Republic of the Philippined HO
HOUSE OF REPRESENTA’ ‘Ss
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS

First Regular Session |

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HOUSE BILL No. 1g2

REGISTRATION UNIT

Introduced by REPRESENTATIVE ERIC L. OLIVAREZ

EXPLANATORY NOTE

Two years ago, the country was faced with the possibility of going
through another power crisis similar to the one that occurred during the late
80's and carly 90's. In fact, the need to avert another looming energy crisis
was so important that then President Aquino had to request Congress to
grant him emergency powers in order to fast track certain power plant
contracts in order to cope with the rising strain on the power grid.

While increasing the nation’s energy capacity is a step towards
achieving the dream of an energy independent nation, the road towards that
dream is not solely built on constantly finding ways to increase the power
grid. A successful energy policy seeks to ensure that enough energy is
available not just for the present generation, but for generations to come. A
successful energy policy is sustainable and reliable, Thus, it is only right for
the state to develop an energy policy that not just focuses on building power
plants but also on reducing the immense consumption of energy present in
the status quo,

While the bill is a step towards crafting a good energy policy, it is also
a sign of our commitment to the Paris Agreement which seeks to reduce
global carbon emissions in the coming years. High energy consumption
leads to an increased use in oil and coal, common sources of energy for our
country, Having an energy policy that would seek to reduce the
consumption of oil barrels and kilowatts would send a signal to the
international community of our commitment to ensuring a safer and
healthier world,

JOE


Through this bill, the country reiterates its commitment to ensuring a
comprehensive energy policy that not only seeks to increase the power grid
but also reduce the consumption of energy in the country. Thus, in view of
foregoing, the passage of this bill is earnestly sought.

au ¢. OW,

ERIC OLIVAREZ


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City
SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 18:2

Introduced by REPRESENTATIVE ERIC L. OLIVAREZ

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

SECTION 1. Short Title. - This Act shall be known as the
Efficiency and Conservation Act of 2016.”

SEC. 2, Declaration of Policy. - It is hereby declared the policy of

ergy

the State to:

a) Institutionalize energy efficiency and conservation as a national
way of life geared towards the efficient and judicious utilization of energy by
formulating, developing, and implementing energy efficiency and
conservation plans and programs to secure sufficiency and stability of
energy supply in the country to cushion the impact of high prices of
imported fuels to local markets and protect the environment in support to
the economic and social development goals of the country;

b) Promote and encourage the development and utilization of efficient
renewable energy technologies and systems to ensure optimal use and

sustainability of the country’s energy resources;


c) Reinforce related laws and other statutory provisions for a
comprehensive approach to energy efficiency, conservation and sufficiency
in the country;

d) Ensure market-driven approach to energy efficiency, conservation,
sufficiency and sustainability in the country

SEC. 3. Scope. - This Act shall establish a framework for introducing
and institutionalizing fundamental policies on energy efficiency and
conservation, including the promotion of efficient and judicious utilization of
energy, increase in the utilization of energy efficiency and renewable energy
technologies and the definition of responsibilities of various government
agencies and private entities,

SEC. 4. Coverage. - This Act shall cover the target sectors of
houscholds, buildings, transport, industrial and manufacturing
establishments, and other energy consumers in the economy, whether
private or public, by virtue of their potential impact on energy efficiency and
conservation efforts.

SEC. 5. Definition of Terms. - For purposes of this Act, the following
terms shall, unless the context indicates otherwise, have the following
meanings:

(a) Certified Energy Conservation Officer (CECO) refers to a
professional who becomes eligible for this certification after demonstrating
high levels of experience, competence, proficiency and ethical fitness in the
energy management profession. A CECO shall be required for Type 1
Designated Establishments. ‘Type 1 Establishments shall designate an
Energy Manager who shall be a registered engineer;

(b) Certified Energy Manager (CEM) refers to a professional who
becomes eligible for this certification after demonstrating expertise in several
areas ranging from standards, air quality, energy audits, lighting,
procurement and even financing. It recognizes individuals who have
demonstrated high levels of experience, competence, proficiency and ethical
fitness in the energy management profession. A person appointed under
Type 2 Designated Sector shall be responsible in the supervision and
maintenance of the facilities for the proper management of energy

consumption and perform other functions deemed necessary for the efficient


and judicious utilization of energy. Type 2 Establishments shall employ full-
time Certified Energy Manager (CEM).

(c) Demand Side Management refers to the reduction of energy
consumption through effective load management resulting to the decrease of
power demand and the migration of power demand from peak to off-peak
periods or such measures undertaken by distribution utilities to encourage
end-users to properly manage their loads to achieve efficiency in the
utilization of fixed infrastructures in the systems;

(d) Designated Establishment (Type 1 / Type 2 Designated
Establishment) refers to a private or public entity in the commercial,
industrial, transport, power, agriculture and public works sectors
consuming energy and/or having other index equivalent to such energy for
the previous year beyond the level specified by the Department of Energy
(DOE). Such entities shall be categorized as Type 1 or Type 2 Designated

Establishment, according to the annual energy consumption, as follows:

i
tons of oil equivalent (TOE) or 2,000,000 kilowatt-hours (kWh) but not
more than 28.8 TJ or 687.9 TOE or 8,000,000 kWh;

ii. Type 2 more than 28.8 TJ or 687.9 TOE or 8,000,000 kWh;
(¢) Distribution Utility refers to any electric cooperative, private

Type 1 equal to or more than 7.2 terajoules (TJ) or 172.0

corporation, government-owned utility or existing local government unit
(LGU) which has an exclusive franchise to operate a distribution system in
accordance with Republic Act No. 9136, otherwise known as the “Electric
Power Industry Reform Act of 2001;”

() Energy refers to all types of energy available commercially
including natural gas (liquid natural gas and liquid oil gas), all heating and
cooling fuels (including district heating and district cooling), coal, transport
fuels, and renewable energy sources;

(g) Energy Audit refers to the evaluation of energy consumption and
review of current energy cost to determine appropriate intervention
measures and efficiency projects in which energy can be judiciously and
efficiently used to achieve savings. The three types of energy audit are walk-

through audit, preliminary audit and detailed audit;


(h) Energy Conservation refers to the reduction of losses and wastage
in various energy stages from energy production to energy consumption
through the adoption of appropriate measures that are technologically
feasible, economically sound and environmentally and socially affordable;

(i) Energy Conservation Report refers to the periodic report
submitted to the DOE by Type 2 Designated Establishment 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;

(ij) Energy Consumption Report refers to the periodic report
submitted to the DOE by Type 1 or Type 2 Designated Establishments and
Transmission Utility containing their energy consumption, energy loss and
other status of energy use, The items to be reported in the Energy
Consumption Report shall be specified by the DOE;

(k) Energy Conservation Officer (ECO) refers to a person appointed
by Type 1 Designated Establishments responsible in the supervision and
maintenance of the 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;

() Energy Efficiency refers to the way of managing and restraining
the growth in energy consumption resulting in the delivery of more services
for the same energy input or the same services for less energy input;

(m) Energy Efficiency and Conservation Office (BECO) refers to
the office to be established in local government units headed by the Energy
Pfficiency Conservation and Sufficiency Officer, who shall be responsible for
overseeing the implementation of the program at the local government level;

(n) Energy Labeling refers to the program of the government which
requires manufacturers to attach an energy label on their products to
inform consumers on the energy performance and efficiency of the product;

(0) Energy Management refers to the process of designing and
implementing an optimal program of purchasing, generating and consuming
various types of energy based on the end-user’s overall short-term and long-
term management program, with due consideration of factors including

costs, availability, economies and environmental impact;


(p) Energy Sufficiency refers to a condition where the quantity of the
supply of energy is enough or sufficient to meet the demand, including the
required reserves;

(q) Minimum Energy Performance Standards refers to a
performance standard which prescribes a minimum level of energy
performance that appliances, lighting, electrical equipment and machinery
must meet or exceed before they can be offered for sale or used for
residential, commercial, transport and industrial purposes;

() National Energy Efficiency and Conservation Coordinating
Officer refers to the person appointed by the Leagues of the Local
Government Units from among the local government’s Energy Efficiency
Conservation and Sufficiency Officers (EECSOs) who shall be responsible for
integrating local energy efficiency, conservation and sufficiency programs;

(s) Road Transport Vehicle refers to a brand new or used transport
vehicle regardless of size or weight classification;

(t) Specific Energy Consumption (SEC) refers to the energy
consumption volume required per unit, such as production volume, sales
amount, transportation ton-kilometer, transportation kilometer, floor space
and such other indicators relevant to energy consumption;

(u) Transmission Utility refers to any private corporation 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
transmission services to any end-user within its franchise area; and

(v) Waste Heat Recovery refers to the extraction of heat from fluids
(.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 through other means, for generation of electricity, cooling,
heating or other usable forms of energy;

SEC. 6. Implementing Agency. - The Department of Energy shall be
the lead agency to implement the provisions of this Act.

SEC. 7. Role of Energy Users. ~ All energy end-user entities shall
exert efforts to use every available energy resource efficiently and promote
the development and utilization of renewable energy technologies and

systems across sectors from the household level to industries in compliance

7


with the declared policies of this Act. Towards this end, the DOE shall, in
collaboration with the energy end-user entities, develop the appropriate
mechanism to effectively implement the same,
CHAPTER 2
ROLE OF AGENCIES

SEC. 8, Responsibilities of the DOE. - The DOE shall be the lead
government agency responsible in the planning, formulation, development,
implementation, enforcement and monitoring of energy management policies
and other related energy efficiency and conservation plans and programs. In
addition to its existing mandate, the DOE shall have the following powers
and functions:

(a) Consult and coordinate with other government agencies, local
government units and the private sector or create an inter-agency
committee, as may be deemed necessary, to effective implement energy-
saving policies of the government;

(b) Initiate and maintain collaborative efforts with the business sector,
particularly the commercial, industrial, transport and power sectors, to
broaden and enhance their efficient and judicious utilization of energy;

(c) Develop and review energy performance standards pursuant to
Chapter 5, Section 14, on Minimum Energy Performance Standards (MEPS)
of machinery and equipment, appliances, vehicles and other fuel-using
combustion equipment and electric devices, among others, in consultation
with the Department of Trade and Industry - Bureau of Philippine
Standards (DTI-BPS);

(d) Require manufacturers, importers and dealers to comply with the
MEPS and to display the Energy Label showing the energy requirement and
consumption efficiency of such products on the packaging and on the
products themselves;

(ec) Ensure compliance with applicable existing benchmarks for energy
performance in buildings and industries, in consultation with the
appropriate agencies and organizations;

() Develop and maintain a centralized, comprehensive and unified
database on energy consumption, energy efficient technologies, renewable

energy technologies, and other critical and relevant information to ensure


efficient evaluation, analysis and dissemination of data and information for
planning and policy-making;

(g) Periodically review and reclassify designated establishments
pursuant to Sections 19, 21 and 23 of this Act; and

(h) Perform such other powers and functions as may be necessary to
attain the objectives of this Act.

SEC. 9. Role of Other Government Agencies. ~ In general, all other
government agencies shall promote the judicious and efficient use of energy
through their different mandates, In addition, the following agencies shall
have the following respective roles and functions in the promotion of energy
efficiency and conservation.

(a) Climate Change Commission (CCC). - The CCC shall collaborate
with the DOE and other government agencies in establishing targets,
monitoring and recording all greenhouse gas emission reduction resulting
from energy efficiency and conservation projects:

(b) Commission on Higher Education (CHED) and State Universities and
Colleges (SUCs). - The CHED and SUCs shall integrate into the existing
engineering curricula appropriate courses related to energy management.

(c) Board of Investments (BO!). - The BOI shall include energy
efficiency and conservation projects among the country's investment
priorities entitled to incentives

(A) Department of Budget and Management (BDM) and Commission on
Audit (COA). - The DBM and COA shall develop a mechanism to enable
government agencies to procure energy savings performance contracts and
other forms of off-balance sheet project finance for energy efficiency projects,

(e) Department of Education (DEPED), - The DEPED shall promote
energy efficiency and conservation practices through its K-12 career
advocacy program.

() Department of Finance (DOF). - The DOF and concerned agencies
shall draw-up appropriate mechanisms for the grant of subsidies and/or tax
credit equivalent to one hundred percent (100%) of the customs and duties
and national internal revenue taxes on the purchase and installation of
EEC machinery and equipment, whether for individual or industrial use.

(g) Department of Interior and Local Government (DILG). - The DILG

shall, in coordination with the DOE, be responsible in ensuring compliance

9


of all LGUs in implementing energy efficiency and conservation through the
adoption of appropriate Energy Management System.

(h) Department of Public Works and Highways (DPWH). - The DPWH
shall, in coordination with the DOE, be responsible in ensuring the
implementation of Guidelines on Energy Efficiency and Conserving Design
in Buildings as an integral part of the National Building Code, Roadway
Lighting Guidelines and such other guidelines as may be issued by the
DOE.

(i) Department of Trade and Industry (DTI). - The DTI, through the
Bureau of Philippine Standards ((BPS) shall, in consultation with the DOE,
require manufacturers, importers and dealers to comply with the MEPS and
to display the Energy Label showing the energy requirement and
consumption efficiency of such products on the packaging and on the
products themselves.

() Department of Science and Technology (DOST). ~ The DOST shall be
responsible in carrying-out strategic research and development programs
aimed at facilitating the development of energy efficient technologies and
the promotion thereof,

(k) Department of Transportation and Communication (DOTC. - ‘The
DOTC shall, in coordination with the DOE and the Department of
Environment and Natural Resources (DENR), be responsible in ensuring
compliance of vehicle owners, manufacturers and importers with the MEPS
for road transport vehicles consistent with the specifications for all types of
fuels prescribed under Section 26 of Republic Act No, 8749, otherwise
known as the “Clean Air Act of 1999,” and to display the energy
consumption label in coordination with the vehicle manufacturers, road
transport industry associations, public transport group and non-
government organizations. It shall also be responsible in ensuring the
enforcement of and compliance with energy management system in the sea
and air transport sectors.

(l) Government Financial institutions (GFis). - The GFls shall set aside
lending funds for Energy Efficiency and Conservation Projects at
concessional rates of interest to attract private sector investments. In
collaboration with the Insurance Commission (IC), they shall ensure the

availability of compatible guarantee products that would mitigate the credit

10


risks associated with energy efficiency investments in small and medium
enterprises and performance risks related to the energy efficiency solutions
developed by energy service companies, engineering companies and other
technology providers.

(m) Philippine Statistics Authority (PSA). - The PSA shall, in
coordination with the DOE, institutionalize household energy consumption
survey (HECS) and survey of energy consumption of establishments (SECE)
to establish an energy consumption database.

(n) Technical Education Skills Development Authority (TESDA). - The
TESDA shall, in collaboration with the CHED, DOST and other similar
training and service institutions, develop a program/system for the
certification of energy managers and conservation officers. It shall also
ensure the promotion of energy efficiency practices through its Technical
Vocational Education and ‘Training (TVET) Programs, TESDA shall
implement skills training, assessment and certification programs for
mechanics, technicians, installers and operators of renewable energy
systems,

CHAPTER 3
ROLE OF LOCAL GOVERNMENT UNITS

SEC. 10, Role of Local Government Units and Leagues of Local
Government Units and Elective Officials. - In support of the government’s
energy efficiency and conservation program, local government units shall
integrate a local energy efficiency program, to be headed by Municipal/City
Planning and Development Officer, into their local development plans based
on the guidelines to be provided in the implementing rules and regulations
(IRR) of this Act. The Energy Efficiency and Conservation (EE&C) plan shall
include the reporting of an Annual Energy Consumption by SMEs as part of
the requirements for business permit renewal.

The LGU shall monitor and report on the status of energy efficiency

programs and projects to the DILG and the DOE.
CHAPTER 4
CERTIFICATION FOR PROFESSIONAL COMPETENCY AND
ACCREDITATION FOR PROFESSIONAL SERVICES

SEC. 11. Certified Energy Manager (CEM) and Certified Energy

Conservation Officer (CECO). - There shall be an approved learning

MW


curriculum for the achievement of the required competencies and skills, and
a competency-based system for the assessment and certification of energy
managers and energy conservation officers to be developed through the
collaboration of the DOE, CHED and TESDA.

The certification system shall be based on an approved scope of
practice and a set of competency standards with clear assessment process
and tools, and certification for the determined competency, and undertaken

by the prescribed governance structure and quality-assurance system, and

aligned with the Philippine Qualifications Framework (PQF) and applicable
international standards. (TESDA]

Similarly, TESDA shall register TVET programs and conduct trainings,
assessment and certification of workers for qualification levels 1 to 5 of the
PQF, [TESDA] and competent non-profit organizations and other private
training institutions duly accredited by the DOE, The CHED shall offer
professional certificate programs for energy managers and energy
conservation officers,

SEC. 12, Accreditation of Energy Service Company (ESCO) and
other Energy Efficiency Service Provider (ESP). - The DOE shall develop
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) Enhancement of the capabilities of ESCOs, particularly in their
energy auditing services;

(c) Enhancement of support services procurement and selection
procedures;

(a) Enhancement of support to public sector incentive schemes in the
promotion of energy efficiency; and

(ec) Reduction of energy wastage and elimination of false claims on
energy efficiency among industry players.

The development of this sector shall expand the general service sector
and stimulate economic development through the enhancement of cost
competitiveness while at the same time strengthening Philippine energy

security. The accreditation process of this energy service sector is a natural

12


segment of the knowledge economy, providing sustainable environmental
and energy-saving benefits and ensuring that ESCOs include services for all
energy applications, including heating ventilation air conditioning (HVAC),
lighting and motors.

CHAPTER 5
ENERGY PERFORMANCE STANDARDS AND LABELING REQUIREMENTS

SEC, 13. Minimum Energy Performance Standards (MEPS). - To
ensure appropriate and effective implementation of energy efficiency and
conservation, all manufacturers, importers, distributors and retailers of
energy-consuming products, including electrical appliances, lighting
products, transport vehicles, machinery and other equipment, shall subject
their energy-consuming products to energy performance testing.

MEPS shall be developed in consultation with all of the stakeholders
involved in the manufacturing, sale and use of the products to which they
apply. Prior to the adoption of the MEPS, cost/benefit analysis shall be
performed to determine the cost and benefit associated with the
improvements in energy efficiency.

SEC. 14, High Energy-Consuming Equipment and Devices, - To
ensure appropriate and effective implementation of energy efficiency and
conservation in high-energy consuming equipment and devices,
manufacturers, importers, suppliers, distributors and retailers engaged in
selling the designated products shall provide information such as energy
performance and other information that shall contribute to the general
consumers’ awareness, knowledge and actions, Such information shall be
specified in the implementing rules and regulations,

SEC. 15. Energy Labeling for Products and Equipment. - To
ensure appropriate and effective implementation of energy efficiency and
conservation, the following shall be implemented

a) All energy-consuming products, devices and equipment shall have
Energy Label displayed;

b) Manufacturers, importers and suppliers shall provide information
that contributes to the general consumers’ awareness, knowledge and
actions towards energy efficiency and conservation; and

c) Manufacturers, importers and suppliers shall submit product

samples to the DOE for verification testing,

13


SEC. 16. Fuel Economy Performance for Motor Vehicles. — To
ensure fuel efficiency for transport, vehicle manufacturers, importers and
dealers shall comply with fuel economy performance labeling requirements
set by the DOB. The vehicle manufacturers, importers and dealers shall
provide technical information on fuel economy rating of the engine that will
allow the consumer to make an informed decision in choosing the vehicles
for their use.

SEC. 17. Energy Performance for Buildings, - To ensure
appropriate and effective implementation of energy efficiency and
conservation for new and existing buildings for commercial and institutional
use such as, but not limited to, hospitals, educational facilities, exhibition
centers, government offices and military facilities, LGUs shall implement the
following measures in accordance with building permit issuances:

a) New building construction shall comply with the minimum
requirements as specified in the Guidelines on Energy Conserving Design on
Buildings issued by the DOE, in consultation with the DPWH; and

b) Retrofit of buildings shall also comply with the minimum
requirements as specified in the Guidelines on Energy Conserving Design on
Buildings issued by the DOE, in consultation with the DPWH.

CHAPTER 6
TYPE 1 AND TYPE 2 DESIGNATED ESTABLISHMENTS

SEC. 18. Type 1 Designated Establishments. - Establishments with
an annual energy consumption equal to or more than 7.2 terajoules (TU) or
172.0 tons of oil equivalent (TOE) or 2,000,000 kilowatt-hours (kWh) but not
more than 28.8 TJ or 687.9 TOE or 8,000,000 kWh are hereby categorized
as Type 1 Designated Establishment and shall include the following sectors:

a) Building Sector

1) Commercial Building

2) Hotel

3) Hospital Building

4) Educational Institutions

5) Office Buildings

6) Government Buildings
b) Retail

1) Food and Beverage Services

14


2) Retail Companies
c) Industrial/ Manufacturing (Medium size industrial/manufacturing

plant)

1) Cement

2) Mining

3) Food and Beverage

4) Electronic/Semi-Conductor

5) Steel and Metal Fabrication

6) Chemical

7) Vehicle

8) Appliance

9) Glass
10) Plastic
11) Others

d) Transport Sector (Fleet)
1) Railway
2) Road Transport
3) Sea Freight and Passenger Vessel
4) Air Transport Cargo and Passenger Vessel
e) Power Sector
1) Power Generation
2) Transmission and Distribution Utilities
f) Agriculture
1) Primary Agriculture
2) Irrigation
3) Agricultural Processing
g) Public Works
1) Water
2) Waste Water
3) Solid Waste Treatment
4) Road Energy Performance
5) Road Operators
6) Other urban and municipal services
SEC. 19, Obligations of Type 1 Designated Establishments. - Type
1 Designated Establishment shall have the following obligations:

18


a] Employ one (1) Certified Energy Conservation Officer (CECO) and
shall, within ten (10) working days, duly notify the DOE on the appointment
or separation from the service of the said CECO, The CECO shall manage
the energy consumption of facilities, equipment and devices, the
implementation and improvement of energy efficiency measures, the
conduct of regular energy audit, energy monitoring and control, and the
preparation of periodic energy consumption 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, plans and methods of measurements and
verification for the implementation of energy efficiency and conservation
projects;

d) Submit a Semi-Annual Energy Consumption Report (SAECR) and
Annual Energy Conservation Report (AECR) to the DOE, within thirty (30)
days after the reference period;

¢) Conduct a periodic Energy Audit once every three (3) years by
engaging either an in-house energy auditor or an accredited private energy
service company or energy provider and submit an Energy Audit Report
(EAR) to the DOE upon completion of the energy audit;

1) Improve average Specific Energy Consumption (SEC) in accordance
with the annual reduction targets to be established by the DOE in the
Implementing Rules and Regulations of this Act; and

g) Set up programs to develop and design measures that promote
energy efficiency, conservation and sufficiency that may include, but not
limited to, installation of renewable energy technologies

SEC. 20. Type 2 Designated Establishment. - Energy intensive
establishments with an annual energy consumption of more than 28.8
terajoules (TJ) or 687.9 tons of oil equivalent (TOE) or 8,000,000 kilowatt-
hours (kWh) are hereby categorized as Type 2 Designated Establishment
and shall include the following sectors

a) Building Sector

1) Commercial Building
2) Hotel
3) Hospital Building
16


b)

d)

8)

4) Educational Institutions
5) Office Buildings

6) Government Buildings

Retail

1) Food and Beverage Services

2) Retail Companies

Industrial/ Manufacturing (Medium size industrial/manufacturing
plant)

1) Cement

2) Mining

3) Food and Beverage

4) Blectronic/Semi-Conductor

5) Steel and Metal Fabrication

6) Chemical

7) Vehicle

8) Appliance

9) Glass
10) Plastic
11) Others

Transport Sector (Fleet)

1) Railway

2) Road Transport

3) Sea Freight and Passenger Vessel

4) Air Transport Cargo and Passenger Vessel
Power Sector

1) Power Generation

2) Transmission and Distribution Utilities
Agriculture

1) Primary Agriculture

2) Irrigation

3) Agricultural Processing

Public Works

1) Water

2) Waste Water

3) Solid Waste Treatment

7


4) Road Energy Performance
5) Road Operators
6) Other urban and municipal services

SEC. 21. Obligations of Type 2 Designated Establishments. -

‘Type 2 Designated Establishments shall have the following obligation:
a) Employ one (1) Certified Energy Manager (CEM) and shall, within
ten (10) working days, notify the DOE on the appointment or separation

from the service of the said CEM. The CEM shall manage the energy

consumption of facilities, equipment and devices, the implementation and
improvement of energy efficiency measures, the conduct of regular energy
audit, energy monitoring and control, and the preparation of periodic energy
consumption 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, plans and methods of measurements and
verification for the implementation of energy efficiency and conservation
projects;

d) Submit a Semi-Annual Energy Consumption Report (SAECR) and
an Annual Energy Conservation Report (AECR) to the DOE within thirty (30)
days after the reference period;

€) Conduct periodic Energy Audit once every three (3) years through
cither an in-house energy auditor or by engaging an accredited energy
service company or energy provider, and submit an Energy Audit Report to
the DOE upon completion of the energy audit;

1) Improve average Specific Energy Consumption (SEC) in accordance
with the annual reduction targets to be established by the DOE in the
Implementing Rules and Regulations of this Act; and

g) Set up programs to design and develop measures that promote
energy efficiency, conservation and sufficiency that may include, but not
limited to, installation of renewable energy technologies

SEC. 22. Other Establishments, - Establishments with an annual
energy consumption equal to or more than 3.6 terajoules (TJ) or 86.0 tons of
oil equivalent (TOE) or 1,000,000 kilowatt-hour (kWh) but less than 7.2. Td
or 172 TOE or 2,000,000 kilowatt-hour (kWh) shall be required to submit an

annual energy consumption report to the DOE. These establishments may,

18


on a voluntary basis, submit themselves to external audit or quality control
assessment to assist them in their energy planning and management.
CHAPTER 7
INCENTIVES FOR ENERGY EFFICIENCY AND CONSERVATION
PROJECTS

SEC. 23. Fiscal Incentives, - Investors, developers, energy service
companies and users of energy-efficient technologies and practices from
procurement to manufacturing to supply, as duly certified by the DOE, shall
be entitled to the following incentives:

a) Tax and Duty Exemption on Imported Capital Equipment. - Within
the first ten (10) years upon the issuance of a certification by the DOB, the
importation of technologically energy-efficient machinery, equipment,
vehicles, spare parts and materials shall be exempt to the extent of one
hundred percent (100%) of the customs duties and national internal revenue
tax payable thereon: Provided, That the machinery, equipment, vehicles and
spare parts are directly and actually needed and used exclusively by the
users of energy-efficient technologies and practices,

b) Tax Credit on Domestic Capital Equipment. - A tax credit on the
machinery, equipment and spare parts purchased from a domestic
manufacturer equivalent to one hundred percent (100%) of the value of the
national internal revenue taxes and customs duties that would have been
waived had such machinery, equipment, vehicles, and spare parts been
imported: Provided, That (1) the said machinery, equipment, vehicles and
spare parts are directly and actually needed and used exclusively by the
users of energy-efficient technologies and practices.

¢) Income Tax Holiday - Exemption from income taxes levied by the
National Government for a period of six (6) years from commercial operation
for pioneering efficient technology, and for a period of four (4) years for non-
pioneering efficient technology.

d) The Department of Finance and concerned agencies shall draw-up
appropriate mechanisms for the grant of subsidies, establishment of
guarantee funds and/or tax credit equivalent to one hundred percent (100%)
of the customs duties and national internal revenues on the purchase and
installation of energy-efficient machinery, equipment and spare parts,

whether for individual or industrial use.

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SEC. 24. Non-Fiscal Incentives, - Establishments that will
implement or are implementing energy-efficient projects shall be entitled to
the following non-fiscal incentives:

a) Provision of awards and recognition for energy efficiency and
conservation best practices and successful energy-efficient projects and
products; and

b) Provision of technical assistance from government agencies in the
development and promotion of energy-efficient technologies.

SEC. 25. Financial Assistance, ~ Government Financial Institutions
(GFls), such as the Development Bank of the Philippines (DBP), Land Bank
of the Philippines (LBP), and other financial institutions shall, in accordance
with and to the extent allowed by the enabling provisions of their respective
charters or applicable laws, provide concessional financial packages for the
development, utilization, and commercialization of renewable energy and
energy efficiency projects as duly recommended and endorsed by the DOE.

CHAPTER 8
MISCELLANEOUS PROVISIONS

SEC. 26. Visitorial Powers, - For the effective enforcement of this
Act, the DOE shall have the authority to visit Designated Establishments to
inspect energy-consuming facilities, evaluate energy management systems
and procedures, identify areas for efficiency improvement, and verify energy
monitoring reports and other documents related to the compliance
requirements of this Act.

SEC. 27. Reports and On-site Inspections, - For the effective
enforcement of this Act, the DOE shall, to the extent possible, exercise
visitorial powers for designated establishments to inspect energy-consuming
facilities, verify energy monitoring records and other documents related to
the compliance requirements of this Act.

SEC. 28. Strengthening of the Energy Utilization Management
Bureau. ~ For the effective implementation of the provisions of this Act, the
Energy Utilization Management Bureau (EUMB) under the DOE is hereby
strengthened. The Secretary of the DOE shall, in consultation with the
Department of Budget and Management, determine the revised
organizational structure and staffing complement, including the creation of

appropriate plantilla positions and the number of staff necessary to

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complement or augment the existing plantilla of the DOE-EUMB in
accordance with the existing civil service rules and regulations.
CHAPTER 9
FINAL PROVISIONS

SEC. 29. Prohibited Acts. ~ The following acts shall not be allowed:

1, Failure to comply with the Energy Label showing the energy
requirement and consumption efficiency of products on their packaging, and
on the products themselves;

2, Failure and/or willful refusal to submit annual  reportorial
compliance reports to the DOE/LGU;

3, Failure and/or willful refusal to appoint/designate a Certified
Energy Conservation Officer/Certified Energy Manager;

4. Failure to comply with the Order under Section 30 of this Act;

5. Willful refusal to submit an on-site inspection; and

6. Failure to submit energy audit report.

SEC. 30. Recommendation, Disclosure and Order. - Upon
determination that an establishment has committed any of the prohibited
acts under Section 29 of this Act, the DOE may consider the following
measures prior to the imposition of the appropriate 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 DOB; and

c) Issue an Order to the establishment 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 with such order shall be a valid ground for
imposition of penalties in accordance with Section 31 of this Act.

SEC. 31. Penalty Clause. - The responsible officers and employees of
any establishment or organization, who willfully commit any of the
prohibited acts enumerated under Section 29 of this Act shall, upon
conviction, be imposed with the penalties provided herein, Any person, who

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willfully aids or abets the commission of the said prohibited acts or who
causes the commission of any such act by another shall be liable in the
same manner as the principal.

In case of association, partnership or corporations, the penalty shall
be imposed on the partner, president, chief operating officer, chief executive
officer, directors or officers responsible for the violation,

The commission of any of the prohibited acts provided under Section
29 of this Act, upon conviction thereof, shall suffer the penalty of
imprisonment of from one (1) year to five (5) years, or a fine ranging from a
minimum of One hundred thousand pesos (P100,000.00) to One hundred
million pesos (P100,000,000,00) or twice the amount of damages caused or
costs avoided for non-compliance, whichever is higher, or both, upon the
discretion of the court.

The DOE is further empowered to impose administrative fines and
penalties for any violation of the provisions of this Act, its implementing
rules and regulations and other issuances relative to this Act. This is
without prejudice to the penalties provided for under existing environmental
regulations prescribed by the DTI-BPS or any other concerned government
agency.

SEC. 32, Appropriations. - Such sums as may be necessary 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 this Act shall be included in the annual general
appropriation.

SEC. 33, Implementing Rules and Regulations, - The DOE shall, in
consultation with concerned government agencies and/or entities, local
government units, industrial and commercial sectors, and other relevant
stakeholders, promulgate the Implementing Rules and Regulations (IRR)
within six (6) months from the effectivity of this Act.

SEC. 34. Congressional Oversight. - Upon the effectivity of this Act,
the Joint Congressional Commission on EEC is hereby constituted to
exercise oversight powers over the implementation of this Act. The oversight
commission shall be composed of fourteen (14) members, with the chairmen
of the Committee on Energy of the Senate and the House of Representatives

and six (6) additional members from each House, to be designated by the

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Senate President and the Speaker of the House of Representatives,
respectively, The minority shall be entitled to pro rata representation but
shall have at least one (1) representative in the oversight commission.

SEC. 35. Separability Clause. - If for any reason, any section or
provision of this Act is declared to be unconstitutional or invalid, such part
not affected thereby shall remain in full force and effect.

SEC. 36. Repealing Clause. - All laws, Presidential decrees,
executive orders, issuances rules and regulations, inconsistent with the
provisions of this Act are hereby repealed or modified accordingly.

SEC. 37. Effectivity. ~ This Act shall take effect fifteen (15) days after
its publication in at least two (2) newspapers of general circulation upon its

approval.

Approved,

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