Department Circular

Department Circular No. 2004-04-004

Guidelines On The Issuance Of Certificate Of Accreditation And Certificate Of Authority To Import Under The Natural Gas Vehicle Program For Public Transport


WHEREAS, Executive Order No. 66, series of 2002 entitled "Designating the Department of Energy (DOE) as the Lead Agency in Developing the Philippine Natural Gas Industry", mandates the DOE to ensure a unified and coordinated effort towards establishing a successful and robust natural gas industry;

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Department Circular No. 2004-04-003

DC 2004-04-003-Rules and Regulations Implementing Memorandum Circular No. 55


Pursuant to Section 4 of Memorandum Circular No. 55 issued by the Office of the President on February 9, 2004, directing all departments, bureaus, offices, agencies and instrumentalities of the government, including government-owned and controlled corporations to incorporate the use of one percent (1%) by volume Coconut Methyl Ester in their diesel requirements, the Department of Energy, in consultation with concerned government agencies and private entities, hereby promulgates and adopts the following rules and regulations.

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Department Circular No. 2004-02-002

Prescribing The Guidelines For The Formulation Of A Five-Year Distribution Development Plan Pursuant To Section 2 Of Department Of Energy Circular No. 2003-12-011, Entitled “Enjoining All Distribution Utilities To Supply Adequate, Affordable, Quality and Reliable Electricity”


WHEREAS, under Section 2 of Republic Act (RA) No. 9136, otherwise known as the "Electric Power Industry Reform Act of 2001" or EPIRA, it is declared, among others, the policy of the State to ensure quality, reliability, security and affordability of the supply of electric power; WHEREAS, pursuant to Section 37 (c) of EPIRA, the Department of Energy (DOE) is mandated to prepare and update annually a Power Development Program (PDP) and integrate the same into the Philippine Energy Plan (PEP);

WHEREAS, the PDP shall consider and integrate the individual or joint development plans of the transmission, generation, and distribution sectors of the electric power industry, which are submitted to the DOE; WHEREAS, Section 23 of the EPIRA, required distribution utilities (DUs), among other functions, to prepare and submit to the DOE their annual distribution development plans and in the case of electric cooperatives, to submit such plans through the National Electrification Administration (NEA); WHEREAS, it is provided under Section 4 (p), Rule 7 of the Implementing Rules and Regulations of the EPIRA (EPIRA-IRR) that DUs shall prepare and submit to the DOE an annual five year-distribution development plan (DDP) not later than the fifteenth (15th) of March of every year for integration with the PDP and PEP; WHEREAS, there is an imperative need to institutionalize the formulation process of the DDP consistent with the policy and structural reforms envisioned in the EPIRA; WHEREAS, in compliance with DOE Circular No. DC 2003-12-011 issued on December 5, 2003, the DDP of a DU shall include, among others, an abstract of the terms and conditions of power supply contracts with National Power Corporation (NPC) existing and available supply, and, where NPC supply is not available and sufficient, the power supply contracts with private power producers to augment the power supply in their franchise areas and to assure that power interruptions are minimized;

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Department Circular No. 2004-01-001

Prescribing The Rules And Procedures For Private Sector Participation In Existing NPC-SPUG Areas Pursuant To Rule 13 Of The Implementing Rules And Regulations Of The Electric Power Industry Reform Act Of 2001 (EPIRA-IRR)


WHEREAS, it is the declared policy of the State to ensure and accelerate the total electrification of the country; WHEREAS, under Section 1 of Rule 13 of the EPIRA IRR, the Department of Energy (DOE) is tasked to issue specific guidelines on how to encourage the inflow of private capital and the manner whereby other parties including distribution utilities and qualified third parties can participate in the missionary electrification;

WHEREAS, under Section 3 of the EPIRA IRR, the Small Power Utilities Group of the National Power Corporation (NPC-SPUG), is mandated to periodically assess the requirements and prospects of bringing power generation and associated power delivery systems to commercial viability on an area-by-area basis including a program to encourage private sector participation; WHEREAS, missionary electrification functions of NPC-SPUG are funded from the revenues from sales in missionary areas and from the Universal Charge, the participation of private sector shall reduce the burden on the missionary electrification component on the Universal Charge (UC-ME); WHEREAS, the participation of private sector in missionary areas shall reduce the burden on the UC-ME;

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Department Circular No. 2003-12-011

Enjoining All Distribution Utilities Adequate, Affordable, Quality and Reliable Electricity


WHERE AS, Section 2 of Republic Act No. 9136, also known as the "Electric Power Industry Reform Act of 2001" or "EPIRA", declared as a policy of the state, among others, "[t]o ensure the quality, reliability, security and affordability of the supply of electric power;"

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Department Circular No. 2003-11-010

Providing For the Rules & Regulations Governing the Business of Retailing Liquid Petroleum Products


WHEREAS, R. A. 8479, otherwise known as the "Downstream Oil Industry Deregulation Act of 1998", applies to all persons or entities engaged in any and all activities of the domestic downstream oil industry and mandates the DOE to promote the entry of new industry participants;

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Department Circular No. 2003-10-009

Geothermal Safety and Health Code of Practice


STATEMENT OF AUTHORITY Pursuant to Rule 2, Section 8 of Department Circular No. 2000-02-001, otherwise known as the “Revised Geothermal Safety and Health Rules and Regulations”, and in order to ensure adequate safety and protection against hazards to health, life and property as well as pollution of air, land and water from geothermal operations, the following geothermal safety and health code of practice are hereby promulgated:

GENERAL PROVISIONS SECTION I. SAFETY AND HEALTH POLICY A. SAFETY AND HEALTH POLICY STATEMENT 1. Providing a safe workplace while protecting the health of the workers must be the principal responsibility of the geothermal operator. To achieve this, safety and health concerns must be thoroughly integrated in the geothermal operator's management policy.

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Department Cicular No. 2003-07-008

Creation and Establishment of A Project Management Office to Manage the Implementation of the World Bank Financed Rural Power Project


WHEREAS, the Department of Energy (DOE), in pursuance of its mandate under the "Electric Power Industry Reform Act of 2001" or "EPIW has envisioned the achievement of country's total electrification; WHEREAS, rural power development is a flagship program of the DOE that would provide support for the implementation of reforms and priority investments critical for achieving the goals in a sustainable manner in partnership with the private sector;

WHEREAS, on 27 February 2003, the NEDA﷓Investment Coordination Committee Cabinet Committee (ICC﷓CC) has approved the proposed Rural Power Project (the Project) to be financed by the World Bank through its Adaptable Program Lending (APL) Facility with co﷓financing from the Global Environment Facility (GEF) in support of the country's total electrification program;

WHEREAS, the Project provides a programmatic structure, piloting new strategies and business models in implementing rural electrification program consistent with EPIRA;

WHEREAS, there is the need to create and establish an adequate and full﷓time Project Management Office (PMO) to ensure the implementation and monitoring of the investment and capacity﷓building components of the Project is done in a timely, organized, and efficient manner;

WHEREAS, one of the conditions in the loan consideration by the NEDA﷓ICC is that the DOE shall ensure that the establishment of such PMO shall not lead to the creation of new positions, given the rationalization program of the Department of. Budget and Management, NOW, THEREFORE, the DOE hereby creates and establishes the Project Management Office for the effective management of the Rural Power Project, and ensure the integration and consistency with the rest of the rural electrification programs and activities of the Government through the Department of Energy.

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Department Circular No. 2003-06-007

"Rules and Regulations Implementing Republic Act 8479, Downstream Oil Industry Deregulation Act of 1998," As Amended


Pursuant to chapter VII, Section 23 of Republic Act No. 8479, otherwise known as the "Downstream Oil Industry Deregulation Act Of 1998," Section 14 (paragraph) c of Department Circular nNo. 98-03-004, as amended by Department Circular No. 2002-05-001, is hereby further amended to read as follows:

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Department Circular No. 2003-05-006

Amending Certain Provisions of Petroleum Board Circular Nos. 15 And 2, Series of 1975 and 1976, Respectively, Providing Guidelines to the Financial and Technical Capabilities of A Viable Petroleum Exploration and Production Company


WHEREAS, the former Petroleum Board now Department of Energy issued Circular Nos. 15 and 2, Series of 1975 and 1976, respectively, providing guidelines related primarily to the financial and technical. Capabilities of a viable petroleum exploration and production company.

WHEREAS, it is necessary to amend certain provisions of the said Circular to make it attuned to the conditions under which it is being implemented and considering that petroleum exploration and production is highly capital intensive. NOW, THEREFORE, the DEPARTMENT hereby adopts and promulgates the following amendments to certain provisions of Petroleum Board Circular Nos. 15 and 2, Series of 1975 and 1976, respectively:

Section 1. 3RD AND 5TH Paragraphs of Circular No. 15 is hereby amended to read as follows: Considering that establishing the capitalized value of a company differs in different countries, a company who will engage in onshore exploration and offshore exploration ventures may be considered as a viable exploration company if the DEPARTMENT is satisfied in the adequacy of its financial resources. Likewise, the exploration company should show that it has sufficient resources to meet future requirements.

Section 2. Paragraph a of Circular No. 2 on the Financial Qualification is hereby amended to read as follows: a) Financial Qualification A company to be financially qualified to enter into a service contract must have a minimum working capital equivalent to one hundred percent (100%) of the cost of the firm Work Obligation on the area being applied for. In case of consortium, to qualify, each member's working capital shall be pro-rata based on its participating interest in the service contract. "Working Capital," in the concept of the guidelines, refers to the company's net liquid assets (Liquid Assets less Current Liabilities) consisting primarily of cash, temporary investments, (marketable securities), short-term receivables and deposits, which are free for investment in petroleum operation. It is understood that the available working capital should be net of the financial commitment from other existing service contracts. In addition, each consortium member should have an acid-test ratio of 1.5:1 and a debt/equity ratio of 3:1.

Section 3. Additional Provisions are hereby inserted between paragraph (C) and the Penultimate paragraph of Petroleum Board Circular No. 2, series of 1976, to read As follows: a) In case of a newly organized subsidiary company which is willing to engage in petroleum operations but its capital is not sufficient to meet the minimum requirement, its parent company shall be required to submit its financial statements and provide support to a subsidiary through a parent guarantee. b) Past exploration expenditures incurred by a contractor shall be included in the new service contract as an operating expense and cost recoverable in case of production subject to the validation of the DEPARTMENT. Such expense however, shall be limited to the past expense relative to the same area subject of the application and participating interest of the contractor. In the event, that the area covered by prior service contract is bigger than the area applied for, such expense shall be pro-rated to effect the actual expenses to be carried in the new service contract.

Section 4. Repealing Clause All other circulars, rules and regulations inconsistent with this Department Circular are hereby modified, amended and repealed accordingly.

Section 5. Effectivity This Circular shall take effect fifteen (15) days following its publication in a newspaper of general circulation. Issued this 19th day of May 2003 in Fort Bonifacio, Taguig, Metro Manila. (Sgd.) VINCENT S. PEREZ Secretary


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