Republic Act No. 7638
AN ACT CREATING THE DEPARTMENT OF ENERGY
RATIONALIZING THE ORGANIZATION AND FUNCTIONS OF GOVERNMENT AGENCIES RELATED TO
ENERGY AND FOR OTHER PURPOSES
CHAPTER
I
GENERAL
PROVISIONS
SECTION 1. Short Title. – This Act shall be known as the
“Department of Energy
Act of 1992.”
SEC. 2.
Declaration of Policy. –
It is hereby declared the policy of the State:
(a) to ensure a continuous, adequate, and economic supply of energy with
the end in view of ultimately achieving self-reliance in the country’s
energy requirements through the integrated and intensive exploration,
production, management, and development of the country’s indigenous
energy resources, and through the judicious conservation, renewal and efficient
utilization of energy to keep pace with the country’s growth and economic
development and taking into consideration the active participation of the
private sector in the various areas of energy resource development; and (b) to
rationalize, integrate, and coordinate the various programs of the Government
towards self-sufficiency and enhanced productivity in power and energy without
sacrificing ecological concerns.
SEC. 3. Definition
of Terms. – (a) “Energy
projects” shall mean activities or projects relative to the exploration,
extraction, production, importation-exportation, processing, transportation,
marketing, distribution, utilization, conservation, stockpiling, or storage of
all forms of energy products and resources.
(b)
“Board” shall mean the
Energy
Regulatory Board.
SEC. 4.
Department of Energy. –
To carry out the above-declared policy, there is hereby created the
Department of Energy, hereinafter referred to
as the
Department, which shall prepare,
integrate, coordinate, supervise, and control all plans, programs, projects, and
activities of the Government relative to energy exploration, development,
utilization, distribution, and conservation.
SEC. 5.
Powers and Functions. –
The
Department shall have the following
powers and functions:
(a) Formulate
policies for the planning and implementation of a comprehensive program for the
efficient supply and economical use of energy consistent with the approved
national economic plan and with the policies on environmental protection and
conservation and maintenance of ecological balance, and provide a mechanism for
the integration, rationalization, and coordination of the various energy
programs of the Government;
(b) Develop
and update the existing Philippine energy program which shall provide for an
integrated and comprehensive exploration, development, utilization,
distribution and conservation of energy resources, with preferential bias for
environment-friendly, indigenous, and low-cost sources of energy. The program shall include a policy direction
towards the privatization of government agencies related to energy,
deregulation of the power and energy industry and reduction of dependency on
oil-fired plants. Said program shall be
updated within nine (9) months from its completion and not later than the
fifteenth day of September every year thereafter;
(c) Establish
and administer programs for the exploration, transportation, marketing,
distribution, utilization, conservation, stockpiling and storage of energy
resources of all forms, whether conventional or nonconventional;
(d) Exercise
supervision and control over all government activities relative to energy
projects in order to attain the goals embodied in Section 2 of this Act;
(e) Regulate
private sector activities as provided under existing laws: Provided, That the
Department shall endeavor to provide for an
environment conducive to free and active private sector participation and
investment in all energy activities.
At the end of four (4) years
from the effectivity of this Act, the
Department
shall, upon approval of the President, institute the programs and timetable of deregulation
of appropriate energy projects and activities of the energy industry;
(f) Assess the
requirements of, determine priorities for, provide direction to, and
disseminate information resulting from energy research and development programs
for the optimal development of various forms of energy production and
utilization technologies;
(g) Formulate
and implement programs, including a system of providing incentives and
penalties, for the judicious and efficient use of energy in all energy-consuming
sectors of the economy;
(h) Formulate
and implement a program for the accelerated development of nonconventional
energy systems and the promotion and commercialization on its applications;
(i) Devise
ways and means of giving direct benefits to the province, city, or
municipality, especially the community and people affected, and equitable and
preferential benefit to the region that hosts the energy resource and/or the
energy-generating facility: Provided,
however, That the other provinces, cities, municipalities, or regions shall
not be deprived of their energy requirements;
(j) Encourage
private enterprises engaged in energy projects, including corporations,
cooperatives, and similar collective organizations, to broaden the base of
their ownership and thereby encourage the widest public ownership of
energy-oriented corporations;
(k) Formulate
such rules and regulations as may be necessary to implement the objectives of
this Act; and
(l) Exercise
such other power as may be necessary or incidental to attain the objectives of
this Act.
CHAPTER
II
THE
DEPARTMENT PROPER
SEC. 6.
Composition. – The
Department Proper shall be composed of the
Office of the Secretary and the Offices of the Undersecretaries and Assistant
Secretaries, and the bureaus and services of the
Department.
SEC. 7.
Office of the Secretary. –
The Office of the Secretary shall consist of the Secretary and his immediate
staff.
SEC. 8.
The Secretary. – The
Secretary shall be appointed by the President, subject to confirmation by the
Commission on Appointments.
No officer, external auditor,
accountant, or legal counsel of any private company or enterprises primarily
engaged in the energy industry shall be eligible for appointment as Secretary
within two (2) years from his retirement, resignation, or separation
therefrom.
The Secretary shall have the
following functions:
(a) Establish
policies and standards for the effective, efficient, and economical operation
of the
Department in accordance with the
programs of the Government;
(b) Exercise
direct supervision and control over all functions and activities of the
Department, as well as all its officers and
personnel;
(c) Devise a
program of international information on the geological and contractual
conditions obtaining in the
(d) Create
regional offices and such other service units and divisions as may be
necessary;
(e) Create
regional or separate grids as may be necessary or beneficial; and
(f) Perform
such other functions as may be necessary or proper to attain the objectives of
this Act.
The Secretary shall be an ex
officio member of the Board of the
National
Economic and Development Authority (NEDA).
He shall also be a member of the
NEDA’s
Committee on Infrastructure (INFRACOM) and the Investment Coordinating Council
(ICC). For this purpose, the provisions
of Executive Order No. 292, otherwise known as the Administrative Code of 1987,
relative to the creation and organization of the
NEDA and its component agencies and offices
are hereby modified accordingly.
The Secretary shall also be a
member of the body authorized to formulate, prescribe, or amend the necessary
guidelines for the financing, construction, operation, and maintenance of the
infrastructure projects by the private sector, under
Republic
Act No. 6957, otherwise known as the Build-Operate-Transfer
Law.
SEC. 9.
The Undersecretaries. –
The Secretary shall be assisted by three (3) Undersecretaries who shall be
appointed by the President upon the recommendation of the Secretary. They shall have the powers and functions as
provided for in Section 10, Chapter 2, Book IV of the Administrative Code of
1987.
The Office of the
Undersecretaries shall consist of the Undersecretaries and their respective
immediate staff.
SEC. 10.
Assistant Secretaries. –
The Secretary shall also be assisted by three (3) Assistant Secretaries, one
(1) for operations, one (1) for policy and programs, and another for
administrative services. The Assistant
Secretaries shall be appointed by the President upon the recommendation of the
Secretary.
SEC. 11.
Qualifications. – No
person shall be appointed Secretary, Undersecretary, or Assistant Secretary of
the
Department unless he is a citizen and
resident of the Philippines, of good moral character, and of proven competence
in any of the following fields: (a)
energy or utility economics; (b) public administration; (c) physical or
engineering sciences; (d) management; or (e) law.
SEC. 12.
Bureaus and Services. –
Subject to the power of the Secretary, with the approval of the President, to
reorganize, restructure, and redefine the functions of the bureaus and services
for the effective discharge of the powers and functions of the
Department under this Act, the Department
shall have the following bureaus and services:
Energy Resource Development Bureau; Energy Utilization Management
Bureau; Energy Industry Administration Bureau; Energy Planning and Monitoring
Bureau; and Administrative Support Services.
The bureaus and services shall
have the following powers and functions:
(a) Energy
Resource Development Bureau – (1) Assist in the formulation and implementation
of policies to develop and increase the domestic supply of local energy
resources like fossil fuels, nuclear fuels, and geothermal resources;
(2) Assist in
the formulation of sectoral programs and plans relative to the exploration, development,
and extraction of local energy resources and implement, monitor, and regularly
review said program;
(3) Conduct
energy research and studies in support of the abovementioned activities;
(4) Provide
consultative training and advisory services to practitioners and institution
sin the areas of regulated activities; and
(5) Assist in
the formulation of financial and fiscal policies, rules, guidelines, and
requirements relative to the operation of service contractors and implement and
enforce said policies.
(b) Energy
Utilization Management Bureau – (1) Assist in the formulation and
implementation of policies for the efficient and economical transformation,
conversion, processing, refining, marketing, distribution, transportation, and
storage of petroleum, coal, natural gas, geothermal, and other nonconventional
energy resources such as wind, solar, biomass, and others; and ensure their
efficient and judicious utilization;
(2) Monitor
sectoral energy consumption and conduct energy audits, technical training,
energy management advisory services, and technology application on efficient
energy utilization;
(3) Develop,
promote and commercialize applications of biomass, solar, small hydro, wind,
wood, and charcoal and other nonconventional energy systems including new and
more efficient and economical transformation, conversion, processing, refining,
marketing, distribution, transportation, and storage technologies for
conventional energy resources;
(4) Assist in
the formulation of an integrated rural energy program to effectively address
the needs of rural development and environmental programs and implement,
monitor, and regularly review said program;
(5) Assist in
the formulation of an operational plan for the allocation of oil, fuel, and
energy sources in the event of the declaration of critically low-energy supply
provided for in Section 25 of this Act;
(6) Provide
information on energy technology and develop middle and long-term energy
technology development in cooperation with the
Department
of Science and Technology;
(7) Monitor
the implementation of energy projects in coordination with the
Department of Environment and Natural Resources
to ensure compliance with prescribed environmental standards;
(8) Recommend
appropriate courses of action to resolve major issues may impede energy project
siting or result in adverse environmental impact;
(9) Require
industrial, commercial, and transport establishments to collect or cause the
collection of waste oil for recycling as fuel or lubricating oil; and
(10) Develop and implement
a continuing energy conservation program designed to optimize energy
utilization, including a nationwide information campaign on energy
conservation.
(c) Energy
Industry Administration Bureau – (1) Assist in the formulation of
regulatory policies to encourage and guide the operations of both government
and private entities involved in energy resource supply activities such as
independent power production, electricity distribution, as well as the
importation, exportation, stockpiling, storage, shipping, transportation,
refinement, processing, marketing, and distribution of all forms of energy
products, whether conventional or nonconventional;
(2) Draw up
plans to cope with contingencies of energy supply interruptions; and
(3) Assist in
the formulation of financial and fiscal policies, rules, guidelines, and
requirements relative to the operations of entities involved in the supply of
energy resources such as oil companies, petroleum product dealers, coal
importing and distributing companies, natural gas distribution entities,
independent power producers, and all other entities involved in conventional
supply activities and implement and enforce said policies.
(d) Energy
Planning and Monitoring Bureau – (1) Assist in the development and
updating of an integrated energy plan for the short, medium, and long-term
periods to provide a comprehensive assessment on the demand scenarios and
supply options as well as the impacts of energy policies on the economy,
poverty, and environment;
(2) Develop
and maintain a centralized, comprehensive, and unified data and information
program to ensure the efficient collection, evaluation, analysis, and
dissemination of data and information on reserves of various energy resources,
production, demand, development technology, and related economic and
statistical information which are required for policy formulation, program
planning and implementation;
(3) Supervise,
coordinate, and integrate the formulation, monitoring, and review of programs
and plans for energy supply development such as power development, local energy
resource development and production, and energy importation;
(4) Regularly
review and analyze past and current patterns of energy consumption vis-à-vis
growth and development performance of the various economic sectors to evaluate
current and foreseeable trends in energy demand; and conduct energy
supply-demand balancing studies to define energy supply and utilization
strategies, estimate the resources required, and assess the energy program’s
economic, environmental, social, and political impact;
(5) Assume the
incorporation of national environmental goals in the formulation and
implementation of energy programs, and to advance the goals of restoring,
protecting, and enhancing environmental quality, and assuring public health and
safety; and
(6) Conduct
studies on international energy issues that have a direct impact on
negotiations involving energy resources and technologies.
(e) Administrative
Support Services – The Administrative Support Services shall be
composed of the Office of the Legal counsel and the Financial and Management
Services.
The Office of the Legal Counsel
shall be responsible for providing legal advice and services on all policies,
programs, and operational matters of the
Department. It shall provide legal counseling services in
cases where the
Department is a party and
shall also handle administrative cases against any personnel of the
Department and submit recommendations
pertaining to them.
The Financial and Management
Services, which shall consist of the Human Resources Management Division,
General Services Divisions, and the Financial Management Division, shall be
responsible for providing the
Department
with services relative to personnel information, records, supplies, equipment,
collection and disbursements, security, and custodial works. It shall also be responsible for providing
the
Department with staff advice and
assistance on budgetary, financial, and management improvement matters.
CHAPTER
III
ATTACHED
AGENCIES AND CORPORATIONS
SEC. 13.
Attached Agencies and Corporations.
– The
Philippine National
Oil Company (PNOC), the
National Power
Corporation (NPC), and the
National
Electrification Administration (NEA) are hereby placed under the
supervision of the
Department, but shall
continue to perform their respective functions insofar as they are not
inconsistent with this Act. Their annual
budget shall be submitted to Congress for approval. The Secretary shall, in a concurrent
capacity, be the ex officio chairman of the respective boards of the
PNOC,
NPC,
and
NEA, unless otherwise directed by the
President: Provided, That in no
case shall the Secretary be the chief executive officer or chief operating
officer of the said agencies or their subsidiaries, any law to the contrary
notwithstanding.
To this end, Section 6,
paragraph (3) of
Presidential Decree No. 927 and
Section 8 of
Presidential Decree No. 334, providing that the Chairman of the
PNOC shall be the president and chief
executive officer thereof, are accordingly repealed.
The Secretary may recommend to
the President the reorganization of the boards of directors of the
PNOC,
NPC,
and
NEA.
SEC. 14. Council of Energy Advisers. – A council of advisers on energy
affairs consisting of five (5) members and appointed from the industry, labor,
and consumer sectors shall advise the President on the overall energy program,
especially on private sector initiatives and proposals.
The President shall convene the
council within thirty (30) days upon approval of this Act.
CHAPTER
IV
TRANSITORY
PROVISIONS
SEC. 15.
Abolition of Agencies. –
The
Office of Energy Affairs and the Energy Coordinating Council are hereby
abolished subject to Section 17 of this Act.
SEC. 16.
Transfer of Powers and Functions.
– The powers and functions of the Energy Coordinating Council
and the
Office of Energy Affairs are hereby transferred to the
Department.
The foregoing transfer of powers
and functions shall include all applicable funds and appropriations, records,
equipment, property, and personnel as may be necessary.
The same shall apply to agencies
and government units which have not been abolished but whose functions have
been transferred to the
Department.
As the successor-in-office of
the
Office of Energy Affairs, the
Department
shall administer the activities of the Technology Transfer for Energy
Management (TTEM) project. For this purpose,
the
Department shall continue the
utilization of all funds, monies, interests, reflows, and properties
outstanding and accruing from the TTEM project upon its termination for the
following purposes:
(a) To finance
energy conservation projects of industrial and commercial establishments;
(b) To monitor
implemented sub-projects and document the actual energy savings generated; and
(c) To
disseminate information on implemented sub-projects through case studies and
seminars/workshops so as to encourage replication by other industrial and
commercial establishments.
Sec. 17.
Transfer of Rights, Assets, and Liabilities. – The
Department shall, by virtue of this Act, be
subrogated to all the rights and assume all the liabilities of the
Office of
Energy Affairs, the Energy Coordinating Council, and all other agencies, or
government units whose functions and powers have been transferred to the
Department, and all their funds, records,
property, assets, equipment, and such personnel as necessary, including
unexpended appropriations and/or allocations.
All contracts and liabilities of said offices, agencies, and government
units are hereby transferred to and assumed by the
Department and shall be acted upon in
accordance with the Auditing Code and other pertinent laws, rules, and
regulations: Provided, That the
officers and employees of said offices, agencies, and government units shall
continue in a holdover capacity until such time as the new officers and
employees of the
Department shall have been
duly appointed pursuant to the provisions of this Act.
SEC. 18.
Rationalization or Transfer of Functions of Attached or Related
Agencies. – The non-price
regulatory jurisdiction, power and functions of the
Energy Regulatory Board as provided for in
Section 3 of
Executive Order No. 172 are hereby
transferred to the
Department.
The foregoing transfer of power
and functions shall include all applicable funds and appropriations, equipment,
property, and such personnel as may be necessary: Provided, That only each amount of
funds and appropriations of the
Board as
well as only the personnel thereof which are completely or primarily involved
in the exercise by said
Board of its
non-price regulatory powers and functions shall be affected by such
transfer.
The power of the
NPC to determine, fix and prescribe the rates
being charged to its customers under Section 4 of
Republic
Act No. 6395,
as amended, as well as the power of
electric cooperatives to fix rates under Section 16 (o), Chapter II of
Presidential Decree No. 269,
as
amended, are hereby transferred to the
Energy
Regulatory Board. The
Board shall exercise its new powers only after
due notice and hearing and under the same nature provided for under
Executive Order No. 172.
SEC. 19.
Structure and Staffing Pattern.
– The organizational framework and staffing pattern of the
Department shall be prescribed and approved by
the Secretary within sixty (60) days after the approval of this Act and the
authorized positions created therein shall be filled by regular appointments by
the President or the Secretary as the case may be: Provided, That, in the filling of
positions created, preference shall be given to the personnel of the
Office of
Energy Affairs, the Energy Coordinating Council, and the
Energy Regulatory Board: Provided, however, That if such
individuals possess the same qualifications, seniority shall be given
priority.
SEC. 20.
Separation from Service. –
Employees separated from the service as a result of this reorganization shall,
within six (6) months from their separation from the service, receive the
retirement benefits to which they may be entitled under existing laws, rules,
and regulations.
CHAPTER
IV
APPROPRIATIONS
SEC. 21.
Appropriations. –
Such sums as may be necessary for the implementation of this Act shall be taken
from the current fiscal year appropriations of the
Office of Energy Affairs,
the
Office of Energy Affairs’ special fund created under Section 8 of
Presidential Decree No. 910, and such amounts as the President
of the Philippines may allocate from other resources in accordance with
law: Provided, That the total
amount shall not exceed Three hundred million pesos (P 300,000,000). Thereafter, the amount needed for the
operation and maintenance of the
Department
shall be included in the annual General Appropriations Act.
Subject to existing rules and
regulations, the funds and monies collected or which otherwise come into
the possession of the
Department and its
bureaus from fees, surcharges, fines, and penalties which the
Department and its bureaus may impose and collect
under this Act, as well as an amount to be determined at the beginning of every
calendar year representing twenty percent (20%) of the outstanding balance of
the funds and monies forming part of the special fund under Section 8 of
Presidential Decree No. 910, shall be disbursed for
expenses necessary for the effective discharge of the powers and functions of
the
Department under this Act.
CHAPTER
VI
MISCELLANEOUS
PROVISIONS
SEC. 22.
Disclosure and Divestment of Financial Interest. – Before assumption of office, the
Secretary of the Department, the
Undersecretaries, and the Assistant Secretaries shall submit to the
Civil Service Commission a list of all
companies, partnerships, or business enterprises, including nonprofit
organizations, in which he or any immediate member of their families within the
second degree of consanguinity or affinity have any form of financial interests
or employment relationship, including consultancy: Provided, however, That all other
forms of employment relationship held by the heads of the offices of the
Department shall be immediately upon
assumption of office.
Within thirty (30) days
thereafter, complete divestments of financial interests in any institution,
firm, or company which fall under the supervisory or regulatory jurisdiction of
the
Department shall be made: Provided, however, That in cases where
confirmation of appointment by the Commission on Appointments is required, the
divestment mandated herein shall be complied with within thirty (30) days after
such confirmation.
The divestment prescribed in the
preceding paragraph shall likewise apply to the member of the immediate family
within the second degree of consanguinity having interest in any institution or
activity which falls under the regulatory jurisdiction or supervision of the
Department and the attached agencies.
SEC. 23.
Relationship with Other Government Departments. – The
Department and its priority projects shall
enjoy preferential treatment in the exploration, development, exploitation, and
extraction of petroleum, coal, and other geothermal resources, and in the
matter of providing technical support necessary for the establishment of
power-generating plants.
Upon request of the
Department or any of its bureaus, all
government agencies with functions relative to the approval of the projects of
the
Department or its duly authorized and
endorsed entities, whether government or private, shall act upon and resolve
the matter within ten (10) calendar days.
Toward this end, the Secretary, with the approval of the President, may
establish an interagency secretariat for the purpose of expediting the approval
of said projects.
SEC. 24.
Visitorial Powers. –
The Secretary of the
Department or his
representative shall have visitorial and examining authority over nongovernment
entities with contracts for the exploration, development, or utilization of the
natural resources for energy purposes in order to determine the share of the
Government in the revenue or product thereof, and to ascertain all funds
collectible and products due the Government have actually been collected or
delivered.
During such examination, the
nongovernment entity concerned shall produce all the reports, records, books of
accounts, and other papers that may be required.
The refusal by any such
nongovernment entity to allow an examination of its books of accounts and
pertinent records or its concealment of any material information concerning its
financial status shall be a breach of its contract with the Government and
shall constitute a legal ground for the cancellation thereof.
SEC. 25.
Contingency Powers. –
In time of critically low-energy supply or imminent danger thereof, the
President may, upon the determination and recommendation of the Secretary,
issue a declaration of the same.
Thereafter, the Secretary is hereby authorized to implement the fuel and
energy allocation plan provided in Section 12 (b) (5) of this Act, and to
formulate other measures for the conservation of energy including, but not
limited to, power or fuel rationing, load curtailments, and restrictions on the
use of government vehicles and resources.
SEC. 26.
Repealing Clause. –
All laws, presidential decrees, executive orders, and rules and regulations, or
parts thereof, inconsistent with the provisions of this Act are hereby repealed
or modified accordingly.
However, in no case are the
provisions of
Republic Act No. 6969 repealed, amended,
or modified by the provisions of this Act.
SEC. 27.
Separability Clause. –
If, for any reason, any section or provision of this Act is held
unconstitutional or invalid, the other sections or provisions hereof shall not
be affected thereby.
SEC. 28.
Effectivity Clause. –
This Act shall take effect after its complete publication in at least two (2)
national newspapers of general circulation.
Approved, December 9, 1992.
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