2. Section 1. Short Title. – This Act shall be known as the
"Department of Energy Act of 1992."
3. Section 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.
4. 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.
6. 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.
7. Powers and Functions of the DOE
◦ (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;
8. Powers and Functions of the DOE
◦ (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;
9. Powers and Functions of the DOE
◦ (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;
10. Powers and Functions of the DOE
◦ (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.
11. 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.
Officeof theSecretary
The Office of the Secretary shall consist of the Secretary and his
immediate staff.
TheSecretary
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.
12. The Secretaryshall have the following functions:
(a) Establish policies and standards for the effective, efficient, and economical
operation of the Department in accordance with the programs of the
Government;
(b) Exercise direct supervision and control over all functions and activities of the
Department, as well as all its officers and personnel;
(c) Devise a program of international information on the geological and contractual
conditions obtaining in the Philippines for oil and gas exploration in order to advance
the industry;
(d) Create regional offices and such other service units and divisions as may be
necessary;
13. (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.
14. TheUndersecretaries
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.
AssistantSecretaries
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.
15. 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.
16. Issuance of IRRs
The law empowers the DOE to formulate rules and regulations as may be necessary to implement
laws under its watch.
In Perez v. LPG Refillers Association, the issue is the validity of Circular No. 2000-06-010 issued
by the DOE to implement BP Blg. 33 which penalizes illegal trading, hoarding, overpricing, adulteration,
underdelivery, and underfilling of petroleum products, as well as possession for trade of adulterated petroleum
products and of underfilled liquefied petroleum gas (LPG) cylinders, and sets the monetary penalty for
violators. In upholding the validity of the Circular, the court laid down the rule that for an administrative
regulation, such as the circular in question, to have the force of penal law:
◦ 1. the violation of the administrative regulation must be made a crime by the delegating statute itself; and
◦ 2. the penalty for such violation must be provided by the statute itself.
The Circular satisfies the first requirement.
17. BP Blg. 33, as amended, criminalizes illegal trading, adulteration, underfilling and hoarding,
and overpricing of petroleum products. The Circular merely lists the various modes by which the
said criminal acts may be perpetrated. The enabling laws on which the circular is based provide the
DOE with increased administrative and penal measures with which to effectively curtail rampant
and adulteration and shortselling, as well as other acts involving petroleum products, which are
inimical to public interest.
In a case, the court upheld DOE Circular no. 2000-06-10 implementing BP Blg. 33. The
circular provided for fines for the commission of prohibited acts. The court found that nothing in
the circular contravened the law because the DOE was expressly authorized by the BP Blg. 33 and
R.A. No. 7638 to impose fines or penalties.
18. BureausandServices
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 Policy and Planning Bureau;
Electric Power Industry Administration Bureau; and
Oil Industry Administration Bureau.
19. Energy Resource Development Bureau (ERDB)
FUNCTIONS & SERVICES:
1. Formulate and implement policies, programs, regulations on
the exploration, development production of energy from
indigenous petroleum, petrochemical, coal and geothermal
energy resources; and
2. Undertake product and market development of coal and
geothermal resources/ industries.
20. Energy Utilization Management Bureau ( EUMB)
FUNCTIONS & SERVICES:
1. Formulate and implement policies, programs, regulations on
new energy technologies, alternative fuels and the efficient,
economical transformation, marketing and distribution of
conventional renewable energy resources; and
2. Undertake plans, programs and strategies to ensure efficient
and judicious utilization of conventional and renewable energy
resources.
21. Energy Policy andPlanning Bureau ( EPPB)
(which replaced the Energy Planning and Monitoring Bureau (EPMB)
FUNCTIONS & SERVICES:
1. Develop, prepare and update an integrated national energy
plan and other support plans for the energy sector;
2. Formulate energy policies, programs and strategies;
3. Undertake comprehensive assessment of the demand
scenarios and supply options; and
4. Undertake studies on the impact of energy policies on the
economy and environment
22. Electric Power Industry Administration Bureau ( EPIAB)
FUNCTIONS & SERVICES:
1. Supervise the restructuring of the electric power industry,
with a view to establishing a competitive, market-based
environment and encouraging private sector participation;
2. Formulate plans and programs that would ensure adequate,
efficient and reliable supply of electricity; and
3. Formulate plans, programs and strategies on rural
electrification.
23. Oil Industry Administration Bureau ( OIAB)
FUNCTIONS & SERVICES:
1. Formulate and implement policies, programs, and regulations
on the downstream oil industry, including then importation,
exportation, stockpiling, storage, shipping, transportation,
refining, processing, marketing and distribution of petroleum
crude oils, products and by-products; and
2. Monitor developments in the downstream oil industry;
24. The Administrative Support Services created
under R.A. No. 7638 was redefined into 3
services:
The Administrative Services
Finacial Services
Legal Services
25. The Philippine National Oil Company ( PNOC), the National
Power Corporation (NPC), and the National Electrification
Administration (NEA) have been placed under the supervision of the
Department, but are to continue to perform their respective
functions insofar as they are not inconsistent with the provisions of
RA No. 7638.
26. The National Transmission Corporation (TRANSCO)
Sec. 8 of R.A. No. 9136 created the National Transmission Corporation (TRANSCO) which shall
assume the electrical transmission functions of the National Power Corporation (NPC), and
exercise the powers and functions specified in the law. The TRANSCO shall assume the authority
and responsibility of the NPC for the planning, construction, and centralized operation and
maintenance of its high voltage transmission facilities, including grid-interconnections and ancilliary
services.
27. The Power Sector Assets andLiabilities Management Corporation
(PSALM)
Sec. 14 of R.A. No. 9136 , otherwise known as “the Electric Power Industry Reform Act of 2001”
(EPIRA), created a government-owned and controlled corporation known as The Power Sector
Assets and Liabilities Management Corporation
(PSALM) which shall take ownership of all existing NPC generation assets, liabilities, IPP contracts,
real estate and all other disposable assets.
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 liquidating all NPC financial obligations and stranded contract costs in an
optimal manner. .
28. National Electricication Administration
(NEA)
NEA shall continue to be under the supervision of the DOE and shall exercise its functions under
P.D. No. 269, as amended by P.D. 1645.
NEA shall develop and implement programs:
1. To prepare electric cooperatives in operating and competing under the deregulated electricity
market within 5 years from the effectivity of R.A. No. 9136, specifically in an environment of
open access and retail wheeling;
2. To strengthen the technical capability and financial viability of rural electric cooperatives, and
3. To review and upgrade regulatory policies with a view to enhancing the viability of rural
electric cooperatives as electric utilities.
29. Relationship with Other Government Departments
◦ The Department and its priority projects shall enjoy preferential treatment to 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.
30. ELECTRIC POWER INDUSTRY ACT OF 2001
(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;
(e) To ensure fair and non-discriminatory treatment of public and private sector
entities
in the process of restructuring the electric power industry;
(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.
