DC2009-05-0008 — Rules and Regulations Implementing RA 9513

Full title: Rules and Regulations Implementing Republic Act No. 9513, Otherwise Known as the “Renewable Energy Act of 2008” Document code: DC2009-05-0008 Signed: 25 May 2009 Signatory: Secretary Angelo T. Reyes, Department of Energy Effectivity: 15 days after publication ≈ 9 June 2009 Cleaned source: raw/regulations/dc2009-05-0008.md (1,000 lines; OCR-cleaned from raw/_ocr/regulations/dc2009-05-0008.txt)

Coverage

The base omnibus IRR for RA 9513. Establishes the implementing rules for all provisions of the Renewable Energy Act of 2008 — fiscal incentives, policy mechanisms (RPS, FiT, GEOP, Net-Metering, WtE, REM), RE Contracts, Government Share, institutional bodies (NREB, REMB), and the Renewable Energy Trust Fund.

Structure: 7 PARTS, 13 RULES, 45 SECTIONS

Key Provisions

Institutional

• REMB (SEC. 28–31): Created under §32 RA 9513; absorbed REMD of EUMB; NREB Technical Secretariat; 12 powers and functions; REMB Desks in Luzon/Visayas/Mindanao; organizational structure within 6 months per DOE-DBM consultation
• NREB (SEC. 23–27): Chair + 14 members (8 government + 6 sectoral); at least quarterly meetings; resource persons (DOST/DA/NWRB/NCIP/NEA/NRCP/academe); Director/Manager level minimum for members; Code of Ethics for private sector members
• RETF (SEC. 32–34): Special account in any GFI; 6 exclusive purposes; 8 funding sources; DOE/PCSO/PAGCOR/DENR/DBM to formulate transmittal mechanism within 6 months

Fiscal Incentives (SEC. 13–18)

Nine incentives for registered RE Developers:

• (A) ITH: 7yr from commercial ops; up to 21yr cumulative per facility
• (B) Duty-free importation: first 10yr from COR; early disposal requires DOE endorsement
• (C) Realty tax: cap at 1.5% of original cost/net book value
• (D) NOLCO: first 3yr losses carried over for 7 consecutive years
• (E) 10% CIT post-ITH; savings passed on to end-users (ERC mechanism)
• (F) Accelerated depreciation: alternative to ITH (mutual exclusion); double-declining or sum-of-years digit
• (G) 0% VAT on RE fuel/power sales, local inputs, and exploration/development services
• (H) Carbon credit proceeds fully tax-exempt
• (I) 100% domestic tax credit on equivalent VAT + duties for locally purchased equipment

Manufacturers/fabricators of RE equipment entitled to: duty-free component imports, domestic tax credit, 7yr ITH, 0% VAT.

Biomass farmers: duty-free agricultural inputs/equipment for 10yr.

Other incentives: tax rebate (DOF, within 1yr), GFI preferential finance (within 6mo), UC exemption (own-use/free off-grid), 50% UC-ME cash incentive for missionary electrification RE, per-kWh average transmission option for intermittent RE, must-dispatch priority status for intermittent RE (wind/solar/ROR hydro/ocean).

Conditions: COR + BOI registration + Certificate of Endorsement (per-transaction, 15-day issuance). Existing incentives under prior laws preserved (transitory provision).

Policy Mechanisms (SEC. 4–12)

• RPS (SEC. 4): Annual increment floor = 1%/year (statutory minimum; DC2022-09-0030 raised to 2.52%). 5 mandatory elements of RPS Rules. 6-month DOE timeline after NREB recommendation.
• FiT (SEC. 5): 1-year ERC timeline for FiT rules. Priority connection and purchase mandated.
• GEOP (SEC. 6): 6-month timeline for DOE + ERC rules. Monthly bill must show RE portion.
• Net-Metering (SEC. 7): “Qualified End-users” = entities with eligible on-site RE facility grid-connected. DU receives REC for RPS compliance. Non-discrimination mandate.
• Transmission (SEC. 8): TRANSCO/DUs must include RE connections in development plans. ERC provides cost recovery for connection facilities.
• WtE (SEC. 9): DOE coordinates with DENR for compliance.
• REM (SEC. 10): REM as WESM sub-market; DOE framework within 6 months; PEMC to implement WESM rule changes within 1 year.
• RE Registrar (SEC. 11): PEMC to establish within 1 year; transaction fee = half of regular WESM rate.
• Off-Grid RE (SEC. 12): NPC-SPUG or qualified third parties must source minimum RE % within 1 year.

RE Contracts (SEC. 19)

Constitutional basis: all forces of potential energy are State-owned and inalienable. DOE directed to issue full regulatory framework within 1 month of IRR effectivity. Biomass/WtE/methane capture explicitly designated as RE Operating Contracts. Foreign RE Developers may participate subject to Art. XII §2 of the Constitution. Compliance required with LGC (prior LGU consultation), IPRA (RA 8371), and EIA requirements (ECC sufficient).

Government Share (SEC. 20–21)

• 1% of gross income (general); 1.5% (geothermal, by operation type)
• National 60% / Local 40% split (except GOCCs)
• Local sub-distribution per LGC §292: Province 20% / City/Municipality 45% / Barangay 35%
• Quarterly release direct to LGU treasurer within 5 days of quarter-end; no holdback
• Exceptions: biomass (no Government Share) and ≤100kW micro-scale communal non-commercial projects
• Host LGU allocation: 80% for electricity subsidies (≤100kWh/mo consumers) + 20% for LGU/livelihood projects

Penalties (SEC. 35–38)

• Administrative: P100K–P500K fine; reprimand to revocation of license/contract
• Criminal: 1–5 years imprisonment; P100K–P100M fine or 2× damages, whichever is higher

Specific Repeals (SEC. 44)

• PD 1442 §1 (Geothermal Resources Exploration and Development Act — government exploration) — repealed
• RA 7156 §10(1) (Mini-Hydro Electric Power Incentive Act — 2% special privilege tax rate) — repealed

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