RA 7638 — Department of Energy Act of 1992
Signed: December 9, 1992 Effective: December 9, 1992 (upon publication)
Contradiction note (approver): The source-summary ingest pass listed the approver as “President Corazon C. Aquino.” This is inconsistent with the signing date of December 9, 1992 — Aquino’s term ended June 30, 1992, and Fidel V. Ramos was President by the time this Act was signed. The page’s original value, President Fidel V. Ramos, is used here as the better-supported figure.
RA 7638 creates the Department of Energy (DOE) by merging and absorbing the Office of Energy Affairs (OEA) and the Energy Coordinating Council (ECC), both of which are abolished. It is the DOE’s organic act — the statutory basis for all DOE functions, authority, and structure. Subsequent energy laws (RA 9136/EPIRA, RA 9513/RE Act, RA 11234/EVOSS Act, etc.) expand DOE’s mandate without replacing this foundational statute.
Chapter I — General Provisions (§1–5)
Declaration of Policy (§2)
The State shall: (a) ensure a continuous, adequate, and economical supply of energy toward self-reliance through integrated and intensive exploration, production, management, and development of indigenous energy resources, and through judicious conservation, renewal, and efficient utilization; and (b) rationalize, integrate, and coordinate the various government energy programs toward self-sufficiency and enhanced productivity in power and energy without sacrificing ecological concerns. [RA 7638, §2, 1992]
Powers and Functions (§5)
| Function | Detail |
|---|---|
| Formulate comprehensive energy program | Integrated exploration, development, utilization, distribution, conservation; consistent with national economic plan and environmental protection |
| Develop and update Philippine Energy Program | Comprehensive energy plan with “preferential bias for environment-friendly, indigenous, and low-cost sources of energy”; includes privatization and deregulation policy direction |
| Establish and administer energy programs | All forms of energy resources, conventional and nonconventional |
| Supervise and control government energy activities | All government activities relative to energy projects |
| Regulate private sector energy activities | Under existing laws; while endeavoring to provide an environment conducive to free and active private sector participation |
| Deregulation mandate | After 4 years from effectivity (i.e., by 1996), institute programs and timetable for deregulation of appropriate energy projects and activities |
| Assess, direct, and disseminate energy R&D | For optimal development of various energy production and utilization technologies |
| Formulate incentives and penalties for energy efficiency | In all energy-consuming sectors |
| Develop nonconventional energy systems | Promote and commercialize applications |
| Host community benefits (§5(i)) | Devise ways of giving direct benefits to the province, city, or municipality — especially the community and people affected — and equitable and preferential benefit to the region hosting the energy resource or facility; other regions shall not be deprived of their energy requirements |
| Broaden ownership of energy corporations | Encourage widest public ownership of energy-oriented corporations |
| Promulgate rules and regulations | As necessary to implement the objectives of this Act |
[RA 7638, §5, 1992]
§5(i) is the statutory antecedent of ER 1-94 (Energy Regulations No. 1 of 1994), which operationalized the host community benefit as 1 centavo/kWh shared among host LGUs, DUs, and ICCs/IPs. See Energy Regulations 1-94 (ER 1-94) .
§5(b) embeds a deregulation mandate that became the legislative basis for: Digest: RA 8479 — Downstream Oil Industry Deregulation Act of 1998 (1998 Downstream Oil Deregulation), and eventually EPIRA (RA 9136, 2001). The 4-year clock (expiring 1996) was not met on time, but the statutory direction was clear from Day 1.
Chapter II — The Department Proper (§6–12)
The Secretary (§8)
- Appointed by the President, confirmed by Commission on Appointments
- Cooling-off period: No officer, external auditor, accountant, or legal counsel of any private company primarily engaged in the energy industry is eligible for appointment as Secretary within 2 years from retirement, resignation, or separation from that company
- Secretary is ex officio member of the NEDA Board and member of NEDA’s INFRACOM and Investment Coordinating Council (ICC)
- Member of the BOT/PPP infrastructure financing body under RA 6957 (Build-Operate-Transfer Law)
[RA 7638, §8, 1992]
Conflict of Interest and Divestment (§22)
Before assumption of office, the Secretary, Undersecretaries, and Assistant Secretaries must submit to the Civil Service Commission a list of all companies in which they or immediate family members within the 2nd degree of consanguinity or affinity have financial interests or employment. Complete divestment within 30 days of assumption of office (or 30 days after Commission on Appointments confirmation where required). Applies to family members with interests in entities under DOE’s supervisory or regulatory jurisdiction. [RA 7638, §22, 1992]
Bureaus (§12)
| Bureau | Abbreviation | Key Functions |
|---|---|---|
| Energy Resource Development Bureau | ERDB | Develop domestic energy resource supply (fossil fuels, nuclear, geothermal); service contractor fiscal policies |
| Energy Utilization Management Bureau | EUMB | Energy conservation, petroleum/coal/gas distribution and processing, rural energy, nonconventional RE, environmental compliance monitoring |
| Energy Industry Administration Bureau | EIAB | Regulatory policies for supply entities (IPPs, distributors, importers/exporters); contingency supply plans |
| Energy Planning and Monitoring Bureau | EPMB | Integrated short/medium/long-term energy plan; centralized data; supply-demand balancing; international energy issues |
| Administrative Support Services | — | Legal counsel office; financial and management services (HR, General Services, Financial Management) |
[RA 7638, §12, 1992]
Note: These bureaus persist in DOE’s current structure. The EUMB is the bureau implementing EEC programs under RA 11285; it serves as secretariat for the IAEECC.
Chapter III — Attached Agencies (§13–14)
Attached Agencies (§13)
PNOC, NPC, and NEA are placed under DOE supervision but continue to perform their respective functions insofar as not inconsistent with this Act. Their annual budgets must be submitted to Congress for approval.
The DOE Secretary is ex officio chairman of the boards of PNOC, NPC, and NEA — unless otherwise directed by the President. The Secretary may not be the chief executive officer or chief operating officer of these agencies or their subsidiaries. [RA 7638, §13, 1992]
Note: This arrangement was significantly modified by EPIRA (RA 9136, 2001), which restructured NPC, created PSALM and TransCo, and changed the board governance model. PSALM and TransCo are not mentioned in RA 7638 — they are EPIRA creations.
Council of Energy Advisers (§14)
A 5-member advisory council from the industry, labor, and consumer sectors advises the President on the overall energy program. [RA 7638, §14, 1992]
Chapter IV — Transitory Provisions (§15–20)
Abolition and Transfer (§15–17)
The Office of Energy Affairs (OEA) and Energy Coordinating Council (ECC) are abolished. All their powers, functions, funds, records, property, assets, equipment, and personnel are transferred to the DOE. [RA 7638, §15–17, 1992]
Energy Regulatory Board (§18)
The non-price regulatory jurisdiction of the Energy Regulatory Board (ERB) is transferred to DOE. ERB retains its price/rate-setting functions, including:
- NPC rate-setting power (transferred from NPC’s own authority under RA 6395 §4)
- Electric cooperative rate-setting (transferred from ECs under PD 269 §16(o))
ERB must exercise its new rate-setting powers after due notice and hearing. [RA 7638, §18, 1992]
Historical note: ERB was created under Executive Order No. 172 (1987). RA 7638 transferred ERB’s non-price functions to DOE but left ERB in place for price regulation. ERB was eventually abolished by EPIRA (RA 9136, 2001) and replaced by the independent Energy Regulatory Commission (ERC).
Miscellaneous Provisions (§23–26)
Relationship with Other Agencies (§23)
DOE and its priority projects enjoy preferential treatment in exploration, development, exploitation, and extraction of petroleum, coal, geothermal resources, and in providing technical support for power-generating plants. All government agencies with functions relative to DOE projects must act and resolve matters within 10 calendar days of DOE request. [RA 7638, §23, 1992]
Visitorial Powers (§24)
The Secretary or representative has visitorial and examining authority over nongovernment entities with contracts for exploration, development, or utilization of natural resources for energy purposes — to verify the government’s revenue share and collect amounts due. Refusal to allow examination constitutes a breach of contract and grounds for cancellation. [RA 7638, §24, 1992]
Contingency Powers (§25)
In times of critically low-energy supply or imminent danger thereof, the President (upon DOE Secretary’s determination and recommendation) may declare a state of critically low energy supply. The Secretary is then authorized to implement fuel and energy allocation plans and other conservation measures including power/fuel rationing, load curtailments, and restrictions on government vehicle use. [RA 7638, §25, 1992]
Full text: Cleaned copy