Introduced by REP. REYNALDO UMALI

EXPLANATORY NOTE

The maintenance turn-around of the SPEX Malampaya Onshore Natural Gas Plant
set from March 15 to April 14, 2015 would result in the total cut-off of the supply
of natural gas to the three (3) natural gas-fired power plants in Luzon, i.e., the Sta.
Rita, San Lorenzo and llijan, with a total installed capacity of 2,700 MW. Due to the
foregoing, these three power plants, as well as other natural gas-fired power plants
similarly situated throughout the country, may have to use alternate fuel to ensure
continuity of generation supply during the said period. Thus, Sta. Rita (1000 MW)
and San Lorenzo (500 MW) may run on liquid condensate fuel, while Mijan (1200
MW) may use industrial diesel oil or biodiesel.

Power plants which would use biodiesel (the Biofuels Act of 2006 requires that
biofuel should be blended with all diesel engine fuels sold in the country) would
have a reduced limited capacity due to lower combustion of biodiesel vis-a-vis pure
diesel. This would further deplete the energy supply available for the Luzon grid
during the summer of 2015, which is already in a state of crisis due to other factors
such as the delays in the commissioning of committed power projects as well as the
increased levels of unplanned power station outages.

A short-term solution to mitigate this narrow reserve margin and augment the
power supply during these periods of natural gas supply shortages is to allow
natural gas plants in the country to use pure or straight-run diesel as their
alternative fuel. To achieve this objective, however, would require an amendment to
Section 5 of Republic Act No. 9367, otherwise known as the "Biofuels Act of 2006,"
that would exempt the Iijan plant and other similarly situated power generation
plants in the country from compliance with the minimum biodiesel blend
prescribed therein.

is bill is earnestly sought.

It is in this light that the immediate approvs

V. UMALI
Representative
2» District, Oriental Mindoro, LP



Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

SIXTEENTH CONGRESS
Second Regular Session

5587

HOUSE BILL NO.

Introduced by REP. REYNALDO UMALI

AN ACT
EXEMPTING NATURAL GAS POWER GENERATING PLAN’
FROM THE REQUIREMENTS OF PARAGRAPH 5.3, SECTION 5 OF
REPUBLIC ACT NO. 9367, OTHERWISE KNOWN AS THE
"BIOFUELS ACT OF 2006"

Be it enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled:

SECTION 1. - Section 5 of Republic Act No. 9367, otherwise known as
the "Biofuels Act of 2006," is hereby amended to read as follows:

“SEC. 5. Mandatory Use of Biofuels. - Pursuant to the above policy it
is hereby declared that all liquid fuels for motors and engines sold in
the Philippines shall contain locally-sourced biofuels components as

follows:

5.3 Within three months from the effectivity of this Act, a
minimum of one percent (1%) biodiesel by volume shall be blended

into all diesel engine fuels sold in the country: Provided, That the


biodiesel blend conforms to PNS for biodiesel: AND PROVIDED
FURTHER, THAT WHEN THERE IS AN EXISTING OR IMMINENT
SHORTAGE OF ELECTRICITY, AS MAY BE DETERMINED BY THE
PRESIDENT OF THE PHILIPPINES, UPON RECOMMENDATION OF
THE SECRETARY OF THE DEPARTMENT OF ENERGY, NATURAL
GAS POWER GENERATING PLANTS MAY USE PURE OR STRAIGHT-
RUN DIESEL AS THEIR ALTERNATE FUEL DURING SAID PERIODS,

Within two years from the effectivity of this Act, the NBB created
under this Act is empowered to determine the feasibility and thereafter
recommend to the DOE to mandate a minimum of two percent (2%)
blend of biodiesel by volume which may be increased taking into
account considerations including but not limited to domestic supply
and availability of locally-sourced biodiesel component: PROVIDED,
THAT WHEN THERE IS AN EXISTING OR IMMINENT SHORTAGE OF
ELECTRICITY, AS MAY BE DETERMINED BY THE PRESIDENT OF
THE PHILIPPINES, UPON RECOMMENDATION OF THE SECRETARY
OF THE DEPARTMENT OF ENERGY, NATURAL GAS POWER
GENERATING PLANTS MAY USE PURE OR STRAIGHT-RUN DIESEL
AS THEIR ALTERNATE FUEL DURING SAID PERIODS,

SEC. 2. Implementing Rules and Regulations. - The Department of

Energy (DOE) shall, within thirty (30) days from the effectivity of this Act,

promulgate the implementing rules and regulations of this Act.

SEC, 3. Separability Clause, — Should any provision of this Act be
declared invalid, the remaining provisions shall continue to be valid and
subsisting.

SEC. 4. Repealing Clause. — All laws, executive orders,

or

administrative orders, 10 rules and regulations or parts thereof, which are


inconsistent with this Act, are hereby 11 amended, repealed or modified
accordingly.

SEC. 5. Effectivity. - This Act shall take effect fifteen (15) days after
its publication in at least two (2) newspapers of general circulation in the
Philippines.

Approved,