EXECUTIVE ORDER NO. 215
EXECUTIVE ORDER NO. 215 - AMENDING
PRESIDENTIAL DECREE NO. 40 AND ALLOWING THE PRIVATE SECTOR TO GENERATE
ELECTRICITY
WHEREAS,
Presidential Decree No. 40 places the responsibility of setting up
transmission line grids and the construction of associated generation
facilities in Luzon, Visayas, Mindanao and the major islands of the
country to the National Power Corporation (NPC);
WHEREAS, the generation of electricity, unlike the transmission and
distribution of electricity, is not a natural monopoly and can be
undertaken by more than one entity;
WHEREAS, the government, as a matter of policy, is encouraging the
private sector to participate in economic development and has started
to disengage in areas which can be adequately handled by the private
sector;
WHEREAS, the generation of electricity by the private sector can
provide a means of increasing power capacity to meet the projected
increase in power demand in the future without in any way requiring
financial assistance or guarantee from the government;
WHEREAS, there is, on the other hand, an imperative need to rationalize
the development of energy resources and the operation of electric
generating facilities in the power grid;
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, do
hereby order:
Section 1. The strategic and rational development of
the country’s power grids shall be the responsibility of the National
Power Corporation. Accordingly, the setting up of transmission line
grids and the construction of associated generating facilities in
Luzon, Visayas, and Mindanao, including the major islands of the
country, to meet the power demand, shall be the responsibility of the
National Power Corporation. However, private corporations, cooperatives
or similar associations shall be allowed to construct and operate the
following types of electric generating plants, subject to the rules and
regulations hereinafter adopted in accordance with Sec. 2
hereof:
a)
Cogeneration units, defined as production of electric energy and forms
of useful thermal energy (such as heat or steam), used for industrial,
commercial, heating or cooling purposes through sequential use of
energy;
b) Electric
generating plants, intending to sell their production to the grids,
consistent with the developmental plans formulated by the National
Power Corporation;
c) Electric
generating plants, intended primarily for the internal use of the
owner, which also plan to sell excess production to the grids; and
d) Electric
generating plants, outside the National Power Corporation grids,
intending to sell directly or indirectly to end-users.
Sec. 2. Rules and regulations to govern private
sector involvement in power generation shall be formulated by the
National Power Corporation for areas within the National Power
Corporation grids, and the National Electrification Administration for
areas outside the National Power Corporation grids. Such rules and
regulations shall be made subject to consultation with concerned
agencies including the private sector and the approval of the Office of
Energy Affairs. These rules and regulations shall include the
following:
a)
Qualifications for accrediting private sector generations;
b) Procedures
for applying for accreditation as a private sector generator of
electricity;
c) Obligations
of private sector generators which shall include efficiency standards
to ensure reliability of power supply and the corresponding penalties
for failure to comply with said standards;
d) Terms and
conditions for the purchase or for the transmission/distribution, as
the case may be, of electricity generated by non-National Power
Corporation entities; and
e) Other
matters which shall be necessary to implement this Order.
Sec. 3. The Office of Energy Affairs shall take
the necessary measures to ensure that the provisions of this Order are
made effective.
Sec. 4. The Department of National Defense shall
assist the National Power Corporation, the private utilities and the
electric cooperatives in providing security to the generating plants to
prevent power black-outs, and in instituting the necessary safeguards
in cases of emergencies, including the training of Armed Forces of the
Philippines personnel in power generation operations.
Sec. 5. Numbers 2, 4, 5 and 6 of Presidential
Decree No. 40 are hereby amended accordingly. All laws, orders,
issuances, rules and regulations or parts thereof inconsistent with
this Executive Order are hereby repealed or modified accordingly.
Sec. 6. This Executive Order shall take effect
fifteen (15) days after the issuance of the rules and regulations for
the implementation of this Executive Order.
Done in the City of Manila,
this 10th day of July in the year of Our Lord, nineteen hundred and
eighty-seven.
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Since 19.07.98.