of

payment of the same.
d) The date of the submittal of the survey returns to the

Energy Development Board.
2. Affidavit of the duly licensed geodetic engineer

representing that he can execute the survey of the coal blocks and
submit the returns thereof within one (1) year from the effectivity
date of the coal operating contract.
C. Abandonment. – Failure to perform the ground survey

for the coal blocks within one (1) year from the effective date of the
coal operating contract shall constitute automatic abandonment of
the coal block and the land embraced therein shall thereupon be
opened to application for another coal operating contract by qualified
persons.
D. Qualified Geodetic Engineers. – Coal block surveys shall

be executed by geodetic engineers of the Energy Development Board
or by any duly licensed geodetic engineers.
2328
E. Cost of Survey. – If the Ground survey shall be undertaken

by a geodetic engineers of the Energy Development Board, the
applicant shall pay the actual cost of the survey.
F. Execution of Coal Block Survey. – Corners of the coal

block shall be defined by monuments placed at intervals of not
more than four hundred (400) meters apart. When the boundary
lines of the coal block pass across mountains or rolling terrains, the
intermediate monuments between corners shall be established or
ridges, whenever practicable, in which case, all consecutive corner
monuments shall be intervisible. The sizes of corner monument of
a coal shall be as follows:
(1) Corners (principal corners) that fall on points with

exact two minutes and/or one and one-half minutes of latitude and
longitude, 20 cm. x 20 cm. concrete monuments shall be set 50 cm.
in the ground.
(2) Other concerns of the coal block shall by cylindrical

concrete monuments of 15 cm. in diameter x 60 cm. long set 50 cm.
in the ground.
The corners of the coal block shall be concrete monuments or

cement patch on boulder, centered with a hole, spike, pipe or nail
and marked with the corresponding corner number and coal block
number. The latitude and longitude of the principal corner shall
also be indicated on the sides of the concrete monuments when it
coincides with the full two minutes and/or one and one-half minutes
of latitude and longitude, respectively.
When the coal block undergoing survey adjoins submerged

land, a witness corner monument along the boundary leading
the shoreline shall be set on the ground to witness the boundary-
point-corner of the coal block at the low tide level of the sea or lake.
Concrete monuments, galvanized iron pipes, fixed rocks, boulders
or stakes and other monuments shall be set to define the corners of
the coal block along the shoreline at low tide level.
All computations, plans and maps of coal blocks surveys to

be submitted to the Energy Development Board for verification and
approval shall be prepared by using the Philippine Plane Coordinate
System.
2329
The characteristics of the Philippine Plane Coordinate System

as used in the DANR Technical Bulletin No. 26 are as follows:
Spheroid – Carke’s Spheroid of 1865.
Projection – Transverse Mercator in zones of two degrees (2º)

net width.
Point of Origin – The intersection of the equator and the

central meridian of each zone, with a northing of 0.00 meter
and an easing of 500,000.00 meters.
Scale factor of the Central Meridian – 0.99995 zonification.
NOTE: The overlap of 30 minutes thereof, however is reduced

to 5 minutes which are as follows:
Zone No.
I 117-00 E 16-00 to 118-05 E
II 119-00 E 117-55 to 120-05 E
III 121-00 E 119-55 to 122-05 E
IV 123-00 E 121-55 to 124-05 E
V 125-00 E 123-55 to 126-05 E
The tables in the DANR Technical Bulletin No. 26 and EDB

Form No. 12 and EDB Form No. 13 hereto attached as Attachment
“C” and “D”, respectively, and part of these Regulations shall be
used for the transformation of geographic to plane coordinates, and
from plane to geographic coordinates.
In all coal block surveys, the corresponding central meridian

of the zone where the coal block is situated shall be used and the
amount of convergency correction in seconds of arc from the central
meridian to be applied to the observed astronomical azimuth of the
line shall be, for all practice purposes, the product of the departure
of the point of observation from the central meridian in kilometers
and the number of seconds of angular convergency per kilometer of
departure corresponding to the latitude of the place of observation
which are tabulated as follows:
2330
Latitude Angular Convergency

in Seconds of Arc per
Kilometer of Departure
5º 2.83
6º 3.40
7º 3.97
8º 4.55
9º 5.12
10º 5.70
11º 6.29
12º 6.87
13º 7.46
14º 8.06
15º 8.66
16º 9.27
17º 9.88
18º 10.50
19º 11.13
20º 11.76
21º 12.41
The angular convergency correction, expressed in seconds,

shall be added to the observed astronomical azimuth for points west
and subtracted for points east of the central meridian.
All bearing of lines and coordinates of corners not in accordance

with the Philippine Plane Coordinate System as used in the area
computations of surveyed coal block that are within 150 m. from the
periphery of the coal block undergoing survey shall be transformed
to the Philippine Plane Coordinate System.
The zone number and central meridian of the Philippine Plane

Coordinate System shall, in all cases, be indicated on the fieldnotes,
computations, plans, maps, and reports of the surveys.
For higher precision of surveys, convergency corrections,

scale factors and azimuth correction (T-t) shall be referred from
the formula used in the table of DANR Technical Bulletin No. 26,
however, for tertiary precision of surveys, the scale factors and the
azimuth correction (T-t) may be discarded.
2331
Coal block surveys shall be definitely fixed in position on

the earth’s surface by monuments of prominent and permanent
structure marking corner points of the coal block and by bearings
and distances from the points of known geographic or Philippine
Plane Coordinate System.
These tie points shall either be as follows:
1) Triangulation stations established by:

a) The Bureau of Coast and Geodetic Survey.
b) The United States Army Engineer Survey.
c) The 29th Engineer Topographic (Base) Battalion.
d) The Bureau of Lands.
e) The Bureau of Mines.
f) Other organizations, the survey of which is of
acknowledged standard.
2) Bureau of Lands Location Monuments (BLM) and Bureau

of Lands Barrio Monuments (BLBM) established by the Bureau of
Lands.
3) Political Boundary Monuments such as Provincial

Boundary Monuments (PBM), Municipal Boundary Monuments
(MBM) and Barrio Boundary Monuments (BBM): Provided, That
they were established by Cadastral Land Surveys, Group Settlement
Surveys or Public Land Subdivision Surveys of the Bureau of
Lands.
4) Bureau of Mines Reference Points (BMRP) monuments

established by the Bureau of Mines.
5) Church cross, church spire, church dome, church tower,

historical monument of known geographic or Philippine Plane
Coordinate System acknowledged by the Bureau of Coast and
Geodetic Survey, Bureau of Lands or Bureau of Mines.
6) Corners of approved coal block surveys with known

geographic and/or Philippine Plane Coordinate Systems may be used
as starting point of a coal block survey: Provided, however, That at
least three (3) or more undisturbed corners of concrete monuments
are surveyed for a good common point and the tie is computed from
the tie point of the aforesaid approved surveys.
2332
Should any discrepancy of datum plane between or among

tie points arise, proper investigation shall be conducted by the
authorized geodetic engineer and a report thereon shall be submitted
to the Energy Development Board to form part of the survey returns
for further investigation and record purposes.
Plans of coal blocks recorded under the Act shall correctly and
neatly drawn to scale in drawing inks on the survey plan.
The latitudes and longitudes of the meridional blocks shall

be drawn to scale on the plan whenever practicable, in light black
inks.
In addition to the symbols used to designate various kinds of

surveys, the survey symbol CBS shall be used to designate a Coal
Blocks Survey.
The manner of execution of coal land surveys shall be in

accordance with these Regulations, as supplemented by the
Manual of Regulations for Mineral Land Surveys in the Philippines
promulgated on June 22, 1965 and the Philippine Land Surveyors
Manual (Technical Bulletin No. 22, Bureau of Lands, July 1, 1955, as
far as the provisions thereof are not inconsistent with the Decree.
G. Submittal and Verification of Survey Returns. – Survey

returns coal block shall be submitted to the Energy Development
Board within one (1) year from effective date of the coal operating
contract and shall consist of the following:
1. Field notes completely filled in, paged and sealed

(G.E.) and fieldnotes cover on EDB Form No. 14 hereto attached
as Attachment “E”, and made part of these regulations, duly
accomplished, signed and sealed by the geodetic engineer and notary
public.
2. Azimuth computations from astronomical observations,

traverse computations, area computations, elevation and
topographic survey computations and other reference computations
all in original and in duplicate properly accomplished and signed by
the computer and the geodetic engineer.
2333
Computerized (EDP) computations, however, may be

submitted in place of the duplicate computations.
3. Tracing cloth plan/s duly accomplished with the

corresponding working sheet thereof.
4. Descriptive and field investigation report on the coal

block in quintuplicate duly signed by the geodetic engineer and
authorized assistant, if any, and duly notarized.
5. A consolidated plan at scale at 1:4,000 showing the

relative positions of the surveyed coal blocks and other coal blocks
with existing rights at the time of the survey, if any.
6. Other documents pertinent to the survey of coal blocks.
Survey returns without items (1) to (6) above, shall not be

accepted for verification and approval purposes.
Concerns and/or location monuments of approved surveys

of coal blocks in spite of the nullity, cancellation, rejection or
abandonment of the coal operating contract over the surveyed area,
shall be preserved as reference mark and the geographic position
thereof shall be kept for use in future coal block surveys, unless
otherwise said survey is found to be erroneous by later approved
coal block surveys.
Surveys of subsisting coal blocks rights, permits and

leases which are to be erroneous may be ordered by the Energy
Development Board to be corrected motu proprio, when justified by
existing circumstances.
IV. Procedure of Filing an Application for Negotiated Coal

Operating Contract Under Presidential Decree No. 972.
In addition to the documents required to be submitted in the

preceding section, the following documents shall accompany all
applications for a coal operating contract:
a) Information Sheet for Coal Operators (EDB Form No.

11).
2334
b) Proposed Coal Operating Contract Patterned after the

Model Contract (EDB Form No. 15).
c) A Comparative Analysis in tabulated form of items in

the Coal Operating Contract Proposal which deviate from the
Model Contract. Reasons for the proposed changes should
likewise be presented.
d) In cases of a corporation, a Certificate of Authority from

the Board of Directors of applicant Operator authorizing a
designated representatives/representative to negotiate the
Coal Operating Contract. The certification must be executed
under oath by the Corporate Secretary and if executed abroad,
must be properly authenticated. In cases of partnership or
other forms of association, a duly authorized representative/s
negotiate the Coal Operating Contract by the partners or
members thereof.
e) Copies of all technical reports or works done on the

proposed coal contract areas, whenever available.
The applicant shall pay a processing fee of P 1.00 per hectare

but in no case less than P 1,000.00 for the proposed coal contract
area. Check should be made payable to the Energy Development
Board. No negotiations can commence until the above requirements
have been fully complied with.
V. Publication and Effectivity.
These rules and regulations shall take effect immediately.
Copies thereof shall be published in newspapers of general

circulations in the Philippines.
Done in Makati, Metro Manila, on August 27, 1976.
2335
EXECUTIVE ORDER NO. 215
AMENDING PRESIDENTIAL DECREE NO. 40 AND ALLOWING

THE PRIVATE SECTOR TO GENERATE ELECTRICITY
WHEREAS, Presidential Decree No. 40 places the responsibility

of setting up transmission line grids and the construction of
associated generation facilities in Luzon, Visayas, Mindanao and
the major islands of the country to the National Power Corporation
(NPC);
WHEREAS, the generation of electricity, unlike the

transmission and distribution of electricity, is not a natural monopoly
and can be undertaken by more than one entity;
WHEREAS, the government, as a matter of policy, is

encouraging the private sector to participate in economic
development and has started to disengage in areas which can be
adequately handled by the private sector;
WHEREAS, the generation of electricity by the private sector

can provide a means of increasing power capacity to meet the
projected increase in power demand in the future without in any way
requiring financial assistance or guarantee from the government;
WHEREAS, there is, on the other hand, an imperative need to

rationalize the development of energy resources and the operation
of electric generating facilities in the power grid;
NOW, THEREFORE, I, CORAZON C. AQUINO, President of

the Philippines, do hereby order:
SECTION 1. The strategic and rational development of the

country's power grids shall be the responsibility of the National
Power Corporation. Accordingly, the setting up of transmission
line grids and the construction of associated generating facilities in
Luzon, Visayas and Mindanao, including the major islands of the
country, to meet the power demand, shall be the responsibility of
the National Power Corporation. However, private corporations,
cooperatives or similar associations shall be allowed to construct
2336
and operate the following types of electric generating plants, subject

to the rules and regulations hereinafter adopted in accordance with
Section 2 hereof:
a) Cogeneration units, defined as the production of electric

energy and forms of useful thermal energy (such as heat or steam),
used for industrial, commercial, heating or cooling purposes through
sequential use of energy;
b) Electric generating plants intending to sell their

production to the grids, consistent with the developmental plans
formulated by the National Power Corporation;
c) Electric generating plants, intended primarily for the

internal use of the owner, which also plan to sell excess production
to the grids; and
d) Electric generating plants, outside the National Power

Corporation grids, intending to sell directly or indirectly to end-
users.
SEC. 2. Rules and regulations to govern private sector

involvement in power generation shall be formulated by the National
Power Corporation for areas with the National Power Corporation
grids, and the National Electrification Administration for areas
outside the National Power Corporation grids. Such rules and
regulations shall be made subject to consultation with concerned
agencies including the private sector and the approval of the Office
of Energy affairs. These rules and regulations shall include the
following:
a) Qualifications for accrediting private sector generators;
b) Procedures for applying for accreditation as a private

sector generator of electricity;
c) Obligations of private sector generators which shall

include efficiency standards to ensure reliability of power supply
and the corresponding penalties for failure to comply with said
standards;
2337
d) Terms and conditions for the purchase or for the

transmission/distribution, as the case may be, of electricity generated
by the non-National Power Corporation entities; and
e) Other matters which shall be necessary to implement this

Order.
SEC. 3. The Office of Energy Affairs shall take the necessary

measures to ensure that the provisions of this Order are made
effective.
SEC. 4. The Department of National Defense shall assist the

National Power Corporation, the private utilities and the electric
cooperatives in providing security to the generating plants to prevent
power black-outs, and in instituting the necessary safeguards in
cases of emergencies, including the training of Armed Forces of the
Philippines personnel in power generation operations.
SEC. 5. Numbers 2, 4, 5 and 6 of Presidential Decree No. 40

are hereby amended accordingly. All laws, order, issuances, rules
and regulations or parts thereof inconsistent with this Executive
Order are hereby repealed or modified accordingly.
SEC. 6. This Executive Order shall take effect fifteen (15) days
after the issuance of the rules and regulations for the implementation
of this Executive Order.
DONE in the City of Manila, this 10th day of July, in the year
of Our Lord, nineteen hundred and eighty-seven.
(Sgd.) CORAZON C. AQUINO

President of the Philippines
By the President:
(Sgd.) JOKER P. ARROYO

Executive Secretary
2338
ENERGY REGULATION NO. 1-95
Rules And Regulations Implementing Executive Order No. 215

On Private Sector Participation In Power Generation
Pursuant to Section 2 of Executive Order No. 215 (EO 215)

allowing private sector participation in power generation activities,
and relevant provisions of Republic Act No. 7638 (RA 7638) creating
the Department of Energy (DOE), the DOE hereby promulgates
the following amended Rules and Regulations to implement the
provisions of EO 215.
PART I
GENERAL PROVISIONS OF THE RULES AND REGULATIONS
The succeeding Articles shall include the general provisions to

be followed for all types of generating facilities owned by the private
sector participating in power generation.
ARTICLE I
STATEMENT OF POLICY, SCOPE AND DEFINITION OF TERMS
SECTION 1. Statement of Policy. – Pursuant to the general

provisions of RA 7638, it is hereby declared a policy of the state
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 economic development
of indigenous energy resources and through the efficient utilization
of energy.
The DOE shall provide policy directions for the formulation

of power system expansion plans and programs to achieve the
above-stated objectives, following the approved national economic
plan and consistent with policies on environmental protection, and
conservation and maintenance of ecological balance.
Pursuant to Section I of EO 215, the National Power

Corporation (NAPOCOR) shall continue to be responsible for the
2339
strategic and rational development of the country’s power grids

including the construction of associated generating facilities and
the setting up of transmission line grids in Luzon, Visayas, and
Mindanao. However, private corporations, cooperatives or similar
associations shall be allowed to construct and operate electric
generating plants and associated transmission facilities.
Furthermore, it is hereby declared the policy of the State to

promote competition in generation, and to increase the responsibilities
of all utilities to perform their own planning, including the acquisition
of an efficient portfolio of generation and demand-side resources. It
is the intent of the State that these rules promote the ability of
all utilities to meet these expanded responsibilities, in particular
by ensuring transmission access at fair prices and by establishing
standard NAPOCOR tariffs for services required by utilities when
contracting for other sources of generation.
SECTION 2. Scope. – These Rules and Regulations shall

govern the relation between the DOE, NAPOCOR, the National
Electrification Administration (NEA), the Energy Regulatory Board
(ERB)), private electric distribution utilities and cooperatives, and
such private corporations, cooperatives or similar associations as
may be allowed to own and operate electric generating plants and
facilities that will sell all or excess electricity production to the
NAPOCOR, other electric utilities, and end-users in areas within
and outside the NAPOCOR transmission grids, pursuant to Section
1 of EO 215.
These rules and regulations shall be the interim set of

rules that shall be amended, replaced, or repealed in due time as
restructuring and privatization efforts for the Philippine power
industry moves through ongoing and anticipated phases towards
an increasingly competitive and efficient industry structure for the
Philippine power sector.
SECTION 3. Definition of Terms. – As used in these rules and

regulations, the following terms shall have the following respective
meanings:
a. “Avoided Cost” means the incremental cost that an

electric utility would incur towards meeting its anticipated power
2340
demand if such utility does not buy power from a Private Sector
Generation Facility (PSGF).
b. “Back-up Power” means electricity supplied by

NAPOCOR, or an electric utility to replace electricity ordinarily
generated by PSGF during unscheduled outages of the latter.
c. “Block Power Production Facility (BPPF)” means any

electric generating facility intended primarily to sell all or the bulk
of its power output to the grid, consistent with the development
plans formulated by NAPOCOR and/or electric utilities, approved
by the DOE.
d. “Bottoming-cycle Cogeneration Facility” means a

cogeneration facility in which the energy input to the system is
first applied to a useful thermal energy process, and the reject heat
emerging from the process is then used for power production.
e. “Capacity” means the load for which a generating unit,

generating station, or other electrical machine is rated by the
manufacturer.
f. “Cogeneration Facility” means a facility which produces

energy (such as heat or steam), used for industrial, commercial,
heating, or cooling purposes, through the sequential use of energy.
g. “Coincident Maximum Demand” means the maximum

demand at the instant greatest load of NAPOCOR.
h. “Department of Energy or DOE” refers to the government

agency created pursuant to RA 7638 promulgated on 9 December
1992.
i. “Developmental Plans”, refers to the Power Development

Programs or PDP formulated and updated yearly by the NAPOCOR
and/or individual electric utilities.
j. “Distribution System”, means the electric system of an

electric utility which delivers electricity from transformation points
on the transmission system to the consumers or end-users.
2341
k. “Electric Cooperative” shall mean a corporation under RA

6038 or PD269 as amended by PD 1645, or a cooperative supplying
or empowered to supply electric service.
l. “Electric Energy”, as commonly used in the electric

utility industry, means kilowatt-hours.
m. “Electric Utility System”, refers to the distribution system

of an electric cooperative, local-government-owned and privately-
owned electric utility operating within the NAPOCOR and electric
utility power grids.
n. “Electric Utility”, refers to the electric cooperative, local-

government-owned and privately-owned electric utility operating
within the NAPOCOR grids or other electric systems.
o. “Energy Industry Administration bureau or EIAB”

refers to the Bureau under the DOE that shall, among others, assist
in the formulation of regulatory policies to encourage and guide
the operations or both government and private entities involved
in energy resource supply activities including independent power
production and electricity distribution.
p. “Energy Planning and Monitoring Bureau or EPMB”

refers to the Bureau under the DOE that shall, among others,
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 distribution.
q. “Energy Regulatory Board or ERB” refers to the quasi-

judicial agency created under Executive Order No. 172, dated 8 May
1987, which among other functions, fixes and regulates the prices
of petroleum products and the power rates of electric utilities now,
including the NAPOCOR and the electric cooperatives, pursuant to
Section 18 of RA 7638.
r. “Energy Resource Development bureau or ERDB” refers

to the Bureau under the DOE that shall, among others, assist in the
formulation and implementation of policies to develop and increase
the domestic supply of local energy resources like fossil fuels, nuclear
fuels, hydropower and geothermal resources.
2342
s. “”Total Energy Input”, for purposed of calculating

thermal efficiencies of cogeneration facilities, is defined as the total
kilograms of fuel sued multiplied by the Higher Heating Value
(HHV) of the fuel input/s as received.
t. “Franchise Area” shall mean a geographical area

franchised to a public service entity such as; electric cooperative,
local government or privately-owned electric utility system.
u. “Grid” means the electrical system of interconnected

transmission lines, substations and generating plants of NAPOCOR
or the concerned electric utility, as the case may be.
v. “Hose Utility” means the franchised electric utility

operating nearest to where, or within whose area a qualified PSGF
is locate.
w. “Incremental PSG Power” means electricity supplied by

NAPOCOR or an electric utility, regularly used by an owner of a
qualified private sector generation facility in addition to that which
the latter generates itself. It is the difference between the total
electricity requirement of a private sector generator and the amount
it generates.
x. “Interconnection” means the connection of a generating

facility or a power distribution facility to an electric utility system
or the NAPOCOR grid.
y. “Interconnection Costs” means the costs of all necessary

interconnecting electrical equipment, protective devices and control
equipment needed by a private sector generator for its PSGF to
permit interconnected operations with NAPOCOR or an electric
utility.
z. “Interruptible Power” means electricity supplied by

NAPOCOR or an electric utility to private sector generator subject
to interruption by the former.
a.1 “Maintenance Power” means electricity supplied by

NAPOCOR or an electric utility, to a private sector generator whose
PSGF is undergoing scheduled maintenance work.
2343
b.1 “Mini-Hydro Facilities” means hydro facilities with

capacities of 101 kilowatts to 10,000 kilowatts.
c.1 “National Electrification Administration or NEA” means

the corporation, wholly-owned or controlled by the government,
created under the provisions of Presidential Decree NO. 269, as
amended of 06 August 1973, and tasked primarily to administer the
rural electrification program.
d.1 “National Power Corporation or NAPOCOR” means the

corporation, wholly-owned and controlled by the government, formed
under the provisions of Republic Act No. 6395 of 10 September 1971
and tasked primarily to undertake the development of hydroelectric
generation of power and the production of electricity from nuclear,
geothermal and other sources, as well as the transmission of electric
power on a nationwide basis.
e.1 “Peak Demand” means the maximum integrated load

demand occurring for thirty (30) minutes continuously.
f.1 “Person” means any natural person, firm association,

corporation, business trust and partnership.
g.1 “Primary Energy Source” means the fuel used for the
generation of electricity except that such terms do not include:
1. The minimum amounts of fuel required for ignition,

to start up, testing, flame stabilization, and control uses, and
2. The minimum amounts of fuel required to alleviate

or prevent:
I. unanticipated equipment outages, and
II. emergencies, directly affecting the public health,

safety or welfare, which would result from electric
power outages.
h.1 “Private Sector Generation Facility, (PSGF)” means:
1. any cogeneration facility meeting the minimum

thermal efficiency standards set by the DOE for
cogeneration systems, or
2344
2. any renewable resource power production facility,

or
3. any electric generation facility that shall use

indigenous energy resources as its primary energy
source, or
4. any electric generating facility, particularly a Block

Power Production Facility, intended primarily
to sell all the bulk of its power output to the grid,
consistent with the development plans formulated
by NAPOCOR and or electric utilities, and approved
by the DOE.
i.1 “Private Sector Generator” refers to the owner and/or

operator of the accredited PSGF.
j.1 “Purchase” means the purchase of electricity of

NAPOCOR or an electric utility from a private sector generator.
k.1 “Rate” means any price, tariff or charge, as classified by

NAPOCOR or the electric utility with respect to sale or purchase
and/or wheeling of electricity.
l.1 “Renewable Energy Sources” means sources of energy

that are regenerative or virtually inexhaustible such as biomass,
solar, wind, geothermal or hydro, and also means by-product
materials that, but for their use as a source of energy would be
considered waste.
m.1 “Renewable Resource Power Production Facility

(RRPPF)” means a facility which produces electricity by the use of
renewable energy resources as its primary energy source.
n.1 “Sale” means the sale of electricity by NAPOCOR or an

electric utility to a private sector generator.
o.1 “Spinning Reserve” means generating capacity that is

on-line and ready to take load, but in excess of the current load of
the electric system.
p.1 “System Emergency” means a condition on NAPOCOR’s

or an electric utility’s system which is likely to result in imminent
2345
significant disruption of service to customers or is imminently likely

to endanger life or property.
q.1 “Thermal Efficiency”, as it pertains to cogeneration

facilities, is defined as the ratio of useful energy output to the total
energy input.
r.1 “Topping-cycle Cogeneration Facility” means a

cogeneration facility in which the energy input to the facility is first
used to produce useful power with the reject heat recovered from
power production then used to provide useful thermal energy.
s.1 “Uncontrolled Forces” means any occurrence beyond the

control of a party which causes that party to be unable to perform its
obligations and which the party has been unable to overcome by the
exercise of due diligence, including but not limited to flood, drought,
earthquake, storm, fire, pestilence, lighting and other natural
catastrophes, epidemic, war, riot, civil disturbance or disobedience,
action or inaction of legislature, judicial or regulatory agencies, or
other proper authority affecting the operation of the PSGFs, failure
or sabotage of facilities which have been maintained in accordance
with good engineering and operating practices in the Philippines.
t.1 “Useful Energy Output”, for purposes of calculating

thermal efficiencies of cogeneration facilities, is defined as the sum
of electricity and or mechanical power plus the useful heat in the
steam or hot exhaust gases and such other thermal energy recovered
for useful purposes.
u.1 “Wheeling” means the provision of electric energy

transmission services by NAPOCOR or an electric utility for the
purpose of enabling the owner of an accredited PSGF to transmit
power to another system or end-user.
ARTICLE II
JURISDICTION OF THE DOES, NAPOCOR, NEA AND ERB
SECTION 1. Jurisdiction of the DOE. – The DOE shall have

overall jurisdiction in the accreditation of qualified Private Sector
generating Facilities (PSGF). As part of its rule-making powers
granted under RA 7638, the DOE shall have the authority to amend
2346
the Rules and Regulations as may be necessary if the common good so

requires, as determined upon public hearing to ascertain the nature
of the exigency or cause requiring the introduction of amendments.
Pursuant to Section 12(c) of RA 7638, the review, evaluation,
and accreditation of qualified private sector proposals shall be
undertaken by the EIAB of the DOE, based on the procedures and
criteria for accreditation set forth in these Rules and Regulations.
The Director of the EIAB shall have the authority to issue

Certificates of Accreditation, as well as denials of requests for
accreditation, as the case may be, for and in behalf of the DOE.
Decisions of the EIAB as regards applications for accreditations as
a qualified PSGF are appealable within a period of thirty (30) days
to the Secretary of the DOE, who in turn must decide on the case
within sixty (60) days after receipt of the appeal.
SECTION 2. Jurisdiction of NAPOCOR. -- NAPOCOR shall

have responsibility for the formulation and implementation of such
programs as are necessary to ensure the reliability of electricity
throughout the country’s power grids, consistent with the general
and specific policies adopted by the DOE. In this regard, NAPOCOR
may undertake required generation and transmission projects
through private sector participation, subject to the provisions of the
Rules and Regulations, and supplemented by Republic Act No. 6957
(An Act Authorizing the Financing, Construction, Operation and
Maintenance of Infrastructure Projects by the private sector and
other purposes), the amendments thereto, and its implementing
guidelines. Pursuant to NAPOCOR’s functions as a bulk power
generation and transmission utility, high-voltage wheeling or
electricity generated by qualified PSGFs to the concerned electric
utility or end-user shall be provided by NAPOCOR, where
necessary.
The DOE shall require the NAPOCOR and individual electric

utilities, to submit power development programs which reflect an
efficient portfolio of generation and demand-side resources, for the
DOE’s review and approval, indicating projects to be undertaken
through private sector participation, the justifications for such, and
indicative timetable for undertaking competitive procurement for
each of the listed projects. NAPOCOR and/or individual electric
utilities shall seek the DOE’s prior approval to implement generation
2347
projects not included in the approved power development plans of

the respective electric utilities.
SECTION 3. Jurisdiction of the NEA. – Pursuant to the

NEA’s role as a developmental and financial institution to electric
cooperatives, the NEA shall make appropriate recommendations to
the DOE regarding applications of electric cooperatives to build and
operate power generation facilities for self-generation, as defined
and allowed in the relevant provisions of PART IV of these Rules and
Regulations, or applications of electric cooperatives for authority to
contract their power supply requirements with PSGFs, consistent
with the provisions of PART III of these Rules and Regulations.
Such endorsement by the NEA shall consider the impact of an

electric cooperative’s power generation proposal on the latter’s ability
to render efficient and reliable service to its existing customers, to
expand its service coverage to non-electrified areas, and to continue
its debt service to the NEA. In endorsing a cooperative’s application,
the NEA shall make no representation as to the overall viability of
the cooperative’s operations.
SECTION 4. Jurisdiction of the ERB. – The ERB shall have

jurisdiction over the implementation of regulations concerning
power rates of investor-owned electric distribution utilities, electric
cooperatives, and NAPOCOR. Such Authority shall include the
review and approval of tariff schedules for wheeling, back-up and
maintenance power, incremental PSG power, and reserve capacities
carrying fees, as well as the review and approval of power purchase
agreements of NAPOCOR and other franchised electric utilities
between qualified PSGFs with respect to the reasonableness of
power purchase rates and their corresponding impacts on electric
utilities’ rates of return, as well as on end-user tariffs.
The ERB shall hear and arbitrate disputes between and/or

among franchised electric utilities, NAPOCOR, and qualified PSGFs
on matters which have implications on rates of NAPOCOR and/or
electric utilities.
2348
ARTICLE III
QUALIFICATIONS OF A PRIVATE SECTOR GENERATION

FACILITY AND A PRIVATE SECTOR GENERATOR
SECTION 1. Ownership. – Qualifications as to ownership of

a PSGF shall be any of the following:
a. A PSGF may be constructed, owned and operated by private

persons, private corporations, cooperatives or other similar
associations not primarily engaged in the transmission and/
or distribution of electricity, and shall be governed by applicable
Philippine Laws on corporations or similar associations as to
registration, independent auditing. Taxation and other related
matters as provided by said laws. Foreign entities may participate
in electricity generation subject to applicable Philippine laws.
b. Private corporations, cooperatives and similar associations

primarily engaged in the transmission and/or distribution of
electricity, referred to in these Rules and Regulations as electric
utilities, may own, construct and operate generating facilities,
subject to electric utility regulations concerning rates, financial
limitations, taxes and other laws applicable to their operations as
electric utilities, and subject to the specific provisions of Part IV for
“Electric Utility-owned Generation Facilities”.
c. Companies or consortium of companies, whether private

or government-owned, primarily engaged in indigenous energy
upstream exploration, development and production activities, may
own, construct and operate generation facilities to the extent that
the primary energy source in power generation shall come from the
local production of such companies or consortiums of companies, and
subject to limitations provided by relevant legislations, regulations,
and/or service contract terms of the DOE, and the specific provisions
on Block Power Production Facilities (BPPFs), where applicable.
Majority interest of NAPOCOR and/or any other electric

utility on the equity of a PSGF shall be considered as ownership by
an electric utility, and shall, thus, be subject to applicable utility
regulations. A PSGF in which NAPOCOR and/or any other utility
has minority interest, and in which the majority interest is being
2349
held by non-utility companies shall be governed by applicable laws

other than for electric utilities.
For entities availing of incentives offered under the

government’s annual Investment Priorities Plan, such entities shall
be guided by relevant legislation thereto.
SECTION 2. Technical and Financial Qualifications. –

Private Sector Generators, more particularly private corporations,
cooperatives, and similar associations seeking to construct, own,
and operate power generation facilities under these Rules and
Regulations, must possess the technical capability (i.e., engineering
and management qualifications) and a proven track record in the
field of power generation, particularly in the generation technology
being proposed. A Private Sector Generator must likewise
demonstrate the financial strength and capability to undertake the
scale of project being proposed under these Rules and Regulations.
SECTION 3. Facility Classification. -- A PSGF referred to in

this Part of these Rules and Regulations shall include the following
electric generating plants:
a. Electric generating facilities intended primarily to sell

all the bulk of its power production to the grid (i.e., to NAPOCOR or
to other electric utilities), consistent with the developmental plans
formulated by NAPOCOR and/or electric utilities and approved by
the DOE;
b. Cogeneration facilities such as topping- or bottoming-

cycle facilities, utilizing fossil fuels or a blend of fossil fuels and
renewable energy forms, meeting engineering, operating and
efficiency standards as prescribed in Section 5 of this Article;
c. Renewable Resource Power Production Facilities such

as those using biomass, solar, wind, geothermal, hydro or wastes as
the primary source of energy; and
d. Electric generating facilities that shall use indigenous

energy resources as their primary fuels.
2350
SECTION 4. Size of Generating Units. – The maximum size of

a generating unit of a PSGF shall be limited to the existing largest
generating unit size or 10% of the coincident maximum demand of
the concerned NAPOCOR, grid or as allowed by DOE. For areas
not covered by the main transmission networks of NAPOCOR, the
size of generating units shall be limited by the power demand in
the concerned isolated area, island or grid, taking into account
reasonable projections of load growth over the period of PSGF
commissioning.
SECTION 5. Engineering, Operating and Efficiency Standards.

– A PSGF shall be guided by internationally-accepted standards in
engineering, operations and reliability.
Cogeneration facilities utilizing fossil fuels, or a blend of

fossil and renewable energy sources, shall be required to meet the
minimum thermal efficiency standard set forth in Part II of these
Rules and Regulations, for purposes of availing incentives offered
under the Investment Priorities Plan of the Board of Investments
and/or securing a DOE accreditation as a qualified Cogeneration
facility under these Rules and Regulations.
SECTION 6. Economic Criteria. – Any proposed electric

generating facility should be able to demonstrate its potential for
providing net foreign exchange savings to the country, by virtue of:
a. generating electric energy more efficiently or cheaper than

can otherwise be generated by existing or programmed generation
facilities under the power development plans of NAPOCOR and/ or
other electric utilities;
b. using indigenous and/or renewable energy sources; and
c. accessing lower costs of capital, cheaper plant investment,

and/or locally manufactured equipment.
2351
ARTICLE IV
GENERAL PROCEDURES FOR APPLYING FOR

ACCREDITATION AS A PRIVATE SECTOR GENERATION
FACILITY
SECTION 1. Contents of Application. – The contents of

application for accreditation as a qualified PSGF should generally
contain the following information:
a. Name and address of the applicant and location of the

proposed facility;
b. Project organization setup;
c. Names of cooperating/participating companies, equity

participation, incorporation documents, audited financial
statements for the last two fiscal years, and records of
successful experience in similar activities in the last five
(5) years;
d. Project financing plans;
e. Administrative and technical manpower complement;
f. Facility classification and general plant description
g. Sale of PSGF generation (whether generation is solely

for sale to the grid, dedicated to an electric utility, or for
internal use with provision for sale of excess power to
the grid);
h. Projected mode of operation (baseload or peaking);
i. Power and annual energy production capacity in (kW

and kWh, respectively) of the proposed facility;
j. Primary energy source (fuel) of the facility, heating

value, and net plant heat rate;
k. Projected forced outage rate, maintenance days,

dependable capacity, and station energy use;
2352
l. Projected economic life of project and proposed duration

of interconnection/cooperation period;
m. Interconnection plans with NAPOCOR or other electric

utility;
m. Detailed project timetable, including target periods for

financial closing, groundbreaking, installation of major
plant equipment, testing and commissioning of the
facility;
o. Any other information as may be required under the

specific provisions of Parts II, III and IV, or as may be
deemed necessary by the EIAB for evaluation purposes.
SECTION 2. Facilities Qualified for Accreditation. – A Private

Sector Generation Facility (PSGF) which meets the qualifications
for accreditation set forth in Sections 1 through 6 of Article III is a
qualified PSGF.\
SECTION 3. Accreditation by the EIAB. – The owner or

operator of a proposed PSGF intending to sell all or its excess power
production to the grid, and whether the facility is existing or shall be
constructed, and whose generating unit is subject to the limitations
under Article III hereof, shall apply for accreditation as a qualified
PSGF to the EIAB.
Provided that all the information requirements shall have

ben complied with, the EIAB shall approve or deny any application
for accreditation as a qualified PSGF, based on the foregoing
qualifications for accreditation in Article III, within two (2) months
from the date of application, unless EIAB shall have required the
submission of additional information, or postponement of final
action on an application for reasonable grounds for postponement,
and the date on which a final ruling shall be issued.
The EIAB shall issue Certificates of Accreditation to

PSGFs which are found to have qualified under these Rules and
Regulations.
SECTION 4. EIAB Issuance of Provisional Accreditations. –

the EIAB my issue provisional accreditations to PSGFS qualifying
2353
under Sections 1,3,4,5 and 6 of Article III of this Part of the Rules and
Regulations if the Private Sector Generator is able to demonstrate
in its formal application sound, reasonable, and time bound
development plans, consistent with overall timetables for project
commissioning, for the formation of a technically and financially
qualified consortium or collaborative of corporations to undertake
the proposed PSGF.
In all cases, notwithstanding compliance with Sections

1 through 6 of Article III, the EIAB may impose the time bound
achievement of specific project milestones with the end in view of
ensuring the untimely completion of the proposed facility, as well as
for monitoring the progress of the provisionally-accredited PSGF.
Provisional accreditations issued by EIAB shall have a

maximum validity period of one (1) year. The EIAB my decide on
the extension or non-extension of the provisional accreditation on
the basis of progress made by the proponent towards complying
with the conditions of t e provisional accreditation, ensuring timely
completion of the project, and EIAB’s evaluation of the continued
viability of the proposed generation project.
SECTION 5. Non-transferability of Accreditation. –

Accreditation issued by the EIAB shall not be transferable or
assignable except to subsidiaries, affiliated companies and/or
partners, determined to be technically financially-qualified by the
EIAB, of the originally-accepted owners/proponents of the qualified
PSGFs.
Transferability of accreditation issued to electric utilities

shall be governed by the relevant provisions of Part IV on “Electric
Utility-Owned Generation Facilities”.
SECTION 6. Representation During Accreditation and

Negotiation. – Where proposals for PSGFs are submitted by persons
or entities, foreign or local, other than the organization which or
will be set up to construct, own and operate the facilities, agreement
made during any negotiation after accreditation shall not legally
bind parties involved thereto until such time when a contract for the
sale of power is agreed upon and signed. Preparation of such contract
between NAPOCOR or the electric utility and the organization,
2354
existing or newly created, owning the PSGF shall be based on

documentary support such as Letter of Intent and Memorandum of
Agreement made and signed during any negotiation.
SECTION 7. Action on Modification of a PSGF. - Prior to

undertaking any substantial alteration or modification of a PSGF
which has been certified under these Rules and Regulations, the
owner or operator of such qualified PSGF shall apply to the EIAB
for a ruling that the proposed alteration would not result in a
revocation of the facility’s qualified status. The term “substantial
alteration or modification of a qualified PSGF” means such alteration,
modification or other changes as will materially affect the accuracy
of the information submitted pursuant to Article III and Section I of
this Article under this Part of the Rules and Regulations.
SECTION 8. Revocation of Qualified Status. -- The EIAB may

revoke the qualified status of a PSGF which has been accredited under
this Article if such facility fails to comply with the requirements of
these Rules and Regulations, or any of the conditions contained in
the Certificate of Accreditation, whether provisional or not, issued
by the EIAB. The EIAB shall advise relevant parties of its decision
to revoke qualified status of a PSGF, citing the reasons for such
revocation.
SECTION 9. EIAB Monitoring of Accredited PSGFs. –

Owners/proponents of accredited PSGFs shall submit quarterly
status reports on the progress of each accredited project to the
EIAB, and shall immediately inform the EIAB of any substantial
changes in the project that may have an impact on the PSGF’s
qualified status. The PSGF shall likewise urgently advise the EIAB
on the attainment of project milestones (e.g., site groundbreaking,
issuance of environmental clearances and other permits, financial
closing, etc.) for monitoring purposes.
The EIAB shall render quarterly reports to the DOE Secretary

on the progress of accredited projects. Copies of these reports shall
be regularly furnished to concerned bureaus and agencies of the
DOE for information and coordination.
SECTION 10. Generation by Cogeneration and Renewable

Resource Power Production Facilities (RRPPFs). – Proponents/
2355
owners of Cogeneration and Renewable Resource Power Production

Facilities (RRPPFs) shall be further guided by the specific provisions
under Part II of these Rules and Regulations.
SECTION 11. Generation by Block Power Production Facilities

(BPPFs). – Generation projects under any power development plan
approved by the DOE, more particularly referred to as Block Power
Production Facilities (BPPFs) shall be further guided by the specific
provisions under Part III of these Rules and Regulations.
SECTION 12. Generation by Companies or Consortiums

Primarily Engaged in Energy Upstream Operations. – Construction
and operation of PSGFs by energy upstream companies or
consortiums shall be further guided by the relevant provisions of
Part II or Part III of these Rules and Regulations, as applicable.
SECTION 13. Generation by Electric Utilities. – PSGFs owned

by electric utilities whose facilities are intended for self-generation
shall be further guided by the specific provisions under Part IV of
these Rules and Regulations.
SECTION 14. Generation by Non-utilities Primarily for

Internal Use. – A non-utility PSGF whose generation is solely for the
owner’s internal use need not apply for accreditation with the EIAB,
but shall inform the EIAB in writing of its power generation plans.
If in the future there is a likelihood that sale to NAPOCOR or electric
utilities would occur, the PSGF shall apply for accreditation with
the EIAB following the provisions of these Rules and Regulations.
ARTICLE V
RIGHTS OF NAPOCOR AND THE CONCERNED ELECTRIC

UTILITY ON THE DESIGN AND OPERATION OF THE
PRIVATE SECTOR GENERATION FACILITY
SECTION 1. Right to Review. – NAPOCOR and/or the

concerned electric utility shall have the right to review the design
of the qualified PSGF and its interconnection and fuel storage
facilities. Any flaws perceived by NAPOCOR and/or the concerned
electric utility in the design of the PSGF shall be described and
communicated in writing to the owner of the PSGF, with a copy
2356
furnished to the EIAB. Internally-accepted engineering standards

shall be utilized as reference in this review process.
SECTION 2. Right to Monitor. – NAPOCOR and/or the

concerned electric utility shall have the right to monitor the
construction work and construction schedule, start-up, operation
and maintenance, and fuel inventor practices of the PSGF, and
shall have the right to consult with and make recommendations to
the owner of the PSGF.
ARTICLE VI
OBLIGATION OF NAPOCOR, ELECTRIC UTILITIES, AND

OWNERS OF QUALIFIED PRIVATE SECTOR GENERATION
FACILITIES
SECTION 1. Interconnection of Accredited PSGFs. –

NAPOCOR and franchised electric utilities with transmission and/
or distribution facilities of 69 KV or above shall file with the ERB
standard interconnection policies and procedures, and wheeling
tariffs for the ERB’s approval.
NAPOCOR, privately-owned electric utilities, and electric

cooperatives connecting with a PSGF shall submit to the ERB a copy
of any interconnection agreement for its review and approval, in line
with ERB/s rate-setting function. The interconnection agreement
shall include the agreements reached on matters pertaining to
rates of purchase and sales, operating and maintenance schedules,
procedures for dispatch, protective and metering devices and
other items that are important to both parties. Copies of such
interconnection agreements shall be submitted to the EIAB for
monitoring purposes.
SECTION 2. Transmission to Electric Utilities (Wheeling).

– Wheeling of power shall be guided by standard interconnection
policies, procedures, and tariffs submitted to and approved by the
ERB. Wheeling rates, charges, terms, and conditions shall permit
the recovery by such utility of all the costs incurred in connection
with the transmission and necessary associated services, and the
costs of any required expansion of transmission facilities. The
appropriate share, if any, of legitimate, verifiable, economic costs
2357
associated with the provision of transmission services may be

included in these charges, while taking into account any benefits of
providing such services to the transmission system.
SECTION 3. Provision on Spinning Reserve. – The owner

of the PSGF shall maintain a continuous spinning reserve at all
times to the extent possible and under terms to be agreed upon with
NAPOCOR or the concerned electric utility.
SECTION 4. Safety Requirements. – The owner of the

PSGF shall provide and install protective devices in their facilities
as a safeguard from any NAPOCOR or electric utility system
disturbances.
SECTION 5. Periodic Reporting to the EIAB and the Concerned

Electric Utility. – The owner of the PSGF shall regularly submit to
the concerned electric utility and the EIAB in a prescribed form,
operating, and other information as may be required by the utility
and the EIAB for monitoring and planning purposes. The EIAB
shall furnish copies of such reports to other relevant units and line
agencies of the DOE.
ARTICLE VII
PURCHASE OF POWER
SECTION 1. General Provisions. – NAPOCOR and/or the

concerned electric utilities shall purchase that power (electric energy
and/or capacity) needed to serve its anticipated demand (including
reasonable reserve requirements) at rates that shall not be more
than their “avoided cost”. “Avoided cost” as herein defined shall
mean the least incremental cost that an electric utility would incur
towards meeting its anticipated power demand, if such utility does
not buy power from a PSGF.
SECTION 2. Purchase Rates Qualification. – Rates for

purchase shall:
a. Be just and reasonable to the electric customers of

NAPOCOR and/or other concerned electric utilities, and in the
public interest; and
2358
b. Be in accordance with guidelines set by the EIAB on this

matter where full and/or excess energy production shall be sold to
the systems of concerned electric utilities. An acceptable competitive
procurement scheme (e.g., bidding) is one means of setting avoided
cost as well as reasonable purchase rates.
SECTION 3. Adjustments in Financial Accounting. –

NAPOCOR and the concerned electric utilities shall accordingly
adjust their financial accounting systems and procedures resulting
from purchases of electricity from private sector generators. The
rate of return on rate base levels shall then be determined after all
adjustments have been made and set in place.
SECTION 4. Determination of Avoided Cost. – The EIAB, in

coordination with the ERB and in consultation with NAPOCOR,
electric utilities and other relevant private sector entities, shall
formulate and adopt a standard methodology for the calculation
of NAPOCOR’s and electric utilities’ avoided costs. Criteria for
competitive procurement schemes (e.g., bidding) shall also be
formulated to define acceptable means of solicitation that can also
provide the basis for determining an electric utility’s avoided costs
and reasonable purchase rates. Said methodology and criteria
shall be formulated by the EIAB within three (3) months from
the effectivity of these Rules and Regulations, and disseminated
to relevant agencies, including ERB, NAPOCOR, and concerned
electric utilities for information and immediate adoption.
The EIAB, to the extent possible, shall take into account the
following factors in its formulation of a standard methodology for
the calculation of avoided cost:
a. The structure of the incremental costs that would have

been incurred by NAPOCOR and/or other electric utilities had they
build the required generation facilities and/or generated electric
power themselves to serve its anticipated demand (including
reasonable reserve requirements);
b. The availability of capacity and energy from a qualified

PSGF during the system daily and seasonal peak periods, including,
but not limited to:
2359
1. The ability of the NAPOCOR or the concerned electric

utility to dispatch the qualified PSGF;
2. The expected or demonstrated reliability of the qualified

PSGF, and the corresponding value of reserve capacity
required to be carried by NAPOCOR and/or other electric
utilities;
3. The extent to which scheduled outages of the qualified

PSGF can be usefully coordinated with scheduled outages
of the NAPOCOR or the electric utility’s facilities;
4. The individual and aggregate value of energy and

capacity from qualified PSGFs on NAPOCOR’s or the
electric utility’s system.
c. The ability of NAPOCOR or the affected electric utility

to avoid costs, including the deferral of capacity additions and the
reduction of fossil fuel use;
d. The costs of saving resulting from variations in line losses

from those that would have existed in the absence of purchases from
a qualified PSGF; and
e. The costs of environmental mitigation measures

necessary to ensure compliance with regulations and standards
on environmental management. For purposes of promoting the
economic utilization of specific indigenous and renewable energy
forms, the DOE may, in line with its rule-making powers, fix power
purchase rates for electricity generated from such resources after
due consultation with relevant private and government entities.
ARTICLE VIII
RATES FOR SALES
SECTION 1. General Rules. – NAPOCOR or any concerned

electric utility shall sell to any owner of a qualified PSGF electricity
requested by the latter. Except for back-up power, rates for sales
of NAPOCOR and/or the concerned electric utility to the qualified
PSGF shall be based on the net interchange of energy between
2360
the said qualified PSGF and NAPOCOR or the concerned electric

utility. If said interchange of energy results in requiring the PSGF
to pay for electricity used, the applicable rates in this case shall
be rates stipulate din a contract between the qualified PSGF and
NAPOCOR or the concerned electric utility.
SECTION 2. Services to be Provided to any Qualified PSGF.

– As contracted with the owner of a qualified PSGF. NAPOCOR or
the concerned electric utility shall provide:
1. Incremental PSG power;
2. Back-up power;
3. Maintenance power; and
4. Interruptible power.
SECTION 3. Rates for Back-up and Maintenance Power. –

NAPOCOR and the individual electric utilities shall submit to the
ERB, for the latter’s review and approval, rates for sales of back-up
and/or maintenance to qualified PSGFs.
ARTICLE IX
OPERATING STANDARDS, ENVIRONMENTAL CONERNS

AND OTHER MATTERS
SECTION 1. Standards for Operations and Reliability. –

Qualified PSGFs, NAPOCOR, and other electric utilities shall
follow established internationally-accepted engineering standards
to ensure safety, system security, and reliability for interconnected
system operations. NAPOCOR and the concerned electric utilities
shall have the right to physically inspect the power installations
and witness the testing and commissioning of the PSGF that will be
interconnected to its system to ensure that all necessary equipment
are in place and functioning properly.
SECTION 2. Operating Structure. – The qualified PSGF

directly connected to the NAPOCOR grid shall be operated by its
owner in accordance with the terms of the interconnection agreement
2361
with NAPOCOR and/or the concerned electric utility with respect

to the wheeling and/or purchase of electricity generated by said
PSGF.
SECTION 3. Environmental Concerns. – Qualified PSGFs

shall meet standards on environmental management, including,
among others, those on air quality, noise levels, water quality, solid
waste, emission balances and controls, land use and aesthetics as
required by law through appropriate government agencies.
SECTION 4. Content of Contract. – Consistent with these

Rules and Regulations, all contracts between the owners of PSGFs,
and NAPOCOR or the concerned electric utility shall include, among
others, the following:
a. Identification of Parties;
b. Recitals (rationale of contract);
c. Considerations (general agreements);
d. Purchase and Sale (stipulation of power purchase and

sale);
e. Conditions of Delivery:
1. Point of Delivery
2. Character of Service (technical specifications for

expected power output)
3. Power Factor
4. Continuity/reliability
f. Rates for Purchase from Facility and Adjustment

clauses;
g. Rates for Sale to Facility and Adjustment clauses;
h. Billing Periods and Payment Terms:
2362
i. Penalty and Discount Clauses;
j. Rights and Obligations of NAPOCOR/Electric Utility

and PSGF as to:
1. Ownership, Design, Operation and Maintenance
2. Construction Requirements
3. Plans and Specifications
4. Inspection and tests
5. Change of Equipment
6. Costs
7. Control and Protective Apparatus
8. Location
9. Deliveries and Amount of Production
10. Notices
11. Land Rights
12. Regulatory Approvals
13. Codes and Standards
14. Removal of Equipment
15. Provisions for Contract Violation
k. Operations
1. Date of Operation
2. Operating Procedure
2363
3. Sell-back Conditions
l. Safety Requirements;
m. Force Majeure;
n. Meter Provisions and Metering Arrangements;
o. Right to Access for Inspection, etc.;
p. Liability of Each Party with Respect to Operations;
q. Duration of Contract and Conditions for Contract

Cancellation;
r. Provision for Security; and
s. Additional Provisions.
SECTION 5. Force Majeure. – Neither party to a contract shall

be in default if failure of performance of the terms of the contract
is caused by factors due to acts of God, nature, or uncontrollable
forces.
PART II
SPECIFIC PROVISIONS FOR COGENERATION AND

RENEWABLE RESOURCE POWER PRODUCTION FACILITIES
In addition to the provisions of Part I of these Rules and

Regulations, the following Articles shall guide proponents/owners
of Cogeneration or Renewable Resource Power Production Facilities
(RRPPFs).
ARTICLE I
DEFINITIONS OF COGENERATION AND RENEWABLE

RESOURCE POWER PRODUCTION FACILITIES
SECTION 1. Definition of Cogeneration Facilities. –

Cogeneration facilities, as defined in these Rules and Regulations,
2364
means a facility which produces electrical and/or mechanical energy

and forms of useful thermal energy (such as heat or steam), used for
industrial, commercial, heating, or cooling purposes, through the
sequential use of energy.
A cogeneration facility may either be a topping-cycle or

bottoming-cycle facility. A topping-cycle cogeneration facility means
a cogeneration facility in which the energy input to the facility is
first used to produce useful power with the reject heat recovered
from power production then used to provide useful thermal energy,
while a bottoming-cycle facility refers to a cogeneration facility in
which the energy input to the system is first applied to a useful
thermal energy process, and the reject heat emerging from the
process is then used for power production.
SECTION 2. Definition of Renewable Resource Power

Production Facilities (RRPPFs). – RRPPFs, as defined in these Rules
and Regulations, refers to any facility which produces electricity by
the use of renewable energy resources as its primary energy source.
Renewable energy sources mean sources of energy that regenerative
or virtually inexhaustible such as biomass, solar, wind, geothermal
or hydro, and also means by-product materials that, but for their
use as a source of energy, would be considered waste.
Primary energy source, on the other hand, means the fuel/s

used for the generation of electricity, except that such terms do not
include:
a. The minimum amounts of fuel required for ignition, start

up, testing, flame stabilization and control users, and
b. The minimum amounts of fuel required to alleviate or

prevent:
i. unanticipated equipment outages, and
ii. Emergencies, directly affecting the public health,

safety or welfare, which would result from electric
power outages.
2365
ARTICLE II
QUALIFICATIONS OF RRPPFs AND COGENERATION

FACILITIES
SECTION 1. Accreditation of RRPPFs and Cogeneration

Facilities. – An RRPPF meeting the general qualifications under
Article III of Part I of these Rules and Regulations is a qualified
PSGF. A cogeneration facility is a qualified PSGF under these Rules
and Regulations if it meets the general qualifications under Article
III of Part I, and the thermal efficiency standard for cogeneration
projects, as defined in Section 2 of this Article.
SECTION 2. Thermal Efficiency Standards for Cogeneration

Facilities. – In addition to the general qualifications for accreditation
under Article III of Part I of these Rules and Regulations, cogeneration
facilities should be able to achieve a minimum thermal efficiency of
sixty (60) percent for purposes of availing incentives offered under
the Investment Priorities Plan of the Board of Investments and/or
securing accreditation from the EIAB as a qualified PSGF. The DOE
shall review the applicability of such thermal efficiency standard
for cogeneration from time to time, considering the viability of
efficiency advances in generation technologies, boilers, and heat
recovery systems.
Thermal efficiency, as herein defined, means the ratio of

useful energy output to the total energy input, calculated on an
annual basis.
Useful energy output, for purposes of calculating thermal

efficiencies of cogeneration facilities, is defined as the sum of
electricity and/o mechanical power plus the useful heat in the steam
or hot exhaust gases, and such other thermal energy recovered for
useful purposes.
Total energy input, on the other hand is defined as the total

kilograms of fuel sued multiplied by the Higher Heating Value
(HHV) of the fuel input/s as received.
SECTION 3. Cogeneration Facilities Utilizing Renewable

Energy Sources. – Cogeneration facilities utilizing renewable energy
2366
forms as its primary energy source shall be classified as Renewable

Resource Cogeneration Facilities for purposes of accreditation as
qualified PSGFs. Cogeneration facilities utilizing renewable energy
sources and fossil fuels, either through a blend, combination, or
alternating use of such fuels, shall be treated and evaluated as
Cogeneration Facilities. By virtue of this distinction, Renewable
Resource Cogeneration Facilities shall not be subject to minimum
thermal efficiency standards required for cogeneration facilities
under Section 2 of this Article.
SECTION 4. Ownership of Cogeneration Facilities. – Any

private corporation, cooperative, or similar associations requiring
thermal and electric energy for industrial, commercial, heating, or
cooling purposes (thermal host) may own and operate cogeneration
facilities intended to supply their internal requirements for thermal
and electric energy, and to sell any excess power generation to the
grid.
Private corporations, cooperatives, or similar associations,

other than the thermal hosts described above, shall be allowed to own
and operate cogeneration facilities, and to sell electric and thermal
energy directly to the concerned thermal hosts, as well as to sell any
excess power generation to the grid, under exclusive contracts with
the thermal host and/or concerned electric utility, and subject to the
provisions and limitations of the Public Service Law.
ARTICLE III
PROCEDURES FOR APPLYING FOR ACCREDITATION AS

A COGENERATION OR RENEWABLE RESOURCE POWER
PRODUCTION FACILITY
SECTION 1. Period of Processing. – All Cogeneration and

RRPPFs intending to sell the excess or all its power production to
NAPOCOR or any electric utility and/or thermal host shall apply for
accreditation with the EIAB. Provided all requirements shall have
ben complied with, the EIAB shall approve or deny any application
for accreditation for qualified PSGF status within one (1) month from
the date of the application, unless the EIAB shall have required the
submission of additional information, or ordered the postponement
of final action on an application for reasonable grounds.
2367
SECTION 2. Accreditation of Mini-Hydro Projects. –

Applications concerning the construction and operation of mini-
hydro facilities shall be governed by the Implementing Rules and
Regulations of Republic Act No. 7156 (Mini-hydro Act of 1991),
promulgated by the Office of Energy Affairs in August 1992. Such
applications shall be referred by the EIAB to the Energy Resource
Development Bureau (EBDB) of the DOE.
Evaluation and processing of such applications shall be

undertaken by the Mini-Hydro Division of the ERDB. The ERDB
shall inform the proponents and the EIAB of its decision to issue
or deny a license to construct and operate mini-hydro facilities
within a period of four (4) months, provided all information
requirements to process the application have been submitted to the
Mini-Hydro Division. The EIAB shall thereafter prepare and issue
the appropriate accreditation certificates for mini-hydro projects
approved by the ERDB.
SECTION 3. Accreditation of Waste-to-Energy Facilities. –

Prior to filing an application with the EIAB for accreditation as
a qualified PSGF under these Rules and Regulations, RRPPFs
utilizing fuels derived from municipal solid wastes, or by-product
materials that, but for their use as a source of energy, would
be considered waste, shall first seek an endorsement from the
appropriate government authority (e.g., the Presidential Task Force
on Solid Waste management, the Department of Environment and
Natural Resources) certifying that the proposed Waste-to-Energy
facility is consistent with the overall country framework for solid
waste management. Such requirement may be waived by the EIAB
for agricultural and industrial wastes not generally classified as
municipal solid wastes.
Notwithstanding any endorsement or certification from

the appropriate government authorities on environmental/waste
management, qualified Waste-to-Energy facilities shall meet
standards on environmental management in accordance with
the provision of Section 3, Article IX, Part I of these Rules and
Regulations.
SECTION 4. Contents of Application for Cogeneration

Facilities. – In addition to the general information requirements
2368
listed in Section 1, Article IV, Part I of these Rules and Regulations,

applications for accreditation as a qualified Cogeneration Facility
shall contain the following information:
a. Minimum, maximum, and average volumes of steam and/or

thermal energy required for industrial, commercial, heating
or cooling purposes, on a monthly and annual basis, together
with the required temperatures, pressures, and conditions of
such volumes;
b. Minimum, maximum, and average requirements of power and

electric energy on a monthly and annual basis;
c. A description of the basic industrial, commercial, heating,

or cooling process requiring any amounts of thermal and/or
electric energy;
d. Single-line mass-balance and energy flow diagrams indicating

volumes and conditions of exhaust gases, steam, heat, and
electric energy produced and utilized at various points of the
cogeneration cycle;
e. Detailed calculation of the overall thermal efficiency of the

cogeneration system, including assumptions used for ambient
temperature, fuel heating values, and other parameters; and
f. Other information that may be required by the EIAB in

evaluating a cogeneration proposal.
SECTION 5. Contents of Application for RRPPFs. – In

addition to the general information requirements listed in Section
1, Article IV, Part I of these Rules and Regulations, applications
for accreditation as a qualified RRPPF shall include detailed
information on fuel supply, collection, and delivery systems in the
form of a feasibility or pre-feasibility study. The EIAB may require
the submission of any other information that may be necessary for
the exhaustive evaluation of RRPPF proposals.
SECTION 5. Contents of Application for RRPPFs. – In

addition to the general information requirements listed in Section
2369
1, Article IV, Part I of these Rules and Regulations, applications

for accreditation as a qualified RRPPF shall include detailed
information on fuel supply, collection, and delivery systems in the
form of a feasibility or pre-feasibility study. The EIAB may require
the submission of any other information that may be necessary for
the exhaustive evaluation of RRPPF proposals.
ARTICLE IV
OBLIGATIONS OF NAPOCOR, ELECTRIC UTILITIES, AND

OWNERS OF QUALIFIED RRPPFs AND COGENERATION
FACILITIES
SECTION 1. Purchase of Electric Energy from Qualified

RRPPFs and Cogeneration. – For facilities whose power production
is also intended for sale to the grid, the qualified RRPPF or
Cogeneration shall apply and negotiate for the sale of its power with
the franchised electric utility within whose area said facility is locate
(host utility). If sale is hindered by any disagreement, the owner
of the facility may negotiate with NAPOCOR or any other electric
utility for the latter to purchase its generation. If after further
negotiation NAPOCOR or the concerned electric utility shall not
purchase the generation, the owner of the RRPPF or Cogeneration
shall apply to the EIAB for a ruling that said facility shall sell to
NAPOCOR.
SECTION 2. Interconnection and Transmission (Wheeling).

– The host utility shall be obligated to interconnect the qualified
RRPPF or Cogeneration facility and wheel the electricity generated
to a third party (electric utility or end-user) through the former’s
transmission and/or distribution lines of 69 KV or higher. The
rate for purchase by the third party (electric utility or end-user) to
which such electricity is transmitted shall be accordingly adjusted
to reflect line losses and the corresponding wheeling charges of the
host utility.
SECTION 3. Interconnection Costs. – Upon effectivity of

an agreement for interconnection by the owner of the qualified
RRPPFs or Cogeneration facilities and NAPOCOR or the concerned
electric utility, NAPOCOR or the electric utility may issue an order
requiring the owner of said RRPPF or Cogeneration facility to
2370
advance investments for the necessary interconnecting electrical

equipment and devices in accordance with appropriate electrical
plans approved by NAPOCOR and/or the concerned electric utility.
Repayment for the investment on these facilities shall be done
following arrangements mutually agreed upon by contracting
parties. Maintenance costs for the interconnection facilities shall
be borne by the concerned electric utility.
For RRPPFs and cogeneration facilities with capacities of

less than 10,000 kilowatts, however, NAPOCOR or the concerned
electric utility shall shoulder all costs needed for the realization of
the physical connection of the PSGF to the former’s transmission
facilities. Maintenance costs for the interconnection facilities shall
also be borne by NAPOCOR or the concerned electric utility.
SECTION 4. System Emergencies. – RRPPFs and cogeneration

facilities shall be obligated to provide power to NAPOCOR or the
concerned electric utility during system emergencies to the extent
provided under their agreement.
ARTICLE V
RATES FOR PURCHASES
SECTION 1. Rate Satisfaction. – Rates for purchases from

qualified RRPPSs or Cogeneration facilities must satisfy the
requirements set forth under Sections 2 and 4 of Article VII, Part
I of these Rules and Regulations. In the case in which the rates
for purchases are based upon estimates of NAPOCOR and/or the
concerned electric utility’s “avoided cost” over the specific period of
a contact, the rates for such purchases do not violate this Article
if these rates differ from NAPOCOR’S or the concerned electric
utility’s “avoided cost” at the time of delivery.
SECTION 2. Purchases “as available”. – The rates for

purchases of energy and capacity on an “as available” basis shall
be based on NAPOCOR’s and/or the purchasing electric utility’s
costs calculated at the time of delivery and stipulated in a contract
to purchase. Energy and capacity on an “as available” basis shall
mean electricity supplied by RRPPFs or Cogeneration facilities to
NAPOCOR and/or an electric utility following a schedule provided
2371
by the RRPPF or Cogeneration owner as to time and period and

agreed to by NAPOCOR or concerned electric utility.
SECTION 3. Rates for Purchases of Power Generated by

RRPFs and Cogeneration Facilities with Capacities of less than
10,000 kilowatts. – NAPOCOR shall formulate and adopt, subject to
ERB’s review and approval, a schedule of power purchase rates which
reflects the structure of capacity and energy costs of NAPOCOR for
varying levels of power availability and dispatchability. Such power
purchase rates shall be adopted as standard power purchase rates
for RRPPFs and Cogeneration facilities less than 10,000 kilowatts
upon ERB approval of such rates to facilitate price negotiations with
NAPOCOR and/or other electric utilities and qualified RRPPFs or
Cogeneration facilities.
PART III
SPECIFIC PROVISIONS ON BLOCK POWER PRODUCTION

FACILITIES
The following Articles shall further guide proponents/owners

of Block Power Production Facilities (BPPFs), in addition to the
general provisions of Part I of these Rules and Regulations.
ARTICLE I
DEFINITION AND QUALIFICATIONS OF A BLOCK POWER

PRODUCTION FACILITY AS A QUALIFIED PSGF
SECTION 1. Definition of Block Power Production Facilities.

– Block Power Production Facilities, or BPPFs, refer to power
generation facilities forming part of the approved power development
plans of NAPOCOR and/or other electric utilities, and which shall
be implemented through private sector participation via the Build-
Own-Operate, Build-Operate-Transfer, Build-Transfer-Operate, or
other variants of the aforementioned private power schemes.
Renewable energy-based power generation facilities forming

part of NAPOCOR’S and/or electric utilities’ development plans are
BPPFs.
2372
SECTION 2. Formulation and submission of Power

Development Plans of NAPOCOR and/or Other Electric Utilities. –
Pursuant to Section 1 of Article I, and Sections 1 and 2 of Article II,
Part I, the DOE shall require NAPOCOR and/or individual electric
utilities to submit power development programs, for the DOE’s
review and approval. NAPOCOR shall submit to the DOE an annual
update of its Power Development Program (PDP) on or before the
first day of June beginning 1995 and every year thereafter.
Such submissions should include NAPOCOR’s system load

forecasts and generation requirements, resource and technology
assessments and evaluations, cost assumptions and other technical
parameters, and the resulting system expansion plans for NAPOCOR’s
major and small-island power grids NAPOCOR submissions should
identify power generation projects to be undertaken through private
sector participation, the justifications for such, and the indicative
time tables for undertaking prequalification of interested private
sector entities, tendering. Of bids, evaluation, and award of private
power contracts for each of the projects identified.
Individual electric utilities seeking to implement or contract

the implementation of generation projects shall be required to
enter into long-term (ten-year) power supply agreements with
NAPOCOR
ARTICLE I
DEFINITIONS AND QUALIFICATIONS OF A BLOCK POWER

PRODUCTION FACILITY AS A QUALIFIED PSGF
SECTION 1. Definition of Block Power Production Facilities.

– Block Power Production Facilities, or BPPFs, refer to power
generation facilities forming part of the approved power development
plans of NAPOCOR and/or other electric utilities, and which shall
be implemented through private sector participation via the Build-
Own-Operate, Build-Operate-Transfer, Build-Transfer-Operate, or
other variants of the aforementioned private power schemes.
Renewable energy-based power generation facilities forming

part of NAPOCOR’s and/or electric utilities’ development plans are
BPPFs.
2373
SECTION 2. Formulation and Submission of Power

Development Plans of NAPOCOR and/or Other Electric Utilities. –
Pursuant to Section 1 of Article I, and Sections 1 and 2 of Article II,
Part I, the DOE shall require NAPOCOR and/or individual electric
utilities to submit power development programs, for the DOE’s
review and approval. NAPOCOR shall submit to the DOE an annual
update of its Power Development Program (PDP) on or before the
first day of June beginning 1995 and every year thereafter.
Such submissions should include NAPOCOR’s system load

forecast and generation requirements, resource and technology
assessments and evaluations, cost assumptions and other technical
parameters, and the resulting system expansion plans for NAPOCOR’S
major and small-island power grids. NAPOCOR submissions should
identify power generation projects to be undertaken through private
sector participation, the justifications for such, and the indicative
timetables for undertaking prequalification of interested private
sector entities, tendering of bids, evaluation, and award of private
power contracts for each of the projects identified.
Individual electric utilities seeking to implement or contract

the implementation of generation projects shall be required to enter
into long-term (ten-year) power supply agreements with NAPOCOR
to facilitate NAPOCOR’s system planning activities. Such electric
utilities shall submit to the DOE their individual or combined long-
term power development plans which shall contain an efficient
portfolio of generation (including projected power purchases from
NAPOCOR and qualified PSGFs) and demand-side resources on or
before 15 January 1996 and every year thereafter, for the DOE’s
review and approval.
SECTION 3. DOE Review of Power Development Plans. – The

DOE, through its Energy Planning and Monitoring Bureau (EPMB),
shall review the power development plans of NAPOCOR and other
electric utilities for consistency with the general and specific policies
for the sector, validate the assumptions used in formulation of such
plans, and check the consistency of such plans with national and
regional resource assessments, development programs, and project
timetables of various energy upstream activities.
2374
The EPMB shall likewise review the list of power generation

projects for private sector implementation and the indicative
timetables towards ensuring sufficient lead times for undertaking
information dissemination, project organization, and preparation
of competitive proposals. The EPMB may also recommend in its
approval of the individual development plans of NAPOCOR and/
or electric utilities the sealing down or integration of proposed
generation projects to ensure the generation of more competitive
proposals with due consideration of cost advantages from economies
of scale.
NAPOCOR and/or other electric utilities shall inform and

seek the DOE’s prior approval to implement generation projects not
included in the approved power development plans.
ARTICLE II
PROCEDURES FOR APPLYING FOR ACCREDITATION AS A

BLOCK POWER PRODUCTION FACILITY
SECTION 1. DOE Announcement of Generation Projects for

Private Sector Implementation. – Upon the DOE’s approval of the
power development plans of NAPOCOR and/or electric utilities, the
EIAB shall cause the publication of the list of projects for private
sector implementation, together with the target commissioning
dates and indicative timetables for commencement of competitive
procurement procedures. Such announcements shall be published
in at least three (3) newspapers of general circulation, once a week
for two (2) consecutive weeks.
SECTION 2. BPPF Solicitation by NAPOCOR and other

Electric Utilities. – Following announcement of generation
projects for private sector implementation, electric utilities, more
particularly investor-owned distribution utilities and electric
cooperatives, may express their interest to the EIAB to undertake
competitive procurement for certain blocks of capacity included in
said announcements.
The EIAB shall allow an electric utility or groups of electric

utilities to conduct competitive procurement for certain blocks of
programmed BPPF capacity, subject to the following conditions:
2375
1. That power to be generated by the block of capacity to

be solicited by an electric utility or groups of electric utilities shall
not exceed the electric utilities’ anticipated demand (including the
provision of reasonable reserve requirements);
2. That such blocks of capacity are sufficient in size to

generate competitive proposals, and that the remaining block of
capacity can still be competitively bided or contracted out; and
3. For electric cooperatives, that the cooperative first

obtain NEA’s endorsement of the cooperative’s plan to solicit BPPF
proposals and to purchase power from qualified BPPFs.
The EIAB shall then issue an order authorizing the concerned

electric utilities to undertake competitive procurement for BPPF
proposals. Such competitive procurement activities shall meet the
criteria set by the EIAB, or follow the procedures detailed in Section
6 of this Article.
NAPOCOR shall undertake competitive solicitation

procedures for the remaining blocks of BPPF capacities within
the corresponding timeframe indicated for each of the projects for
private sector implementation if, within such timeframes, no other
electric utility has expressed interest in undertaking competitive
procurement for the remaining blocks of BPPS capacity.
Solicitation schemes other than tender procedures which

meet the criteria set forth by the EIAB for competitive procurement,
pursuant to Section 4, Article VII, Part I shall be allowed by the
EIAB under this Part of the Rules and Regulations.
In case no award is made following conduct of tender procedures,

NAPOCOR and/or other electric utilities shall inform and seek the
EIAB’s prior approval to either negotiate for the implementation of
BPPF capacities or to undertake pre-construction and construction
activities themselves. Actual incremental investments, fuel,
operating, maintenance and overhead costs of NAPOCOR or the
concerned electric utility shall be benchmarked against avoided cost
figures of NAPOCOR or the concerned electric utility, determined
on the basis of the standard methodology adopted by the EIAB.
2376
SECTION 3. Participation of Corporations or Consortiums

Primarily Engaged in Energy Upstream Operations. – Pursuant to
ownership qualifications provided in Section I, Article III, Part I,
companies or consortiums primarily engaged in indigenous energy
exploration, development, and production may undertake the
construction and operation of associated generation facilities to the
extent that the primary fuel sources for power generation shall come
from the local production of such companies or consortiums, and
subject to demonstrating the technical and financial qualifications
in undertaking the scale and type of generation facility proposed.
Government-owned and controlled corporations involved in

energy upstream operations shall be required to seek accreditation
for associated generation facilities owned and operated by the
same. Private corporations engaged in energy upstream operations
intending to generate electricity for sale to the grid, either directly
or in joint venture or under contract with state-owned energy
upstream companies, shall likewise apply for accreditation with the
EIAB.
In all cases, rates for purchase of power generated from such

facilities shall be governed by limitations provided in Section 1 of
Article V of this Part of the Rules and Regulations .
SECTION 4. Implementation of BPPFs by Electric Utilities.

– Electric utilities seeking to implement blocks to BPPS capacity
shall be governed by the specific provisions of Part IV on “Electric
Utility-Owned Generating Facilities”.
SECTION 5. Facilities not in conformity with Power

Development Plans. – A facility not in conformity with the approved
power development plans of NAPOCOR and/or other electric
utilities may be proposed and its feasibility be submitted to the
EIAB for consideration as a BPPF. The proponent of a facility not
in conformity with the approved development plans should include
in its application with the EIAB the block of BPPF capacity that the
proposed BPPF can displace with regard to capacity, availability,
and commissioning schedule.
The EIAB shall subject such proposals to a thorough evaluation

and shall compare its reliability, cost-competitiveness, and potential
2377
generation of net foreign exchange saving against programmed

BPPFs, as basis for issuing or denying accreditation as a qualified
BPPF. Only Provisional Accreditation shall be issued by the EIAB
n such instances.
A facility not in conformity with NAPOCOR’s development

plans but which has been provisionally accredited by the EIAB as a
qualified PSGF under these Rules and Regulations shall be allowed
to participate in competitive procurements being undertaken by
NAPOCOR and/or any other electric utilities.
SECTION 6. BPPF Solicitation Procedures. – The following

procedure and provisions shall guide the solicitation of proposals or
bids for BPPFs by the NAPOCOR, electric utilities, and government-
owned and controlled energy upstream companies, in lieu of
procurement schemes meeting the EIAB’s criteria for competitive
requirement.
1. Announcement of request for proposals for required

BPPF capacities, together with information on the availability
of prequalification documents, as well as schedules, venues, and
procedures for prequalification documents, as well as schedules,
venues, and procedures for prequalification and tendering of bids.
Publication should be made in three (3) newspapers of general
circulation, at least once a week for three (3) consecutive weeks,
with the last date of publication at least one (1) months before the
deadline for the submission of pre-qualification.
2. Conduct of pre-bid conference for prequalified proponents

to present the project concept and timetables, government taxes and
incentives applicable to proponents, basic criteria for bid evaluation,
the negotiable and non-negotiable specifications or requirements
of NAPOCOR or the concerned electric utility, bid evaluation
procedures, and other information vital for the preparation of
competitive technical and financial proposals.
3. Tendering of bids must be scheduled so as to allow

proponents a reasonable length of time for the preparation of
implementable and competitive technical and financial proposals.
In setting the date for the submission of bids, the scale of the
solicitation, the type of technology and fuel to be employed, and the
2378
risks involved on the part of the Private Sector Generator must be

considered by NAPOCOR and/or the concerned electric utility.
4. To maintain the transparency of the whole solicitation

and bidding process, representatives of BPPF proponents must
be allowed to witness the receipt, opening, tabulation, and final
certification of the contents of the bids received by duly-authorized
officials of NAPOCOR and/or electric utilities.
SECTION 7. EIAB Accreditation of BPPFs. – Following the

conduct of competitive procurement for BPPFs, NAPOCOR and/or
the concerned electric utility shall submit to the EIAB a complete
copy of the records pertaining to the solicitation, evaluation, selection
and award of a BPPF contract.
Electric utilities which have successfully conducted competitive

procurement activities for BPPF facilities shall be required to enter
into and submit to the EIAB a long-term, preferably ten-year, power
purchase agreement with NAPOCOR for any existing, incremental,
and/or back-up power supply requirement. Should interconnection
of an electric utility with NAPOCOR may no longer be necessary, the
concerned electric utility shall furnish NAPOCOR and the EIAB a
copy of its board’s resolution/decision to disconnect from the service
of NAPOCOR.
Upon submission of the required documents (i.e., long-term

power purchase agreement or board resolution) from the concerned
electric utility, the EIAB shall issue the required accreditation
documents for the utility-solicited BOOF project upon verification
of the BPPF’s compliance with the general qualifications for
accreditation as a PSGF, and NAPOCOR’s and/or the concerned
electric utility’s compliance with the criteria for competitive
procurement or with the recommended solicitation procedure
provided in Section 6 above. The EIAB shall issue the required
accreditation documents within one (1) month from receipt of all
requirements.
For BPPF proposals not in conformity with the power

development plans of NAPOCOR and/or individual electric utilities,
the EAIB shall take action to approve or deny any application for
accreditation as a qualified PSGF within two (2) months from receipt
2379
of an application, provided that all necessary information have been

submitted to the EIAB. Such accreditation shall be a provisional
accreditation which shall be cancelled by the EIAB upon conclusion
of competitive procurement procedures and the non-selection of the
provisionally-accredited BPPF in the competitive procurement.
ARTICLE III
OBLIGATIONS OF NAPOCOR, ELECTRIC UTILITIES, AND

OWNERS OF BLOCK POWER PRODUCTION FACILITIES
SECTION 1. Obligation to Purchase Electric Energy from

the Qualified BPPF. – The NAPOCOR and/or the concerned electric
utility shall purchase, at rates in accordance with the succeeding
Article hereof, electric energy and capacity which is made available
by the owners of the qualified BPPF.
SECTION 2. Obligation to Sell to a Qualified BPPF. –

NAPOCOR shall sell to the owner of a qualified BPPF maintenance
and/or back-up power. In cases of electric utilities contracting to
purchase power from a qualified BPPF, NAPOCOR and the concerned
electric utilities may include in their long-term power purchase
agreements BPPF requirements for back-up and maintenance
power.
SECTION 3. Obligation to Interconnect. – NAPOCOR and/

or the concerned electric utility shall interconnect with qualified
BPPFs to accomplish purchases or sales under these Rules and
Regulations and following stipulations in the contract between
NAPOCOR or the concerned electric utility and the owner of the
BPPF on this matter.
Upon effectivity of an agreement for interconnection between

the owner of a qualified BPPF and NAPOCOR or any concerned
electric utility, NAPOCOR or the concerned electric utility shall issue
an order allowing the physical connection of the qualified BPPF to
the transmission facilities of NAPOCOR o to the distribution system
of the concerned electric utility.
SECTION 4. Interconnection Costs. – The owner of a BPPF

shall advance investments needed in interconnecting the BPPF
with the NAPOCOR grid or the concerned electric utility system.
2380
Repayment shall be made in accordance with mutually agreed

upon arrangements of the contracting parties. Maintenance costs
for the interconnection facilities shall also be agreed upon by the
NAPOCOR and the owner of the BPPF.
SECTION 5. Transmission to Other Electric Utilities

(Wheeling). – NAPOCOR and/or any host utility shall be obligated to
transmit or wheel the electricity generated by a qualified BPPF to an
electric utility or to NAPOCOR through the former’s transmission
and/or distribution lines of 69 KV or higher. NAPOCOR and/or any
third party electric utility to which such electricity is transmitted
shall purchase the same under this Section. The rate for purchases
by the third party electric utility to which such electricity is
transmitted shall be accordingly adjusted to reflect line losses and
the corresponding wheeling charges.
ARTICLE IV
RATES FOR PURCHASES AND SALES
SECTION 1. Purchase Rate. – The purchase rate from

a BPPF shall not exceed the “avoided cost” of NAPOCOR and/or
the concerned electric utility, as determined thru the conduct of
competitive procurement schemes meeting the EIAB’s criteria for
BPPF solicitation or using the standard methodology adopted by
the EIAB, pursuant to Section 4, Article VII, Part I of these Rules
and Regulations.
SECTION 2. Rates for Sales. – NAPOCOR shall sell

maintenance power and/o back-up power during unscheduled
outages, as available, to BPPFs or to electric utilities contracting
power supply with qualified BPPFs, at rates approved by the
ERB. Back-up power for capacity unserved by BPPFs due to their
unscheduled outages shall be provided by NAPOCOR’s reserve units.
Penalty due to the inability of the BPPF to provide contracted power
during its unscheduled outage shall be stipulated in the contract
between the owner of the BPPF and NAPOCOR or the concerned
electric utility.
SECTION 3. Adjustments in Financial Accounting. –

NAPOCOR and the concerned electric utilities shall accordingly
2381
adjust its financial accounting systems and procedures resulting

from purchases of electricity from a BPPF. The rate of return on
rate base levels shall then be determined after all adjustments have
been made and set in place.
ARTICLE V
OPEERATING PROCEDURES AND ENVIRONMENTAL

CONCERNS
SECTION 1. Ownership. – Electric utilities shall be allowed to

construct, operate and maintain existing or new generating facilities
for their self-generation subject to financial limitations provided in
Section 4 below. Majority interest by an electric utility on the equity
of a PSGF shall be considered as ownership by an electric utility,
and shall thus be subject to electric utility regulations concerning
rates, financial limitations, taxes and other laws applicable to their
operations as electric utilities.
SECTION 2. Financial Limitation on Electric Utilities. – An

electric utility shall be allowed to own and operate new generation
facilities meeting the qualifications set for in this Article, provided
that the electric utility’s ratio of long-term debt to equity is maintain
at or below 1.5.
The above financial limitations on electric utilities shall be

waived by the EIAB for purposes of accrediting existing generation
facilities of electric utilities and for already accredited PSGFs or the
internal use of electric utilities as of the effectivity of these Rules
and Regulations.
SECTION 3. Facility Classification. – Facility classification

allowed under Section 3, Article III, Part I shall apply to PSGFs
seeking accreditation under this Part of the Rules and Regulations.
SECTION 4. Size of Generating Units. – The limitation on

maximum size of generating units as stipulated in Section 4 of
Article II, Part I of these Rules and Regulations shall be encouraged
in order to facilitate possible NAPOCOR service to these generating
plants during forced outages or maintenance periods.
2382
ARTICLE II
PROCEDURES FOR APPLYING FOR ACCREDITATION AS A

PRIVATE SECTOR GENERATION FACILITY
SECTION 1. Contents of Application. – In addition to the

requirements of Section 1, Article IV, Part I, an electric utility
seeking accreditation for a facility which qualifies under the
preceding Article shall submit to the EIAB a copy of its long-term
power purchase agreement with NAPOCOR for any incremental,
maintenance, or back-up power requirements. Adjustments in
the long-term power purchase agreement between NAPOCOR and
the concerned electric utility shall be considered to the extent that
NAPOCOR may still adjust its Power Development Program .
SECTION 2. Accreditation. – An electric utility’s generating

facility which meets the criteria for accreditation set forth in the
preceding Article, and the conditions of Section 1 of this Article is a
qualified PSGF.
Pursuant to the provisions of Section 4, Article IV, Part I the

EIAB may issue a provisional accreditation to a PSGF which meets
the criteria for accreditation set forth in the preceding Article, to give
the concerned electric utility a reasonable period of time to either
finalize a long-term power purchase agreement with NAPOCOR,
or issue a Board Resolution releasing NAPOCOR from any further
obligation to serve the power requirements of the concerned electric
utility.
SECTION 3. Period of Processing. – Provided all requirements

shall have been complied with, the EIAB shall take action to approve
or deny any application for accreditation within two (2) months from
the date of the application, unless the EIAB shall have required
the submission of additional information, or postponement of final
action on an application or for other reasonable grounds. Any order
postponing final action on an application shall state specifically
the grounds for postponement, and the date on which a final ruling
shall be issued.
SECTION 4. Non-transferability of Accreditation. –

Accreditations issued by the EIAB to electric utilities owning and
2383
operating qualified PSGFs shall not be transferable or assignable

except to an electric utility subsidiary determined to be technically
and financially-qualified by the EIAB. For purposes of this Section,
an electric utility subsidiary shall mean any company wherein the
concerned electric utility holds a majority equity interest.
SECTION 5. Assumption on Interconnection. – It shall be

assumed that electric utilities owning generating units for their
self-generation are already interconnected with the NAPOCOR
grid. Any possible interchange of electricity to and from NAPOCOR
shall be coursed through said interconnection facilities.
Should a qualified electric utility-owned PSGF, however,

require the transmission of any amount of power generated to the
owner-electricity utility, NAPOCOR and/or the host utility shall be
obligated to interconnect such qualified facilities and provide the
required wheeling services, pursuant to the provisions of Section 2,
Article VI, Part I.
ARTICLE III
NAPOCOR’S RELATIONSHIP WITH ELECTRIC UTILITIES

OWNING FACILITIES FOR SELF-GENERATION
SECTION 1. Provision on Reserve Capacity. – NAPOCOR

maintain a reserve capacity in the NAPOCOR grid system
considering all generating facilities existing and operating therein.
A reasonable annual reserve capacity carrying fee, as determined by
NAPOCOR and approved by the ERB, shall be paid by all generating
electric utilities requiring maintenance and/or back-up power from
NAPOCOR. Such payment shall make NAPOCOR obligated to
provide maintenance and back-up power requirements of affected
electric utilities on an “as-available” basis.
SECTION 2. Provision of Incremental PSG Power. –

NAPOCOR shall supply incremental PSG power to the electric
utility owning facilities for self-generation to the extent provided in
a long-term contract for this purpose. The selling rate of NAPOCOR
for incremental PSG power shall be at rates approved by the ERB.
2384
SECTION 3. Provision for System Emergencies. – NAPOCOR

and electric utilities with self-generation may mutually agree on the
provision of power during system emergencies in their respective
systems to the extent possible and under terms to be agreed upon
by both parties.
SECTION 4. Dispatchability. – Electric utilities with self-

generation shall conform with policies pertaining to the Dispatch
Management Systems (DMS) of NAPOCOR.
SECTION 5. Production Cost Higher than NAPOCOR’s. –

At a time when production cost from the generating units solely
for internal use of an electric utility is higher than buying from
NAPOCOR, and the electric utility decides to get power from
NAPOCOR to replace its own generation, NAPOCOR shall sell to
said electric utility provided that: NAPOCOR’s unit production cost
would remain the same with the added load; NAPOCOR’S system
operations would not hampered; NAPOCOR’s service to other
customers would not be unduly affected; and NAPOCOR would not
be pressured to add new capacities to meet the new load. NAPOCOR
shall not be obligated to purchase the generating facilities of the
electric utility as such action may be detrimental to the interest of
NAPOCOR’s regular customers.
SECTION 6. Excess Production of PSGF. – In instances when

the generating units of the electric utilities are capable of producing
electricity in excess of their requirement, NAPOCOR shall not be
obligated to purchase such excess power.
In instances when NAPOCOR may opt to purchase power

from said electric utility, purchase rate shall not exceed the “avoided
cost” of NAPOCOR at the time of delivery.
SECTION 7. Change of Status. – An electric utility with

an accredited facility for self-generation may decide to sell excess
production on a regular basis to NAPOCOR or to another electric
utility. Terms and conditions of purchase by NAPOCOR shall be
consistent with the applicable provisions given n Parts I and III of
these Rules and Regulations and shall be stipulated in a Contract.
2385
SECTION 8. Periodic Reporting to the EIAB. – The electric

utility owning facility for self-generation shall regularly submit to
the DOE, thru the EIAB, operating and other information as may be
required by the DOE for monitoring and planning purposes.
SECTION 9. Formulation of Power Development Plans. –

Electric utilities owning and operating facilities for self-generation
shall submit to the DOE, for review and approval, their individual
or combines long-term power development plans which shall
contain an efficient portfolio of generation (including projected
power purchases from NAPOCOR and other qualified PSGFs) and
demand-side resources on or before 15 January 1996 and every year
thereafter.
PART V
OTHER PROVISIONS
SECTION 1. Implementation of the Rules and Regulations.

– The EIAB shall take all necessary and reasonable measures to
ensure that the provisions of these Rules and Regulations are made
effective.
SECTION 2. DOE Revision of the Rules and Regulations. –

The DOE shall prescribe and, from time to time thereafter, revise
such Rules as it determines necessary to encourage a private sector
participation in power production. Such Rules shall be prescribed
after consultation with the private sector and appropriate
government agencies.
SECTION 3. Publication. – These Rules and Regulations

shall take effect fifteen (15) days after the date of publication in one
(1) newspaper of general circulation.
(Sgd.) FRANCISCO L. VIRAY

Acting Secretary
Fort Bonifacio, Metro Manila, 2 January 1995.
2386
APPENDIX
APPENDIX
2387
2388
APPENDIX
APPENDIX: List of Law Amendments
LAW AMENDS AMENDED BY REPEALS REPEALED BY

ACT 484 ACT 1112
RA 150
RA 4159
ACT 667 sec. 10 ACT 1022
ACT 1022 ACT 667 sec. 10

ACT 1112 ACT 484 ACT 4182
RA 150
RA 4159
ACT 1779 ACT 2307
ACT 1975 RA 2401

ACT 2167 sec. 2 ACT 2446
articles 7-8
ACT 2307 ACT 1779 ACT 3108
AC T 2362 ACT 3108
ACT 2446 ACT 2167 sec. 2

articles 7-8
ACT 2474 ACT 2621
ACT 2475 ACT 2620
RA 3730
ACT 2620 ACT 2475
ACT 2621 ACT 2474
ACT 2644 ACT 2690
ACT 2647 ACT 2882

ACT 2690 ACT 2644
ACT 2694 ACT 3108
ACT 2711 sec. ACT 3248

1495
ACT 2770 RA 278
2389

ACT 2831 ACT 2883
ACT 2882 ACT 2647

ACT 2883 ACT 2831
ACT 2983 ACT 3035

ACT 3035 ACT 2983
ACT 3078 ACT 3458

ACT 3108 ACT 2307 CA 146
ACT 2362
ACT 2694
ACT 3108 secs. ACT 3316
1-3, 10, 13,
24(g), 30
ACT 3215 RA 255
ACT 3248 ACT 2711 sec.

1495
ACT 3316 ACT 3108 secs.
1Energy-3, 10,
13, 24(g), 30
ACT 3458 ACT 3078
ACT 3494 CA 258
ACT 3499 ACT 3551

RA 3234
ACT 3551 ACT 3499
ACT 3636 secs. CA 132

8, 9, 12
ACT 3644 ACT 4167
ACT 3645 ACT 3951

CA 291
RA 3912
ACT 3649 CA 218
ACT 3661 ACT 4106

ACT 3664 ACT 3991
2390
APPENDIX

ACT 3665 ACT 2983
ACT 3759 ACT 4135
ACT 3801 ACT 3891

ACT 3880 CA 488
RA 3178
ACT 3891 ACT 3801
ACT 3907 ACT 3986

ACT 3951 ACT 3645 CA 291
ACT 3986 ACT 3907

ACT 3991 ACT 3664
ACT 4106 ACT 3661

ACT 4135 ACT 3759
ACT 4167 ACT 3644

ACT 4182 ACT 1112
ACT 4243 CA 137
ACT 4265 sec. 1 RA 2996

CA 120 RA 2641
RA 3043
RA 4897
CA 120 sec. 1 RA 2058
CA 120 sec. 2 (k) CA 495

RA 358
RA 1397
CA 120 sec. 11 CA 344
CA 120 sec. 20 CA 454
(j) par. 9
CA 132 ACT 3636 secs.
8, 9, 12
CA 137 ACT 4243
2391

CA 137 secs. 28 RA 746
(a), 59, 61, 62,
64, 68, 73, 100
CA 137 secs. 24, RA 4388
33, 34, 37, 47,
61, 62, 68, 73,
76 par. (a), 81,
89, 91
CA 146 ACT 3108
CA 146 sec. 13 CA 454

RA 1270
CA 146 0secs. CA 454
14, 15, 20 (h)
CA 218 ACT 3649
CA 258 ACT 3494
CA 291 ACT 3645

ACT 3951
CA 344 CA 120 sec. 11
CA 454 CA 146 secs. 13, RA 1270 CA 120 sec.

14, 15, 20 (h) 20 (j) par.
9
CA 466 sec. 124 PD 1119
CA 487 CA 580
RA 3217
RA 3341
CA 488 ACT 3880
CA 495 CA 120
CA 580 CA 487 RA 3217
BP 33 PD 1688-A
PD 1865
BP 73 sec. 3 (a) EO 253 s. 1987
BP 73 secs. 10, BP 872

14
2392
APPENDIX

BP 872 BP 73 secs. 10,
14
BP 876 PD 401 par. 4
EO 13 s. 1992 EO 315 s. 1988
EO 23 s. 1992 EO 338 s. 1988

EO 55 s. 1986 EO 98 s. 1986
EO 60 s. 2011 EO 254 s. 1995
EO 72 s. 1986 National PD 551

Internal sec. 1, as
Revenue Code amended
sec. 227 PD 1445
sec. 15 (1)
RA 2889
sec. 1
EO 98 s. 1986 EO 55 s. 1986
EO 115 s. 1993 EO 478 s. ____ EO 160 s. 1994
EO 119 s. 2002 EO 460 s. 2005

EO 131 s. 1987 EO 131-A s.
1987
EO 131 s. 1987 EO 172 s.
par. 4 sec. 4, 1987
sec. 5 (c)
EO 131 s. 1987 EO 171 s. 1987
par. 4 sec. 4,
sec. 5 (c), sec.
5 (f)
EO 131-A s. EO 131 s. 1987
1987
EO 137 s. 1987 ; PD 1956 sec. 8
EO 160 s. 1994 EO 115 s. 1993
EO 162 s. 1994 EO 258 s.

1995
2393

EO 171 s. 1987 EO 131 s. 1987
par. 4 sec. 4,
sec. 5 (c), sec.
5 (f)
PD 334
EO 172 s. 1987 EO 131 s.
1987 par.
4 sec. 4,
sec. 5 (c)
EO 172 s. ____ RA 6173
sec. 3
EO 172 s. ____ RA 8479
sec. 5
EO 195 s. 1987 National
Internal
Revenue Code
par. (b) sec.
128
EO 215 s. 1987 PD 40
EO 232 s. 2000 EO 462 s. 1997

EO 253 s. 1987 BP 73 sec. 3 (a)
EO 254 s. 1995 EO 60 s. 2011
EO 254 s. 2003 EO 254-A s.

2004
EO 254-A s. EO 254 s. 2003 EO 405 s. 2005
2004
EO 258 s. 1995 EO 162 s.
1994
EO 265 s. 1995 EO 315 s. 1988 EO 315 s.
1988 secs.
3, 4, 5
EO 280 s. 1987 LOI 1352 s.
1983
EO 315 s. 1988 EO 13 s. 1992
EO 265 s. 1995
EO 315 s. 1988 EO 2 65 s.
secs. 3, 4, 5 1995
2394
APPENDIX

EO 336 s. 2004 EO 440 s. 2005
EO 338 s. 1988 EO 23 s. 1992
EO 504 s. 1992
EO 405 s. 2005 EO 254-A s.
2004
EO 440 s. 2005 EO 336 s. 2004
EO 460 s. 2005 EO 119 s. 2002

EO 462 s. 1997 EO 232 s. 2000
EO 473 EO 556 s. 2006

EO 504 s. 1992 EO 338 s. 1988
EO 527 s. 2006 PD 1464 sec.

104
EO 556 s. 2006 EO 473
EO 580 s. 1980 LOI 888
EO 613 sec. 1 EO 640 s. 1981

EO 640 s. 1981 EO 613 sec. 1
EO 661-A s. EO 661 s. 2007

2007 sec. 1 par. 7
EO 691 s. 2008 PD 1464 sec.
104
EO 827 s. 1982 EO 846 s. 1982
EO 827 s. 1982 EO 1075 s. 1985
EO 846 s. 1982 EO 827 s. 1982
EO 860 s. 1983 EO 894 s. 1983

EO 890 s. 2010 PD 1464 sec.
104
EO 894 s. 1983 EO 860 s. 1983 EO 899 s.
1983
EO 899 s. 1983 EO 894 s.
1983
2395

EO 1075 s. 1985 EO 827 s. 1982
LOI 389 LOI 1086 s.
1980
LOI 835 s. 1979 LOI 980 s. 1980
LOI 838 s. 1979 RA 6173

LOI 1335 s. LOI 842 s.
1983 1979
LOI 888 EO 580 s.
1980
LOI 980 s. 1980 LOI 835 s. 1979 LOI 1058 s.
1980
LOI 1058 s. LOI 980 s. 1980
1980
LOI 1086 s. LOI 389
1980
LOI 1352 s. EO 280 s. 1987
1983
LOI 1431 s. RA 8479
1984
LOI 1441 s. RA 8479
1984
LOI 1460 s. RA 8479
1985
National Internal EO 195 s. 1987
Revenue Code
sec. 128 par. (b)
National RA 6965
Internal RA 8184
Revenue Code
sec. 145
National Internal RA 6767
Revenue Code
sec. 145 par. (b)
2396
APPENDIX

National RA 7729
Internal
Revenue Code
sec. 151(a)
National PD 1917
Internal
Revenue Code
secs. 153, 155,
156
National EO 72 s. 1986
Internal
Revenue Code
sec. 227
National PD 1672
Internal
Revenue Code
of 1977 sec.
153
National PD 1671
Internal
Revenue Code
of 1977 sec.
192 (3)
PD 8 PD 87
PD 35 RA 5499
PD 40 EO 215 s. 1987 RA 9136
PD 87 PD 8 PD 469
PD 781
PD 1354
PD 1857
PD 102 RA 6173
PD 234 RA 6361
PD 269 PD 1645 RA 6038
RA 10531
PD 269 Ch. II PD 1370
sec. 6
2397

PD 333 PD 343
PD 510
PD 334 EO 171 s. 1987
PD 405
PD 927
PD 1516
PD 343 PD 333
PD 380 RA 6395 PD 758
PD 1443
PD 389-A RA 6173
PD 395 RA 6395 PD 1443
PD 401 PD 401-A
PD 401 par. 4 BP 876
PD 401-A PD 401
PD 405 PD 334
PD 429-A RA 6173
PD 438 PD 343
PD 456 RA 6173
PD 463 PD 1385 PD 972
PD 469 PD 87
PD 510 PD 333
PD 551 PD 648
PD 852
PD 551 sec. 1, EO 72 s.
as amended 1986
PD 572 PD 334
PD 600 PD 979
PD 647 PD 1101
PD 648 PD 551
2398
APPENDIX

PD 758 PD 380 PD 1443
PD 781 PD 87
PD 782 PD 987
PD 800 RA 6173 sec.
7 (J)
PD 852 PD 551 PD 1029
PD 927 PD 334
PD 938 RA 6395
PD 972 PD 1174 PD 463

PD 979 PD 600
PD 987 PD 782
PD 1029 PD 852
PD 1101 PD 647
PD 1119 CA 466 sec. 124
PD 1128 RA 6173
PD 1158 PD 1956
PD 1174 PD 972
PD 1206 PD 1601
PD 1206 sec. 9 PD 1700

PD 1833
PD 1354 PD 87
PD 1360 RA 6395 PD 1443
PD 1370 PD 269 Ch. II
sec. 6
PD 1385 PD 463
PD 1442 sec. 1 IRR of RA
9513
2399

PD 1443 RA 6395 sec.
5 (b)
PD 380
PD 395
PD 758
PD 1360
PD 1445 sec. 15 EO 72 s.
(1) 1986
PD 1464 sec. EO 527 s. 2006
104 EO 691 s. 2008
EO 890 s. 2010
PD 1484 RA 5207
PD 1515 PD 1749
PD 1516 PD 334
PD 1601 PD 1206
PD 1633 RA 6173
PD 1645 PD 269
PD 1671 National
Internal
Revenue Code
of 1977 sec.
192 (3)
PD 1672 National
Internal
Revenue Code
of 1 977 sec.
153
PD 1688-A BP 33
PD 1700 PD 1206 sec. 9
PD 1749 PD 1515
PD 1833 PD 1206
PD 1857 PD 87
PD 1865 BP 33
PD 1889 RA 8479
2400
APPENDIX

PD 1917 National
Internal
Revenue Code
secs. 153, 155,
156
PD 1956 PD 1158 RA 8479
PD 1956 sec. 8 EO 137 s. 1987

RA 7639
RA 150 ACT 484 RA 4159
ACT 1112
RA 255 ACT 3215
RA 278 ACT 2770

RA 357 (Title) RA 813
RA 357 secs. 1-4
RA 357 secs. RA 2055
1, 5
RA 358 CA 120 sec. 2 RA 1397
(k)
RA 387 art. 22 RA 4889
RA 387 art. 49 RA 4304
RA 387 par. (i) RA 3098
art. 2
RA 387 articles:
16, 27, 43, 46,
48, 53, 57, 59,
73, 91, 104,
112
RA 407 RA 5912
RA 746 CA 137 secs. 28

(a), 59, 61, 62,
64, 68, 73, 100
RA 769 RA 3485
RA 789 RA 2272
RA 813 RA 357 (Title)
RA 357 secs. 1-4
2401

RA 934 RA 3262
RA 1270 CA 146 sec. 13
CA 454
RA 1225 RA 4070
RA 1356 RA 3216
RA 1397 CA 120 sec. 2
(k)
RA 358
RA 1606 RA 2067
RA 1610 RA 4599
RA 1840 RA 4506
RA 4553
RA 5785
RA 2055 RA 357 secs.
1, 5
RA 2058 CA 120 sec. 1
RA 2067 RA 3589 RA 1606

RA 2067 secs. RA 3589
16, 23-25, 28,
32-33
RA 2272 RA 789
RA 2332 RA 2393
RA 2339 RA 2995
RA 4052
RA 2341 RA 4079
RA 9381
RA 2384 RA 3110
RA 2393 RA 2332
RA 2401 ACT 1975

RA 2641 CA 120
RA 2717 RA 6038
2402
APPENDIX

RA 2995 RA 3829
RA 4052
RA 2996 ACT 4265 sec. 1
RA 3003 RA 3941
RA 3014 RA 3829
RA 3043 CA 120
RA 3098 RA 387 par. (i)
art. 2
RA 387 articles:
16, 27, 43, 46,
48, 53, 57, 59,
73, 91, 104,
112
RA 3098 sec. 18 RA 4442
RA 3110 RA 2384
RA 3178 ACT 3880

RA 3207 RA 3660
RA 9967
RA 3216 RA 1356
RA 3217 CA 487
CA 580
RA 3234 ACT 3499
RA 3247 RA 3570
RA 9284
RA 3247 secs. RA 6020
1, 3
RA 3262 RA 934
RA 3341 CA 487
RA 3485 RA 769
RA 3570 RA 3247 RA 6020
RA 9284
2403

RA 3589 RA 2067
RA 2067 secs.
16, 23-25, 28,
32-33
RA 3660 RA 3207
RA 3702 RA 5964
RA 3730 ACT 2475
RA 3738 RA 4616
RA 3829 RA 2995
RA 3014
RA 3912 ACT 3645
RA 3941 RA 3003
RA 4012 RA 4504
RA 5246
RA 4025 RA 4810
RA 4028 RA 5862
RA 4052 RA 2339
RA 2995
RA 4070 RA 1225
RA 4079 RA 2341 RA 9381
RA 4159 ACT 484
ACT 1112
RA 150
RA 4304 RA 387 art.
49
RA 4388 CA 137 secs. 24,
33, 34, 37, 47,
61, 62, 68, 73,
76 par. (a), 81,
89, 91
RA 4442 RA 3098 sec. 18
RA 4504 RA 4012
2404
APPENDIX

RA 4506 RA 1840 RA 4553
RA 5785
RA 4553 RA 1840 RA 5785
RA 4506
RA 4599 RA 1610
RA 4616 RA 3738
RA 4619 RA 5855
RA 4810 RA 4025
RA 4889 RA 387 art. 22
RA 4897 CA 120
RA 5106 RA 5857
RA 5207 PD 1484
RA 5246 RA 4012
RA 5499 PD 35
RA 5785 RA 1840
RA 4506
RA 4553
RA 5855 RA 4619
RA 5857 RA 5106
RA 5862 RA 4028
RA 5912 RA 407
RA 5964 RA 3702
RA 6020 RA 3247 secs. RA 9284

1, 3
RA 3570
RA 6038 RA 2717 PD 269
2405

RA 6173 LOI 838 s. 1979 RA 8479
PD 102
PD 389-A
PD 429-A
PD 456
PD 1128
PD 1633
RA 6173 sec. PD 800
7 (J)
RA 6173 sec. 8 EO 172 sec. 3
RA 8180
RA 6361 PD 234
RA 6395 PD 380
PD 395
PD 758
PD 938
PD 1360
PD 1443
RA 6395 sec. 6 RA 9136
RA 6767 National
Internal
Revenue Code
sec. 145 par.
(b)
RA 6957 secs. RA 7718
1-2
RA 6965 National
Internal
Revenue Code
sec. 145
RA 7156 sec. 10 IRR of RA
(1) 9513
RA 7227 sec. RA 9136
5 (f)
RA 7581 RA 10623
RA 7638 sec. 13 RA 9136
2406
APPENDIX

RA 7639 PD 1956
RA 7718 RA 6957 secs.
1-2
RA 7729 National
Internal
Revenue Code
sec. 151(a)
RA 7916 sec. RA 9136
11 (c)
RA 8180 EO 172 sec. 3 RA 6173
RA 6173 sec. 8 EO 172
sec. 5
LOI 1431 s.
1984
LOI 1441 s.
1984
LOI 1460 s.
1985
PD 1880
PD 1956
RA 8184 National
Internal
Revenue Code
sec. 145
RA 8479 EO 172
sec. 5
LOI 1431 s.
1984
LOI 1441 s.
1984
LOI 1460 s.
1985
PD 1889
PD 1956
RA 6173
2407

RA 9136 RA 10150 PD 40
RA 6395
sec. 6
RA 7227
sec. 5 (f)
RA 7638
sec. 13
RA 7916
sec. 11 (c)
RA 9136 sec. 30 RA 10531
RA 9284 RA 3247
RA 3570
RA 6020
RA 9381 RA 2341
RA 4079
RA 9513 (IRR) PD 1442
sec. 1
RA 7156
sec. 10 (1)
RA 9520 art. RA 10531
132 (3)
RA 9967 RA 3207
RA 10150 RA 9136
RA 10531 PD 269 RA 9136

sec. 30
RA 9520
art. 132
(3)
RA 10623 RA 7581
Note: National Internal Revenue Code = CA 466
2408
INDEX
INDEX
2409
2410
INDEX
INDEX
A Amador Dayola and R. Mulet

(Partners)
AMRECO SEE Association Licenses RA 1975
of Mindanao Rural Electric Ambrosio Andres
Cooperatives Licenses ACT 3755
A. Lumanlan & Sons, Inc., Anastacia Alaras
Licenses RA 4043 Licenses RA 3238
A. S. Diaz Electric Service Andres Caballero
A. Villarama & Sons, Incorporated Angat Watershed Reservation
Licenses RA 4538 Management EO 162 s.
Adolfo A Caubang 1994 ; EO 258 s. 1995
Licenses RA 1354 Angel R. Cabatingan
Adrian Campos Licenses RA 3192
Licenses ACT 3775 Angeles Electric Corporation
Agreements SEE Contracts Licenses RA 2341
Alcogas LOI 863 s. 1979 ; LOI Amendments
983 s. 1980 ; LOI 1153 s. 1981 RA 4079;
Prices LOI 1154 s. 1981 RA 9381
Alcohol LOI 983 s. 1980 Angeles L. Villareal
Taxation LOI 1051 s. Licenses RA 467
1980 ; PD 1089 Anti-electricity and Electric
Alcohol Commission Transmission Lines/Materials
Creation EO 580 s. 1980 Pilferage Act of 1994
Powers and duties RA 7832
EO 580 s. 1980 Anti-Pilferage of Electricity and
Alcohol industry LOI 1153 s. Theft of Electric Transmission
1981 Lines/Materials Act of 1994
Prices LOI 1154 s. 1981 Implementing rules
Alejandro Rasalan IRR of RA 7832
Licenses ACT 3970 Antonia L. Alisangco
Alfredo Angeles Licenses RA 4028
Licenses RA 5692 Amendments
Alfredo L. Noel RA 5862
Licenses RA 1017 Antonio H. Viterbo, Jr.
Alfredo Pardo De Tavera Licenses RA 4535
Licenses ACT 2654 Antonio V. Garces
Alger Electric, Inc. Licenses ACT 3658
Licenses RA 3826 Aquilino Lucero
Amado Arsinas Licenses ACT 3662
Licenses RA 1358 Arayat Electric Plant
Licenses RA 4141
2411
Argao Electric, Ice and Water Baclayon Electric Light and Power
Company Company, Incorporated
Licenses RA 627 Licenses ACT 4265
Arsenio R. Frial Amendments
Licenses RA 467 RA 2996
Artemio Lejano Bacnotan Development Corporation
Licenses ACT 3505 Licenses RA 5862
Asean Council of Petroleum Bacon, Sorsogon Geothermal
Conference and Exhibition 1981 Reservation EO 837 s. 1982
(ASCOPE ’81) LOI 1104 s. Bagatayam Electric Co.
1981 Licenses RA 458
Asphalts EO 672 s. 1981 Baguio Electric Light Plant
Association of Mindanao Rural Amendments ACT 2179
Electric Cooperatives Balance of Payments LOI 1329 s.
(AMRECO) EO 81 s. 2012 1983 ; LOI 1334 s. 1983
Association of South East Asian Balanga Power Plant Co., Inc.
Nations (ASEAN) Free Trade Licenses ACT 3490 ;
Area-Common Effective 4639
Preferential Tariff (AFTA-CEPT) Baliuag Electric Light and Power
EO 268 s. 2004 ; EO 316 s. 2004 Company
Atanacio Romiro Licenses RA 2335
Licenses RA 3251 Bambang Electric Company
Atomic Energy Regulatory and Licenses RA 3220
Liability Act of 1968 RA 5207 Banaag Electric
Amendments PD 1484 Licenses RA 4406
Atomic Energy Research Center Bantayan Electric Service Company,
Creation RA 2067 Incorporated
Atomic Energy Research Fund Licenses ACT 3492
RA 3589 Barauen Electric and Ice Plant
Augusto S. Gonzalez Corporation
Aurelia S. De Intengan Bartolome C. Ligot
Licenses CA 663 Licenses RA 5247
Automobile Service Station Bartolome J. Venus
LOI 980 s. 1980 Licenses ACT 3791
Basilio R. Tangco
B Licenses ACT 4262 ;
ACT 4266
BEU SEE Energy Utilization, Bataan Nuclear Power Plant
Bureau of LOI 876 s. 1979 ; LOI 951 s.
BPPFs SEE Block Power 1979 ; LOI 957 s. 1979 ; LOI
Production Facilities 1065 s. 1980
B. A. Green Presidential Committee on
Licenses ACT 2847 the Bataan Nuclear
Bacarra Electric Power Company Power Plant EO 265
Licenses ACT 4024 s. 1995
2412
INDEX
Batasang Pambansa Bonded warehouses LOI 563 s.

Gasoline Service Station 1977
LOI 1058 s. 1980 Buguey Electric Company Inc.
BECO II Licenses RA 3681
Power services Bulan Electric and Ice Plant, Inc.
Transferred to Licenses RA 3184
Manila Electric Butuan Sawmill, Incorporated
Company Licenses ACT 3800 ;
(MERALCO) RA 497 ; RA 1849
LOI 1510 s.
1986 C
Benguet Development Company, Inc.
Licenses RA 1875 CDC SEE Clark Development
Benjamin Bleibel Corporation
Licenses ACT 2767 CEPT SEE Common Effective
Benjamin Cuaresma Preferential Tariff
Licenses RA 4022 CPEF SEE Consumer Price
Benjamin P. Lazaro Equalization Fund
Licenses RA 4527 Cabatuan Community Cooperative
Bernardita Domingo Service
Licenses RA 3215 Licenses RA3979
Bernardo Gimenez Silverio Cabatuan Electric Company
Bicol Electric Company, Inc. Cabinet Committee on the Bataan
Licenses Nuclear Plant
Amendments Renamed EO 315 s. 1988
RA 934 ; RA Cabugao Farmers’ Cooperative
3262 RA 5359 Marketing Association, Inc.
Bioethanol fuel EO 449 s. 2000 (FACOMA)
Biofuels RA 9367 IRR of Licenses RA 2962
RA 9367 Cacho & Hidalgo
Biofuels Act of 2006 RA 9367 Licenses ACT 3776
Implementing rules Cacho and Hidalgo Copartnership
IRR of RA 9367 Licenses RA 255
Block Power Production Facilities Cagayan Electric Power and Light
(BPPFs) IRR of EO 215 s. Co., Inc.
1987 Licenses RA 3247
Bohol Electric Light Company Amendments
Creation ACT 2831 RA 3570;
Amendments RA 6020;
ACT 2883 RA 9284
Licenses ACT 2831 ; Calbayog Electric Powers, Inc.
ACT 2883 Licenses RA 3962
Bolbok Electric and Ice Plant Calivo Electric Light and Power
Corporation Company
2413
Caltex (Philippines), Inc. LOI 277 Charles M. Swift

s. 1975 Licenses ACT 1446
Licenses LOI 268 s. 1975 Amendments
Camago-Malampaya Natural Gas RA 4159
Reservoir EO 254 s. 2003 Ciriaco Maglaya
; EO 254-A s. 2004 ; EO 405 s. Licenses ACT 3968
2005 City of Baguio
Camago-Malampaya Reservoir Licenses ACT 1968 ;
EO 473 s. 2005 ; ACT 2006
EO 556 s. 2006 ; EO 683 s. 2007 City of Manila
Camiguin Electric Company, Inc. Licenses ACT 484 ;
Licenses RA 4205 ACT 2039
Canuto Damaso Clark Development Corporation
Licenses ACT 3512 (CDC) EO 666 s. 2007
Canuto Octavio Borromeo Clementa Fernandez
Carcar Electric and Ice Plant Co., Cleomenes V. Portugaleza, Jr.
Inc. Licenses RA 469
Licenses RA 444 Climate Change, Council of
Carmen Electric Service Company EO 728 s. 2008
Licenses RA 5265 Coal Phil. Bill of 1902 ; LOI 339
Casimiro E. Sison, Sr. s. 1975 ; LOI 1091 s. 1980 ; LOI
Licenses RA 4458 1103 s. 1981 ; LOI 1226 s. 1982;
Casimiro S. Sison, Jr. PD 1174
Licenses RA 4459 Prospecting IRR of PD
Catmon Electric Company 972 ; LOI 1079 s. 1980 ;
Licenses RA 1982 PD 972 ; PD 1174
Cavite Electricity Distributing Taxation RA 7729
Authority Coal Development Act of 1976
Powers and duties PD 972
RA 2046 Amendments PD 1174
Cebu Coal Thermal Power Plant Implementing rules
LOI 1512 s. 1986 IRR of PD 972
Cecilio Arcinas Coal Development Program
Licenses RA 4000 PD 972
Cecilio Castillo Coal lands SEE Coal
Licenses RA 1349 Coal mines and mining Phil. Bill
Celia M. Mapa Vda. De Feria of 1902
Licenses RA 5845 Equipment and supplies
Cenon Buencamino EO 354 s. 1996
Licenses RA 6355 Coal resources LOI 339 s. 1975
Cesar Altarejos Coco diesel programs LOI 1272 s.
Licenses RA 1359 1982 ; LOI 1332 s. 1983
Coconut industry LOI 1272 s.
Cesar Gonzaga 1982 ; LOI 1361 s. 1983
Licenses RA 3199
2414
INDEX
Coconut oil EO 827 s. 1982 ; Consumer Price Equalization Fund

EO 1075 s. 1985 ; LOI 1272 s. (CPEF) EO 881 s. 1983 ;
1982 ; LOI 1173 s. 1981; LOI EO 894 s. 1983 ; EO 899 s. 1983
1332 s. 1983 ; LOI 1271 s. 1982 ; LOI 1335 s.
Prices LOI 1173 s. 1981 1983
Taxation EO 846 s. 1982 Cooperative Development Authority
Coconut Oil Milling Industry IRR of RA 10531
Rationalization Corazon Abalo Vda. De Hernandez
LOI 1361 s. 1983 Licenses RA 4535
Combinations in restraint trade Corporations, Taxation of
SEE Restraint of trade PD 1029
Commission to Conduct an Inquiry Cotabato Light and Power Company,
on the Safety to the Public of All Incorporated
Nuclear Plants in the Country Licenses CA 487 ;
EO 539 s. 1979 RA 10637
Committee on Power Conservation Amendments
and Demand Management CA 580 ;
Creation EO 123 s. 1993 RA 3217 ;
EO 123 s. 1993 Cristina A. Hernandez
Common Effective Preferential Tariff Licenses RA 4535
(CEPT) EO 316 s. 2004 Crude oil SEE Petroleum
Compañia De los Tranvias De Crude oil prices SEE Petroleum
Filipinas products—Prices
Amendments
ACT 1112 D
Company for Foreign Trade
“Industrial Export” of Romania DOE-DOJ Task Force SEE
LOI 358 s. 1975 Department of Energy (DOE)-
Compressed Natural Gas (CNG) Department of Justice (DOJ)
motor vehicles EO 396 s. Task Force
2004 DOI SEE Downstream oil industry
Concepcion-Clark Power Dagupan Electric Corporation
Transmission Project (CCPTP) Licenses RA 3221 ; RA
(230 KV Concepcion-Clark 4013 ; RA 4025
Power Transmission Project) Amendments
EO 666 s. 2007 RA 4810
Conchita A. Lualhati Dancar Electric Company
Construction and Development Amendments
Corporation of the Philippines RA 3110
(CDCP) EO 671 s. 1981 Datu Tangurac Caorong
Consuelo D. Borja Licenses RA 796
Licenses ACT 3810 Davao Light and Power Company,
Consuelo Napana Incorporated
2415
Dehydration facilities LOI 983 s. Liberalization IRR of

1980 RA 8180 ; IRR of RA
Demetrio Fernandez 8479
Licenses RA 756 Downstream Oil Industry
Demetrio P. Correa Deregulation Act of 1996
Deogracias Camon Implementing rules
Licenses ACT 3209; IRR of RA 8180
ACT 4027 Downstream Oil Industry
Department of Energy (DOE)- Deregulation Act of 1998
Department of Justice (DOJ) EO 890 s. 2010 ; IRR of RA 8479
Task Force IRR of RA 8180 ; RA 8479
Department of Energy Act of 1992 Implementing rules
RA 7638 IRR of RA 8479
Amendments RA 9136 Dumarao Pioneering Service
Functions RA 9136 Licenses RA 858
Diego Young Dumlao Enterprises Co., Inc.
Licenses RA 3226 Licenses RA 2333 ;
Diesel fuels LOI 848 s. 1979 ; RA 3628
LOI 1361 s. 1983 Duties SEE Tariff
Taxation EO 672 s. 1981 ; Duty-free importation EO 100 s.
EO 794 s. 1982 ; EO 827 2002 ; EO 115 s. 1993 ; EO 160 s.
s. 1982 ; EO 846 s. 1982 1994 ; EO 164 s. 2003 ; EO 268 s.
; PD 314 ; PD 392 ; 2004 ; EO 314 s. 2000 ; EO 316 s.
PD 436 ; PD 874 ; 2004 ; EO 336 s. 2004 ; EO 396 s.
RA 6965 2004 ; EO 890 s. 2010 ; EO 894 s.
Diesel oil SEE Diesel fuels 1983 ; EO 899 s. 1983 ; LOI 839
Diosdado Ebarle s. 1979 ; LOI 848 s. 1979
Licenses RA 764 Duty-free importation of Bioethanol
Domiciano B. De Jesus fuel EO 449 s. 2000
Licenses RA 258 ; Duty-free importation of Diesel fuels
RA 448 LOI 1135 s. 1980 ; PD 333 ;
Dominador S. Iñigo PD 343
Licenses RA 403 Duty-free importation of Gasoline
Domingo Caballero LOI 1068 s. 1980 ; PD 333 ;
Domingo Fortuna Duty-free importation of Kerosene
Licenses RA 1347 LOI 1068 s. 1980 ; PD 333 ;
Donato De Los Reyes PD 343
Licenses ACT 3807 Duty-free importation of Liquefied
Downstream oil industry (DOI) natural gas LOI 839 s. 1979
Deregulation EO 377 s. Duty-free importation of Liquefied
1996 ; EO 471 s. 1998 Petroleum Gas (LPG)
; IRR of RA 8180 ; IRR EO 881 s. 1983 ; LOI 839 s. 1979
of RA 8479 ; RA 8180 ; ; LOI 1135 s. 1980 ; PD 333 ;
RA 8479
2416
INDEX
PD 343 ; PD 510 ; PD 1609 ; Powers and duties IRR

PD 1610 of RA 10531 ; RA 6038 ;
Duty-free importation of machinery RA 10531
PD 529 Registration RA 10531
Duty-free importation of Naphtha Reorganization EO 119
EO 365 s. 1996 ; LOI 839 s. 1979 s. 2002
; LOI 1068 s. 1980 ; PD 343 Electric lines EO 215 s. 1987 ;
Duty-free importation of natural gas RA 9511
LOI 1068 s. 1980 Electric power EO 86 s. 1993 ;
Duty-free importation of Petroleum PD 693 ; RA 7648
as fuel LOI 837 s. 1979 ; Conservation LOI 329 s.
LOI 1135 s. 1980 1975 ; LOI 355 s. 1975
Duty-free importation of Petroleum Costs PD 551 ; PD 648
products EO 365 s. 1996 ; Electric power consumption
EO 440 s. 2005 ; EO 461 s. 1997 BP 36 ; EO 433 s. 1990 ;
; EO 478 s. 1991 ; EO 527 s. 2006 LOI 1018 s. 1980 ; PD 401-A
; EO 691 s. 2008 ; EO 890 s. 2010 Electric power costs SEE Electric
; LOI 1068 s. 1980 ; PD 333 ; utilities--Costs
PD 343 ; PD 510 Electric Power Crisis Act of 1993
RA 7648
E Electric power distribution PD 40
Electric power industries SEE
ECs SEE Electric cooperatives Electric utilities
EDB SEE Energy Development Electric power industry IRR of
Board RA 9136
EIAB SEE Energy Industry Electric Power Industry Reform
Administration Bureau Act of 2001 (EPIRA Law)
EPIRA Law SEE Electric Power EO 370 s. 2004 ; EO 460 s. 2005
Industry Reform Act of 2001 ;RA 9136
ERC SEE Energy Regulatory Amendments RA 10150
Commission Government policy
E. J. Guinoo Enterprises EO 119 s. 2002
Licenses RA 3245 Implementing rules
Eduardo A. Barretto IRR of RA 9136
Licenses ACT 2840 Repeals RA 10531
Eduardo Gutierrez Repide Electric power plants ACT 484 ;
Licenses ACT 2839 ACT 667 ; ACT 1112 ; ACT 1303
Eduardo Maruhom ; ACT 1446 ; ACT 1968 ; ACT
Licenses RA 6016 1995 ; ACT 2006 ; ACT 2039
Electric cooperatives (ECs) ; ACT 2167 ; ACT 2179 ; ACT
EO 460 s. 2005 ; IRR of RA 9136 2392 ; ACT 2393; ACT 2446 ;
; PD 269 ACT 2474 ; ACT 2475 ; ACT
Conversion IRR of 2620 ; ACT 2621 ; ACT 2644
RA 10531 ; ACT 2647 ; ACT 2654 ; ACT
Organization RA 6038 2690 ; ACT 2700 ; ACT 2701
; ACT 2767 ; ACT 2821 ; ACT
2417
2831 ; ACT 2839 ; ACT 2840 4136 ; ACT 4137 ; ACT 4167
; ACT 2841 ; ACT 2842 ; ACT ; ACT 4171 ; ACT 4172 ; ACT
2843 ; ACT 2844 ; ACT 2845 4182 ; ACT 4262 ; ACT 4263
; ACT 2847 ; ACT 2882 ; ACT ; ACT 4264 ; ACT 4265 ; ACT
2883 ; ACT 2981 ; ACT 2982 4266 ; CA 218 ; CA 258 ; CA 291
; ACT 2983 ; ACT 2986 ; ACT ; CA 486 ; CA 487 ; CA 488 ; CA
2987 ; ACT 3035 ; ACT 3078 580 ; CA 662 ; CA 663 ; CA 664
; ACT 3132 ; ACT 3209 ; ACT ; CA 667 ; RA 255 ; RA 256 ; RA
3419 ; ACT 3458 ; ACT 3486 258 ; RA 278 ; RA 316 ; RA 317
; ACT 3488 ; ACT 3489 ; ACT ; RA 398 ; RA 400 ; RA 403 ; RA
3490 ; ACT 3491 ; ACT 3492 405 ; RA 407 ; RA 420 ; RA 442
3499 ; ACT 3502 ; ACT 3503 449 ; RA 452 ; RA 458 ; RA 466
3507 ; ACT 3508 ; ACT 3509 476 ; RA 494 ; RA 497 ; RA 499
3512 ; ACT 3551 ; ACT 3641 625 ; RA 627 ; RA 651 ; RA 689
3644 ; ACT 3645 ; ACT 3646 785 ; RA 788 ; RA 789 ; RA 791
; ACT 3647 ; ACT 3648 ; ACT ; RA 795 ; RA 796 ; RA797 ; RA
3649 ; ACT 3650 ; ACT 3651 798 ; RA 811 ; RA 853 ; RA 858 ;
; ACT 3652 ; ACT 3653 ; ACT RA 888 ; RA 916 ; RA 934 ; RA
3654 ; ACT 3655 ; ACT 3656 935 ; RA 941 ; RA 971 ; RA 1016
; ACT 3657 ; ACT 3658 ; ACT ; RA 1017 ; RA 1112 ; RA 1114 ;
3659 ; ACT 3660 ; ACT 3661 RA 1115 ; RA 1347 ; RA 1348 ;
; ACT 3662 ; ACT 3663 ; ACT RA 1349 ; RA 1351 ; RA 1352 ;
3664 ; ACT 3665 ; ACT 3666 RA 1353 ; RA 1354 ; RA 1357 ;
3759 ; ACT 3760 ; ACT 3762 RA 1385 ; RA 1431 ; RA 1436 ;
3776 ; ACT 3778 ; ACT 3780 RA 1453 ; RA 1501 ; RA 1555 ;
3789 ; ACT 3791 ; ACT 3792 RA 1871 ; RA 1872 ; RA 1874 ;
3801 ; ACT 3807 ; ACT 3810 RA 1982 ; RA 1994 ; RA 2045 ;
3880 ; ACT 3891 ; ACT 3906 RA 2280 ; RA 2284 ; RA 2286 ;
3951 ; ACT 3966 ; ACT 3968 RA 2293 ; RA 2294 ; RA 2295 ;
3981 ; ACT 3985 ; ACT 3986 RA 2305 ; RA 2306 ; RA 2312 ;
3991 ; ACT 4020 ; ACT 4021 RA 2318 ; RA 2319 ; RA 2320 ;
4026 ; ACT 4027 ; ACT 4028 ; RA 2324 ; RA 2326 ; RA 2328 ;
ACT 4106 ; ACT 4135 ; ACT RA 2330 ; RA 2332 ; RA 2332 ;
2418
INDEX
RA 2335 ; RA 2337 ; RA 2339 ; 4143 ; RA 4158 ; RA 4159 ; RA

RA 2340 ; RA 2341 ; RA 2349 ; 4205 ; RA 4278 ; RA 4280 ; RA
RA 2383 ; RA 2384 ; RA 2401 ; 4305 ; RA 4406 ; RA 4409 ; RA
RA 2402 ; RA 2931 ; 2939 ; RA 4411 ; RA 4435 ; RA 4439 ; RA
2940 ; RA 2949 ; RA 2954 ; RA 4445 ; RA 4458 ; RA 4459 ; RA
2956 ; RA 2959 ; RA 2962 ; RA 4460 ; RA 4462 ; RA 4463 ; RA
2965 ; RA 2966 ; RA 2967 ; RA 4469 ; RA 4474 ; RA 4478 ; RA
2968 ; RA 2969 ; RA 2970 ; RA 4490 ; RA 4504 ; RA 4506 ; RA
2971 ; RA 2972 ; RA 2973 ; RA 4527 ; RA 4531 ; RA 4535 ; RA
2975 ; RA 2981 ; RA 2982 ; RA 4538 ; RA 4543 ; RA 4553 ; RA
2988 ; RA 2991 ; RA 2992 ; RA 4556 ; RA 4580 ; RA 4595 ; RA
2993 ; RA 2996 ; RA 3003 ; RA 4598 ; RA 4599 ; RA 4610 ; RA
3011 ; RA 3013 ; RA 3014 ; RA 4615 ; RA 4616 ; RA 4619 ; RA
3110 ; RA 3121 ; RA 3173 ; RA 4638 ; RA 4639 ; RA 4687 ; RA
3178 ; RA 3180 ; RA 3182 ; RA 4697 ; RA 4810 ; RA 4922 ; RA
3182 ; RA 3184 ; RA 3186 ; RA 4924 ; RA 5011 ; RA 5078 ; RA
3187 ; RA 3192 ; RA 3195 ; RA 5081 ; RA 5085 ; RA 5106 ; RA
3198 ; RA 3199 ; RA 3200 ; RA 5177 ; RA 5216 ; RA 5226 ; RA
3202 ; RA 3206 ; RA 3207 ; RA 5246 ; RA 5247 ; RA 5265 ; RA
3209 ; RA 3210 ; RA 3211 ; RA 5332 ; RA 5359 ; RA 5360 ; RA
3212 ; RA 3214 ; RA 3215 ; RA 5369 ; RA 5445 ; RA 5454 ; RA
3216 ; RA 3217 ; RA 3220 ; RA 5683 ; RA 5684 ; RA 5692 ; RA
3221 ; RA 3226 ; RA 3227 ; RA 5721 ; RA 5722 ; RA 5785 ; RA
3231 ; RA 3234 ; RA 3236 ; RA 5791 ; RA 5808 ; RA 5840 ; RA
3237 ; RA 3238 ; RA 3240 ; RA 5842 ; RA 5845 ; RA 5846 ; RA
3241 ; RA 3242 ; RA 3243 ; RA 5855 ; RA 5857 ; RA 5862 ; RA
3245 ; RA 3247 ; RA 3249 ; RA 5912 ; RA 5934 ; RA 5964 ; RA
3251 ; RA 3261 ; RA 3262 ; RA 5992 ; RA 5993 ; RA 5994 ; RA
3337 ; RA 3333 ; RA 3341 ; RA 5996 ; RA 5998 ; RA 6005 ; RA
3351 ; RA 3402 ; RA 3444 ; RA 6006 ; RA 6013 ; RA 6016 ; RA
3485 ; RA 3486 ; RA 3570 ; RA 6019 ; RA 6020 ; RA 6120 ; RA
3583 ; RA 3628 ; RA 3660 ; RA 6252 ; RA 6355 ; RA 6420 ; RA
3681 ; RA 3702 ; RA 3730 ; RA 8997 ; RA 9209 ; RA 9284 ; RA
3738 ; RA 3752 ; RA 3799 ; RA 9381 ; RA 9511 ; RA 9967 ; RA
3803 ; RA 3804 ; RA 3806 ; RA 10373 ; RA 10637
3821 ; RA 3826 ; RA 3829 ; RA Electric power transmission
3843 ; RA 3907 ; RA 3910 ; RA EO 215 s. 1987
3912 ; RA 3941 ; RA 3958 ; RA Electric power transmission lines
3960 ; RA 3962 ; RA 3966 ; RA RA 7832
3979 ; RA 3999 ; RA 4000 ; RA Electric power transmission lines
4001 ; RA 4012 ; RA 4013 ; RA and materials IRR of
4022 ; RA 4025 ; RA 4028 ; RA RA 7832
4029 ; RA 4043 ; RA 4052 ; RA Electric street railroads
4058 ; RA 4062 ; RA 4064 ; RA ACT 484 ; ACT 667 ; ACT 1112 ;
4070 ; RA 4079 ; RA 4080 ; RA ACT 1446 ; ACT 4182
4104 ; RA 4135 ; RA 4141 ; RA
2419
Electric utilities CA 487 ; IRR of Oil Price Stabilization Fund

EO 215 s. 1987 ; LOI 38 s. 1972 RA 7639
; PD 40 ; PD 401 ; PD 401-A ; Powers and duties
RA 9136 EO 193 s. 1987
Amendments BP 876 Reorganization EO 193
Costs LOI 432 ; s. 1987
LOI 1149 s. 1981 ; Energy conservation BP 33 ;
PD 551 ; PD 648 BP 36 ; EO 253 s. 1987 ; EO 123
Licenses EO 72 s. 1986 ; s. 1993 ; EO 418 s. 1990 ; EO 433
EO 473 s. 1998 ; PD 551 s. 1990 ; EO 472 s. 1998 ; LOI
; PD 648 ; PD 852 328 s. 1975 ; LOI 329 s. 1975
Mortgages ACT 1022 ; LOI 339 s. 1975 ; LOI 355 s.
Electricity EO 433 s. 1990 ; 1975 ; LOI 360 s. 1976 ; LOI 825
LOI 1331 s. 1983 ; PD 551 ; s. 1979 ; LOI 869 s. 1979 ; LOI
PD 648 ; RA 9511 892 s. 1979 ; LOI 990 s. 1980 ;
Pilferage RA 7832 LOI 1009 s. 1980 ; LOI 1018 s.
Electrification IRR of RA 10531 1980 ; LOI 1152 s. 1981 ; PD 846
; PD 40 ; PD 1688-A
Electrification Administration Amendments BP 872
Creation RA 2717 Rules and regulations
Electrification Administration Act BP 73
RA 2717 Energy Conservation Inter-Agency
Eliseo Barbosa Committee EO 412 s. 1990 ;
Licenses RA 476 EO 418 s. 1990
Emergency Petroleum Operations Energy Conservation Movement
Board EO 422 s. 1990 PD 846
Composition EO 547 s. Energy Conservation Program
1979 Implementation EO 418
Creation EO 547 s. 1979 s. 1990
Emigdio Borja Energy consumption BP 36 ;
Licenses ACT 2986 BP 73 ; EO 418 s. 1990 ; EO 433
Emilio E. Teves s. 1990 ; LOI 825 s. 1979 ; LOI
Licenses RA 4029 869 s. 1979 ; LOI 1018 s. 1980 ;
Emilio Olores LOI 1152 s. 1981
Licenses RA 258 Energy Contingency Task Force
Energy Affairs, Office of EO 418 (ECTF) EO 731 s. 2008
s. 1990 ; EO 422 s. 1990 ; EO Energy Coordinating Council
433 s. 1990 ; IRR of RA 7156 ; Abolition RA 7638
RA 7156 Composition EO 338 s.
Abolition RA 7638 1988 ; EO 23 s. 1992 ;
Bureaus and offices EO 504 s. 1992
EO 193 s. 1987 Creation EO 338 s. 1988
Energy Conservation Inter- ; EO 504 s. 1992
Agency Committee Powers and duties
EO 412 s. 1990 EO 338 s. 1988
2420
INDEX
Energy Development Board (EDB) Powers and duties

LOI 421 s. 1976 ; PD 948 ; EO 172 s. 1987
PD 972 Energy Regulatory Commission
Abolition PD 1206 (ERC) IRR of RA 9136
Coal regions IRR of PD Energy resources SEE Power
972 resources
Creation PD 910 Energy supply base
Philippine National Creation LOI 781 s.
Petroleum Center 1978
PD 910 Energy tax BP 36 ; LOI 1009 s.
Powers and duties 1980
PD 910 ; PD 1068 Energy Turns the World
Special fund PD 1068 LOI 1202 s. 1982
Energy Development Bureau Energy Utilization Bureau
EO 131 s. 1987 EO 131 s. 1987
Energy Development, Bureau of Energy Utilization, Bureau of (BEU)
LOI 924 s. 1979 ; EO 192 s. 1987 EO 192 s. 1987 ; IRR of BP 33 as
Abolition EO 193 s. 1987 amended by PD 1865 ; LOI 837
Amendments PD 1573 s. 1979 ; PD 1610
Creation PD 1206 Amendments PD 1573
Powers and duties Creation PD 1206
PD 1206 Powers and duties
Energy Development Program EO 193 s. 1987 ;
LOI 715 s. 1978 PD 1206
Energy Industry Administration Energy, Board of EO 551 s. 1979
Bureau (EIAB) IRR of ; LOI 1335 s. 1983 ; LOI 1441
EO 215 s. 1987 s. 1984 ; LOI 1460 s. 1985 ;
Energy Operations Board EO 731 PD 1609 ; PD 1633 ; PD 1700
s. 2008 Amendments PD 1573 ;
Reorganization EO 422 PD 1833
s. 1990 Creation PD 1206
Energy Priorities Program Crude Cost Equalization
LOI 1329 s. 1983 Differential Fund
Alcohol LOI 933 s. 1979 LOI 975-A s. 1980
Biogas Equipment Powers and duties
LOI 933 s. 1979 PD 1206
Mini-Hydro Turbine Reorganization EO 172
Generators LOI 933 s. 1987
s. 1979 Energy, Bureau of LOI 924 s.
Solar Water Heaters 1979
LOI 933 s. 1979 Energy, Department of (DOE)
Energy Regulatory Board EO 473 EO 66 s. 2002 ; EO 169 s. 2003 ;
s. 1998 ; RA 8180 EO 377 s. 1996 ; EO 473 s. 2005 ;
Composition EO 172 s. EO 527 s. 2006 ; EO 683 s. 2007
1987 ; EO 691 s. 2008 ; IRR of EO 215
Creation EO 172 s. 1987 s. 1987 ; IRR of PD 1459 ; IRR
2421
of RA 8479 ; IRR of RA 9136 ; Energy, Ministry of EO 20 s.

RA 8479 ; RA 8180 ; RA 8479 1986 ; EO 539 s. 1979 ; EO 551 s.
Amendments PD 1573 ; 1979 ; EO 580 s. 1980 ; EO 1024
PD 1601 s. 1985 ; LOI 842 s. 1979 ; LOI
Creation PD 1206 ; 869 s. 1979 ; LOI 888 s. 1979
RA 7638 ; LOI 892 s. 1979 ; LOI 906 s.
Administrative 1979 ; LOI 907 s. 1979 ; LOI 969
Support s. 1979 ; LOI 975 s. 1980 ; LOI
Services 1003 s. 1980 ; LOI 1005 s. 1980
RA 7638 ; LOI 1036 s. 1980 ; LOI 1051 s.
Energy Industry 1980 ; LOI 1065 s. 1980 ; LOI
Administration 1068 s. 1980 ; LOI 1079 s. 1980
Bureau ; LOI 1091 s. 1980 ; LOI 1103 s.
RA 7638 1981 ; LOI 1104 s. 1981 ; LOI
Energy Planning 1121 s. 1981 ; LOI 1148 s. 1981
and Monitoring ; LOI 1149 s. 1981 ; LOI 1152 s.
Bureau 1981 ; LOI 1164 s. 1981 ; LOI
RA 7638 1173 s. 1981 ; LOI 1174 s. 1981 ;
Energy Resource PD 1515
Development Abolition EO 131 s. 1987
Bureau ; EO 131-A s. 1987
RA 7638 Amendments PD 1839
Energy Utilization Emergency Petroleum
Management Operations Board
Bureau EO 547 s. 1979
RA 7638 Oil Price Stabilization Fund
Operations Center EO 137 s. 1987
EO 655 s. 2007 Philippine Atomic Energy
Philippine Atomic Commission
Energy Commission Transferred to
PD 1206 EO 613 s. 1980
Power Sector Assets and Special fund LOI 951 s.
Liabilities Management 1979 ; LOI 1174 s. 1981
Corporation (PSALM Transferred to Ministry of
Corporation) EO 169 Environment, Energy
s. 2003 and Natural Resources
Powers and duties EO 131 s. 1987
IRR of RA 9367 ; Watershed reservations
PD 1206 ; RA 9136 PD 1749
Special Account General Engine fuel EO 827 s. 1982 ;
Fund 151 (SAGF-151) EO 846 s. 1982
EO 848 s. 2009 Engracio Orense
Energy, Environment and Natural Licenses ACT 2843
Resources Regional Office Enrique Navarro
Functions EO 131 s. Licenses RA 3960
1987
2422
INDEX
Environment and Natural Resources, Exploration Supply Base(s)

Department of (DENR) LOI 563 s. 1977
EO 258 s. 1995 ; EO 446 s. 1997 Export Processing Zone Authority
Angat Watershed Reservation (EPZA) (Administrator)
Management EO 162 EO 358 s. 1989
s. 1994 Export-Import Bank of Washington,
Inter-Agency Technical D.C. RA 813 ; RA 2055
Advisory Council
Creation RA 6969 F
Environment, Energy and Natural
Resources, Department of FCC SEE Fuel Compensating
Reorganization EO 192 Charge
s. 1987 FSDC SEE Farm Systems
Environment, Energy and Natural Development Corporation
Resources, Ministry of F. J. Ferguson SEE Estate of Floyd
EO 131 s. 1987 ; EO 131-A s. Eagle
1987 Facoma of Calinog
Licenses RA 1871
Environment Unit Facoma of Lambunao
Abolition EO 193 s. 1987 Licenses RA 1872
Escudero Electric Service Company Farm Systems Development
Licenses ACT 3648 Corporation (FSDC) EO 673
Amendments s. 1981
RA 2340 Fausto Guillen
Esperanza Lucerna Licenses ACT 3778
Licenses CA 486 Faustino Nuyda
Estate of Floyd Engle Licenses RA 916
Licenses ACT 3780 Federico Magdangal
Esteban De La Rama Licenses RA 3243
Licenses ACT 2983 Feliciana S. Bermudez
Amendments Licenses RA 1840
ACT 3035; Amendments
ACT 3665 RA 4553
Eusebio Diaz Cacitas Feliciano Yu
Amendments Felipe Pica
Eusebio G. Bernales, Sr. Felix M. Roxas
Evangeline A. Hernandez Felix Maronilla, Jr.
Evaristo Festejo Felix O. Hernandez
Evaristo P. Sanchez Fidel F. Reyes
2423
Fidel Fortich Fuelwood

Licenses ACT 3508 Conservation LOI 866 s.
Fiduciary Fund, Commission on 1979
Atomic Energy Research
Fund RA 3589 G
First Gas Holdings Corporation
Licenses RA 8997 Gabriel Centenera
Foreign trade regulation RA 613 Licenses RA 785
Form for Bills for the Granting Gabriel H. Viterbo
of Electric Light and Power Licenses RA 4535
Franchises ACT 3636 Gabriel T. Hernandez
Fortunato Balmoria Licenses ACT 3215
Fortune Development Corporation RA 255
Licenses RA 5998 Gapan Electric Corporation
Franchises SEE Licenses Licenses RA 3013
Francisca R. Justiniani Gapan Rural Electric Service
Licenses RA 4278 Cooperative, Inc.
Francisco Benedicto Licenses RA 6252
Licenses RA 1356 Garcia, Diapo and Co.
RA 3216 Gas LOI 839 s. 1979
Francisco Borromeo Gas industry CA 351 ; EO 66 s.
Licenses RA 5842 2002
Francisco Luansing Gasifier equipment EO 673 s.
Fuel Gasoline EO 446 s. 1997 ; EO 471
Prices RA 6124 ; RA s. 1998 ; LOI 847 s. 1979 ;
6361 PD 2001
Taxation PD 1956 Export control RA 613
Fuel Compensating Charge (FCC) Taxation PD 314 ;
RA 10376 PD 392 ; PD 874
Fuel Conservation and Efficiency in Gasoline Service Station
Road Transport, Committee on Batasang Pambansa
Composition EO 472 s. LOI 835 s. 1979 ; LOI
1998 980 s. 1980 ; LOI 1058
Creation EO 472 s. 1998 s. 1980
Powers and duties Gasoline tax SEE Gasoline—
EO 472 s. 1998 Taxation
Fuel consumption SEE Energy George H. Viterbo
consumption Licenses RA 4535
Fuel Cost Adjustment LOI 1148 Geothermal energy SEE
s. 1981 Geothermal resources
Fuel oil SEE Petroleum as fuel Geothermal Energy, Natural
Fuel subsidy SEE Subsidies Gas and Methane Gas Law
RA 5092
2424
INDEX
Geothermal engineering H
Albay EO 661 s. 2007
Laguna EO 661 s. 2007 Hadji Datu Abubakar Pen-Datun
Leyte EO 661 s. 2007 Licenses RA 3212
Negros Occidental Hawaii-Boholanos Agricultural and
EO 661-A s. 2007 Commercial Co., Ltd.
Negros Oriental EO 661 Licenses CA 662
s. 2007 Hector A. Torres
Sorsogon EO 661 s. 2007 Licenses ACT 4028
Geothermal exploration SEE Heirs of Dr. Guillermo B. De Vera
Geothermal resources Licenses RA 4478
Geothermal reservations EO 837 Heirs of Gabriel K. Hernandez
s. 1982 Licenses RA 4535
Bacon-Manito Geothermal Heirs of Milagros Hernandez Viterbo
Reservation EO 223 Licenses RA 4535
s. 1987 Hernandez H. Viterbo
Management EO 223 s. Licenses RA 4535
1987 Hernani J. Jimenez
Palinpinon Geothermal Licenses RA 1352
Reservation EO 223 Hidalgo Enterprises, Inc.
Tongonan Geothermal Honorio Rojas
Reservation EO 223 Licenses ACT 3489
s. 1987 Hydroelectric power plants
Geothermal resources LOI 531 s. RA 1610; RA 1875
1977 ; RA 5092 Human Settlements, Ministry of
Prospecting LOI 258-A s. National Electrification
1975 ; LOI 1226 s. 1982 Administration (NEA)
; PD 1442 ; RA 5092 LOI 1510 s. 1986
Geothermal Resources Exploration Hydraulic power plants ACT 4062 ;
and Development Act (sec. 1) CA 700
Repealed IRR of RA 9513 Hydroelectric equipment IRR of
; RA 9513 RA 7156 ; LOI 431 ; RA 7156
Geronimo Lasala Hydroelectric power plants
Licenses ACT 2986 ACT 4062 ; EO 687 s. 1981 ;
Graciano Banogon RA 2058 ; RA 7718
Licenses RA 2939 Hydropower projects RA 7718
Green Energy Option Program
Creation RA 9513 I
Guagua Electric Light Plant
Company, Incorporated IFO SEE Industrial Fuel Oil
Licenses RA 2981 IPAS Fund SEE Integrated
Guillermo Confesor Protected Areas Fund
Licenses RA 1440 Ice plant / cold storage RA 3110
Guiwan Electric Plant Co., Inc. ; RA 3198 ; RA 3199 ; RA 3220
Licenses ACT 3641
2425
; RA 3261 ; RA 3702 ; RA 3907 Indigenous energy sources

; RA 3960 ; RA 4000 ; RA 4064 ; Royalty EO 100 s. 2002
RA 4080 ; RA 4435 ; RA 5106 ; Industrial Fuel Oil (IFO) LOI 996
RA 5226 ; RA 5722 ; RA 5791 ; s. 1980
RA 5857 Industrial Technology Development
Ignacio Rafols Institute
Licenses ACT 3659 Creation EO 128 s. 1987
Ilagan Electric and Ice Plant, Functions EO 128 s.
Incorporated 1987
Licenses ACT 3494 Inter-Agency Committee
Amendments Creation LOI 888 s. 1979
CA 258 Inter-Agency Technical Advisory
Ilocos Norte Electric Company Council
Licenses RA 3583 Creation RA 6969
Ilocos Region Fuelwood Development Interconnected electronic utility
Program systems RA 9511
Municipal Implementing Internal Bank for Reconstruction
Unit LOI 866 s. and Development RA 357
1979 International Bank for
Program Executive Reconstruction and Development
Committee LOI 866 RA 813 ; RA 2055
s. 1979 Ipil Electric Light and Ice Plant, Inc.
Program Management Office Licenses RA 5226
LOI 866 s. 1979 Ireneo Lambatan
Program Technical Licenses RA 2292
Committee LOI 866 Isidora B. Pador
Provincial Coordinating
Committee LOI 866 J
s. 1979
Imelda Clarin Zarraga J. V. House
Import fees SEE Tariff Jaime C. Dacanay
Import quotas LOI 1086 s. 1980 RA 3261
Imus Electric Company, Inc. Jaro Liberty Electric Company
Amendments Jesus B. Arevalo
Inabanga Electric Service Company Jesus Sol
Incremental Cost Charge Jesus Vaño
RA 10376 Licenses ACT 4171
Independent Power Producers (IPPs) Jesusa Viuda de Arroyo
Power Generation Facilities Licenses CA 664
EO 27 s. 2011 Joaquin Bocanegra
Licenses RA 3198
2426
INDEX
Joaquin M. Joson Jose Jumamoy

Licenses ACT 3493 Licenses ACT 3507
Jolo Power Company, Incorporated Jose Maria Solinap
Jose A. Garcia Jose O. Martinez
Jose A. Hernandez Jose S. Magallanes
Jose A. Rigotti Jose S. Mercado
Jose A. Veloso Jose S. Recto
Jose Alonso Jose S. Valenciano
Jose Araneta Amendments
Jose B. Jaucian Jose Valencia Jr.
Jose Baga Amendments
Jose Borres Jose Vaño
Licenses RA 1385 Licenses ACT 3506 ;
Jose C. Trota ACT 3510
Licenses ACT 4263 Josefina Aranda
Jose Catolico Licenses RA 2975
Licenses RA 466 Juan A. Tabla
Jose De Borja Licenses RA 3200
Licenses ACT 3990 Juan G. Galinato
Jose De La Rosa Licenses RA 4280
Licenses ACT 3132 Juan Juarez
Jose De Leon Electric Light, San Licenses RA 789
Miguel, Bulacan Juan R. Alcasid
Licenses ACT 3502 Licenses RA 4506 ;
Jose De Leon Electric Plant RA 4553
Jose Dyogi RA 5785
Licenses RA 4445 Juan Siquian
Jose Fillones Licenses RA 3182
Licenses RA 467 Juan Suarez
Jose Fontanoza Repealed RA 2272
Licenses RA 4543 Julian M. Locsin Anson
Jose G. Zarraga Licenses ACT 2475
Licenses ACT 3643 Amendments
Jose Hernandez ACT 2620 ;
Licenses ACT 2842 RA 3730
2427
Juliano Infante Land Transportation Commission

Licenses ACT 3651 Powers and duties
Julita T. Grana Transferred
Licenses RA 2295 to Energy
Jural Electric, Inc Regulatory
Licenses RA 5785 Board
EO 172 s. 1987
Laoag Electric Light and Power
K
Company
Licenses ACT 3078
Kalibo Electric Co.
Amendments
Licenses RA 5996
ACT 3458
Kerosene EO 471 s. 1998
Laoang Electric Company
Prices EO 383 s. 1989
Licenses ACT 3642
Taxation EO 672 s. 1981
Leaded gasoline SEE Gasoline ;
; PD 392 ; PD 1672 ;
Petroleum products
PD 1917 ; PD 1956 ;
Lealda Electric Company,
RA 8184
Incorporated
Kiamba Light and Power Company,
Licenses RA 3730
Incorporated
Lemery Electric Power Compnay,
Licenses RA 935
Inc.
Kuwait National Petroleum
Licenses RA 795
Company LOI 996 s. 1980
Leon Arcinas
Licenses RA 2349
L Leon Belen
Licenses RA 3180
LUSTEVECO SEE Luzon Leon Borromeo
Stevedoring Corporation Licenses ACT 3644
La Castellana Electric Plant Amendments
La Electrica Leoncio Limpiado
La Union Electric Company, Inc. Leopoldo De La Cruz
Amendments Leopoldo Diones
RA 4070 Licenses RA 3211
Labason Electric Light Company Leopoldo T. Calderon
Labor, Department of Liability for nuclear damages
Wage Commission PD 56 PD 1484
Lanao Licenses
Maria Cristina Falls A. Lumanlan & Sons, Inc.,
Hydraulic RA 4043
power plant A. S. Diaz Electric Service
CA 700 RA 1453
2428
INDEX
A. Villarama & Sons, Antonio V. Garces

Incorporated ACT 3658
RA 4538 Aquilino Lucero
Adolfo A Caubang ACT 3662
RA 1354 Arayat Electric Plant
Adrian Campos RA 4141
ACT 3775 Argao Electric, Ice and
Alejandro Rasalan Water Company
ACT 3970 RA 627
Alfredo Angeles RA 5692 Arsenio R. Frial RA 467
Alfredo L. Noel Artemio Lejano
ACT 1017 ACT 3505
Alfredo Pardo De Tavera Atanacio Romiro RA 3251
ACT 2654 Augusto S. Gonzalez
Alger Electric, Inc. RA 2954
RA 3826 Aurelia S. De Intengan
Amado Arsinas CA 663
RA 1358 B. A. Green ACT 2847
Amador Dayola and R. Bacarra Electric
Mulet (Partners) Power Company
RA 1975 ACT 4024
Ambrosio Andres Baclayon Electric Light
ACT 3755 and Power Company,
Amendments EO 72 s. Incorporated
1986 ACT 4265
Anastacia Alaras Amendments
RA 3238 RA 2996
Andres Caballero Bacnotan Development
ACT 1016 Corporation
Angel R. Cabatingan RA 5862
RA 3192 Bagatayam Electric Co.
Angeles Electric RA 458
Corporation Baguio Electric Light Plant
RA 2341 Amendments
Amendments RA 2179
RA 4079; Balanga Power Plant Co.,
RA 9381 Inc. ACT 3490 ;
Angeles L. Villareal RA 4639
RA 467 Baliuag Electric Light
Antonia L. Alisangco and Power Company
RA 4028 RA 2335
Amendments Bambang Electric Company
RA 5862 RA 3220
Antonio H. Viterbo, Jr. Banaag Electric RA 4406
RA 4535
2429
Bantayan Electric Service Cabatuan Community

Company, Incorporated Cooperative Service
ACT 3492 RA 3979
Barauen Electric and Ice Cabatuan Electric Company
Plant Corporation RA 2296
RA 5791 Cabugao Farmers’
Bartolome C. Ligot Cooperative Marketing
RA 5247 Association, Inc.
Bartolome J. Venus RA 2962
ACT 3791 Cacho & Hidalgo
Basilio R. Tangco ACT 3776
ACT 4262 ; ACT 4266 Cacho and Hidalgo
Benguet Development Copartnership
Company, Inc. RA 255
RA 1875 Cagayan Electric Power
Benjamin Bleibel and Light Co., Inc.
ACT 2767 RA 3247 ;
Benjamin Cuaresma Amendments
RA 4022 RA 3570;
Benjamin P. Lazaro RA 6020 ;
RA 4527 RA 9284
Bernardita Domingo Calbayog Electric Powers,
RA 3215 Inc. RA 3962
Bernardo Gimenez Silverio Calivo Electric Light
RA 2988 and Power Company
Bicol Electric Company, Inc. ACT 4020
Amendments Camiguin Electric Company,
RA 934; Inc. RA 4205
RA 3262; Canuto Damaso
RA 5359 ACT 3512
Bohol Electric Light Canuto Octavio Borromeo
Company ACT 2831 ACT 2770
; ACT 2883 Carcar Electric and
Amendments Ice Plant Co.
ACT 2883 RA 444
Bolbok Electric and Ice Carmen Electric
Plant Corporation Service Company
RA 4435 RA 5265
Buguey Electric Company Casimiro E. Sison, Sr.
Inc. RA 3681 RA 4458
Bulan Electric and Ice Casimiro S. Sison, Jr.
Plant, Inc. RA 3184 RA 4459
Butuan Saw Mill, Catmon Electric Company
Incorporated ACT RA 1982
3800; RA 497 Cecilio Arcinas RA 4000
2430
INDEX
Celia M. Mapa Vda. De Davao Light and Power

Feria RA 5845 Company, Incorporated
Cenon Buencamino ACT 3760
RA 6355 Demetrio Fernandez
Cesar Gonzaga RA 3199 RA 756
Charles M. Swift Demetrio P. Correa
ACT 1446 RA 1440
Amendments Deogracias Camon
RA 4159 ACT 3209; ACT 4027
Ciriaco Maglaya Diego Young RA 3226
ACT 3968 Diosdado Ebarle RA 764
Cleomenes V. Portugaleza, Domiciano B. De Jesus
Jr. RA 469 RA 258 ; RA 448
Clementa Fernandez Dominador S. Iñigo
RA 2383 RA 403
Compañia De los Tranvias Domingo Caballero
De Filipinas RA 811
Amendments Donato De Los Reyes
ACT 1112 ACT 3807
Conchita A. Lualhati Dumarao Pioneering Service
RA 4080 RA 858
Consuelo D. Borja Dumlao Enterprises Co.,
ACT 3810 Inc. RA 3628
Consuelo Napana Dumlao Enterprises, Inc.
RA 508 RA 2333
Corazon Abalo Vda. De E. J. Guinoo Enterprises
Hernandez RA 4535 RA 3245
Cotabato Light and Power Eduardo A. Barretto
Company, Incorporated ACT 2840
CA 487 ; RA 10637 Eduardo Gutierrez Repide
Amendments ACT 2839
CA 580; Eduardo Maruhom
RA 3217 ; RA 6016
RA 3341 Electric power plants
Cristina A. Hernandez CA 120
RA 4535 Electric power systems
Dagupan Electric CA 120
Corporation RA 3221 ; Electric railroads
RA 4013 ; RA 4025 Mortgages
Amendments ACT 1022
RA 4810 Eliseo Barbosa RA 476
Dancar Electric Company Emigdio Borja ACT 2986
RA 3110 Emilio E. Teves
Datu Tangurac Caorong RA 4029
RA 796 Emilio Olores RA 258
2431
Engracio Orense ACT 2843 Felix Maronilla, Jr.

Enrique Navarro RA 256
RA 3960 Felix O. Hernandez
Escudero Electric Service RA 2293
Company ACT 3648 Fidel F. Reyes RA 4687
; RA 2340 Fidel Fortich ACT 3508
Esperanza Lucerna First Gas Holdings
CA 486 Corporation RA 8997
Estate of Floyd Engle Fortunato Balmoria
ACT 3780 RA 3210
Esteban De La Rama Fortune Development
ACT 2983 Corporation
Amendments RA 5998
ACT 3035; Francisca R. Justiniani
ACT 3665 RA 4278
Eusebio Diaz Cacitas Francisco Benedicto
ACT 2644 RA 1356
Amendments Amendments
ACT 2690 RA 3216
Eusebio G. Bernales, Sr. Francisco Borromeo
RA 5993 RA 5842
Evangeline A. Hernandez Gabriel Centenera
RA 4535 RA 785
Evaristo Festejo Gabriel H. Viterbo
ACT 2982 RA 4535
Evaristo P. Sanchez Gabriel T. Hernandez
ACT 3503 ACT 3215
Facoma of Calinog Amendments
RA 1871 RA 255
Facoma of Lambunao Gapan Electric Corporation
RA 1875 RA 3013
Fausto Guillen Gapan Rural Electric
ACT 3778 Service Cooperative, Inc.
Faustino Nuyda RA 916 RA 6252
Federico Magdangal Garcia, Diapo and Co.
RA 3243 RA 5994
Fees PD 852 George H. Viterbo
Feliciana S. Bermudez RA 4535
RA 1840 Geronimo Lasala
Amendments ACT 2986
RA 4553 ; Graciano Banogon
RA 5785 RA 2939
Feliciano Yu RA 5683 Guagua Electric Light Plant
Felipe Pica RA 797 Company, Incorporated
Felix M. Roxas ACT 2845 RA 2981
2432
INDEX
Guillermo Confesor J. V. House ACT 2700

RA 1440 Jaime C. Dacanay
Guiwan Electric Plant Co., RA 3261
Inc. ACT 3641 Jaro Liberty Electric
Hadji Datu Abubakar Pen- Company, Inc.
Datun RA 3212 RA 5332
Hawaii-Boholanos Jesus B. Arevalo RA 4924
Agricultural and Jesus Sol RA 5840
Commercial Co., Ltd. Jesus Vaño ACT 3510;
CA 662 ACT 4171
Hector A. Torres Jesusa Viuda de Arroyo
ACT 4028 CA 664
Heirs of Dr. Guillermo B. De Joaquin Bocanegra
Vera RA 4478 RA 3198
Heirs of Gabriel K. Joaquin M. Joson
Hernandez RA 4535 ACT 3493
Heirs of Milagros Hernandez Jolo Power Company,
Viterbo RA 4535 Incorporated
Hernandez H. Viterbo ACT 3770
RA 4535 Jose A. Garcia RA 3240
Hidalgo Enterprises, Inc. Jose A. Hernandez
RA 3806 ACT 4535
Honorio Rojas ACT 3489 Jose A. Rigotti ACT 3762
Ignacio Rafols ACT 3659 Jose A. Veloso ACT 3657
Ilagan Electric and Ice Jose Alonso ACT 3656
Plant, Incorporated Act Jose Araneta RA 2337
3494 Jose B. Jaucian RA 3910
Amendments Jose Baga RA 3214
CA 258 Jose Borres RA 1385
ILOCOS Norte Electric Jose C. Trota ACT 4263
Company RA 3583 Jose Catolico RA 466
Imelda Clarin Zarraga Jose De Borja ACT 3990
RA 2956 Jose De La Rosa ACT
Imus Electric Company, Inc. 3132
ACT 3801 Jose De Leon Electric Light,
Amendments San Miguel, Bulacan
ACT 3891 ACT 3502
Inabanga Electric Service Jose De Leon Electric Plant
Company RA 400 RA 3958
Ipil Electric Light and Ice Jose Dyogi RA 4445
Plant, Inc. RA 5226 Jose Fillones RA 467
Ireneo Lambatan Jose Fontanoza RA 4543
RA 2292 Jose G. Zarraga
Isidora B. Pador ACT 3643
RA 2294 Jose Hernandez
ACT 2842
2433
Jose Jumamoy Amendments

ACT 3507 RA 4070
Jose Maria Solinap Labason Electric Light
RA 449 Company RA 1555
Jose O. Martinez Laoag Electric Light and
RA 5078 Power Company
Jose S. Magallanes ACT 3078
RA 3402 Amendments
Jose S. Mercado ACT 3458
RA 4616 Laoang Electric Company
Jose S. Recto RA 3215 ACT 3642
Jose S. Valenciano Lealda Electric Company,
ACT 3664 Incorporated
Amendments RA 3730
ACT 3991 Lemery Electric Power
Jose Valencia Jr. Company, Inc.
RA 3178 RA 795
Jose Vaño ACT 3506 ; Leon Arcinas RA 2349
ACT 3510 Leon Belen RA 3180
Josefina Andrada Leon Borromeo ACT
RA 2975 3644
Juan A. Tabla RA 3200 Amendments
Juan G. Galinato ACT 4167
RA 4280 Leoncio Limpiado
Juan R. Alcasid RA 4506 RA 1439
; RA 4553 ; RA 5785 Leopoldo De La Cruz
Juan Siquian RA 3182 RA 1115
Juan Suarez RA 2272 Leopoldo Diones RA 3211
Julian M. Locsin Anson Leopoldo T. Calderon
ACT 2475 RA 6013
Amendments Lingayen Gulf Electric
ACT 2620; Power Company Inc.
RA 3730 RA 3843
Juliano Infante ACT Lino Gomez ACT 3759
3651 Amendments
Julita T. Grana RA 2295 ACT 4135
Jural Electric, Inc. Lipa Electric Company,
RA 5785 Incorporated
Kalibo Electric Co. RA 5454.
RA 5996 Lorenzo P. Varron
La Castellana Electric Plant RA 2267
RA 5845 Louber Enterprises, Inc.
La Electrica ACT 2701 RA 4556
La Union Electric Company, Lucas Martines RA 798
Inc. RA 1225 Lucas Vicente RA 756
2434
INDEX
Lucia D. Ulangkaya Marcela Vda. De Marcon

RA 791 RA 5808
Lucila San Jose ACT 3789 Maria D. Tan RA 2931
; ACT 3906 ; ACT 3907 Maria De La Rosa
; ACT 3985 RA 405
Amendments Mariano Abella E. Isaac
ACT 3986 ACT 2647
Luis Rabat RA 2289 Amendments
Lumanlan Brothers ACT 2882
Company RA 619 Mariano Nasser RA 1112
Mabini Electruic and Ice Mariano R. Lamson
Plant Co., Inc. RA ACT 3661
3209 Amendments
Mactan Electric Light and ACT 4106
Ice Company RA 3242 Marikina Electric Light,
Magalang Electric Company Incorporated
RA 4615 Amendments
Magin H. Bautista RA 3444
ACT 4264 Martin M. Levering
Malasiqut Electric Plant ACT 1303
RA 5846 Mateo Auayan RA 853
Malolos Electric Light, Mati Light and Power, Inc.
Power, and Ice Plant RA 5684
Company ACT 2474 Mauricio Palau RA 789
Amendments Repealed
ACT 2621 RA 2272
Manaoag Utility Company, Melecio Marquez
Inc. RA 4474 ACT 4137
Manila Electric Company Melvic and Company,
(MERALCO) RA 4159 ; Incorporated
RA 5177 ; RA 9209 RA 3738
Manila Electric Railroad Amendments
and Light Company RA 4616
ACT 1112 Miguel Perez ACT 3908
Amendments Milagros A. Hernandez
ACT 4182 RA 4535
Manila Gas Corporation Minda-Linang-Lala
RA 2278 RA 452
Manuel Andres ACT Mindanao Electric
3132 Company, Inc.
Manuel Lavides RA 6019 RA 3821
Manuel Palacios RA 888 Misamis Lumber Company,
Marcelo Secuya Incorporated
Amendments ACT 3783
RA 2328
2435
Misamis Oriental Rural Amendments

Electric Service CA 291
Cooperative, Inc. Oleaga Hermanos Y Corral
RA 5445 ACT 2841
Moises Iturralde Olimpia Decologon
ACT 3647 RA 3752
Monkayo Elecric Company Olongapo Electric Light
RA 1351 and Power Corporation
Montano Cabales RA 2992
ACT 3792 Olongapo Electricity
Mortgages ACT 1022 Distribution Company,
Naic Electric Company Inc. RA 10373
RA 1501 Opon Electric Service
Naguilian Electric Co., Inc. Company RA 420
RA 5934 Ormoc Electric Company,
Nancy De Luna RA 1874 Inc. ACT 2770 ;
Narciso Fuertes RA 789 ; RA 769
RA 2272 Amendments
Natalia Amparado RA 278 ;
RA 5011 RA 485
Natalio Digal ACT 3645 Oton Electric Company, Inc.
Amendments ACT 3974
ACT 3951 ; P. Fagutao RA 499
RA 3912 Pablo R. Halili RA 4135
National Grid Corporation ; RA 4610
of the Philippines Pablo Salaveria
RA 9511 ACT 3653
Natividad R. Ortega Panay Electric Company,
RA 6005 Inc. RA 5360
Negros Electric Power Pangi Sangki RA 6120
Corporation Pedro A. Castro
RA 1610 RA 1353
Amendments Pedro Bangug RA 2959
RA 4599 Pedro Cantuba RA 468
Nicolas Limcaoco Pedro Changco ACT
RA 625 3652
Nilda E. Martinez Pedro Ibañez RA 5721
RA 407 Pedro Laman RA 3195
Amendments Pedro R. Banzon RA 3799
RA 5912 Pedro S. Limjoco
North Electric Company RA 4638
ACT 3758 Pedro V. Serranzana
Ocmis Electric Service RA 3702
Company ACT 3645; Amendments
ACT 3951 RA 5964
2436
INDEX
Pedro V. Serranzana Riverside Electric Company

RA 3702 CA 488
Pedro Ygay ACT 3660 Rizalina M. Obidos
Piadosa Dominado RA 689
ACT 3795 Roberto Aurellano
Pioneer Electric and Ice ACT 3981
Plant, Inc. RA 3907 Roberto S. Iñigo RA 398
Porfirio Royo RA 2383 Roman Baluyut
Posadas Electric Company, ACT 3880 ;
Inc. RA 3804 Amendments
Pototan Electric Light CA 488 ;
and Power Company, RA 3178
Limited ACT 2392 Romblon Light and Ice
Pototan Electric Light and Plant Company
Power Corporation ACT 2821
RA 4012 Romeo Firme RA 2330
Amendments Romulo V. Ramos
RA 4504 ; RA 788 ; RA 3014 ;
RA 5246 RA 3829
Pulupandan Power Plant Roque Plasos RA 3186
ACT 3486 Rosiano Rodano
Quirino Gonzales RA 3249 RA 1431
Rafael C. Aquino RA 5106 Ruben A. So RA 4922
Amendments Ruben D. Neri RA 2312
RA 5857 Rufino Ramirez ACT
Rafael Consing RA 971 ; 3654
RA 3003 Rules and regulations
Amendments CA 132
RA 3941 Ruperto A. Villareal
Rafael G. Abiera CA 667
ACT 3505 Ruperto Tamula, Sr.
Rafael Garces ACT 3509 RA2280
; ACT 4172 Sablayan Development
Ramon Del Castillo Corporation
ACT 3663 RA 6420
Red Rovers Society Salvador E. Villarroya
ACT 3646 RA 3222
Rene T. Hamoy RA 3999 Salvador T. Singuillo
Restituto Palma Gil RA 1114
RA 6006 San Carlos Electric Light
Rhode E. Yonzon Company ACT 3655;
RA 941 ACT 3988
Ricardo Carreon San Fernando Electric Light
ACT 3666 and Power Co., Inc.
Ricardo Gemora RA 2293 ; RA 3207
ACT 3781
2437
Amendments Tabaco Electric Co., Inc.

RA 3660 ; RA 5216
RA 9967 Tacloban Electric Light and
San Guillermo Development Ice Plants Co., Inc.
Corporation Amendments
RA 4697 RA 2339 ;
San Jose Power House and RA 4052
Company ACT 3488 Tagum Electric Company
San Mateo Electric Plant RA 4158
Company, Incorporated Talibon Business
RA 4531 Enterprises RA 3202
Santa Cruz Electric Light Talisay Electric Plant
Co. Inc. ACT 2844 RA 1360
Saturnino Mendoza Tanuan Electric &
RA 651 Development Co., Inc.
Silay Electric and Ice Plant RA 2993
Company, Incorporated Taxation EO 72 s. 1986
ACT 2393 Tayabas Light and Power
Sociedad Anonima Company, Incorporated
denominated La ACT 3649
Electrica ACT 2701 Amendments
Sociedad Anonima CA 218
denominated Pototan Tayug Electric Corporation
Electric Light and RA 4409
Power Company, Teofilo M. Pereyra
Limited ACT 2392 ACT 3853
Sociedad Anonima, Silay Teresa Electric and Power
Electric and Ice Plant Co., Inc. RA 4411
Company, Incorporated Tertuliano G. Portes
ACT 2393 RA 1348
Amendments Tigbauan Electric Company
RA 2332 ACT 3966
Sociedad Anonima, Malolos Tomas Alonso ACT 4136
Electric Light, Power, Tubigon Electric Light
and Ice Plant Company RA 3227
ACT 2474 Tubigon Electric Service Co.
Sorsogon Electric Plant ACT 3511
RA 4595 Tuguegarao Electric Plant
Southern Farmers Co., Inc. RA 3337
Cooperative Association U. Bañez Electric Light
RA 4058 Company RA 4143
Surigao Electric Company Upi-nuro Farmers’
ACT 3419 Cooperative Marketing
Surigao Electric Company Association, Inc.
Incorporated RA 2306
RA 2949
2438
INDEX
V. B. Flores Electric Light, Lipa Electric Company, Incorporated

Inc. RA 3803 Licenses RA 5454
V-M-C Rural Electric Liquefied gas carriers LOI 239 s.
Service Cooperative, Inc. 1975
RA 4598 Liquefied Petroleum Gas (LPG)
Ventura P. Marilao EO 471 s. 1998 ; IRR of BP 33
RA 1444 amended by PD 1865 ; LOI 360
Vicente A. Racaza s. 1976
ACT 3814 Prices EO 383 s. 1989 ;
Vicente Cañete RA 494 EO 414 s. 1990
Vicente M. Fortich Zerda Taxation PD 392 ;
RA 4064 ; RA 5722 PD 1672 ; PD 1917 ;
Vicente San Pedro PD 1956 ; RA 6965 ; RA
RA 4460 ; RA 4462 ; 8184
RA 4463 Liquefied Petroleum Gas (LPG)
Vicente Villanueva Y Tanker
Florendo of Vican, Importation LOI 793 s.
Ilocos Sur RA 5369 1979
Victoria H. Viterbo Perez Loans RA 813 ; RA 2055
RA 4535 Lorenzo P. Varron
Victorino M. Salcedo Licenses RA 2267
ACT 3650 Louber Enterprises, Inc.
Victorino Yenko RA 3237 Licenses RA 4556
Vigan Electric Light Lubricating oils LOI 847 s. 1979
Company RA 316 ; PD 436
Visayan Electric Company, Export control RA 613
Inc. RA 3234 ; RA 4619 Taxation EO 672 s. 1981
Amendments ; PD 314 ; PD 1672 ; PD
RA 5855 1917 ; RA 6965 ;
Visayan Electric Company, RA 8184
S. A. ACT 3499 ; Lubrication and lubricants
RA 442 ; RA 443 ; Prices RA 6124
RA 502 Lucas Martines
ACT 3551 ; Lucas Vicente
Zambales Electric Plant Lucila San Jose
Corporation RA 5992 Licenses ACT 3906 ;
Lingayen Gulf Electric Power ACT 3907 ; ACT 3789 ;
Company Inc. ACT 3985
Lino Gomez ACT 3986
Licenses ACT 3759 Luis Rabat
ACT 4135 Lumanlan Brothers Company
Licenses RA 619
2439
Luzon Stevedoring Corporation Manila Electric Company

(LUSTEVECO) EO 671 s. (MERALCO) LOI 1510 s.
1981 1986 ; PD 401 ; PD 401-A ;
RA 9209
M Licenses RA 4159 ;
RA 5177
MEPA SEE Mindanao Electric Manila Electric Railroad and Light
Power Alliance Company
MERALCO SEE Manila Electric Licenses ACT 1112
Company Amendments
MPMC SEE Mindanao Power ACT 4182
Monitoring Committee Manila Gas Corporation
Mabini Electruic and Ice Plant Co., National Development
Inc. Company PD 1601
Mactan Electric Light and Ice RA 2278
Company Manito, Albay Geothermal
Licenses RA 3242 Reservation EO 837 s. 1982
Magalang Electric Plant Company Manuel Andres
Magat Hydroelectric PowerPlant Manuel Lavides
Magat Multi-Purpose Project Manuel Palacios
National Irrigation Licenses RA 888
Administration (NIA) Marcela Vda. De Marcon
National Power Corporation Marcelo Secuya
(NAPOCOR) Licenses RA2328
LOI 660 s. 1978 Maria D. Tan
Transferred from Licenses RA 2931
LOI 660 s. 1978 Maria De La Rosa
Magat River Multi-Purpose Project Licenses RA 405
Isabela PD 693 Mariano Abella E. Isaac
Magin H. Bautista Licenses ACT 2647
Licenses ACT 4264 Amendments
Malasiqut Electric Plant ACT 2882
Licenses RA 5846 Mariano Nasser
Malolos Electric Light, Power, and Licenses RA 1112
Ice Plant Company Mariano R. Lamson
Amendments Amendments
ACT 2621 ACT 4106
Manaoag Utility Company, Inc. Marikina .25 Electric Light,
Licenses RA 4474 Incorporated
Licenses
2440
INDEX
Amendments Composition EO 81 s.
RA 3444 2012
Marine pollution PD 600 Creation EO 81 s. 2012
Marine Pollution Decree of 1974 Powers and duties EO 81
PD 600 s. 2012
Amendments PD 979 Mineral exploration SEE Mines
Marine Pollution Decree of 1976 and mineral resources—
PD 979 Prospecting
Martin M. Levering Mineral lands CA 137 ; RA 4388
Licenses ACT 1303 Mineral oil—Taxation SEE
Mateo Auayan Petroleum—Taxation
Licenses RA 853 Mineral resources SEE Mines and
Mati Light and Power, Inc. mineral resources
Licenses RA 5684 Mineral Resources Development
Mauricio Palau Decree of 1974
Licenses RA 789 ; RA 2272 Amendments PD 1385
Repealed RA 2272 Repeals PD 972
Melecio Marquez Mines and mineral resources
Licenses ACT 4137 PD 1385
Melvic and Company, Incorporated Prospecting CA 137
Licenses RA 3738 Mini-hydroelectric power plants
Amendments IRR of RA 7156; LOI 1334 s.
RA 4616 1983
Methane gas PD 508 Mini-Hydroelectric Power Incentives
Prospecting RA 5092 Act RA 7156
Methanol as fuel PD 1688-A Implementing rules
Micro-distillery unit LOI 1227 s. IRR of RA 7156
1982 Mini-Hydroelectric Power Incentives
Micro-hydroelectric equipment Act [sec. 10(1)]
LOI 431 Repealed IRR of RA 9513
Miguel Perez ; RA 9513
Licenses ACT 3908 Mining SEE Mining industries ;
Milagros A. Hernandez Mines and mineral resources
Licenses RA 4535 Mining Act CA 137
Minda-Linang-Lala Amendments RA 746 ;
Mindanao Electric Company, Inc. Mining claims RA 746 ; RA 4388
RA 3821 Mining leases
Mindanao Electric Power Alliance Rules and regulations
(MEPA) EO 81 s. 2012 RA 746
Mindanao Modular Generator Sets Misamis Lumber Company,
(Gensets) Program Incorporated
Creation EO 137 s. 2013 Licenses ACT 3783
Mindanao Power Monitoring Misamis Oriental Rural Electric
Committee (MPMC) Service Cooperative, Inc.
Licenses RA 5445
2441
Moises Iturralde Municipality of Bacolod,

Licenses ACT 3647 Province of Lanao
Monkayo Electric Company RA 2323
Licenses RA 1351 Municipality Bacoor,
Monopolies ACT 3247 Province of Cavite
Montano Cabales RA 3351
Licenses ACT 3792 Municipality of Balasan,
Mortgages ACT 1022 Province of Iloilo
Motor fuel LOI 1051 s. 1980 RA 2302
Motor vehicle LOI 990 s. 1980 Municipality of Barotac
Municipal franchises ACT 667 ; Viejo, Province of loilo
ACT 2446 RA 2324
Amendments ACT 2446 Municipality Basco,
City of Baguio ACT 1968 Province of Batanes
; ACT 2006 RA 3486
City of Manila ACT 484 ; Municipality of Bay,
ACT 2039 Province of
Municipal Government of Laguna RA 3011
Samal, Province Municipality Bilar, Province
of Davao RA 1994 of Bohol RA 3231
Municipalities, Province Municipality of Bontoc,
of Catanduanes Province of Southern
RA 1436 Leyte RA 3121
Municipalities, Province Municipality of Borongan,
of Negros Oriental Province of Samar
RA 4062 RA 2326
Municipality of Abuyog, Municipality of Buhi,
Province of Leyte Province of Camarines
RA 2319 Sur RA 2286
Municipality of Agoo, Municipality of Cabalian,
Province of La Union Southern Leyte
RA 4104 RA 3121
Municipality of Alaminos, Municipality of Calamba,
Province of Laguna Province of Laguna
RA 3011 RA 3011
Municipality of Anahawan, Municipality of Calatagan,
Province of Leyte Province of Batangas
RA 2968 RA 4439
Municipality of Asingan, Municipality of Calinog,
Province of Pangasinan Province of Iloilo
RA 1979 RA 4001
Municipality of Babac, Municipality of Calubian,
Province of Davao Province of Leyte
RA 2322 RA 2305
2442
INDEX
Municipality of Casiguran, Municipality of Japan,

Province of Sorsogon Province of Bohol
ACT 4025 ACT 2981
Municipality of Castillejos, Municipality of Lallo,
Province of Zambales Province of Cagayan
Licences RA 2284 RA 4305
Municipality of Cateel, Municipality of Libagon,
Province of Davao Province of Leyte
RA 2940 RA 2967
Municipality of Claveria, Municipality of Liloan,
Province of Cagayan Province of Southern
Municipality of Claveria, Municipality of Los Banos,
Province of Misamis Province of Laguna
Oriental RA 3966 RA 3011
Municipality of Cortes, Municipality of Lucban,
Province of Bohol Province of Tayabas
RA 3206 ACT 2167
Municipality of Cortes, Amendments
Province of Surigao ACT 2446
RA 3204 Municipality of Maasin,
Municipality of Dalaguete, Province of Leyte
Province of Cebu RA 2972
RA 3214 Municipality of Mabinay,
Municipality of Dingras, Province of Negros
Ilocos Norte RA 317 Oriental RA 5081
Municipality of Dulag, Municipality of Mabini,
Province of Leyte Province of Batangas
RA 2318 RA 3173
Municipality of El Nido, Municipality of Macarthur,
Province of Palawan Province of Leyte
RA 2982 RA 2315
Municipality of Guiuan, Municipality of Macrohon,
Province of Samar Province of Leyte
RA 3181 RA 2971
Municipality of Hima- Municipality of Magallanes,
maylan, Province of Province of Sorsogon
Negros Occidental ACT 4026
RA 3236 Municipality of Malitbog,
Municipality of Province of Leyte
Hinundayan, Province RA 3187
of Leyte RA 2966 Municipality of Malitbog,
Municipality of Isabela, Province of Southern
Province of Occidental Leyte RA 3121
Negros ACT 3491
2443
Municipality of Mayorga, Municipality of Sogod,

Province of Leyte Province of Southern
Municipality of Naga, Municipality of Solana,
Province of Camarines Province of Cagayan
Sur ACT 2987 RA 2991
Municipality of Padre Municipality of Sta. Fe,
Burgos, Province of Province of Leyte
Leyte RA 2973 RA 2217
Municipality of Panabo, Municipality of Tayasan,
Province of Davao Province of Negros
RA 2402 Oriental RA 5989
Municipality of Pandan, Municipality of Tayug,
Province of Antique Province of Pangasinan
ACT 4021 RA 1979
Municipality of Pila, Municipality of Tolosa,
Province of Laguna Province of Leyte
RA 3011 RA 2320
Municipality of Pintuyan, Municipality of Torrijos,
Province of Leyte Province of Marinduque
RA 2970 RA 2965
Municipality of Sagnay, Municipality of Tuy,
Province of Camarines Province of Batangas
Sur RA 2287 RA 4469
Municipality of Saint Municipality of Umingan,
Bernard, Province of Province of Pangasinan
Leyte RA 2969 RA 1979
Municipality of San Municipality of Urdaneta,
Francisco, Province of Province of Pangasinan
Southern Leyte RA 2304
RA 3121 Municipality of
Municipality of San Mateo, Vallehermoso, Province
Province of Rizal of Negros Oriental
RA 2045 RA 5085
Municipality of San Nicolas Municipality of Victoria,
RA 4490 Province of Laguna
Municipality of San Nicolas, RA 3011
Province of Pangasinan Municipality of Villaba,
RA 1979 Province of Leyte
Municipality of San RA 2321
Quintin, Province of Municipality of Zamboanga,
Pangasinan RA 1979 Moro Province
Municipality of Silago, ACT 1995
Province of Southern Province of Rizal
Leyte RA 3121 ACT 2039
2444
INDEX
Subprovince of Benguet, Municipality of Bay, Province of

Mountain Province Laguna
Municipal Government of Samal, Municipality Bilar, Province of Bohol
Province of Davao Licenses RA 3231
Licenses RA 1994 Municipality of Bontoc, Province of
Municipalities, Province of Southern Leyte
Catanduanes Licenses RA 3121
Licenses RA 1436 Municipality of Borongan, Province
Municipalities, Province of Negros of Samar
Oriental Licenses RA 2326
Licenses RA 4062 Municipality of Buhi, Province of
Municipality of Abuyog, Province of Camarines Sur
Leyte Licenses RA 2286
Licenses RA 2319 Municipality of Cabalian, Province of
Municipality of Agoo, Province of La Southern Leyte
Union Licenses RA 3121
Licenses RA 4104 Municipality of Calamba, Province of
Municipality of Alaminos, Province Laguna
of Laguna Licenses RA 3011
Licenses RA 3011 Municipality of Calatagan, Province
Municipality of Anahawan, Province of Batangas
of Leyte Licenses RA 4439
Licenses RA 2968 Municipality of Calinog, Province of
Municipality of Asingan, Province of Iloilo
Pangasinan Licenses RA 4001
Licenses RA 1979 Municipality of Calubian, Province
Municipality of Babac, Province of of Leyte
Davao Licenses RA 2305
Licenses RA 2322 Municipality of Casiguran, Province
Municipality of Bacolod, Province of of Sorsogon
Lanao Licenses ACT 4025
Licenses RA 2323 Municipality of Castillejos, Province
Municipality Bacoor, Province of of Zambales
Cavite Licenses RA 2284
Licenses RA 3351 Municipality of Cateel, Province of
Municipality of Balasan, Province of Davao
Iloilo Licenses RA 2940
Licenses RA 2302 Municipality of Claveria, Province of
Municipality of Barotac Viejo, Cagayan
Province of Iloilo Licenses RA 4580
Licenses RA 2324 Municipality of Claveria, Province of
Municipality Basco, Province of Misamis Oriental
Batanes Licenses RA 3966
Licenses RA 3486
2445
Municipality of Cortes, Province of Licenses ACT 2167

Bohol Amendments
Municipality of Cortes, Province of Municipality of Maasin, Province of
Surigao Leyte
Municipality of Dalaguete, Province Municipality of Mabinay, Province of
of Cebu Negros Oriental
Municipality of Dingras, Ilocos Norte Municipality of Mabini, Province of
Licenses RA 317 Batangas
Municipality of Dulag, Province of Licenses RA 3173
Leyte Municipality of Macarthur, Province
Licenses RA 2318 of Leyte
Municipality of El Nido, Province of Licenses RA 2315
Palawan Municipality of Macrohon, Province
Municipality of Guiuan, Province of Licenses RA 2971
Samar Municipality of Magallanes, Province
Licenses RA 3181 of Sorsogon
Municipality of Hima-maylan, Licenses ACT 4026
Province of Negros Municipality of Malitbog, Province
Municipality of Hinundayan, Licenses RA 3187
Province of Leyte Municipality of Malitbog, Province of
Licenses RA 2966 Southern Leyte
Municipality of Isabela, Province of Licenses RA 3121
Occidental Negros Municipality of Mayorga, Province of
Licenses ACT 3491 Leyte
Municipality of Japan, Province of Licenses RA 2316
Bohol Municipality of Naga, Province of
Licenses ACT 2981 Camarines Sur
Municipality of Lallo, Province of Licenses ACT 2987
Cagayan Municipality of Padre Burgos,
Licenses RA 4305 Province of Leyte
Municipality of Libagon, Province of Licenses RA 2973
Leyte Municipality of Panabo, Province of
Licenses RA 2967 Davao
Municipality of Liloan, Province of Licenses RA 2402
Southern Leyte Municipality of Pandan, Province of
Licenses RA 3121 Antique
Municipality of Los Banos, Province Licenses ACT 4021
of Laguna Municipality of Pila, Province of
Licenses RA 3011 Laguna
Municipality of Lucban, Province of Licenses RA 3011
Tayabas
2446
INDEX
Municipality of Pintuyan, Province Municipality of Torrijos, Province of

of Leyte Marinduque
Municipality of Sagnay, Province of Municipality of Tuy, Province of
Camarines Sur Batangas
Municipality of Saint Bernard, Municipality of Umingan, Province
Province of Leyte of Pangasinan
Municipality of San Francisco, Municipality of Urdaneta, Province
Province of Southern Leyte of Pangasinan
Municipality of San Mateo, Province Municipality of Vallehermoso,
of Rizal Licenses Province of Negros Oriental
Municipality of San Nicolas Municipality of Victoria, Province of
RA 4490 Laguna
Municipality of San Nicolas, Municipality of Villaba, Province of
Province of Batangas Leyte
Municipality of San Quintin, Municipality of Zamboanga, Moro
Province of Pangasinan Province
Municipality of Silago, Province of
Southern Leyte N
Licenses RA 3121
Municipality of Sogod, Province of NAPOCOR SEE National Power
Southern Leyte Corporation
Licenses RA 3121 NBB SEE National Biofuels Board
Municipality of Solana, Province of NEA SEE National Electrification
Cagayan Administration
Licenses RA 2991 NFEC SEE National Food and
Municipality of Sta. Fe, Province of Energy Council
Leyte NGVPPT SEE Natural Gas Vehicle
Licenses RA 2217 Program for Public Transport
Municipality of Tayasan, Province of NIPAS SEE National Integrated
Negros Oriental Protected Areas System
Licenses RA 5989 NPC SEE National Power
Municipality of Tayug, Province of Corporation
Pangasinan NREB SEE National Renewable
Licenses RA 1979 Energy Board
Municipality of Tolosa, Province of Naguilian Electric Co., Inc.
Leyte Licenses RA 5934
Licenses RA 2320
2447
Naic Electric Company 1981 ; LOI 1103 s. 1981

Licenses RA 1501 National Development Company
Nancy De Luna Shares PD 1601
Licenses RA 1874 National Development Corporation
Naphtha LOI 848 s. 1979 (NDC) EO 671 s. 1981
Taxation EO 672 s. 1981 National Economic Development
; PD 314 ; PD 392 ; Authority (NEDA)
PD 1672 ; PD 1917 ; Oil Industry Commission
PD 1956 ; RA 6767 ; PD 56
RA 8184 Price Control Council
Narciso Fuertes PD 56
Licenses RA 789 National Electrification
Repealed RA 2272 Administration (NEA)
Natalia Amparado EO 131 s. 1987 ; EO 137 s. 2013 ;
Licenses RA 5011 IRR of RA 9136 ; LOI 38 s. 1972
Natalio Digal ; LOI 1121 s. 1981 ; PD 1645
Licenses ACT 3645 Capital stocks PD 1370
Amendments Creation PD 269
ACT 3951 ; Obligations IRR of RA
RA 3912 10531
National Alcohol Program Organization RA 6038
LOI 1154 s. 1981 Powers and duties IRR
Implementation LOI 888 of RA 10531 ; PD 269 ;
s. 1979 RA 6038 ; RA 10531
National Biofuels Board (NBB) Reorganization EO 192
RA 9367 ; IRR of RA 9367 s. 1987 ; EO 119 s. 2002
Creation RA 9367; National Electrification
IRR of RA 9367 Administration Act RA 6038
Organization IRR of National Electrification
RA 9367 Administration Decree
Powers and duties PD 269
RA 9367; IRR of National Electrification
RA 9367 Administration Reform Act of
National Coal Authority 2013 RA 10531
LOI 1091 s. 1980 Implementing rules
Abolition EO 193 s. 1987 IRR of RA 10531
Creation PD 1722 National Food and Energy Council
Merged to (NFEC)
Natural Resources Climate Change, Council of
Development EO 728 s. 2008
Corporation Composition EO 728 s.
EO 131 s. 1987 2008
Powers and duties Creation EO 728 s. 2008
EO 685 s. 1981; Energy Contingency Task
PD 1722 Force
Special fund EO 686 s.
2448
INDEX
Compositions ; IRR of EO 215 s. 1987 ; IRR

EO 731 s. 2008 of RA 9136 ; LOI 1065 s. 1980 ;
Energy Operating Board LOI 1148 s. 1981 ; LOI 1149 s.
EO 731 s. 2008 1981 ; LOI 1331 s. 1983 ; PD 380
National Grid Corporation of the ; PD 395 ; PD 1749 ; RA 813 ; RA
Philippines 2055 ; RA 7639 ; RA 9136 ; RA
National Institute of Science and Amendments CA 344 ;
Technology PD 758 ; PD 938 ; PD
Research Foundation Fund 1360 ; PD 1443 ; RA 358
RA 3589 ; RA 1397 ; RA 2058 ;
National Institutes of Biotechnology RA 3043 ; RA 4897
and Applied Microbiology Angat Watershed
(BIOTECH) Reservation
Creation LOI 1224 s. Management
1982 EO 162 s. 1994
National Internal Revenue Code Bonds RA 1397
Amendments EO 72 s. Composition EO 844 s.
1986 ; PD 874 1982
National Irrigation Administration Contracts EO 358 s.
(NIA) PD 693 ; RA 5499 1989
Magat Dam and Conversion RA 2641
Appurtenant Facilities Creation CA 120
LOI 1203 s. 1982 Functions EO 687 s.
Special fund LOI 1203 s. 1981
1982 ; PD 35 Loan agreement RA 357
National Oil Pollution Operations Magat Multi-Purpose Project
Center Decree PD 602 LOI 660 s. 1978
National Operations Center for Oil Philippine Nuclear Power
Pollution Plant-I (PNPP-I)
Creation PD 602 EO 55 s. 1986 ; EO 98
National Pollution Control s. 1986
Commission PD 979 Powers and duties
National Pollution Control Decree of CA 120
1976 Reorganization RA 7648
National Power Board Revision RA 6395
Amendments PD 1360 San Roque Multi-Purpose
Creation CA 120 Project EO 687 s.
Powers and duties 1981
CA 120 Special fund LOI 1149 s.
National Power Corporation 1981 ; LOI 1201 s. 1982
(NAPOCOR / NPC) CA 495 ; ; LOI 1512 s. 1986
EO 27 s. 2011 ; EO 215 s. 1987 ; Transferred to the Office
EO 224 s. 1987 ; EO 86 s. 1993 ; of the President
EO 258 s. 1995 ; EO 354 s. 1996 ; EO 131 s. 1987
EO 370 s. 2004 ; EO 473 s. 1998
2449
National Research Council of the Natural gas pipelines RA 8997

Philippines RA 2067 Natural Gas Vehicle Program for
National Renewable Energy Board Public Transport (NGVPPT)
(NREB) EO 396 s. 2004
Creation IRR of RA 9513 Implementation EO 290
; RA 9513 s. 2004
Powers and duties Natural Gas Vehicle Program for
IRR of RA 9513 ; Public Transport (NGVPPT)
RA 9513 Executive Forum
National Science and Technology Composition EO 290 s.
Authority 2004
Philippine Council Creation EO 290 s. 2004
for Industry and Powers and duties
Energy Research and EO 290 s. 2004
Development Natural marsh gas PD 508
Composition Natural Resources Development
EO 128 s. 1987 Corporation (NRDC)
Reorganization National Coal Authority
EO 128 s. 1987 EO 131 s. 1987
National Science Development Board National Development
Nuclear Indemnity Board Corporation Plantation
Creation Inc. (NDCPI)
RA 3083 EO 131 s. 1987
Philippine Atomic Energy Natural Resources
Commission PD 606 Development
Science, Engineering and Corporation (NRDC)
Technology Research EO 131 s. 1987
Fund RA 3589 Natural Resources, Ministry of
National Telecommunications (MNR)
Commission LOI 1078 s. Renamed EO 131 s. 1987
1980 Reorganization EO 131
National Transmission Corporation s. 1987 ; EO 131-A s.
(TRANSCO) EO 666 s. 2007 ; 1987
IRR of RA 9136 Negros Electric Power Corporation
Creation RA 9136 Licenses RA 1601
Functions RA 9136 Amendments
Natividad R. Ortega RA 4599
Licenses RA 6005 Nicolas Limcaoco
Natural gas RA 5092 Licenses RA 625
Prospecting CA 351 ; Nilda E. Martinez
Natural gas industry SEE Gas Amendments
industry RA 5912
Natural gas liquids SEE Liquefied Non-conventional energy resources
natural gas LOI 892 s. 1979 ; LOI 933 s.
1979;PD 1068
2450
INDEX
North Electric Company Energy, Ministry of

Licenses ACT 3758 EO 20 s. 1986
Nuclear energy PD 1484 ; Energy, Board of
RA 1815 EO 551 s. 1979
Nuclear facilities PD 1484 National Environmental
Nuclear Indemnity Board Protection Council
Creation RA 3083 PD 1121
Nuclear power plants EO 539 s. National Power Corporation
1979 EO 131 s. 1987
Accidents RA 3083 Oil Industry Commission
Management LOI 876 s. PD 56
1979 Philippine Atomic Energy
Nuclear Power Plant Commission Commission EO 613
LOI 906 s. 1979 s. 1980 ; EO 640 s. 1981
Nuclear Reactor Plants, Commission ; PD 606
on LOI 951 s. 1979 ; LOI 957 Philippine National Oil
s. 1979 Company EO 131 s.
Nuclear reactors 1987
Accidents RA 3083 Price Control Council
Nuclear wastes SEE Radioactive PD 56
wastes Wage Commission PD 56
Oil SEE Petroleum
O Oil and gas LOI 1271 s. 1982
Oil crisis SEE Petroleum industry
OPSF SEE Oil Price Stabilization and trade
Fund Oil exploration SEE Oil
OSW SEE Ocean, solar and wind fields—Production methods ;
energy resources Petroleum—Prospecting
Ocean energy resources EO 232 Oil Exploration and Development
s. 2000 Act of 1972 PD 8 ; PD 87
Ocean thermal power plants Amendments PD 469 ;
EO 462 s. 1987 PD 781 ; PD 1857
Ocean, solar and wind (OSW) energy Oil fields
resources EO 232 s. 2000 ; Production methods
EO 462 s. 1987 LOI 358 s. 1975
Ocmis Electric Service Company Oil Industry Commission LOI
Licenses ACT 3951 187 s. 1974 ; PD 56; PD 429-A ;
Amendments PD 1128
CA 291 Abolition PD 1206
Office of the President Creation RA 6173
Alcohol Commission Powers and duties
EO 580 s. 1980 PD 102 ; RA 6173
Energy Affairs, Office of Special fund PD 389-A ;
EO 193 s. 1987 PD 456 ; PD 800
Energy, Board of Amendments
PD 1833 LOI 838 s. 1979
2451
Transferred to PD 56 Overpricing BP 33
Oil Industry Commission Act Overseas Economic Cooperation
RA 6173 Fund of Japan LOI 1164 s.
Amendments PD 102 ; 1981
PD 429-A ; PD 1128
Oil pollution damages, Liability for P
SEE Liability for oil pollution
damages PAEC SEE Philippine Atomic
Oil Pollution Operations Center Energy Commission
Creation PD 602 PAOCC SEE Presidential Anti-
Oil Price Stabilization Fund (OPSF) Organized Crime Commission
EO 1024 s. 1985 ; LOI 1441 PECs SEE Petroleum exploration
s. 1984 ; PD 1956 ; RA 6952 ; concessions
RA 7639 PECAs SEE Petroleum
Oil storage tanks EO 137 s. 1987 Exploration Concession
; LOI 994 s. 1980 ; LOI 1431 s. Applications
1984 PGPTF SEE Philippine Gas
Oil tankers SEE Tankers ; Project Task Force
Liquefied gas carriers PIP SEE Performance
Oleaga Hermanos Y Corral Improvement Program
Licenses ACT 2841 PNAC SEE Philippine National
Olimpia Decologon Alcohol Commission
Licenses RA 3752 PSALM Corporation SEE Power
Olongapo Electric Light and Power Sector Assets and Liabilities
Corporation Management Corporation
Licenses RA 2992 PNOC Energy Development
Olongapo Electricity Distribution Corporation LOI 1164 s.
Company, Inc. 1981
Licenses RA 10373 PNOC Exploration Corporation
Operations Center LOI 421 s. 1976
Creation EO 655 s. 2007 PSGF SEE Private Sector
Opon Electric Service Company Generation Facility
Licenses RA 420 PTFCC SEE Presidential Task
Organic Act Phil. Bill of 1902 Force on Climate Change
Ormoc Electric Company PTF-SEFEELS SEE Presidential
Licenses ACT 2770 ; Task Force on the Security
RA 769 of Energy Facilities and
Amendments Enforcement of Energy Laws
RA 278 and Standards
Ormoc Electric Company, Inc. PUPTF SEE Philippine Upstream
Licenses Petroleum Task Force
Amendments P. Fagutao
Oton Electric Company, Inc. Pablo R. Halili
Licenses ACT 3974 Licenses RA 4135 ;
RA 4610
2452
INDEX
Pablo Salaveria Laws and legislations

Licenses ACT 3653 PD 529
Palawan, Province of Licenses PD 987
Camago-Malampaya Prospecting ACT 3636 ;
Natural Gas Reservoir CA 351 ; EO 556 s. 2006
EO 254 s. 2003 ; ; EO 280 s. 1987 ; EO
EO 254-A s. 2004 473 s. 2005 EO 683 s.
Palimpinon Geothermal Power Plant 2007 ; IRR of RA 8479
LOI 1512 s. 1986 ; LOI 241 s. 1975 ; LOI
Panay Electric Company, Inc. 421 s. 1976 ; LOI 838
Licenses RA 5360 s. 1979 ; PD 8 ; PD 529
Pangi Sangki ; PD 782 ; PD 987 ; RA
Licenses RA 6120 387 ; RA 3098 ; RA 4442
Pedro A. Castro ; RA 5086
Licenses RA 1353 Storage LOI 994 s. 1980
Pedro Bangug Taxation ACT 3248 ; EO
Licenses RA 2959 672 s. 1981 ; EO 900 s.
Pedro Cantuba 1983 ; EO 195 s. 1987
Licenses RA 468 ; LOI 663 s. 1978; LOI
Pedro Changco 847 s. 1979 ;LOI 1068;
Licenses ACT 3652 PD 314 ; PD 318 ; PD
Pedro Ibañez 392 ; PD 436 ; PD 874
Licenses RA 5721 ; PD 1119 ; PD 1354
Pedro Laman ; PD 1615 ; PD 1671
Licenses RA 3195 ; PD 1672 ; PD 1709 ;
Pedro R. Banzon PD 1889 ; PD 1917 ; PD
Licenses RA 3799 1956 ; RA 6965 ; RA
Pedro S. Limjoco 7729 ; RA 8184
Licenses RA 4638 Petroleum Act of 1949 PD 529 ;
Pedro V. Serranzana PD 782 ; RA 387
Licenses RA 3702 Amendments RA 3098 ;
Amendments RA 4442 ; RA 4889
RA 5964 Repeals RA 4304
Pedro Ygay Petroleum as fuel LOI 837 s. 1979
Licenses ACT 3660 ; PD 874
Performance Improvement Program Conversion to coal
(PIP) EO 119 s. 2002 LOI 339 s. 1975
Petrochemical Industrial Zone Petroleum Board PD 87 ; PD 469 ;
PD 949 PD 781; PD 782
Petrochemicals SEE Petroleum Abolition PD 910
chemicals Creation PD 8 ;
Petroleum—Prices SEE Petroleum Philippine National
products—Prices Petroleum Center
Petroleum Petroleum
Export control RA 613 Data Bank
PD 575
2453
Petroleum Institute LOI 216 s. 1974 ; LOI

PD 575 842 s. 1979 ; LOI 969 s.
Petroleum 1979 ; LOI 975 s. 1980
Laboratory ; LOI 975-A s. 1980 ;
PD 575 LOI 1335 s. 1983 ; LOI
Petroleum chemicals EO 316 s. 1441 s. 1984 ; LOI 1460
2004 ; RA 6767 s. 1985 ; PD 389-A ; PD
Petroleum Division PD 782 1633 ; RA 6361
Petroleum exploration SEE Tonnage fees LOI 400 s.
Petroleum—Prospecting 1976
Petroleum Exploration Concession Petroleum products—Ad valorem
Applications (PECAs) duty SEE Tariff on petroleum
PD 987 products
Petroleum exploration concessions Petroleum products—Exploration
(PECs) PD 529 ; PD 987 ; RA SEE Petroleum—Prospecting
3098; RA 5086 Petroleum service contracts
Petroleum industry and trade PD 1459
BP 33 ; LOI 663 s. 1978 ; LOI Petroleum storage tank LOI 1073
842 s. 1979 ; LOI 847 s. 1979 s. 1980
; PD 318 ; PD 429-A ; PD 438 Petroleum Technical Committee
; PD 1865 ; LOI 848 s. 1979 Petroleum Division
; LOI 907 s. 1979 ; LOI 969 s. PD 782
1979 ; LOI 996 s. 1980 ; LOI Petron TBA Corporation LOI 564
1431 s. 1984 ; LOI 1441 s. 1984 ; s. 1977
RA 5086; RA 6173 Petrophil Corporation LOI 216 s.
Petroleum Price Standby Fund 1974 ; LOI 564 s. 1977
Creation RA 6952 Philippine Atomic Energy
Petroleum products CA 351 ; Commission (PAEC) EO 613
RA 387; EO 134 s. 2002 ; EO 280 s. 1980 ; EO 640 s. 1981 ; LOI
s. 1987 ; EO 446 s. 1997 ; EO 547 591 s. 1977 ; LOI 1065 s. 1980 ;
s. 1979 ; IRR of BP 33 amended PD 1206 ; PD 1571
by PD 1865 ; LOI 224 s. 1974 ; Amendments PD 606
LOI 485 s. 1976; LOI 848 s. 1979 Atomic Energy Research
; LOI 1036 s. 1980 ; LOI 1104 s. Center
1981 ; LOI 1154 s. 1981 ; PD 87 Creation
; PD 368 ; PD 436 ; PD 1688-A ; RA 2067
PD 1865 Creation RA 2067 ;
Implementing rules and RA 3589
regulations EO 433 Functions RA 5207
s. 1990 Philippine Coast Guard Headquarter
Prices EO 900 s. 1983 National Operations Center
; EO 195 s. 1987 ; EO for Oil Pollution
839 s. 2009 ; IRR of RA Creation PD 602
8180 ; LOI 187 s. 1974 Philippine Coconut Authority
; LOI 187-A s. 1974 ; (PHILCOA) LOI 1272 s. 1982
2454
INDEX
Philippine Council for Industry Funds LOI 1224 s. 1982

and Energy Research and Powers and duties
Development EO 171 s. 1987 ; PD 334
Composition EO 128 s. ; PD 927 ; LOI 564 s.
1987 1977
Reorganization EO 128 Special fund LOI 224 s.
s. 1987 1974 ; LOI 239 s. 1975
Philippine Economic Zone Authority ; LOI 241 s. 1975 ; LOI
(PEZA) EO 661 s. 2007 254 s. 1975 ; LOI 285 s.
Philippine Gas Project Task Force 1975 ; LOI 358 s. 1975
(PGPTF) ; LOI 392 s. 1976 ; LOI
Renamed EO 60 s. 2011 420 s. 1976 ; LOI 531 s.
Philippine National Alcohol 1977 ; LOI 591 s. 1977
Commission (PNAC) ; LOI 715 s. 1978 ; LOI
LOI 1036 s. 1980 793 s. 1979 ; LOI 1003
Special fund LOI 1154 s. 1980 ; LOI 1079 s.
s. 1981 1980 ; LOI 1153 s. 1981
Philippine National Oil Company ; LOI 1226 s. 1982 ; LOI
(PNOC) EO 223 s. 1987 ; EO 1227 s. 1982 ; LOI 1512
473 s. 2005 ; EO 580 s. 1980 ; s. 1986
EO 671 s. 1981 ; EO 794 s. 1982 Tara Field (Northwest
; LOI 187 s. 1974 ; LOI 187-A s. Palawan) LOI 1512
1974 ; LOI 216 s. 1974 ; LOI 280 s. 1986
s. 1975 ; LOI 400 s. 1976 ; LOI Transferred to the Office
485 s. 1976 ; LOI 837 s. 1979 of the President
; LOI 848 s. 1979 ; LOI 980 s. EO 131 s. 1987
1980 ; LOI 994 s. 1980 ; LOI 996 Philippine National Petroleum
s. 1980 ; LOI 1058 s. 1980 ; LOI Center (PNPC) PD 910
1078 s. 1980 ; LOI 1154 s. 1981 Abolition PD 1206
; LOI 1272 s. 1982 ; LOI 1332 s. Creation PD 575
1983 ; LOI 1361 s. 1983 ; PD 469 Philippine National Petroleum
; PD 781 ; PD 949 Center Fund PD 575
Amendments PD 405 Philippine Nuclear Energy Act of
; PD 572 ; PD 927 ; 1957 RA 1815
PD 1516 Philippine Nuclear Energy
Batasang Pambansa Commission
Gasoline service Creation RA 1815
station Powers and duties
LOI 835 s. 1979 RA 1815
Creation PD 334 Technical Advisory
Energy supply base Committee RA 1815
LOI 781 s. 1978 Philippine Nuclear Oil Company
Exploration Corporation Exploration Corporation
LOI 421 s. 1976 EO 683 s. 2007
Exploration supply base(s) Philippine Nuclear Power Plant-I
LOI 563 s. 1977 (PNPP-I) EO 98 s. 1986
2455
Transferred to EO 55 s. Licenses RA 4012

1986 Amendments
Philippine Nuclear Research RA 4504 ;
Institute RA 5246
Reorganization EO 128 Power and Waterworks, Board of
s. 1987 Abolition PD 1206
Philippine Nuclear Research Reactor Power Development Council
Project RA 3083 Abolition PD 1206
Philippine Organic Act of 1902 Powers and duties
Phil. Bill of 1902 PD 948
Philippine Sugar Commission Power Generation Facilities
Special fund LOI 983 s. EO 27 s. 2011
1980 Power plants RA 7718
Philippine Upstream Petroleum Power resources EO 81 s. 2012
Task Force ; EO 137 s. 2013 ; EO 232 s.
Compositions EO 60 s. 2000 ; EO 462 s. 1987 ; LOI 924
2011 s. 1979 ; LOI 983 s. 1980 ; LOI
Named EO 60 s. 2011 1005 s. 1980 ; LOI 1079 s. 1980
Powers and duties EO 60 ; LOI 1103 s. 1981 ; LOI 1121 s.
s. 2011 1981 ; LOI 1174 s. 1981 ; PD 35;
Piadosa Dominado PD 693 ; PD 927 ; PD 948 ; PD
Licenses ACT 3795 1089 ; RA 3043
Pilferage of Electricity SEE Costs LOI 1148 s. 1981
Electricity theft Economic zone EO 661-A
Pilipinas Shell Petroleum s. 2007
Corporation LOI 1073 s. Prices LOI 669 s. 1978
1980 Prospecting LOI 863 s.
Pioneer Electric and Ice Plant, Inc. 1979 ; LOI 1174 s. 1981
Licenses RA 3907 Research LOI 1174 s.
Pioneer preferred areas LOI 933 1981 ; PD 1068
s. 1979 Power Sector Assets and Liabilities
Pipelines Management Corporation
Cost PD 1700 (PSALM Corporation)
Pipelines concession RA 387 EO 119 s. 2002 ; EO 169 s. 2003
Pototan Electric Light and ; IRR of RA 9136
Power Corporation Creation RA 9136
RA 4012 Powers and duties
Porfirio Royo RA 9136
Licenses RA 2383 Taxation EO 27 s. 2011
Posadas Electric Company, Inc. Power supply SEE Power
Licenses RA 3804 resources
Pototan Electric Light and Power Presidential Anti-Organized Crime
Company, Limited Commission (PAOCC)
Licenses ACT 2392 Presidential Task Force
Pototan Electric Light and Power on the Security of
Corporation Energy Facilities and
2456
INDEX
Enforcement of Energy Price Control Law

Laws and Standards Amendments PD 234
EO 655 s. 2007 Price Coordinating Council
Presidential Committee on the Composition RA 10623
Bataan Nuclear Power Plant Creation RA 10623
Composition EO 13 s. Price regulation EO 383 s. 1989
1992 ; EO 265 s. 1995 ; EO 414 s. 1990 ; LOI 975-A s.
Named EO 13 s. 1992 1980
Powers and duties Private companies EO 215 s.
EO 265 s. 1995 1987
Presidential Committee on the Private Sector Generation Facility
Philippine Nuclear Power Plant (PSGF) IRR of EO 215 s.
Administrator of the 1987
Export Processing Zone Province of Rizal
Authority (EPZA) Licenses ACT 2039
Revoked EO 358 Public Information, Department of
s. 1989 LOI 329 s. 1975
Composition EO 315 s. Public Service Act CA 146
1988 Amendments CA 454 ;
Named EO 315 s. 1988 RA 1270
Powers and duties Public Service Commission
EO 315 s. 1988 RA 1270
Renamed EO 13 s. 1992 Composition CA 146
Presidential Task Force on Climate Name ACT 3316
Change (PTFCC) Powers and duties
Reorganization EO 774 CA 146
s. 2008 Reorganization CA 146
Presidential Task Force on the Public Transport Assistance
Security of Energy Facilities and Program (PTAP)
Enforcement of Energy Laws Creation EO 32 s. 2011
and Standards (PTF-SEFEELS) “Pantawid Pasada”
Composition EO 655 s. Implementation
2007 EO 32 s. 2011
Creation EO 655 s. Special fund EO 32 s.
2007 2011
Functions EO 655 s. Public utilities
2007 Licenses PD 551
Price Act Public Utility Commission
Amendments RA 10623 Amendments ACT 3316
Price Control Council Composition ACT 3108
Composition RA 6124 ; Creation ACT 3108
RA 6361 Powers and duties
Creation RA 6124 ; RA ACT 3108
6361 Renamed
Transferred to PD 56
2457
Public Service Licenses RA 5106

Commission Amendments
ACT 3316 RA 5857
Public Utility Commissioners, Board Rafael Consing
of Licenses RA 971 ;
Composition ACT 2307 RA 3003
Creation ACT 2307 Amendments
ACT 2307 Rafael G. Abiera
Pulupandan Power Plant Licenses ACT 3505
Licenses ACT 3486 Rafael Garces
Licenses ACT 3509 ;
Q ACT 4172
Ramon Del Castillo
Quezon, Province of Licenses ACT 3663
Independent Power Red Rovers Society
Producers (PPPs) Licenses ACT 3646
EO 27 s. 2011 Rehabilitation and Efficiency Plan
Power generation facilities (REP) EO 119 s. 2002
EO 27 s. 2011 Reimbursement certificates
Quirino Gonzales LOI 975 s. 1980 ; LOI 1271 s.
Rene T. Hamoy
Licenses RA 3999
R
Renewable Energy Act of 2008
RA 9513
REMB SEE Renewable Energy
Implementing rules
Management Bureau
IRR of 9513
REP SEE Rehabilitation and
Renewable Energy Industry
Efficiency Plan
Development and Operations
RETF SEE Renewable Energy
Renewable Energy Policy
Trust Fund
Mechanisms
RPS SEE Renewable Portfolio
Feed-in Tariff
Standards
(FiT) System
RRPPFs SEE Renewable Resource
IRR of RA 9513
Power Production Facility
Green Energy
Radio RA 4810
Option
Program
Radio stations RA 4025
IRR of RA 9513
Radioactive minerals SEE
Net-Metering for
Radioactive substances
Renewable
Radioactive substances PD 647 ;
Energy IRR
PD 1101
of RA 9513
Radioactive wastes RA 6969
Off-Grid
Rafael C. Aquino
2458
INDEX
Renewable Research Foundation Fund

Energy RA 3589
Development Restituto Palma Gil
Renewable Energy Restraint of trade ACT 3247
Market IRR Rhode E. Yonzon
of RA 9513 Licenses RA941
Renewable Portfolio Ricardo Carreon
Standards Licenses ACT 3666
(RPS) IRR Ricardo Gemora
of RA 9513 Licenses ACT 3781
Transmission and Riverside Electric Company
Distribution Licenses CA 488
System Rizalina M. Obidos
Development Licenses RA 689
IRR of RA 9513 Roberto Aurellano
Waste-to-Energy Licenses ACT 3981
Technologies Roberto S. Iñigo
Renewable Energy Management Roman Baluyut
Bureau (REMB) Licenses ACT 3880
Creation IRR of RA 9513 Amendments
; RA 9513 CA 488 ;
Powers and duties IRR RA 3178
of RA 9513 ; RA 9513 Romblon Light and Ice Plant
Renewable Energy resources Company, Limited
Prospecting RA 9513 Licenses ACT 2821
Renewable Energy Trust Fund Romeo Firme
(RETF) Licenses RA 2330
Creation IRR of RA 9513 Romulo V. Ramos
; RA 9513 Licenses RA 788 ;
Renewable Resource Power RA 3829
Production Facility (RRPPFs) Roque Plasos
IRR of EO 215 s. 1987 Licenses RA 3186
Reorganization Act of the Rosiano Rodano
Department of Environment and Licenses RA 1431
Natural Resources EO 192 Royalty EO 100 s. 2002
s. 1987 Ruben A. So
Reorganization Act of the Ministry Licenses RA 4922
of Environment, Energy and Ruben D. Neri
Natural Resources EO 131 Licenses RA 2312
s. 1987 Rufino Ramirez
Reorganization Act of the National Licenses ACT 3654
Science and Technology Ruperto Tamula, Sr.
Authority EO 128 s. 1987 Licenses RA 2280
2459
Ruperto A. Villareal Sociedad Anonima denominated La

Licenses CA 667 Electrica
Rural electrification loans Licenses ACT 2701
EO 119 s. 2002 ; EO 460 s. 2005 Sociedad Anonima denominated
Pototan Electric Light and
S Power Company, Limited
Licenses ACT 2392
SPUG SEE Small Power Utilities Sociedad Anonima, Malolos Electric
Group Light, Power, and Ice Plant
Sablayan Development Corporation Company
Salvador E. Villarroya Amendments
Salvador T. Singuillo Sociedad Anonima, Silay Electric
Licenses RA 1114 and Ice Plant Company,
Incorporated
San Carlos Electric Light Company Licenses ACT 2393
Licenses ACT 3655 ; Amendments
ACT 3988 ACT 2332
San Fernando Electric Light and Solar energy EO 232 s. 2000
Power Co., Inc. Solar power plants EO 462 s.
Licenses RA 2293 ; 1987
RA 3207 Sorsogon Electric Plant
RA 3660 ; Southern Farmers Cooperative
RA 9967 Association
San Guillermo Development Licenses RA 4058
Corporation Southern Negros Geothermal Project
Licenses RA 4697 LOI 1164 s. 1981
San Jose Power House and Company Special Account General Fund 151
Licenses ACT 3488 (SAGF-151) EO 848 s. 2009
San Mateo Electric Plant Company, Special Account in the General Fund
Incorporated PD 1956
Licenses RA 4531 Speedboats SEE Motorboats
Santa Cruz Electric Light Co. Inc. State of National Emergency
Licenses ACT 2844 Declaration RA 6826
Saturnina Mendoza Subprovince of Benguet, Mountain
Licenses RA 651 Province
Science Act of 1958 RA 2067 Licenses ACT 2006
Science, Engineering and Technology Subsidies EO 32 s. 2011 ;
Research Fund RA 3589 LOI 907 s. 1979 ; LOI 1226 s.
Silay Electric and Ice Plant 1982 ; LOI 1227 s. 1982; LOI
Company, Incorporated 280 s. 1975 ; LOI 663 s. 1978
Licenses ACT 2393 Surigao Electric Company
Small Power Utilities Group (SPUG) Licenses ACT 3419
IRR of RA 9136
2460
INDEX
Surigao Electric Company Tariff on petroleum products EO

Incorporated 365 s. 1996 ; EO 894 s. 1983 ; EO
Licenses RA 2949 899 s. 1983 ; EO 115 s. 1993 ; EO
160 s. 1994 ; EO 314 s. 2000 ; EO
T 268 s. 2004 ; EO 316 s. 2004 ; EO
336 s. 2004 ; IRR of RA 8180
TEL SEE Tetraethyl Tayabas Light and Power Company,
TRANSCO SEE National Incorporated
Transmission Corporation Licenses ACT 3649
Tabaco Electric Co., Inc. Amendments
Licenses RA 5216 CA 218
Tacloban Electric Light and Ice Tayug Electric Corporation
Plants Co., Inc. Licenses RA 4409
Licenses Technical Advisory Committee
Amendments Composition RA 1815
ACT 2339 ; Creation RA 1815
RA 4052 Telecommunication lines
Tagum Electric Company RA 9511
Licenses RA 4158 Teofilo M. Pereyra
Talibon Business Enterprises Licenses ACT 3853
Licenses RA 3202 Teresa Electric and Power Co., Inc.
Talisay Electric Plant Licenses RA 4411
Licenses RA 1360 Tertuliano G. Portes
Tankers LOI 239 s. 1975 Licenses RA 1348
Tanuan Electric & Development Co., Tetraethyl (TEL) SEE
Inc. Tetraethyllead
Licenses RA 2993 Tetraethyl lead SEE
Tariff EO 115 s. 1993 ; EO 160 s. Tetraethyllead
1994 ; EO 314 s. 2000 ; EO 100 Tetraethyllead (TEL) PD 2001
s. 2002 ; EO 164 s. 2003 ; EO Theft of Electric Power Transmission
316 s. 2004 ; EO 461 s. 1997 ; Lines/Materials IRR of
EO 473 s. 1998 ; EO 449 s. 2000 RA 7832
; EO 890 s. 2010 Thorium PD 647 ; PD 1101
Tariff on asphalt EO 890 s. 2010 Tigbauan Electric Company
Tariff on electronic equipment Licenses ACT 3966
EO 396 s. 2004 Tomas Alonso
Tariff on fuel oil SEE Tariff on Licenses ACT 4136
petroleum as fuel Toxic Substances and Hazardous
Tariff on Natural Gas Vehicle (NGV) Wastes Control Act of 1990
industry EO 396 s. 2004 RA 6969
Tariff on petroleum as fuel Transmission lines SEE Electric
LOI 282 s. 1975 lines ; Telecommunication lines
Tariff on petroleum chemicals Transportation and
EO 316 s. 2004 Communications, Ministry of
LOI 1078 s. 1980
2461
Trip Ticket System LOI 990 s. Vicente San Pedro

1980 Licenses RA 4460 ;
Tubigon Electric Light RA 4462 ; RA 4463
Licenses RA 3227 Vicente Villanueva Y Florendo of
Tubigon Electric Service Co. Vican, Ilocos Sur
Tuguegarao Electric Plant Co., Inc. Victoria H. Viterbo Perez
Victorino M. Salcedo
U Licenses ACT 3650
Victorino Yenko
U. Bañez Electric Light Company Licenses RA 3237
Licenses RA 4143 Vigan Electric Light Company
Unleaded gasoline SEE Gasoline ; Licenses RA 316
Petroleum products Visayan Electric Company, Inc.
Upi-nuro Farmers’ Cooperative Licenses RA 4619
Marketing Association, Inc. Amendments
Upper Pampanga River Project Visayan Electric Company, S. A.
PD 35 ; RA 5499 Licenses ACT 3499 ;
Uranium LOI 669 s. 1978 ; RA 442 ; RA 443 ;
PD 647 ; PD 1101 RA 502
Prospecting LOI 669 s. Amendments
1978 ; LOI 1079 s. 1980 ACT 3551 ;
; LOI 1226 s. 1982 RA 3234
V W
V. B. Flores Electric Light, Inc. Watershed areas and reservations

Licenses RA 3803 Palimpinon Geothermal
V-M-C Rural Electric Service Area PD 1749
Cooperative, Inc. Tiwi Geothermal
Licenses RA 4598 Reservation PD 1749
Ventura P. Marilao Tongonan Geothermal Area
Vicente A. Racaza Watershed management EO 258
Licenses ACT 2770 ; s. 1995; EO 837 s. 1982 ; EO 223
ACT 3814 s. 1987
Vicente Cañete Angat Watershed
Licenses RA 494 Reservation EO 224
Vicente M. Fortich Zerda s. 1987
Licenses RA 4064 ; Buhi-Barit Watershed
RA 5722 Caliraya-Lumot Watershed
Reservation EO 224
s. 1987
2462
INDEX
Makiling-Banahaw World Fair

Geothermal Energy Turns the World
Reservations EO 224 LOI 1202 s. 1982
s. 1987 World Joy tanker LOI 1003 s.
Tiwi Geothermal 1980
Reservation EO 224
s. 1987 Z
Upper Agno Watershed
Reservation EO 224 ZANECO SEE Zamboanga Del
s. 1987 Norte Electric Cooperative, Inc.
Watershed Management Unit Zambales Electric Plant Corporation
Abolition EO 193 s. 1987 Licenses RA 5992
Watershed reservation PD 1515 Zamboanga Del Norte Electric
Water skiing PD 1688-A Cooperative, Inc. (ZANECO)
Wind power EO 232 s. 2000 RA 10376
Wind power plants EO 462 s.
1987
2463
A Publication of the
Office of the Secretary General

and the
Legislative Information Resources Management Department
House of Representatives
Editorial Board
Atty. Marilyn B. Barua-Yap, DPA, Secretary General

Edgardo H. Pangilinan, Deputy Secretary General
Editorial Team
Editors: Henedina Mary Anne S. Polo,

Herminia B. Callejo, Dante Roberto P. Maling
Assistant Editor and Head Indexer: Ester S. Gapas
Research, Indexing and Proofreading Team:
Jose V. Enciso (Team Leader), Rosemarie D. Balidoy,
Denise Marie C. Betia, Kenny Rose D. Clasita,
Jertrude C. Dimaano, Eugene J.T. Espinoza,
Annaliza O. Quigao, Mary Geraldine S. Reyes,
Fairlyn H. Sarga, Israelex A. Veleña
Encoders: Katleen G. Borja, Jonathan Z. Rodriguez,
Enrico D. Seña, Liwayway C. Zuñiga
Administrative Support Team: Richard S. Balucan,
Robert S. Cariño, Edgar B. Mancio, Ramon B. Nungay
Cover Concept and Design: Israelex A. Veleña
Page Lay-out and Printing: Printing and Reproduction Service,
Administrative Department
Laws & Executive Issuances Series No. 7
2464

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LAWS & EXECUTIVE ISSUANCES

IMPLEMENTING RULES AND REGULATIONS

BATAS PAMBANSA BLG. 33 1791

RULES AND REGULATIONS ON THE IMPLEMENTATION OF

REPUBLIC ACTS PAGE

REPUBLIC ACT NO. 7156 1818

RULE AND REGULATIONS GOVERNING THE FILING

REPUBLIC ACT NO. 7832 1841

REPUBLIC ACT NO. 8180 1873

REPUBLIC ACT NO. 8479 1900

REPUBLIC ACTS PAGE

REPUBLIC ACT NO. 9136 1948

REPUBLIC ACT NO. 9367 2144

REPUBLIC ACT NO. 9513 2184

REPUBLIC ACT NO. 10531 2264

PRESIDENTIAL DECREE NO. 972 2307

EXECUTIVE ORDER NO. 215 2336

RULES AND REGULATIONS IMPLEMENTING EXECUTIVE

APPENDIX: LIST OF LAW AMENDMENTS 2387

•List of Energy-Related Franchise Laws

LIST OF FRANCHISE LAWS

AN ACT PROVIDING FOR THE GRANTING OF A FRANCHISE TO

Approved October 20, 1902

ACT NO. 667

AN ACT PRESCRIBING THE METHOD OF APPLYING TO

Approved March 06, 1903

ACT NO. 1112

AN ACT AUTHORIZING THE ASSIGNMENT, SALE, AND TRANSFER

CONSTRUCT, MAINTAIN, AND OPERATE AN ELECTRIC STREET

Approved April 11, 1904

ACT NO. 1303,

AN ACT GRANTING TO MARTIN M. LEVERING A FRANCHISE TO

Approved February 24, 1905

ACT NO. 1446

AN ACT GRANTING A FRANCHISE TO CHARLES M. SWIFT TO

Approved January 30, 1906

ACT NO. 1968

AN ACT TO PROVIDE FOR THE GRANTING OF A FRANCHISE TO

Approved December 07, 1909

ACT NO. 1995

AN ACT AUTHORIZING THE GRANTEE OF THE FRANCHISE

Approved July 23, 1910

ACT NO. 2006

AN ACT TO PROVIDE FOR THE GRANTING OF A FRANCHISE FOR TFIE

Approved December 19, 1910

ACT NO. 2039

AN ACT TO PROVIDE FOR THE GRANTING OF A FRANCHISE TO

Approved February 03, 1911

ACT NO. 2167

AN ACT AUTHORIZING THE GRANTING OF A FRANCHISE TO

Approved February 06, 1912

ACT NO. 2179

AN ACT AUTHORIZING THE SALE OF THE BAGUIO ELECTRIC

Approved March 16, 1912

ACT NO. 2392

AN ACT GRANTING TO THE SOCIEDAD ANONIMA DENOMINATED

Approved February 28, 1914

ACT NO. 2393

AN ACT GRANTING TO THE SOCIEDAD ANONIMA KNOWN AS

Approved February 28, 1914

ACT NO. 2446

AN ACT AMENDING ARTICLES SEVEN AND EIGHT OF SECTION

Approved January 18, 1915

ACT NO. 2474

LAWS & EXECUTIVE ISSUANCES (1900-2014) : ENERGY Part3

LAWS & EXECUTIVE ISSUANCES (1900-2014) : ENERGY Part3