FIFTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES) 
Third Regular Session 
) 
SENATE 
Senate Bill No. 
I 
Cf-L 
3325 
Introduced by SENATOR TEOFISTO "TG" GUINGONA HI 
Explanatory Note 
Access to energy is vital in achieving the government's goal of spurring economic 
activity to create livelihood and employment for 913 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 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 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 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 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 CO2 reduction shall be in the level of8.9 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 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 offue!' 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 
crisis 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 Etliciency and Conservation 
measure is being proposed to address the gap by setting an overall policy framework, 
promoting energy etliciency and conservation thl~ough 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 regulatOlY 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. 
In view of the foregoing, the passage of this bill is earnestly sought. 


FIFTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES) 
Third Regular SesslOn 
) 
SENATE 
Senate Bill No. 3325 
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Introduced by SENATOR TEOFISTO 'TG" GUINGONA lU 
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 
GENERAL PROVISIONS 
SEC. 1. Sho,'! Title. -
This Act shall be known as the "Energy Efficiency and 
Conservation Act of2012." 
SEC. 2. Policy Declaration. -
It is hereby declared the policy of the State to 
institutionalize energy efficiency and conservation as a national way of life geared towards the 
efficient and judicious utilization of energy by formulating, developing, and implementll1g 
energy efficiency and conservation plans and programs to enhance energy supply security of the 
country, cushion the impact of the high price of imported fuels to local markets and protect the 
environment in support to the economic and social development goals of the country. 
SEC. 3. Role of Energy Uscrs. - All Energy users shall exert efforts to use every 
available energy resources judIciously and efficiently in complIance with the fundamental 
policies oft1l1S Act. 
SEC. 4. Scope. -
This Act shall establish a framework for introducing and 
institutionalizing fundamental policies on energy efficiency and conservation including the 
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promotion of efficient and judiclOuS utilization of energy and the definition of responsibilities of 
various govemment agencies and private entities. 
SEC, 5, Definition of Tel'ms, - For purposes of this Act, the following terms shall, 
unless the context indicates otherwise, have the following meanings: 
(a) Certified Energy Manager (CEM) refers to a Professional who becomes eligible for 
tillS certification after demonstrating expeltise in several areas ranging from standards for 
energy-consuming appliances, equipment, products, vehicles and systems; air quality; energy 
audits; procurement and financing. It recognizes individuals who have demonstrated high levels 
of experience, competence, proficiency and ethical fitness in the energy management profession. 
Type 2 DeSIgnated Establishments shall appoint a CEM who shall be responsible for 
management of energy consumption of its facility or facilities. 
(b) Demand Side Management refers to measures undeitaken by dIstribution utilities to 
encourage end-users in the proper management of their load to achieve efficiency in the 
utilization of fixed infrastructures in the systems; 
(c) Designated Establishment (Type I / Type 2 Designated Establishment) refers to 
private entity in industrial, commercial, transport and power sectors consuming energy andlor 
having other index equivalent to such energy for the previous year beyond the level specified by 
the Depattment of Energy (DOE). Such establishments shall be categorized as Type 1 or Type 2 
Designated Establishment, according to the annual energy consumption [Type 1: 2'1,000,000 but 
<2,000,000 Liters of Oil Equivalent (LOE), Type 2: 2'2,000,000 Liters of Oil Equivalent (LOE)]; 
(d) ])istJoiiJution Utility refers to any electric cooperative, private corporation, 
govemment-owned utility 01' existing local govemment umt (LGU) which has atl exclusive 
franchise to operate the system of wires extending between the delivery points of the 
transmission system and the customer point of cOimection. A distribution utIlity shall have the 
obligation to provide distribution services to any end-user within its franchise area; 
(e) Energy Audit refers to the evaluation of energy consumption and review of current 
energy cost, to determine ways in which energy can be conserved to achieve savings. The three 
types of energy audit are walk-through audit, preliminary audit and detailed audIt; 
(f) Energy Omsel'vation refers to reducing the loss and waste in various energy stages 
from energy production to energy consumption and using energy more efficiently and rationally 
through application of appropriate energy management system and adopting measures which are 
technologically feasible, economically sound and environmentally and socially affordable; 
(g) Enel'gy Conservation Olficer (ECO) refers to a person appointed by Type 1 
Designated Establishments responsible for the supervision and maintenance of facilities for the 
proper management of energy consumption and such other functions deemed necessary for the 
efficient and judicious utilization of energy prescribed under this Act; 
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(h) Energy Efficiency refers to the efficient utilization of energy in its various forms 
through cost-effective options towards the use of less energy for the same or higher performance 
than regular products or energy systems, 
(i) Energy Management refers to the process of managing energy consumption to 
ensure that energy has been efficiently consumed; 
(j) Energy Using Entities refers to all energy demand sectors such as commercial, 
industrial, transport, agricultural, household, government buildmgs and the power generatlOn, 
transmission and distribution industly sectors, 
(k) Energy Conserviltion Report refers to the periodic report submitted to the DOE by 
Type 2 Designated Establishments and Transmission Utility with regard to the EE&C plan The 
items to be reported in the Energy Conservation Report shall be specified by the DOE; 
(I) Energy Consumption Report refers to tile periodic report submitted to the DOE by 
Type I or Type 2 Designated Establishments and Transmission Utility with regard to the energy 
consumption and energy loss and other status of energy use. The items to be reported m the 
Energy Consumption Report shall be speCIfied by the DOE; 
(m) Spec({ic Energy ConsunqJfion (SEC) refers to the energy consumption volume 
required per unit, such as production volume, sales amount, transportatIOn ton-km, transportation 
km, floor space and such other indicators relevant to energy consumption; 
(n) "')Istem Loss refers to the difference between the electrIC energy purchased and 
generated and the electric energy sold by a Distribution Utility. For purposes of this Act, the 
term System Loss shall consist of the following components: Technical System Loss, referring to 
the loss inherent m the physical delIvery of electric energy, including conductor loss, transfonner 
core loss and technical elTors in meters; Non-Technical Loss, referring to energy loss not related 
to the physical characteristics of the electrical system, including those attributable to pilferage, 
tampering of meters and erroneous meter reading; and Administrative Loss, referring to the 
energy required for the operatIOn of the distrIbution system and any un-billed energy for 
community-related activities; 
(0) Trllnsmission Utility refers to any private corporatlOn or government-owned utility 
which has an exclusive franchise to operate the system of wires extending from power generating 
units to the delivery points through the grid. A transmission utility shall have the oblIgatIon to 
provide distribution services to any end-user within its franchise area.; and 
(p) Wilsie Hetli ReC011e1'y refers to the extraction of heat from flUIds (i.e., gases or 
liquids) produced in a thermodynamic or separation process, that would otherwise be vented to 
the atmosphere, reinjected to the ground or disposed of by other means, for power generation or 
other applications. 
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CHAPTER 2 
TYPE 1 AND TYPE 2 DESIGNATED ESTABLISHMENTS 
SEC. 6. Type 1 Designated Establishmell,ts. Establishments with an annual energy 
consumption equal to or more than 1,000,000 Liters of Oil EqUIvalent (LOE) but less than 
2,000,000 LOE are hereby categorized as Type 1 Designated Establishment and shall include the 
following sectors: 
a) Buildmg Sector 
1) Commercial Build1l1g 
2) Hotel 
3) Hospital Bnilding 
4) Educationallnstitutions 
5) Office Building 
b) IndustriallManufacturing(Medium size industriallmanufacturing plant) 
1) Food and Beverages 
2) Plastic 
3) Metal FabricatIOn 
4) Chemical 
5) Appliance 
c) Transport Sector (Fleet) 
I) Railway 
2) Road Transport 
3) Sea Freight and Passenger Vessel 
4) Air Transport cargo and passenger vessel 
d) Power Sector 
1) Power Generation 
2) Distribution Utilities 
SEC. 7. Obligations of Type 1 Designated Establishments. - Type I Designated 
Establishment shall have the following obligations: 
a) Employ an Energy Conservation Officer (ECO) and duly notify the Department of 
Energy (DOE), said ECO's appointment or separation as soon as possible. The ECO shall 
manage the energy consumption of facilities, equipment and devices, the improvement and 
implementation of energy efficiency measures, the conduct of regular energy audit, energy 
monitoring and control and the preparation of periodic energy consumption report; 
b) Keep records of monthly energy consumption data and other energy-related data, 
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" 
c) Set up annual targets and plans for the implementatIOn of energy efficiency and 
conservation projects or measures. Submit a Semi-Annual Allergy ConSlImpl1on Report to the 
DOE, not later than the 30th day of June and December; 
d) Conduct, through competent energy auditors certified by bodies accredited by the 
DOE, or DOE-accredited energy service company or service provider, the periodic Energy Audit 
once evelY three (3) years and submIt an Energy Audit Report to the DOE upon completion of 
the energy audit. 
e) Improve average Specific Energy Consumption (SEC) by at least one percent (1 %) 
year on year. 
SEC. 8. Type 2 Designated Establishments. - Energy intensive establishments WIth an 
annual energy consumption equal to or more than 2,000,000 Liters of Oil Equivalent (LOE) are 
hereby categorized as Type 2 Designated Establishment and shall include the followmg sectors: 
a) Building Sector 
I) CommercIal 
2) Hotel 
3) Hospital 
4) Educationallnstitutions 
5) Office 
b) Industrial/Manufacturing sectors 
I) Cement 
2) Mining 
3) Food and Beverages 
4) Electronic/Semi-Conductor 
5) Steel & Metal 
6) Chemical 
7) Vehicle 
8) Appliance 
9) Glass 
10) Plastic 
11) Others 
c) Transport Sector (Fleet) 
1) Railway 
2) Road TranspOlt Fleet 
3) Sea Freight and Passenger Vessel 
4) Air Transport cargo and passenger vessel 
d) Power Sector 
1) Power Generating Plants 
2) Distribution and Transmission Utilities 
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SEC. 9. Obligations of Type 2 Designated Establishments - Type 2 Designated 
Establishments shall have the following obligations 
a) Employ one (1) Certified Energy Manager (CEM), subject to the provisions of 
Sectton 11 of this Act, and duly notIfy the Department of Energy (DOE) said CEM's 
app0111tment or separation as soon as possible. The CEM shall manage the energy consumption 
of facilities, equipment and devices, the improvement and implementation of energy efficiency 
measures, the conduct of regular energy audit, energy monitoring and control, and the 
preparation of periodic energy consnmption and energy COnservation program reports of the 
establishment; 
b) Keep records on monthly energy consumption data and other energy-related data, 
c) Set up annual targets and plans for the implementation of energy efficiency and 
conservation pro.l ects; 
d) Snbmit a Semi-Annual Enelgy Consumption Report and an Annual Enelgy 
Conservation Program Report to the DOE not later than the 30u, day of Jnne and December; 
e) Conduct, throngh competent energy anditor certified by bodies accredited by the 
DOE or DOE-accredited energy service company or energy provider, periodic Energy Audit 
once evety three (3) years and submit Energy Audit Report to the DOE upon c0111pletion of the 
energy audit. 
f) Improve average Specific Energy Consumption (SEC) by at least one percent (1 %) 
year on year 
CHAPTER 3 
ROLE OF THE DEPARTMENT OF ENERGY 
SEC. 10. Responsibilities of the DOE. - The DOE shall be 1he primary govemment 
agency responsible for the planning, formnlation and development of energy management 
policies and other related energy efficiency and conservation programs and plans. The DOE is 
shall consult and coordinate with other govemment agencies and the private sector or create an 
inter-agency committee, as may be deemed necessary, for the effective implementation of energy 
efficiency and conservation policies of the govemment. It shall also promote collaborative 
effotts with the bus111ess sector, particularly the commercial, industrial, transport and power 
sectors, to broaden and enhance their efficient and judicious utilization of energy. The DOE 
shall, in consultation with the DTl-BPS, require manufacturers, impOlters and dealers to comply 
with the Minimum Energy Performance Standards (MEPS) and to display the Energy Label 
showing the energy requirement and consumption efficiency of products on their packaging, and 
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on the products themselves, among them designated machinery and equipment, applIances, 
vehicles and other fuel-using combustion equipment and electric devIces 
CHAPTER 4 
CERTlFICA TJON FOR PROFESSIONAL COMPETENCY AND ACCREDIT A TlON 
FOR PROFESSIONAL SERVICES 
SEC. 11. 
Cel'tified Enel'gy ManageI' (CEM) and Enel'gy Consel'vation OfficeI' 
(ECO). - The Commission on Higher Education (CRED) and State Universities and Colleges 
(SCUs) shall formulate and develop appropriate training course modules for Energy Manager 
and Energy Conservation Officer under a Certificate Course Program for inclusion in the school 
curricula. 
Similarly, competent Non-Profit OrganizatIOns and other private training institutions duly 
accredited by the DOE and CRED shall offer professional certIficate programs for Energy 
Manager and Energy Conservation Officer 
SEC. 12. ACCI'editation of Enel'gy Sel'vice Company (ESCO) and othel' Enel'gy 
Efficiency Sel'vice Pl'Ovidel' (EESP). -
The Department of Energy shall promote and 
implement an Energy Service Company (ESCO) Accreditation System as an important 
component for market development measures and for the following purposes: 
a) development of professional and qualified ESCOs and energy engineers; 
b) enhance the capabilities of ESC Os, particularly in their energy auditing services; 
c) enhance support services procurement and selection procedures, 
d) enhance support to publIc sector incentive schemes in the promotion of energy 
efficiency; and 
e) reduce energy wastage and eliminate false claims on energy effiCiency among 
industry players. 
The development of this sector shall expand the general service sector and stImulates 
economic development through enhancing cost competitiveness while at the same time 
strengthening Philippine energy security. The accreditation process of this energy service sector 
is a natural segment of the knowledge economy, providing sustainable environmental and 
energy-saving benefits. 
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CHAPTER 5 
INCENTIVES FOR ENERGY EFFICIENCY AND CONSERVA TlON PROJECTS 
SEC. 13, Incentives rOl' Energy Efficiency and Conservation Projects. The DOE shall 
endorse projects that utilize pioneering energy efficient technologies to the Board of Investments 
(BOI) to avail of incentives for a period of five years (5) upon the effectivity of this Act. Such 
incentives shall include (a) tax and duty free impoltation of pioneenng energy effiCIent 
technologies; or (b) income tax holIday. 
CHAPTER 6 
MISCELLANEOUS PROVISIONS 
SEC. 14, Recommendation, DisciosUI'e and Ordel', - Upon determination that an 
establishment has committed of any of the prohibited acts under Section 16 of this Act, the DOE 
may consider the following measures pnor to the imposition of the appropnate 
sanctions/penalties for such violations: 
(a) Provide citations in cases where the DOE finds materially insufficient reports, false 
returns, and non-submission of notifications or reports; 
(b) Disclose the name of the establishment in cases where the establishment that has 
received a citation under the preceding paragraph, faIled to remedy such citation by the DOE; 
and 
(c) Issue an Order to tbe establisbment to take measures in cases where the saId 
establishment failed to follow or comply with the citation or recommendations issued by the 
DOE. Failure on the part of the establishment to comply witb such order shall be ground for 
imposition of penalties in accordance with Section 17 of this Act. 
SEC. 15, On-site Inspections - For the effective enforcement of this Act, the DOE shall 
have the right to visit Designated Establishments to inspect energy-consnming facilities, evaluate 
energy management procedures, identifY areas for efficiency improvement, and verify energy 
monitoring reports and other documents related to the compliance requirements of this Act. 
CHAPTER 7 
FINAL PROVISIONS 
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SEC 16. Pl'ohibited Acts. - The following acts shall be prohIbited: 
a) Failure and/or willful refusal to submit periodic reportorial compl!ance repOlts to the 
DOE; 
b) Failure and/or willful refusal to appoint/designate an Energy Conservation Officer 
and Certified Energy Manager; 
c) Failure to comply with the Order under Section 15 hereof, and 
d) Willful refusal to submit energy audit repolt. 
SEC 17. Penalties. - Any person who willfully commits any of the prohibited acts 
enumerated under this Act shall, upon conviction, be liable for penalties that will be defined in 
the Implementing Rules and Regulations of this Act. 
SEC 18. Contingency Powers. - Upoo the recommendation of the Secretary of Energy, 
in times of critical energy supply disruptions or imminent danger thereof, the President may 
dIrect the adoption of stringent energy conservation measures, including but not limited to 
powerffuel allocations or rationing; limiting the operating hours of commercial, industrial and 
similar establishments; restricting the use of government and private motor vehicles; staggering 
or limiting working hours in both public and private sectors; and the temporary closure of all 
energy intensive industries. 
SEC. 19. Appl·opriations. - Such sums as may be necessaty for the implementation of 
this act shall be taken from the current fiscal year appropriation of the Department of Energy 
Thereafter, the amount needed for the implementation of the act shall be included in the annual 
general appropriation. 
SEC 20. ImJllementing Rules and Regulations. - The DOE shaIl, in consultation with 
concerned government agencies and/or entities, the energy, industrial and commercial sectors, 
and other relevant stakeholders, promulgate the Implementing Rules and Regulations (IRR) of 
the Act within six (6) months from the effectivity of this Act. 
SEC 21. Sepambility C1anse. -If for any reason, any section or provision of this Act IS 
declared unconstitutional or invalid, such pms not affected thereby shall remain in full force and 
effect. 
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SEC. 22. Repealing Clause. - All laws, Presidential decrees, executive orders, issuances 
rules and regulations, inconsistent with the provisions of this Act are hereby repealed or 
modified accordmgly 
SEC. 23. Effectivity. - This Act shall take effect fIfteen (15) days after its publication in 
at least two (2) newspapers of general circulatIon following its approval. 
Approved, 
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