Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

‘SEVENTEENTH CONGRESS

First Regular Session

: 4408

No.

House

INTRODUCED BY REPRESENTATIVES CARLOS ROMAN L. UYBARRETA and RODEL M. BATOCABE

EXPLANATORY NOTE

Electricity is one of the most important blessings that science has given to mankind. It has also
become part of modern life and one cannot think of a world without it. Through time, the importance
of electricity to people's life has only increased. On this ground, more efficient and reliable provision
of electricity is desirable for peace and security. Our government has taken full gear in the provision
of electricity for all and to the farthest and poorest sector of our society...thus PD 269 was signed into
law in August 1973. Presidential Decree 269 created the National Electrification Administration
(NEA) declaring as a national policy objective the total electrification of the Philippines and the
development of electric cooperatives to uplift the standard of living in the rural areas.

The fact that the Philippines contain several small islands makes electricity distribution difficult. It is
also located in the “typhoon belt” which makes it more challenging as an average of twenty (20)
typhoons visit each year. The effects of the 2013 thru 2016 Pacific typhoon season were considered
some of the worst in decades. Through the years, series of typhoons impacted the country with
Typhoon Yolanda bringing the worst damage in terms of death toll and damage to properties.
Typhoon Yolanda made its first landfall in the Easter Visayas with winds recorded at 315 km/hr (195
mph), The storm produced a large storm surge which brought the death of around 7,000 people.
Damages are estimated at 89.6 billion. Transmission and distribution lines of electricity were
damaged. It took the government weeks and even months to fully rehabilitate the metropolis of
Leyte.

Data from the Department of Budget and Management (DBM) shows the actual cost of damages
from destructive typhoons from 2010 to 2016: 2010 - Typhoon Juan-11 billion; 2011 - Typhoon
Pedring - 15 billion; 2012 - Typhoon Pablo - 42.2 billion; 2013 - Typhoon Yolanda - 89.6 billion; 2014 -
‘Typhoon Glenda - 38.6 billion; 2015 - Typhoon Lando and Onyok - 6.2 billion; and 2016 - Typhoon
Ferdie - 365 million.

Without electricity, no meaningful relief and rescue efforts can take place, health conditions
deteriorate in the absence of basic services and peace and order condition quickly degenerates.

There is therefore a need for the government to act fast enough to respond to the needs of the
electric cooperatives especially after the Force Majeure and Fortuitous Events. And the need to
infuse funds to quickly respond to put back electricity —-relocate, rehabilitate, repair transmission
and distribution lines and other assets of electric cooperatives with out the long procedure to wait
for funds to be released by the national government. From 2004-2014, the national government has
provided a total of Php 6.3 billion to 75 electric cooperatives which were damaged by calamities. The
release of the funds was significantly delayed due to the completion of facts/reports of damages and
finally, approval of the President upon completion of the required reports on the extent of damages.

The time lapse provides opportunity for lawless elements to bring more uncertainty and further
burden families already devastated emotionally and financially. The economy is at a stand still, no
production of goods and services and no means of communication.

For 2015, data from the Department of Energy (DOE) shows 79.9% or 17.4 million households are
electrified and this figure translates to 87 million Filipinos who are dependent for electricity from 120


electric cooperatives nation-wide. DOE is working to achieve 86.20% household electrification by
end of this year and 90% by 2017.

The creation of a readily available TRUST FUND will certainly streamline the process of fund sourcing
and will allow for the fast restoration and rehabilitation of transmission and distribution lines and
other assets of electric cooperatives.

In view of all the foregoing, the kind and favourable support of the members of Congress for the
prompt and timely passage of this measure is earnestly sought.

CAR IAN L. UYBARRETA

Representative
1-CARE Party List AKO BICOL Party List,


Republic of the Philippines
Congress of the Philippines
Quezon City

Seventeenth Congress
First Regular Session
House Bill No, 4408

Introduced by Representatives Carlos Roman L. Uybarreta, 1-CARE Party List and
Rodel Batocabe, Ako Bicol Party List

AN ACT CREATING AN ENERGY DISASTER TRUST FUND FOR ELECTRIC
COOPERATIVES AND PROVIDING FUNDS THEREFOR

CHAPTER 1
TITLE, POLICY AND DEFINITIONS

SECTION 1. Title. This Act shall be known as the “Energy Disaster Trust Fund For
Electric Cooperatives.”

SECTION 2. Declaration of Policy. The total electrification of the Philippines on an area
coverage basis being vital to the welfare of its people and the sound development of the
Nation, it is hereby declared to be the policy of the state to pursue and foster, in an
orderly and vigorous manner, the attainment of this objective. For this purpose, the
State shall:

a) Give every tenable support and assistance, to the fullest extent of which the
State is capable, the electric cooperatives because of their non-profit nature,
cooperative character and the heavy financial burdens that they must
sustain to become effectively established and operationally viable;

b)

Uphold the people's constitutional rights to life and property by providing
immediate assistance to electric cooperatives adversely affected by force
majeure or fortuitous events and restore electricity to the fullest extent;

°)

Adopt and implement a coherent, comprehensive and efficient means of
financial assistance to electric cooperatives and promote involvement and
participation of all sectors and stakeholders to restore electric service in the
earliest time to lessen the socio-economic and environmental impacts
brought about by force majeure or fortuitous events;

d) Allocate funds in the form of a trust fund for the immediate restoration of
electric cooperatives’ damaged facilities;

°)

Require electric cooperatives to develop a comprehensive vulnerability risk
assessments that identifies disaster preparedness and mitigation measures

and emergency response plans to protect, strengthen, restore and
rehabilitate damaged infrastructure assets and facilities.


SECTION 3. Scope. This Act shall be applicable to all Electric Cooperatives
throughout the country.

SECTION 4. Definition of Terms. As used in this Act, the following words or terms
shall have the following meanings, unless provided otherwise:

a) Disaster - shall refer to a serious disruption of the functioning of a
community or a society involving widespread human, material, economic
or environmental losses and impacts which exceeds the ability of the
affected community to cope using its own resources.

b) Electric Cooperatives - shall refer to distribution utility created and

‘operating pursuant to Presidential Decree No. 269, as amended;

Emergency Response Plan - shall refer to the development and preparation

of written and formal plan regarding “organizational structure and steps”

which will enable the Electric Cooperative to restore its system in a safc
and timely manner after a Force Majeure or Fortuitous Event;

°)

d) Energy Regulatory Commission - shall refer to the regulatory agency
created under Republic Act No. 9136;
e) Force Majeure- shall refer to an event that is a result of elements of nature

that cannot be reasonably anticipated or controlled, such as, but not limited
to typhoon, storm, tropical depression, flood drought, volcanic eruption,
earthquake, tidal wave or landslide;

f) Fortuitous Event- shall refer to an act of war (declared or undeclared),
sabotage, blockade, revolution, riot, insurrection, civil commotion or any
violent or threatening action;

g) Government Agency- or “agency of the government” or “agency” refers to

any department, bureau or office of the national government, or any of its

branches or instrumentalities, or any political subdivision, as well as any
government controlled corporations including its subdivisions, or other
self-governing board or commission of the government.

Joint Congressional Power - shall refer to the Commission created under

Republic Act No. 9136;

i) Malampaya Fund - shall refer to a Special Fund created under Presidential
Decree No. 910 intended to finance energy resource development and
exploration programs and projects of the government and for such other
purposes duly approved by the President;

j) National Electrification Administration - shall refer to the government
agency created under Presidential Decree No. 269, as amended;
Restoration and Rehabilitation - shall refer to the actions or activities
undertaken by the Electric Cooperatives to rebuild, replace or repair the
necessary facilities to provide reliable electric service to member-
consumers after a Force majeure or fortuitous event, taking into
consideration designs, materials or equipment that will make the
infrastructure more resilient;

1) Trust Fund - refers to a fund which have come officially into the possession
of any agency of government or of a public officer or trustee, agent of
administrator or which have been received for the fulfilment of some
obligation (P.D. No. 1445, s. 1978).

m) Vulnerability and Risk Assessment - shall refer to the Electric Cooperatives
identification of critical assets and the development of Disaster
Preparedness, Disaster Prevention and Mitigation Measures to protect,

h)

k)



restore or strengthen critical assets prior to the onset of a Force Majeure or
Fortuitous Event.

CHAPTER II

CREATION AND IMPLEMENTATION OF THE TRUST FUND FOR ELECTRIC
COOPERATIVES

SECTION 5. Creation of the Trust Fund for Electric Cooperatives. To implement the
aforesaid policy of the State, there is hereby created a Trust Fund for Electric
Cooperatives, which shall be managed and administered by the National
Electrification Administration. Resources appropriated for this fund shall not be
returned to the Treasury, but shall remain within the Fund affected and shall
continue destined to its objective for the following years.

SECTION 6. Powers and Functions of the National Electrification Administration.
The National Electrification Administration shall have the following additional
powers and functions:

a) Formulate policies and coordinates the implementation of all activities of

the Electric Cooperatives relative to disaster management;

Establishes, administers and monitors the implementation of the Electric

Cooperatives’ comprehensive and integrated programs such as but not

limited to Vulnerability Risk Assessment and emergency Response Plan;

Reviews and approves all activities of the Electric Cooperatives relative to

Disaster Mitigation, Disaster Preparedness and Disaster Prevention Plans s

a result of the Vulnerability Risk Assessment;

Develops the criteria and requirements to enable Flectric cooperatives to

avail of the Trust Fund for Electric Cooperatives;

Develops the procedural requirements for program participation and fund

allocation;

f) Determines the annual budget of the Electric Cooperatives’ Trust Fund

and submits the same for approval of Congress;

Receives all donations (funds, materials and/or equipment) which are

intended for the express purpose of addressing the restoration of Electric

Cooperatives’ infrastructure damaged by a Force Majeure or Foriuitous

Event; and

h) Promulgates such rules and regulations as may be necessary to implement
the provisions of this Act.

b)

ie)

°)

a

CHAPTER III
RESPONSIBILITIES OF THE ELECTRIC COOPERATIVES

SECTION 7. Responsibilities of the Electric Cooperatives. In addition to its mandate
to implement the rural electrification program nation-wide under existing laws,
Electric Cooperatives shall be vested with all the powers necessary to ensure the
protection, preparedness and mitigation of the adverse impact of any Force Majeure
or Fortuitous Event to its infrastructures. It shall ascertain the ability of its
manpower to undertake emergency response for the immediate restoration and
rehabilitation of its damaged infrastructures. It shall undertake the following
activities:


a) Undertake a disaster Vulnerability Risk assessment of all their
infrastructures in accordance with the national _ electrification
administration approved template;

Prepare projects and programs including the financial requirements
necessary to protect and mitigate the disaster vulnerability of all its
infrastructures to review and approval of the National Electrification
Administration;

Institutionalize an Emergency Response Plan to be activate immediately
before and after the occurrence if a Force Majeure or Fortuitous Event;
Comply with the National Electrification Administration policies and
procedural requirements for the program participation and fund allocation;
Undertake all other activities necessary to implement the objectives of the
provisions of this Act.

Dd)

°)

d

°)

CHAPTER IV
FUND SOURCES AND ALLOCATION

Section 8. Fund Sources. The Energy Disaster Trust Fund of Electric Cooperatives
shall be funded through the following sources:

a) Malampaya Fund
b) General Appropriations Act

Section 9. Donations. All donations (fund, materials, and or equipment), whether
local or international, intended for the express purpose of restoring or rehabilitating
the Electric Cooperatives infrastructure damaged by a Force Majeure or Fortuitous
Event, shall be received directly by the National Electiification Administration.
International donations shall be exempt from all duties, fees, taxes and other
charges.

Section 10. Appropriations. The sum of Seven Hundred Fifty Million Pesos (Php
750,000,000.00) for the initial implementation of this Act shall be taken out from the
Malampaya Fund and shall be included in the annual General Appropriation Act
(GAA).

Section 11. Allocation of the Trust Fund for Electric Cooperatives. The Trust Fund
for Electric Cooperatives shall be allocated in the following manner:

a) One Hundred Percent (100%) for Electric Cooperatives which incurred
75%-100% damages through Force Majeure or Fortuilous Events duly
approved by the National Electrification Administration;

Fifty Percent (50%) for Electric Cooperatives which incurred 50%-74%
through Force Majeure or Fortuitous Events duly approved by the National
Electrification Administration ;

¢) Twenty Five Percent (25%) for Electric Cooperatives which incurred 19%
and below damages through Fortuitous Event duly approved by the
National Electrification Administration;

Ten Percent (10%) for the repayment of outstanding obligations of the
Electric Cooperatives incurred for the purpose of financing the restoration
or rehabilitation of its infrastructures damaged by Force Majeure or
Fortuitous Events.

b)

d)


The Energy Disaster Trust Fund for Electric Cooperatives shall be administered by
the National Electrification Administration (NEA). NEA shall regularly submit an
annual disbursement report on the utilization of the Trust Fund to Commission on
Audit (COA) Auditor within the 1 quarter of the succeeding year.

If the Energy Disaster Trust Fund for the year is inadequate to cover the restoration,
rehabilitation of damaged facilities due to Force Majeure or Fortuitous Events, the
NEA shall seek for the allocation of supplementary budget corresponding to the
outstanding balance from the Malampaya Fund subject to the approval of the
President.

Section 12. Outstanding Calamity Loans for Electric Cooperatives. Upon the
effectivity of this Act, all outstanding obligations of Electric Cooperatives to the
NEA and other financing institutions incurred for the purpose of financing the
restoration or rehabilitation of the Electric Cooperatives damaged by Force Majeure
or Fortuitous Events shall be assumed by the NEA from the Energy Disaster Trust
Fund in accordance with the program duly approved by the Joint Congressional
Power commission within six (6) months from the effectivity of this Act. The Energy
Regulatory Commission (ERC) shall ensure the reduction in the electricity rates of
the 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 calamity loans, any Electric Cooperative which shall transfer
ownership or control of its assets, franchise or operations to any individual or entity
other than another electric Cooperative shall repay the national government the total
loans including accrued interest thereon.

CHAPTER V
GENERAL PROVISIONS

Section 13. Reportorial Requirements. The National Electrification Administration
shall take the necessary measures to ensure that the provisions of this Act are
properly implemented and submit annual reports on the program implementation
and fund utilization to the Department of Energy, the Joint Congressional Power
Commission and the Office of the President.

Section 14. Congressional Oversight. Upon the effectivity of this Act, the Joint
Congressional Power Commisssion shall exercise oversight function over the
implementation of this Act.

Section 15. Evaluation. Within five (8) years after the effectivity of this Act, the Joint
Congressional Power Commission shall conduct a systematic evaluation of the
accomplishments and impact of this Act for purposes of determining remedial
legislation.

Section 16. Implementing Rules and Regulations. The National Electrification
Administration shall, in consultation with relevant government agencies, electric
cooperatives and end-users, promulgate the Implementing Rules and Regulations
within six (6) months from the effectivity of this Act, subject to the approval of the
Joint Congressional Power Commission.

Section 17. 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 in effect


Section 18. 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 this Act are hereby repealed, modified or
amended accordingly.

Section 19. Effectivity. This Act shall take effect on the fifteenth day following its
publication in at least two (2) papers of general circulation.
| fh \ “

CARL! |AN L. UYBARRETA RODEL BATOCABE

Representative ‘epresentative
1-CARE PARTY LIST AKO BICOL PARTY LIST

Approved.