FIFTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
) 
SENATE 
"'1'11 
S.B. No. u t) k, __ 
"~ j, (, . ' 
Illtl'oduced by Sellatol' Sergio Osmefia HI 
EXPLANATORY NOTE 
Access to energy is vital in achieving the government's goal of spurring economic 
activity to create livelihood and employment for 92.3 million Filipinos, 26.5 percent of 
which are currently living below the povelty threshold (National Statistics Office, 2012). 
The demand for energy is expected to increase even further in light of the country's 
growing population, currently pegged at 1.9 percent per year (NSO, 2012) 
The 
government basically addresses this situation two-fold: 1) by ensuring adequate supply 
through vigorous development of indigenous energy resources and promoting 
investments in the power sector, and 2) managing domestic energy consumption. 
Based on the DOE 2010-2030 energy saving forecast projection, there is an 
annual energy saving potential of 3,455 kilotons of oil equivalent (KTOE) that can be 
contributed by the energy demand sector comprising of household, industrial, 
commercial, transport and agriculture sectors. It has a monetary equivalent value of PhP 
122 million per year and enough to support socio-economic development of a certain 
region of the country. Likewise, such projected potential energy saving shall impact on 
the deferment or postponement of putting-up additional viltual power plant capacity 
equivalent to 340 Megawatts. On the other hand, the direct contribution of investments 
and job opportunities could help reciprocate in achieving a sustainable economic 
environment in this sector of energy. For the environment, a CO2 reduction shall be in 
the level of 8.9 million tons per year which means reducing stress to the environment that 
have direct impact to the survival of the population. Henceforth, the Philippines can 
actively SUppOlt global efforts to use energy efficiently as it is widely regarded as the 
most cost-effective means to reduce CO2 emissions in the energy sector and mitigate 
climate change. 
Due to the high cost of energy that fuels its economic growth and insufficient 
indigenous energy resources at this time, the country has to ensure that all present and 
future energy supply must be used in an efficient manner with minimal waste 
This 
demand-side approach not only contributes to the national economy, but helps the 
environment as well through the reduction of harmful emissions caused by the 
combustion of fuel 
Furthermore, it is a low-cost and relatively quick but effective 
solution to managing the natiort'·s energy security. 
While the government has espoused energy efficiency and conservation since the 
oil crisis of the early seventies, such policy has not been institutionalized through 
legislation. Numerous executive orders and issuances had been issued (0 implement said 
policy, but the lack of an overall framework has precluded the crafting of comprehensive 
national energy efficiency and conservation programs involving all sectors of the 
economy and the population at large. 


In view of the foregoing considerations, this Energy Efficiency and Conservation 
measure is being proposed to address the gap by setting an overall policy framework, 
promoting energy efficiency and conservation through various means, including fiscal 
and non-fIscal incentives, empowering the Department of Energy to effectively 
implement the same. Among the other features of the bill are providing incentives for 
significant capital investments and accreditation of energy service providers and energy 
managerl 
professionals, 
information, 
education 
and 
communication 
activities, 
formulation of an energy utilization data base, setting of performance standards and 
enforcing compliance thereto 
Although this may require building the capacity of government to effectively 
perform its monitoring and regulatory functions, it does not necessarily entail substantial 
increases in expenditures as many of the foreseen activities can be undertaken through 
new modalities of cooperation such as public-private partnerships, international and 
regional cooperation and assistance from multilateral organizations. 
Early approval of this bill is earnestly requested. 
/J !~~ 
SiRGIO R. OSMENA III 
Senator 


FIFTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES) 
Third Regular Session 
) 
SENATE 
S.B. No. 3.321 
'Ii' ruv 
Introduced by Senator Sergio Osmefia III 
AN ACT 
INSTITUTIONALIZING ENERGY EFFICIENCY AND CONSERVATION, 
ENHANCING THE EFFICIENT USE OF ENERGY, GRANTING INCENTIVES TO 
ENERGY EFFICIENCY AND CONSERVATION PROJECTS, AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
CHAPTER I 
2 
GENERAL PROVISIONS 
3 
SECTION 1. Short Title. - This Act shall be known as the "Energy Efficiency and 
4 
Conservation Act of2012." 
5 
SEC. 2. Policy Declaration. -
It is hereby declared the policy of the State to 
6 
institutionalize energy efficiency and conservation as a national way of life geared towards the 
7 
efficient and judicious utilization of energy by formulating, developing, and implementing 
8 
energy efficiency and conservation plans and programs to enhance energy supply security of the 
9 
country, cushion the impact of the high price of imported fuels to local markets and protect the 
10 
environment in support of the economic and social development goals of the country. 
II 
SEC. 3. Role of Energy Users. - All Energy users shall exert effOlts to use every 
12 
available energy resources judiciously and efficiently in compliance with the fundamental 
13 
policies of this Act. 
14 
SEC. 4. Scope. -
This Act shall establish a framework for introducing and 
IS 
institutionalizing fundamental policies on energy efficiency and conservation including the 
16 
promotion of efficient and judicious utilization of energy and the definition of responsibilities of 
17 
various government agencies and private entities. 
18 
SEC. 5. D~(inition of Terms. - For purposes of this Act, the following terms shall, unless 
19 
the context indicates otherwise, have the following meanings: 
20 
(a) "Certified Energy Manager" or "CEM" refers to a Professional who becomes eligible 
21 
for this certification after demonstrating expertise in several areas ranging from standards for 
22 
energy-consuming appliances, equipment, products, vehicles and systems; air guality; energy 
23 
audits; procurement and financing. It recognizes individuals who have demonstrated high levels 
24 
of experience, competence, proficiency and ethical fitness in the energy management profession. 
I 


Type 2 Designated Establishments shall appoint a CEM who shall be responsible for the 
2 
management of the energy consumption of its facility or facilities. 
3 
(b) "Demand Side Management" or "DSM" refers to measures undertaken by distribution 
4 
utilities to encourage end-users in the proper management of their load to achieve efficiency in 
5 
the utilization of fixed infrastructures in the system; 
6 
(c) "Designated Establishment" or "Type lIType 2 Designated Establishment) refers to a 
7 
private entity in the indllstrial, commercial, transport and power sectors consuming energy and/or 
8 
having other index equivalent to such energy for the previous year beyond the level specified by 
9 
the Department of Energy (DOE). Such establishments shall be categorized as Type 1 or Type 2 
10 
Designated Establishment, according to the annual energy consumption [Type 1: :0:1,000,000 but 
11 
<2,000,000 Liters of Oil Equivalent (LOE), Type 2: :0:2,000,000 Liters of Oil Equivalent (LOE)]; 
12 
(d) "Distribution Utility" refers to any electric cooperative, private corporation, 
13 
government-owned utility or existing local government unit (LGU) which has an exclusive 
14 
franchise to operate the system of wires extending between the delivery points of the 
15 
transmission system and the customer point of connection. A distribution utility shall have the 
16 
obligation to provide distribution services to any end-user within its franchise area; 
17 
( e) "Energy Audit" refers to the evaluation of energy consumption and review of current 
18 
energy cost, to determine ways in which energy can be conserved to achieve savings. The three 
19 
types of energy audit are walk-tlu'ough audit, preliminary audit and detailed audit; 
20 
(f) "Energy Conservation" refers to the act of reducing the loss and waste in various 
21 
energy stages from energy production to energy consumption and using energy more efficiently 
22 
and rationally through application of appropriate energy management system and adopting 
23 
measures which are technologically feasible, economically sound and environmentally and 
24 
socially affordable; 
25 
(g) "Energy Conservation Officer" or "ECO" refers to a person appointed by Type 
26 
Designated Establishments responsible for the supervision and maintenance of facilities for the 
27 
proper management of energy consumption and such other functions deemed necessary for the 
28 
efficient and judicious utilization of energy prescribed under this Act; 
29 
(h) "Energy Efliciency" refers to the efficient utilization of energy in its various forms 
30 
tlu'ough cost-effective options towards the use of less energy for the same or higher performance 
31 
than regular products or energy systems; 
32 
(i) "Energy Management" refers to the process of managing energy consumption to 
33 
ensure that energy has been efficiently consumed; 
34 
(j) "Energy Using Entities" refers to all energy demand sectors such as commercial, 
35 
industrial, transport, agricultural, household, government buildings and the power generation, 
36 
transmission and distribution industry sectors; 
2 


1 
(k) "Energy Conservation Report" refers to the periodic report submitted to the DOE by 
2 
Type 2 Designated Establishments and the Transmission Utility with regard to the EE&C plan. 
3 
The items to be reported in the Energy Conservation Report shall be specified by the DOE; 
4 
(I) "Energy Consumption Report" refers to the periodic report submitted to the DOE by 
5 
Type I or Type 2 Designated Establishments and the Transmission Utility with regard to the 
6 
energy consumption and energy loss and other status of energy use. The items to be reported in 
7 
the Energy Consumption Report shall be specified by the DOE; 
8 
(m) "Specific Energy Consumption" or "SEC" refers to the energy consumption volume 
9 
required per unit, such as production volume, sales amount, transportation ton-km, transportation 
10 
km, floor space and such other indicators relevant to energy consumption; 
II 
(n) "System Loss" refers to the difference between the electric energy purchased and 
12 
generated and the electric energy sold by a Distribution Utility. For purposes of this Act, the 
13 
term System Loss shall consist of the following components: Technical System Loss, referring to 
14 
the loss inherent in the physical delivery of electric energy, including conductor loss, transformer 
15 
core loss and technical errors in meters; Non-Technical Loss, referring to energy loss not related 
16 
to the physical characteristics of the electrical system, including those attributable to pilferage, 
17 
tampering of meters and erroneous meter reading; and Administrative Loss, referring to the 
18 
energy required for the operation of the distribution system and any un-billed energy for 
19 
community-related activities; 
20 
(0) "Transmission Utility" refers to any private corporation or government-owned utility 
21 
which has an exclusive franchise to operate the system of wires extending from power generating 
22 
units to the delivery points through the grid. A transmission utility shall have the obligation to 
23 
provide transmission/distribution services to any end-user within its franchise area and to any 
24 
sale for resale customers; and 
25 
(p) "Waste Heat Recovery" refers to the extraction of heat from fluids (i.e., gases or 
26 
liquids) produced in a thermodynamic or separation process, that would otherwise be vented to 
27 
the atmosphere, reinjected to the ground or disposed of by other means, for power generation or 
28 
other applications. 
29 
CHAPTER 2 
30 
TYPE 1 AND TYPE 2 DESIGNATED ESTABLISHMENTS 
31 
SEC. 6. Type 1 Designated Establishments. 
Establishments with an annual energy 
32 
consumption equal to or more than 1,000,000 Liters of Oil Equivalent (LOE) but less than 
33 
2,000,000 LOE are hereby categorized as Type I Designated Establishments and shall include 
34 
the following sectors: 
35 
a) Building Sector 
36 
1) Commercial BUild'ing 
37 
2) Hotel 
38 
3) Hospital Building 
3 


----------- -
I 
4) Educational Institutions 
2 . 
5) Office Building 
3 
b) Industrial/Manufacturing (Medium-size industrial/manufacturing plants) 
4 
5 
6 
7 
8 
9 
10 
c) 
I) Food and Beverages 
2) Plastic 
3) Metal Fabrication 
4) Chemical 
5) Appliance 
Transport Sector (Fleet) 
I) Railway 
II 
2) Road Transport 
12 
3) Sea Freight and Passenger Vessel 
13 
4) Air Transport cargo and passenger vessel 
14 
d) Power Sector 
IS 
I) Power Generation 
16 
2) Distribution Utilities 
17 
SEC. 7. Obligations of Type 1 Designated Establishments. -
Type I Designated 
18 
Establishments shall have the following obligations: 
19 
a) Employ an Energy Conservation Officer (ECO) and duly notify the DOE of said 
20 
ECO's appointment or separation as soon as possible. The ECO shall manage the energy 
21 
consumption of facilities, equipment and devices, the improvement and implementation of 
22 
energy efficiency measures, the conduct of regular energy audit, energy monitoring and control 
23 
and the preparation of periodic energy consumption report; 
24 
b) Keep records of monthly energy consumption data and other energy-related data; 
25 
c) Set up annual targets and plans for the implementation of energy efficiency and 
26 
conservation projects or measures and submit a Semi-Annual Energy Consumption Report to the 
27 
DOE not late, than the 30th day of June and December of each year; 
28 . 
d) Conduct, through competent energy auditors certified by bodies accredited by the 
29 
DOE or by DOE-accredited energy service companies or service providers, a periodic Energy 
30 
Audit once every three (3) years and submit an Energy Audit Report to the DOE upon 
31 
completion of the said energy audit. 
32 
e) Improve the average Specific Energy Consumption (SEC) by at least one percent 
33 
(1%) every year. 
34 
SEC. 8. Type 2 Designated Establishments. 
- Energy intensive establishments with 
35 
annual energy consumption equal to or more than 2,000,000 Liters of Oil Equivalent (LOE) are 
36 
hereby categorized as Type 2 Designated Establishments and shall include the following sectors: 
37 
a) Building Sector 
38 
I) Commercial 
4 


I 
2 
3 
4 
5 
6 
7 
8 
b) 
2) Hotel 
3) Hospital 
4) Educational Institutions 
5) Office 
Industrial/Manufacturing Sectors 
1) Cement 
2) Mining 
3) Food and Beverages 
9 
4) Electronic/Semi-Conductor 
10 
5) Steel & Metal 
11 
6) Chemical 
12 
7) Vehicle 
13 
8) Appliance 
14 
9) Glass 
15 
10) Plastic 
16 
II) Others 
17. 
c) Transport Sector (Fleet) 
18 
1) Railway 
19 
2) Road Transport Fleet 
20 
3} Sea Freight and Passenger Vessel 
21 
4) Air Transport cargo and passenger vessel 
22 
d) Power Sector 
23 
1) Power Generating Plants 
24 
2) Distribution and Transmission Utilities 
25 
SEC. 9. Obligations of Type 2 Designated Establishments. -
Type 2 Designated 
26 
Establishments shall have the following obligations: 
27 
a) Employ one (1) Certified Energy Manager (CEM), subject to the provisions of 
28 
Section 11 of this Act, and duly notify the DOE of the said CEM's appointment or separation as 
29 
soon as possible. The CEM shall manage the energy consumption of facilities, equipment and 
30 
devices, the improvement and implementation of energy efficiency measures, the conduct of 
31 
regular energy audit, energy monitoring and control, and the preparation of periodic energy 
32 
consumption and energy conservation program reports of the establishment; 
33 
b) Keep records on monthly energy consumption data and other energy-related data; 
34 
c) Set up annual targets and plans for the implementation of energy efficiency and 
35 
conservation projects; 
36 
d) Submit a Semi-Annual Energy Consumption Report and an Annual Energy 
37 
Conservation Program Report to the DOE not later than the 30th day of June and December of 
38 
each year; 
5 


1 
e) Conduct, through competent energy auditors certified by bodies accredited by the 
2 
DOE or by DOE-accredited energy service companies or energy providers, a periodic Energy 
3 
Audit once every three (3) years and submit an Energy Audit Report to the DOE upon 
4 
completion of the said energy audit. 
5 
f) Improve the average Specific Energy Consumption (SEC) by at least one percent 
6 
(1 %) every year. 
7 
CHAPTER 3 
8 
ROLE OF THE DEPARTMENT OF ENERGY 
9 
SEC. 10. Responsibilities of the DOE. - The DOE shall be the primary government 
10 
agency responsible for the planning, formulation and development of energy management 
11 
policies and other related energy efficiency and conservation programs and plans. The DOE shall 
12 
consult and coordinate with other government agencies and the private sector or create an inter-
13 
agency committee, as may be deemed necessary, for the effective implementation of energy 
14 
efficiency and conservation policies of the govenm1ent. It shall also promote collaborative 
15 
efforts with the business sector, particularly the commercial, industrial, transport and power 
16 
sectors, to broaden and enhance their efficient and judicious utilization of energy. The DOE 
17 
shall, in consultation with the Department of Trade and Industry-Bureau of Product Standards 
18 
(DTI-BPS), require manufacturers, importers and dealers to comply with the Minimum Energy 
19 
Performance Standards (MEPS) and to display the Energy Label showing the energy requirement 
20 
and consumption efficiency of products on their packaging, and on the products themselves, 
21 
among them designated machinery and equipment, appliances, vehicles and other fuel-using 
22 
combustion equipment and electric devices 
23 
CHAPTER 4 
24 
CERTIFICATION FOR I)ROFESSIONAL COMPETENCY AND ACCREDITATION 
25 
FOR PROFESSIONAL SERVICES 
26 
SEC. 11. Certified Energy Manager (CEM) and Energy Conservation Officer (ECO). -
27 
The Commission on Higher Education (CHED) and State Universities and Colleges (SCUs) shall 
28 
formulate and develop appropriate training course modules for Energy Managers and Energy 
29 
Conservation Officers under a Certificate Course Program for inclusion in the school curricula. 
30 
Similarly, competent Non-Profit Organizations and other private training institutions duly 
31 
accr.edited by the DOE and CHED shall offer professional certificate programs for Energy 
32, 
Managers and Energy Conservation Officers. 
33 
SEC. 12. Accreditation of Energy Service Company (ESCO) and other Energy Efficiency 
34 
Service Provider (EESP). - The Department of Energy shall promote and implement an Energy 
35 
Service Company (ESCO) Accreditation System as an important component for market 
36 
development measures and for the following purposes: 
37 
a) Development of professional and qualified ESCOs and energy engineers; 
6 


1 
b) Enhancement of the capabilities of ESCOs, particularly in providing energy auditing 
2 
services; 
3 
c) Enhancement of support services procurement and selection procedures; 
4 
d) Enhancement of support to public sector incentive schemes in the promotion of 
5 
energy efficiency; and 
6 
e) Reduction of energy wastage and elimination of false claims on energy efficiency 
7 
among industry players. 
8 
The development of this sector shall expand the general service sector and stimulate 
9 
economic development through enhancing cost competitiveness while at the same time 
10 
strengthening Philippine energy security. The accreditation process of this energy service sector 
11 
is a natural segment of the knowledge economy, providing sustainable environmental and 
12 
energy-saving benefits. 
13 
CHAPTERS 
14 
INCENTIVES FOR ENERGY EFFICIENCY AND CONSERVATION PROJECTS 
15 
SEC. 13. Incentives for Energy Efficiency and Conservation Projects. The DOE shall 
16 
endorse projects that utilize pioneering energy efficient technologies to the Board ofInvestments 
17 
(Bo!) to avail of incentives for a period of five years (5) upon the effectivity of this Act. Such 
18 
incentives shall include: (a) tax and duty free importation of pioneering energy efficient 
19 
technologies; or (b) income tax holiday. 
20 
CHAPTER 6 
21' 
MISCELLANEOUS PROVISIONS 
22 
SEC. 14. Recommendation, Disclosure and Order. -
Upon determination that an 
23 
establishment has committed any of the prohibited acts under Section 16 of this Act, the DOE 
24 
may consider the following measures prior to the imposition of the appropriate 
25 
sanctions/penalties for such violations: 
26 
(a) Provide citations in cases where the DOE finds materially insufficient reports, false 
27 
returns, and non-submission of notifications or reports; 
28 
(b) Disclose the name of the establishment in cases where the establishment that has 
29 
received a citation under the preceding paragraph, failed to remedy such citation by the DOE; 
30 
and 
3 1 
(c) Issue an Order to the establishment to take measures in cases where the said 
32 
establishment failed to follow or comply with the citation or recommendations issued by the 
33 
DOE. Failure on the part of the establishment to comply with such order shall be a ground for 
34 
the imposition of penalties in accordance with Section 17 of this Act. 
35 
SEC. 15. On-site Inspections - For the effective enforcement of this Act, the DOE shall 
36 
have the right to visit Designated Establishments to inspect energy-consuming facilities, evaluate 
37 
energy management procedures, identify areas for efficiency improvement, and verify energy 
38 
monitoring reports and other documents related to the compliance requirements of this Act. 
7 


CHAPTER 7 
FINAL PROVISIONS 
1 
2 
3 
4 
SEC. 16. Prohibited Acts. - The following acts shall be prohibited: 
a) Failure and/or willful refusal to submit periodic reportorial compliance reports to the 
5 
DOE; 
6 
b) Failure and/or willful refusal to appoint/designate an Energy Conservation Officer 
7 
and Certified Energy Manager; 
8 
c) Failure to comply with the mandate prescribed in Section 15 hereof; and 
9 
d) Willful refusal to submit an energy audit report. 
10' 
SEC. 17. Penalties. - Any person who willfully commits any of the prohibited acts 
11 
enumerated under this Act shall, upon conviction, be liable for the penalties that will be defined 
12 
in the Implementing Rules and Regulations of this Act. 
13 
SEC. 18. Contingency Powers. - Upon the recommendation of the Secretary of Energy, 
14 
in times of critical energy supply disruptions or imminent danger thereof, the President may 
15 
direct the adoption of stringent energy conservation measures, including but not limited to, 
16 
power/fuel allocations or rationing; limiting the operating hours of commercial, industrial and 
17 
similar establishments; restricting the use of government and private motor vehicles; staggering 
18 
or limiting working hours in both public and private sectors; and the temporary closure of all 
19 
energy intensive industries. 
20 
SEC. 19. Appropriations. - Such sums as may be necessary for the implementation of 
21 
this Act shall be taken from the current fiscal year appropriation of the DOE. Thereafter, the 
22 
amount needed for the implementation of the Act shall be included in the annual general 
23 
appropriations. 
24 
SEC. 20. Implementing Rules and Regulations. - The DOE shall, in consultation with 
25 
concerned government agencies and/or entities, the energy, industrial and commercial sectors, 
26 
a~d other relevant stakeholders, promulgate the Implementing Rules and Regulations (IRR) of 
27 
the Act within six (6) months from the effectivity ofthis Act. 
28 
SEC. 21. Separability Clause. - If for any reason, any section or provision of this Act is 
29 
declared unconstitutional or invalid, such parts not affected thereby shall remain in full force and 
30 
effect. 
31 
SEC. 22. Repealing Clause. - All laws, Presidential Decrees, executive orders, rules and 
32 
regulations and other issuances inconsistent with the provisions of this Act are hereby repealed 
33 
or modified accordingly. 
34 
SEC. 23. Effectivity. - This Act shall take effect on the fifteenth day after its publication 
35 
in at least two (2) newspapers of general circulation. 
36' 
Approved, 
8