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Republic of the Philippines
DEPARTMENT OF ENERGY |

DEPARTMENT CIRCULAR NO. 2002-07-04

RULES OF PRACTICE AND PROCEDURE BEFORE THE
DEPARTMENT OF ENERGY

Pursuant to the provisions of Section 5 (k) of R.A. 7638, otherwise known as the
Department of Energy Act of 1992, in compliance with Executive Order No. 26
dated 7 October 1992, and in line with Department Special Order No. 2000-07-
016, dated 13 July 2000, the following Rules of Practice and Procedure are
hereby adopted and promulgated:

PART |— GENERAL PROVISIONS

RULE 1
Title, Definition, Scope and Construction

Section 1. Title of Rules — These Rules shall be known as the Rules of
Practice and Procedure of the Department of Energy.

Section 2. Definitions — For purposes of these Rules, the terms:
(a) “Department* shall refer to the Department of Energy.

(b) “Deregulation Act” shall refer to the “Downstream Oil industry
‘Deregulation Act of 1998”.

(c) “Director” shall mean the Director of the Office of the Legal
Counsel.

(d)  “EIRA” shall refer to Republic Act No. 9136, otherwise known as
the “Electric Power Industry Reform Act of 2001.”

(e) “Energy Act” shall refer to Republic Act No. 7638, the Department
of Energy Act of 1992.

(f}. “OLC’ shall mean -the Office’ of the Legal Counsel of the
Department of Energy.

(g) “Public Service Act” shall refer fo C_A. No. 146, as amended.
(h) “Rules” shail refer to these Rules.
{i) “Secretary” shall refer to the Secretary of Energy.

Section 3. | Scope — These rules shall govern all pleadings, practice and
procedure before the Department in all matters concerning inquiry, investigation,
hearing, study and/or any other proceedings conducted by the Department in the
performance of its functions. However, in the public interest and consistent with
due process, the Department may, in any particular matter, except itself from
these rules and apply such fair and reasonable procedures to assist the parties
to obtain speedy disposition of cases.

Energy Center, Merritt Rd., Fort Bonifacio, Taguig, Metro Manila,. Philippines
. Tels.: (Trunks} 840-1401 to 40; Fax 840-1731; 840-2236; 840-2067 (Domestic): 632 840-1731; 632 840-2236: 632 840-2067 (Intemational)
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These rules shail likewise cover applications for the issuance of permits or
other forms of authorization to entities involved in the supply and distribution of
energy resources. ,

Section 4. Construction — These rules shall be liberally construed in
order to protect and promote public interest and attain the objectives of the Public
Service Act, the Energy Act, the Deregulation Act, the EIRA and any other law,
Statute, executive order or decree that is being, or may hereafter be:
implemented by the Department in the most speedy and inexpensive disposition
of cases. In the broader interest of justice and to avoid unnecessary delay, the
Department may resort to summary proceedings in cases hereinafter provided.

Section 5. Supplétory Application of the Rules of Court of the
Philippines. — In the absence of any applicable provision in, and provided they
are not inconsistent with these Rules, the pertinent provisions of the Revised
_Rules of Court of the Philippines may, in the interest of expeditious disposition of
cases and whenever practicable and convenient, be applied by analogy or in a
suppletory manner.

RULE 2
PARTIES

Section 1. Who may be a Party — Any person or group of persons
whether natural or juridical, who may be affected by the decision to be rendered
by the Department in a particular case may be a party and may appeal, and
participate in the manner hereinafter provided.

Section 2. . Applicant — An applicant is any person who applies with the
Department for a permit for the operation of services involved in energy resource
supply activities or who seeks any other form of authorization, to undertake any
matter or business that is within the jurisdiction of the Department.

Section 3. Complainant - A complainant is any aggrieved person who
files a complaint against another party for legal redress on matters within the
jurisdiction of the Department.

Section 4. Petitioner - A petitioner is any person who’ files an
application with the Department ex parte, or where there are no parties in
opposition, praying for the exercise of the powers of the Department, for authority
to do some act which requires the sanction of the Department.

Section 5. | Respondent — A respondent is any person or party, who may
or may not be a holder of a permit or other form of authorization to whom an
order is issued by the Department to appear or give his explanation in writing, or
who is otherwise summoned to answer any allegation, imputation or issue in any
case, hearing or proceeding cognizable by the Department, or any person who
may also be adversely or is otherwise affected by a complaint or petition.

Section 6. | Oppositor — An oppositor is any person who interposes any
objection against the approval of an application or petition.
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RULE 3
PLEADINGS

Section 1. Pleading — The pleadings allowed by these Rules are the
application, the complaint, the petition, the opposition, the answer, and such
further pleadings as the Department may allow...

Section 2. Form of Pleading, Copies - All pleadings filed with the
Department must be in triplicate and typewritten or printed on legal size bond
paper and shall be in English. Every pleading shall contain the names and
addresses of all the parties, the Department file number and designation of the
pleading: —

Section 3. Application - By means of an application or petition for
permit or other forms of authorization, the applicant seeks for authorization or
permission to undertake any matter within the power of the Department under the
Public Service Act, the Energy Act, the Deregulation Act, the EIRA or any other
law, statute, executive: order or decree that is being, or may hereafter be,
implemented by the Department, stating the ultimate facts on which the relief
sought is based.

The Department will refer to the proper bureau or office the evaluation of
the technical and financial qualifications of an applicant for a permit or other
’ forms of authorization.

Section 4. Complaint — A complaint is a concise statement of the
ultimate facts constituting the acts or matters complained of, and shall specify the
relief sought. The names and addresses of the complainants and the
respondents must be stated in the complaint, and whenever practicable, the date
and place of the commission of the alleged act or omission complained of.

Section 5. Petition - A petition is an application made to the Department
ex parte or where there are no parties in opposition, praying for the exercise of
the powers of the Department for authority to do some act which requires the
' sanction of the Department.

Section 6. Opposition — An opposition is a pleading filed by an
oppositor against the grant of an application or petition in which the oppositor
states his right or interest affected by the application or.petition and the ultimate
facts constituting alt his grounds for opposition.

Section 7. Answer — An answer is a pleading in which the respondent
sets forth the defense upon which he relies. The respondent to whom an order is
issued by the Department to show cause or against whom a complaint or
petition is filed, shall file an answer within ten (10) calendar days from receipt of
the order, complaint or petition.

Section 8. | ‘Verification — All pleadings filed with the Department must be
verified and accompanied by such: documents as would reasonably tend to
establish prima facie the truth of the factual allegations thereof.

Section 9. Service - Service may. be by personal delivery or by
registered mail, properly. addressed to each party, together with all annexes
attached thereto. All pleadings and motions submitted to the Department for

filing must show proof of service thereof upon all parties to the case.

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Section 10. Service upon Parties Represented by Counsel - When any

party is represented by a counsel, service shall be made to his counsel of record.

Section 11. Contents of Pleadings ~ <All pleadings filed with the
Department must state clearly and categorically the ultimate facts upon which the
pleader relies. Pleadings shall contain a prayer for the principal relief sought and
may also add a general prayer for such further or other reliefs as may be deemed

-just and equitable.

Section 12. Amendments — Any modification or supplement to an
application, complaint, petition or other pleadings shall be deemed as an
amendment and must comply with the formal requirements of pleadings as
mentioned in these rules. ;

Section 13. Amendment when Allowed — Amendments may be made as
a matter of right at any time before any responsive pleading is filed and,
thereafter, only with leave of the Department.

Section 14. Defect of Form — No defect in the form of any pleading
allowed to be filed under these Rules will prejudice the pleader. however, the
Department may difect amendments or require the submission of additional
affidavits or supporting documents.

Section 15 Filing Fees-- The Treasury Division of the Administrative
Services Unit of the Department shall receive, collect or take the following fees:

a. For filing a complaint — P10,000.00;
b. For filing an appeal — P 10,000.00;

Cc. For certified copies of any paper, record, judgment — P10.00 per
page,
d. - For filing an application for the grant of permit or other form of

authorization to construct, install, own, operate and maintain
pipeline system to transport energy resources — P10.00 per meter
of pipeline. ,

| RULE 4
MOTIONS IN GENERAL

_ Section’. Scope & Contents — Every application for any procedural or
interlocutory ruling or relief may be made through a motion. Motions shall state
the relief sought and the grounds therefor and, if necessary, shall be
accompanied by supporting affidavits and documents. Motions shall be in writing
and copies thereof shail be served upon ail parties at least three (3) days before
the hearing thereof. All written motions shall specify the date and time for the
hearing thereof.

Section 2. Provisional Permit or Authorization -. Motions praying for the
issuance of a provisional permit or other form of authorization to operate must be
in writing and accompanied by affidavit(s) of merit and other supporting
documents showing the necessity of the relief prayed for, together with proof of
service to the other party. Such motions shall be governed by Rule 15 hereof.

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PART Il - PROCEDURE IN APPLICATIONS

RULE 5
APPLICATION

Section 1. | How Commericed - Any proceeding the object of which is to
obtain a permit or any form of authorization under the Public Service Act, the
Energy Act, the Deregulation Act, the EIRA and/or any other law, statute,
executive order or decree that is being, or may hereinafter be, implemented by
the Department shall be commenced by the filing of the corresponding
application. Do

Section 2. Contents — The application shall contain a concise statement
of the service proposed or permit or authorization applied for, and the ultimate
facts that would qualify or entitle the applicant to the grant of the permit or
authorization. When the application is predicated on a permit or other form -of
authorization, sale, lease, mortgage or any other contract, such permit or
authorization or. contract shall be impleaded in the. application by alleging in
substance its salient provisions and appending to the application a copy of the
permit or authorization, contract or pertinent document.

| RULE 6
NOTICE OF APPLICATION

Section 1. Issuance of the Notice — After the filing of the application, it
shall be docketed, and the hearing officer/s duly designated by the Department
shall issue a notice that such application has been filed with the Department and |
furnish the list of affected parties, if any, to the applicant.

Section 2, Publication and Service — The applicant shall cause the
aforesaid notice, at his own expense, to be published once in one (1) newspaper
of general circulation in the Philippines at least ten (10)calendar days before the
date of the proceeding: provided, that if an application covers only one (1) region,
publication in the local newspaper circulated within that region is sufficient, The
applicant shall also serve copies of the notice, with copies of the application, to
the affected parties, as furnished by the Department.

RULE 7 _
OPPOSITION

Section 1. | Contents — Within ‘ten (10) calendar days from receipt by the
affected party of the notice referred to in Section 1 Rule 6 hereof, a written
opposition, not a motion to dismiss, may be-filed against an application with copy
served upon the applicant, in which the oppositor shall state concisely his right of
interest affected by the application and the ultimate facts constituting - all. his
grounds for opposition.

PART Iii — PROCEDURE IN COMPLAINTS AND PETITIONS

RULE 8 .
COMPLAINTS & PETITIONS

Section 1. How Commenced ~ Any action, the object of which is to
subject a holder of a permit or authorization or any person operating without

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- authority from the Department to any penalty that.may be imposed, or other
measure that may be taken in the public interest by the Department for violation
by such holder or any person of the provisions of the Public Service Act, the
Energy Act, the Deregulation Act, the EIRA or any other law, statute, executive
order or decree that is being, or may hereinafter be, implemented by the
Department, ‘or the terms and conditions of his certificate or any order, decision:
or regulations of the Department shall be commenced by the filing of a complaint
or petition.

Section 2. Sufficiency _of Complaint _or Petition — A complaint or a
petition is sufficient if it contains the name of the complainant or offended party,
the name of the respondent, a reference, whenever practicable, to the provisions
of the law, statute, executive order or decree being implemented by the
Department or the permit or authorization, order, decision or regulation violated;
the acts or omissions complained of as constituting the offense, and the date and
place of the commission of the offense.

Section 3. Separate Allegations — Whenever two or more offenses are
charged in one (1) complaint or. petition, each offense must be separately
alleged.

RULE 9
MOTU PROPRIO ACTIONS

Section 1. Institution of Action .by. the Department ~ The Department
may motu proprio initiate an action or inquiry against any person or entity when

so required by law, public or national interest, and/or in its exercise of any of the
powers vested upon it. In the exercise thereof, the Department may commence
such hearing or inquiry by an order to show cause, setting forth the grounds for
such order..

Section 2. Other Instances — When. the basis of a motu proprio action
is a violation of Department orders, rules or regulations, the order shall allege
with definiteness and clarity, the violation and also the range or extent of the

sanction that may be imposed should the violation be substantiated.

RULE 10
ANSWER

Section 1... Answer — Within a period -of ten (10) calendar days ‘from
receipt of a motu proprio order or a copy of the petition or complaint, the
respondent shall file an answer whether admitting or denying the material
allegations or facts set forth in said motu proprio order, petition or complaint, or
setting forth the reason why respondent cannot admit or deny said allegations.
The pleader must state the facts and law upon which he relies for his defense
with definiteness and clarity,

RULE 11
MOTION TO DISMISS

Section 1. | Grounds — No motion to dismiss ‘shall be entertained unless
such motion is incorporated in the answer of the respondent under any of the
following grounds:
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(A) The facts alleged in the complaint or motu proprio order do rot
constitute a violation of the Department’s rules and regulations or
' do not entitle the complainant or petitioner to the relief sought.

(B) - The Department has no jurisdiction over the nature of the case or
controversy.

(C) The applicant has not complied with the jurisdictional requirements
of an application.

PART IV —- PROCEEDINGS BEFORE THE DEPARTMENT

RULE 12
PRE-HEARING CONFERENCE

Section 1. Pre-Hearing Conference — After the answer or the opposition
has been filed, the hearing officer/s duly designated by the Department shall
issue notice to all the parties to appear for a pre-hearing conference to consider:

(A) The possibility of an amicable settlement in cases that may be
compromised: ;

(B) Simplification of the issues through stipulation of facts and/or
admission, incliding admissions of documents and _ their
authenticity; and

(C) Such other matters as may aid in the just, speedy, and inexpensive
disposition of the case.

Section 2. Failure_to Appear ~ All parties and their counsels, if any,
shall attend the pre-hearing conference with full authority to enter into an
agreement on any and all matters necessary to expedite the proceedings. The
' Department may, in case of failure to appear.on the part of a party and his
counsel, issue an order of default against the absent party, and, thereafter, the
hearing officer/s may receive evidence ex parte.

Section 3. Amicable Settlement — When an amicable settlement is
reached as provided under Section 1 (A), Rule 12 hereof, it shall be reduced to
writing duly signed by the parties. Such compromise agreement shall then be
the basis of an order or decision of the Department.

Section 4. Nature of Proceedings — The proceedings before the
Department shall be non-litigious in nature. Subject to the requirements of due
process, the technicalities of law and procedure and the rules obtaining in the
courts of law shall not strictly apply thereto. The Department may avail itself of
all reasonable means to ascertain the facts of the controversy speedily, including
ocular inspection and examination of well informed persons.

Section 5. Postponement — Postponement or continuance of hearing
may be granted only on highly meritorious grounds provided that no more than
_ two (2) postponements or continuances shall be allowed.
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RULE 13
SUMMARY PROCEEDINGS

Section 1. Cases that may be the subject of summary proceedings are:

A) Non-Contested Cases - When there is no opposition filed against
an application or no answer has been filed against a ‘complaint or petition or
when the opposition or the answer filed fails to tender an issue, the Department
may conduct summary proceedings.

(B) Contested Cases — When the opposition or the answer does not
contest the material allegations of the application or the complaint for violation of
Department rules and regulations, respectively, although affirmative defenses are
Stated therein, the Department may conduct summary proceedings.

(C) Applications — All applications for permit or other forms of authority
to engage in business in the petroleum industry in whatever capacity, of
classification may be conducted through summary proceedings.

Section 2. Summary Proceedings, How Conducted — After the time for

filing an answer has expired and none has been filed or after the issues have
been joined by the filing of the answer or the opposition, and the hearing officer/s
shall have determined that the case is one which may be the subject of summary
proceedings under Section 1 of this Rule 13, the hearing officer/s shall.summon
the parties to appear before him/them and require the parties to bring ail
documentary evidence that they may have in support of their claims or defenses.

Section 3. . Offer of Exhibit/Documentary Evidence — The complainant,
the petitioner or applicant shall submit all documentary evidence he may have
which shall be authenticated before the hearing officer/s and marked as exhibits:
then the respondent, or the oppositor shall submit counter documents or
affidavits which shall be authenticated before the hearing officer/s as exhibits
after which the parties shall formally offer their respective exhibits in the same
order, stating the purposes for which they are offered. After the formal offer of
evidence, the hearing officer/s may propound clarificatory questions on the
documents presented and may require the submission of position papers or
memoranda.

Section 4. - Submission of Memorandum, Position Paper, etc. — In order
to expedite resolution of the case, the hearing officer/s may require the parties to

submit, in addition to the memoranda, position papers or last pleading required of
them, a draft of the decision they seek, stating clearly and distinctly the facts and
the ‘law or rules and regulations upon which it is based. Following the termination
of the hearing and the submission by the parties of the required memorandum
and draft of the decision they seek, the Department may, after.considering and
appreciating the applicable laws, rules and regulations and the evidence
submitted, adopt, in whole or in part, either of the parties’ draft decision or reject
both.

oe RULE 14
POWERS AND DUTIES OF HEARING OFFICER/S

Section 1. Powers and Duties — The hearing officer/s shall have the
following powers and duties:

(A) To administer oaths and affirmations: -
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(B) To receive evidence and rule on the admissibility of evidence as to
relevance, materiality or competence of stich evidence.

Section 2: . Period to Decide Case - Should the hearing officer/s
determine that the case cannot be heard by summary proceedings, he/they shall
inform the Secretary who shall then issue an order setting the case for hearing,
which hearing shall be terminated within ‘sixty (60) calendar days from initial
hearing.

Section 3. Role _of. Hearing ‘Officer/s in Proceedings - The hearing

Officer/s shall personally preside in the conferences/hearings and, except as
otherwise provided by law, he/they shal! determine the order of presentation of ©
evidence by the parties, subject to the requirements of due process. He/they
shail take full control of the proceedings, examine the parties and their witnesses
to satisfy himself/themselves with respect to the matters at issue, and may allow
the parties or their counsel to ask questions only for the purpose of clarifying
points of faw or fact involved in the case. He/they shall limit the presentation of
evidence to matters relevant to the issue before him/them and: necessary for a
just and speedy disposition of the case. _

Section 4. _ Presentation of Evidence — The party initiating the case shall
be the first to present his evidence to support his case.

Section 5. Extent_of Cross-Examination - In the cross-examination of
witnesses, only relevant, pertinent and materia! questions necessary to enlighten
the hearing officer/s shall be allowed. .

Section 6. Records of Proceeding — The proceedings before a hearing
officer/s need not be recorded by stenographers but the hearing officer/s shall
prepare a written summary of the proceedings, including the substance of the
evidence presented, in consultation with the parties. The written summary shall
be signed by the parties and shall form part of the records.

RULE 15
PROVISIONAL RELIEF

Section 1. Grounds for Provisional Relief — Upon the filing of an
application, complaint or petition or at any stage thereafter, a party to a case
may, pending hearing of the main case, file.a motion seeking a procedural
remedy, interlocutory order or a provisional authority to operate or undertake any
activity within the jurisdiction of the Department, setting forth the remedy or relief
prayed for and the grounds relied upon for the grant of such provisional relief.
The motion must be accompanied by an affidavit of merit and other supporting
documents together with proof of service to the other party.

Section 2. Grant of Provisional Relief ~ The Department may grant or
deny a motion for provisional relief, without prejudice to a final decision:on the
matter. However, nothing shall prohibit the Department, motu proprio, from
granting any provisional relief to any party when public interest so requires.

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RULE 16
DECISIONS AND MOTIONS FOR:RECONSIDERATION

Section 1. Contents of Decisions ~ The decisions of the Department
shall be signed by the Secretary and shall be clear, concise and include a brief
statement of the (a) facts of the case; (b) issue (s) involved: (c) finding of facts:
(d) applicable law or rules; (e) conclusion and reasons therefor, and (f) the
dispositive portion. They shall be filed with the hearing officer/s who shall, within
three (3) days from receipt thereof, cause true copies thereof to be served upon
the counsel of the parties, or in the absence of any counsel of record, on the
parties themselves.

Section 2. Decisions — The Department shall render a final decision,
order, ruling or resolution in accordance with the following rules:

. (a) In_ Summary Proceedings: - When summary proceedings have
been conducted, the Department shall, within ten (10) calendar days after the
case has been submitted for resolution, render a decision, order, ruling or
resolution on the matter.

(b) In Contested Proceedings. — In contested proceedings where a

formal hearing has been conducted, the Department shall render a decision,
order, ruling or resolution within thirty (30) calendar days after the case has been
submitted for decision.

(c) Grant_of Other Relief. - In all decisions; orders, rulings or
resolutions, the Department may grant such other relief or impose such terms as
it may deem necessary in order to promote public interest. -

Section 3. Motions for Reconsideration — Motions for reconsideration of
any order, resolution or decision of the Department shall not be entertained
except when based on palpable or patent errors, provided that the motion is
under oath and filed within ten (10) calendar days from receipt of the order,
resolution or decision, with proof of service that a copy of the same has been
furnished within the reglementary period, the adverse party and provided further,
that only one (1) such motion from the same party shall be entertained. No
pleading shall. be allowed other than the motion for reconsideration and
opposition thereto. The filirig of a motion for reconsideration shall interrupt the

running of the period for filing an appeal with the Office of the President.

RULE 17 |
APPEAL

Section 1. Appeal. —- Any party may appeal the order, ruling, or decision of
the Department to the Office of the President. However, interlocutory orders
cannot be the subject of an appeal.

Sec. 2. Procedure on Appealed Cases. — In case of an appeal under the
preceding section, the following rules shall apply:

a) An appeal from an order, decision or ruling of the Department shall
be perfected by filing with the Department a notice of appeal and
with the Office of the President, within a. period of fifteen (15)
calendar days from notice of such order, ruling or decision; copy of
the notice of appeal must be furnished ail parties to the case:

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b) Before an appeal will be filed it must be shown that a motion for
reconsideration from the order, ruling or decision has been filed
with the Department and the same has been denied.

c) — Upon the filing of the notice of appeal, the appellant shall pay with
the Department an appeal fee of Ten Thousand Pesos
(P10, 000.00), whereupon, the Department shall act on the notice of
appeal! and shall transmit the certificate of payment of the appeal
fee to the Office of the President.

d) Appellant's position paper shall contain the following data/matters:
1) Exact date of the appealed order, ruling, decision; -

2) Exact date when the appealed order, ruling or decision was
received by him;

3) Information regarding compliance with the requirements for
_ appeal under these rules;

4) Brief statement of the case and the facts;
3) Reasons or grounds for appeal:

6) | Arguments in support of the appeal:

7) Relief sought.

‘The Secretary may require the filing of additional pleadings to
_ provide additional information.

e) Any party filing the required pleading or documents and other
pleadings pertinent to the appealed case shall furnish the adverse
party/ies, including the Department, copies thereof.

Sec. 3. Effect of Appeal. — An appeal shall stay the award, order or
' decision of the Department unless otherwise provided by law, or the appellate

agency directs execution pending appeal, as it may deem just, considering the
nature and circumstances of the case. ,

Sec. 4. Appeal from the Order of the Secretary. - The order of the
Secretary in appealed cases shall be appealable within fifteen (15) calendar days

from receipt thereof to the Office of the President of the Philippines.

Sec. 5. Execution of Order, Ruling or Decision of the Department. — The

. order, ruling, decision, or resolution of the Department shall become executory
fifteen (15) calendar days after the expiration of the period of appeal if no appeal
is taken.

Sec. 6. Entry of Judgment. — The judgment of the Department shall be

entered upon finality, or fifteen (15) calendar days after the expiration of the ©
period to appeal, if no appeal is taken.

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RULE 18
EFFECTIVITY

These rules stall take efféct' fifteen (15) days after publication in the
Official Gazette or in at least two (2) newspapers of general circulation.

Fort Bonifacio, Taguig, Metro Manila, July 31 , 2002.
- , ; Vi

VICENTE S. PEREZ, JR...
Secretary

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