• 
SIXTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES) 
First Regular Session 
SENATE 
S.B. No. 167 
Introduced by Senator Sergio Osmeiia ill 
EXPLANATORY NOTE 
'13 
JUL -1 
P4 :00 
'1- a '\ ' 
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 poverty 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 l.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 of3,455 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 PhP122 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 
virtual 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 C02 
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 support global efforts to use energy efficiently as it is widely regarded as 
the most cost-effective means to reduce C02 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 nation's energy security. 
While the government has espoused energy efficiency and conservation since the oil 
cnsls of the early seventies, such policy has not been institutionalized through legislation. 
Numerous executive orders and issuances had been issued to 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 manager/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 . f.ewt VL-/ 
IE~GIO OSMENA III 
Senator 


SIXTEENm CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES) 
First Regular Session 
SENATE 
S.B. No. 
167 
Introdnced by Senator Sergio Osmeiia m 
AN ACT 
lH:ttZlh' 
Il\itl,;, ,,(flj, ,;t."".I",~ 
'13 
JUl -1 P 4 :00 
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: 
1 
CHAPTER I 
2 
GENERAL PROVISIONS 
3 
SECTION 1. Short Title. - This Act shall be known as the "Energy Efficiency and 
4 
Conservation Act of20 13 ," 
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. 
11 
SEC. 3. Role of Energy Users. - All Energy users shall exert efforts 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 
15 
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. Definition of Terms. - For purposes ofthis Act, the following terms shall, unless 
19 
the context indicates otherwise, have the following meanings: 
1 
" 


1 
(a) 
"Certified Energy Manager' or "CEM" refers to a Professional who becomes 
2 
eligible for this certification after demonstrating expertise in several areas ranging from 
3 
standards for energy-consuming appliances, equipment, products, vehicles and systems; air 
4 
quality; energy audits; procurement and financing. It recognizes individuals who have 
5 
demonstrated high levels of experience, competence, proficiency and ethical fitness in the energy 
6 
management profession. Type 2 Designated Establishments shall appoint a CEM who shall be 
7 
responsible for the management of the energy consumption of its facility or facilities. 
8 
(b) 
"Demand Side Management" or "DSM' refers to measures undertaken by 
9 
distribution utilities to encourage end-users in the proper management of their load to achieve 
10 
efficiency in the utilization of fixed infrastructures in the system; 
11 
(c) 
"Designated Establishment" or "Type I/Type 2 Designated Establishment) refers 
12 
to a private entity in the industrial, commercial, transport and power sectors consuming energy 
13 
and/or having other index equivalent to such energy for the previous year beyond the level 
14 
specific by the Department of Energy (DOE). Such establishments shall be categorized as Type 
15 
1 or Type 2 Designated Establishment, according to the annual energy consumption [Type 1: 
16 
:0:1,000,000 but <2,000,000 Liters of Oil Equivalent (LOE), Type 2: :0: 2,000,000 Liters of Oil 
17 
Equivalent (LOE); 
18 
(d) 
"Distribution Utility" refers to any electric c00perative, private I corporation, 
19 
government-owned utility or existing local government unit (LGU) which has an exclusive 
20 
franchise to operate the system of wires extending between the delivery points of the 
21 
transmission system and the customer point of connection. A distribution utility shall have the 
22 
obligation to provide distribution services to any end-user within its franchise area; 
23 
(e) 
"Energy Audit" refers to the evaluation of energy consumption and review of 
24 
current energy cost, to determine ways in which energy can be conserved to achieve savings. 
25 
The three types of energy audit are walk-through audit, preliminary audit and detailed audit; 
26 
(t) 
"Energy Conservation" refers to the act of reducing the loss and waste in various 
27 
energy stages from energy production to energy consumption and using energy more efficiently 
28 
and rationally through application of appropriate energy management system and adopting 
2 


1 
measures which are technologically feasible, economically sound and environmentally and 
2 
socially affordable; 
3 
(g) 
"Energy Conservation Officer" or "ECO" refers to a person appointed by Type 1 
4 
Designated Establishments responsible for the supervision and maintenance of facilities for the 
5 
proper management of energy consumption and such other functions deemed necessary for the 
6 
efficient and judicious utilization of energy prescribed under this Act; 
7 
(h) 
"Energy Efficiency" refers to the efficient utilization of energy in its various 
8 
forms through cost-effective options towards the use of less energy for the same or higher 
9 
performance than regular products or energy systems; 
10 
(i) 
"Energy Management" refers to the process of managing energy consumption to 
11 
ensure that energy has been efficiently consumed; 
12 
"Energy U sing Entities" refers to all energy demand sectors such as commercial, 
13 
industrial, transport, agricultural, household, government buildings and the power generation, 
14 
transmission and distribution industry sectors; 
15 
(k) 
"Energy Conservation Report" refers to the periodic report submitted to the DOE 
16 
by Type 2 Designated Establishments and the Transmission Utility with regard to the EE&C 
17 
plan. The items to be reported in the Energy Conservation Report shall be specified by the DOE; 
18 
(I) 
"Energy Consumption Report" refers to the periodic report submitted to the DOE 
19 
by Type 1 or Type 2 Designated Establishments and the Transmission Utility with regard to the 
20 
energy consumption and energy loss and other status of energy use. The items to be reported in 
21 
the Energy Consumption Report shall be specified by the DOE; 
22 
(m) 
"Specific Energy Consumption" or "SEC" refers to the energy consumption 
23 
volume required per unit, such as production volume, sales amount, transportation ton-km, 
24 
transportation km, floor space and such other indicators relevant to energy consumption; 
25 
(n) 
"System Loss" refers to the difference between the electric energy purchased and 
26 
generated and the electric energy sold by a Distribution Utility. For purposes of this Act, the 
27 
term System Loss shall consist of the following components: Technical System Loss, referring 
28 
to the loss inherent in the physical delivery of electric energy, including conductor loss, 
29 
transformer core loss and technical errors in meters; Non-Technical Loss, referring to energy loss 
3 


1 
not related to the physical characteristics of the electrical system, including those attributable to 
2 
pilferage, tampering of meters and erroneous meter reading; and Administrative Loss, referring 
3 
to the energy required for the operation of the distribution system and any un-billed energy for 
4 
community-related activities; 
5 
(0) 
"Transmission Utility" refers to any private corporation or government-owned 
6 
utility which has an exclusive franchise to operate the system of wires extending from power 
7 
generating units to the delivery points through the grid. A transmission utility shall have the 
8 
obligation to provide transmission/distribution services to any end-user within its franchise area 
9 
and to any sale for resale customers; and 
10 
(p) 
"Waste Heat Recovery" refers to the extraction of heat from fluids (i.e., gases or 
11 
liquids) produced in a thermodynamic or separation process, that would otherwise be vented to 
12 
the atmosphere, reinj ected to the ground or disposed or by other means, for power generation or 
13 
other applications. 
14 
CHAPTER 2 
15 
TYPE 1 AND TYPE 2 DESIGNATED ESTABLISHMENTS 
16 
SEC. 6. Type 1 J)esignated Establishments. - Establishments with an annual energy 
17 
consumption equal to or more than 1,000,000 Liters of Oil Equivalent (LOE) but less than 
18 
2,000,000 LOE are hereby categorized as Type 1 Designated Establishments and shall include 
19 
the following sectors: 
20 
a) Building Sector 
21 
1) Commercial Building 
22 
2) Hotel 
23 
3) Hospital Building 
24 
4) Educational Institutions 
25 
5) Office Building 
26 
b) Industrial/Manufacturing (Medium-size industrial/manufacturing plants) 
27 
1) Food and Beverages 
28 
2) Plastic 
29 
3) Metal Fabrication 
4 


1 
4) Chemical 
2 
5) Appliance 
3 
c) 
Transport Sector (Fleet) 
4 
1) Railway 
5 
2) Road Transport 
6 
3) Sea Freight and Passenger Vessel 
7 
4) Air Transport cargo and passenger vessel 
8 
d) Power Sector 
9 
1) Power Generation 
10 
2) Distribution Utilities 
11 
SEC. 7. Obligations of Type I Designates Establishments. -
Type 1 Designated 
12 
Establishments shall have the following obligations: 
13 
a) 
Employ an Energy Conservation Officer (ECO) and duly notify the DOE of said 
14 
ECO's appointment or separation as soon as possible. 
The ECO shall manage the energy 
15 
consumption of facilities, equipment and devices, the improvement and implementation of 
16 
energy efficiency measures, the conduct of regular energy audit, energy monitoring and control 
17 
and the preparation of periodic energy consumption report; 
18 
b) 
Keep records of monthly energy consumption data and other energy-related data; 
19 
c) 
Set up annual targets and plans for the implementation of energy efficiency and 
20 
conservation projects or measures and submit a Semi-Annual Energy Consumption Report to the 
21 
DOE not later than 30th day of June and December of each year; 
22 
d) 
Conduct, through competent energy auditors certified by bodies accredited by the 
23 
DOE or by DOE-accredited energy service companies or service providers, a periodic Energy 
i 
24 
Audit once every ·three (3) years and submit an Energy Audit Report to the DOE upon 
25 
completion of the said energy audit. 
26 
e) 
Improve the average Specific Energy Consumption (SEC) by at least one percent 
27 
(1%) every year. 
5 


1 
SEC. 8. Type 2 Designated Establishments. - Energy intensive establishments with annual 
2 
energy consumption equal to or more than 2,000,000 Liters of Oil Equivalent (LOE) are hereby 
3 
categorized as Type 2 Designated Establishments and shall include the following sectors: 
4 
a) Building Sector 
5 
I) Commercial 
6 
2) Hotel 
7 
3) Hospital 
8 
4) Educational Institutions 
9 
5) Office 
10 
b) Industrial/Manufacturing Sectors 
11 
I) Cement 
12 
2) Mining 
13 
3) Food and Beverages 
14 
4) Electronic/Semi-Conductor 
15 
5) Steel & metal 
16 
6) Chemical 
17 
7) Vehicle 
18 
8) Appliance 
19 
9) Glass 
20 
10) Plastic 
21 
1 I) Others 
22 
c) Transport Sector (Fleet) 
23 
I) Railway 
24 
2) Road Transport Fleet 
25 
3) Sea Freight and Passenger Vessel 
26 
4) Air Transport cargo and passenger vessel 
27 
d) Power Sector 
28 
1) Power Generating Plants 
29 
2) Distribution and Transmission Utilities 
6 


1 
SEC. 9. Obligations of Type 2 Designated Establishments. - Type 2, Designated 
2 
Establishments shall have the following obligations: 
3 
. a) 
Employ one (1) Certified Energy manager (CEM), subject to the provisions of 
4 
Section 11 of this Act, and duly notify the DOE of the said CEM's appointment or separation as 
5 
soon as possible. The CEM shall manage the energy consumption of facilities, equipment and 
6 
regular energy audit, energy monitoring and control, and the preparation of periodic energy 
7 
consumption and energy conservation program reports of the establishment; 
8 
9 
b) 
c) 
Keep records on monthly energy consumption data and other energy-related data; 
Set up annual targets and plans for the implementation of energy efficiency and 
10 
conservation projects; 
11 
d) 
Submit a Semi-Annual Energy Consumption Report and 
an Annual Energy 
12 
Conservation Program Report to the DOE not later than 30th day of June and December of each 
13 
year; 
14 
e) 
Conduct, through competent energy auditors certified by bodies accredited by the 
15 
DOE or by DOE-accredited energy service companies or energy providers, a periodic Energy 
16 
Audit once every three (3) years and submit an Energy Audit Report to the DOE upon 
17 
completion of the said energy audit. 
18 
f) 
Improve the average Specific Energy Consumption (SEC) by at least one percent 
19 
(1 %) every year. 
20 
CHAPTER 3 
21 
ROLE OF THE DEPARTMENT OF ENERGY 
22 
SEC. 10. Responsibilities of the DOE. - The DOE shall be the primary government 
23 
agency responsible for the planning, formulation and development of energy management 
24 
policies and other related energy efficiency and conservation programs and plans. The DOE 
25 
shall consult and coordinate with other government agencies and the private sector or create an 
26 
inter-agency committee, as may be deemed necessary, for the effective implementation of energy 
27 
efficiency and conservation policies of the government. It shall also promote collaborative 
28 
efforts with the business sector, particularly the commercial, industrial, transport and power 
29 
sectors, to broaden and enhance their efficient and judicious utilization of energy. The DOE 
7 


1 
shall, in consultation with the Department of Trade and Industry-Bureau of Product Standards 
2 
(DTI-BPS), require manufacturers, importers and dealers to comply with the Minimum Energy 
3 
Performance Standards (MEPS) and to display the Energy Label Showing the energy 
4 
requirement and consumption efficiency of products on their packaging, and on the products 
5 
themselves, among them designated machinery and equipment, appliances, vehicles and other 
6 
fuel-using combustion equipment and electric devices. 
7 
CHAPTER 4 
8 
CERTIFICATION FOR PROFESSIONAL COMPETENCY AND ACCREDITATION 
9 
FOR PROFESSIONAL SERVICES 
10 
SEC. 11. Certified Energy Manager (CEM) and Energy Conservation Officer (ECO). -
11 
The Commission on Higher Education (CRED) and State Universities and Colleges (SCUs) shall 
12 
formulate and develop appropriate training course modules for Energy Managers and Energy 
13 
Conservation Officers under a Certificate Course Program for inclusion in the school curricula. 
14 
Similarly, competent Non-Profit Organizations and other private training institutions duly 
15 
accredited by the DOE and CRED shall offer professional certificate programs for Energy 
16 
Managers and Energy Conservation officers. 
17 
SEC. 12. Accreditation of Energy Service Company (ESCO) and other Energy Efficiency 
18 
Service Provider (EESP). - The Department of Energy shall promote and implement an Energy 
19 
Service Company (ESCO) Accreditation System as an important component for market 
20 
development measures and for the following purposes: 
21 
22 
a) 
b) 
23 
services; 
24 
25 
c) 
d) 
Development of professional and qualified ESCOs and energy engineers; 
Enhancement of capabilities of ESCOs, particularly in providing energy auditing 
Enhancement of support services procurement and selection procedures; 
Enhancement of support to public sector incentive schemes in the promotion of 
26 
energy efficiency; and 
27 
e) 
Reduction of energy wastage and elimination of false claims on energy efficiency 
28 
among industry players. 
8 


1 
The development of this sector shall expand the general servIce sector and stimulate 
2 
economic development through enhancing cost competitiveness while at the same time 
3 
strengthening Philippine energy security. The accreditation process of this energy service sector 
4 
is a natural segment of the knowledge economy, providing sustainable environmental and 
5 
energy-saving benefits. 
6 
CHAPTERS 
7 
INCENTIVES FOR ENERGY EFFICIENCY AND CONSERVATION PROJECTS 
8 
9 
SEC. 13. Incentives for Energy Efficiency and Conservation Projects. - The DOE shall 
10 
endorse projects that utilize pioneering energy efficient technologies to the Board ofInvestments 
11 
(B0l) to avail of incentives for a period of five years (5) upon the effectivity of this Act. Such 
12 
incentives shall include: 
(a) tax and duty free importation of pioneering energy efficient 
13 
technologies; or (b) income tax holiday. 
14 
CHAPTER 6 
15 
MISCELLANEOUS PROVISIONS 
16 
SEC. 14. Recommendation, Disclosure and Order. -
Upon determination that an 
17 
establishment has com~itted any of the prohibited acts under Section 16 of this 4ct, the DOE 
18 
may consider the following measures prior to the imposition of the I appropriate 
19 
sanctions/penalties for such violations: 
20 
(a) 
Provide citations in cases where the DOE finds materially insufficient reports, 
21 
false returns, and non-submission of notifications or reports; 
22 
(b) 
Disclose the name of the establishment in cases where the establishment that has 
23 
received a citation under the preceding paragraph, failed to remedy such citation by the DOE; 
24 
and 
25 
(c) 
Issue an Order to the establishment to take measures in cases where the said 
26 
establishment failed to follow or comply with the citation or recommendations issued by the 
27 
DOE. Failure on the part of the establishment to comply with such order shall be a ground for 
28 
the imposition of penalties in accordance with Section 17 of this Act. 
9 


1 
SEC. 15. On-site Inspections - For the effective enforcement of this Act, the DOE shall 
2 
have the right to visit Designated Establishments to inspect energy-consuming facilities, evaluate 
3 
energy management procedures, identify areas for efficiency improvement, and verify energy 
4 
monitoring reports and other documents related to the compliance requirements of this Act. 
5 
CHAPTER 7 
6 
FINAL PROVISIONS 
7 
SEC. 16. Prohibited Acts. - The following acts shall be prohibited: 
8 
a) 
Failure and/or willful refusal to submit periodic reportorial compliance reports to 
9 
the DOE; 
10 
b) 
Failure and/or willful refusal to appoint/designate an Energy Conservation Officer 
11 
and Certified Energy Manager; 
12 
c) 
Failure to comply with the mandate prescribed in Section 15 hereof; and 
13 
d) 
Willful refusal to submit energy audit report. 
14 
SEC. 17. Penalties. - Any person who willfully commits any of the prohibited acts 
15 
enumerated under this Act, shall, upon conviction, be liable for the penalties that will be defined 
16 
in the Implementing Rules and Regulations ofthis Act. 
17 
SEC. 18. Contingency Powers. - Upon the recommendation ofthe Secretary of Energy, 
18 
in times of critical energy supply disruptions or imminent danger thereof, the President may 
19 
direct the adoption of stringent energy conservation measures, including but not limited to, 
20 
power/fuel allocations or rationing; limiting the operating hours of commercial, industrial and 
21 
similar establishments; restricting the use of government and private motor vehicles; staggering 
22 
or limiting working hours in both public and private sectors; and the temporary closure of all 
23 
energy intensive industries. 
24 
SEC. 19. Appropriations. - Such sums as may be necessary for the implementation of 
25 
this Act shall be taken from the current fiscal year appropriation of the DOE. Thereafter, the 
, 
i 
26 
amount needed for the implementation of the Act shall be included in the anpual general 
, 
27 
appropriations. 
28 
SEC. 20. Implementing Rules and Regulations. - The DOE shall, in consultation with 
29 
concerned government agencies and/or entities, the energy, industrial and commercial sectors, 
10 


1 
and other relevant stakeholders, promulgate the Implementing Rules and Regulations (IRR) of 
2 
the Act within six (6) months from the effectivity of this Act. 
3 
SEC. 21. Separability Clause. - If for any reason, any section or provision of this Act is 
4 
declared unconstitutional or invalid, such parts not affected thereby shall remain in full force and 
5 
effect. 
6 
SEC. 22. Repealing Clause. - All laws, Presidential Decrees, executive orders, rules and 
7 
regulations and other issuances inconsistent with the provisions of this Act are hereby repealed 
8 
or modified accordingly. 
9 
SEC. 23. Effectivity. - This Act shall take effect on the fifteenth day after its publication in 
10 
at least two (2) newspapers of general circulation. 
11 
Approved, 
11