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Republic of the Philippines
DEPARTMENT OF ENERGY

DEPARTMENT CIRCULAR NO. DC2006 -04-0003 ‘

?

AMENDING DEPARTMENT CIRCULAR NO. 2003-04-004 CREATING THE
EXPANDED RURAL ELECTRIFICATION PROGRAM TEAM

WHEREAS, the Electric Power Industry Reform Act af 20014 or “EPIRA,” enacted in
June 2001 declared as policy of the State the total electrification of the country and at the
same allowed the participation of the private sector in missionary electrification;

WHEREAS, pursuant to the EPIRA, the Government has set the target of achieving
100% barangay electrification by 2008 and 90% household connection by 2017;

WHEREAS, the Letter of Sector Development Program jointly issued by the
Department of Finance (DOF) and Department of Energy (DOE) on 07 March 2003 commits
to the implementation of key reforms in the rural power sector; .

WHEREAS, on 1 April 2003, the DOE issued Department Order No. 2003-04-004
creating the Expanded Rural Electrification Program Team ("ER Team”) to manage the
implementation of rural and missionary electrification program for the purpose of achieving
the country’s total electrification objectives;

WHEREAS, in view of the foregoing, the DOE: (i} completed the 2005-2009
Missionary Electrification Development Plan which outlined the specific policies, strategies
and mechanisms for the implementation of the country’s Expanded Rural Electrification (ER)
Program through greater private sector participation (PSP); (ji) issued on 28 May 2004
Department Circular No. 2004-05-005 which streamlines and rationalizes the grant of
subsidies in the electrification of missionary areas using Solar Photovoitaic (PV) Systems”,
and (iii) issued on 18 June 2004 Department Circular No. 2004-06-006 and on 12 December
2005 Department Circular No. DC2005-12-011, prescribing the qualification criterla and
participation guidelines for the Qualified Third Party (QTP) pursuant to Section 59 of the
EPIRA and as detailed in Rule 14 of the Implementing Rules and Regulations of EPIRA with
the objective of pursuing PSP Program in missionary areas;

WHEREAS, there is a necessity to refocus and strengthen the integrated and
synchronized approach to rural and missionary electrification taking inta account the
institutional changes in the rural power sector aS well as the recent policy issuances of the
DOE to ensure and accelerate total electrification in a sustainable and holistic manner;

NOW, THEREFORE, the DOE hereby amends Department Order No. 2003-04-004
to reinforce the ER Team in the management of rural/missionary electrification program:

Section 1. Composition of the ER Program Team. The composition of the ER Program-
Oversight Committee (ER Program-OC), the ER Pragram Technica! Working Group (ER
Program-TWG) and the ER Program Secretariat are hereby reconstituted as follows:

(A) Oversight Committee (ER Team-OC)

Oversight Chair: Melinda L. Ocampo, Undersecretary - DOE

Alternate Chair: Editha S. Buena, Administrator — National Electrification
Administration (NEA)
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Members: Director, DOE — Electric Power Industry Management
Bureau (EPIMB}

Director, DOE — Energy Policy and Planning Bureau
(EPPB)

Director, DOE ~ Energy Utilization and Management
Bureau (EUMB)

Department Manager — NPC-SPUG

To ensure consistency in policies and achieve effective collaboration, the following
government agencies and their duly nominated representatives, may be requested to
join the ER Team-OC as honorary members: (i) National Economic and Development
Authority (NEDA); (ii) Department of Finance (DOF); (iii) Department of Budget and
Management (DBM); and (iv) other stakeholders in rural/missionary electrification,
including the Philippine National Oil Company (PNOC), PNOC-Energy Development
Corporation (PNOC-EDC) and private power producers also involved _ in
electrification.

(B} Inter-Agency Technical Working Group (ER Team-TWG

A Technical Working Group (TWG) shali provide assistance to the Oversight
Committee and assist in the development of sub-programs, review and assessment
of existing programs and formulate strategies for the efficient implementation of the
ER Program. Membership of the ER TWG shal! be comprised of the follawing
agencies and organizations:

Chair: Director, DOE-EPIMB
Co-Chair. Division Manager, Corporate Planning Department - NEA .
Members: Division Chief, Rural Electrification Administration and

Management Division (DOE EPIMB-REAMD)

Division Chief, EUMB-Renewable Energy Management
Division (DOE-REMD)

Division Manager — Project Management, NPC-SPUG
Division Manager — Strategic Planning, NPC-SPUG
Representative, DOE-EPPB

Representative, Infrastructure Staff, NEDA

Representatives from other ER Program partners and
stakeholders

The ER Program TWG shal! form the following Committees to oversee the various
functions of the ER-TWG. The members of the Committees shall be selected by the
ER Program TWG on the basis of qualifications/guidelines approved by the ER Team
oc.

1. Committee on Policy

(a) Identify the objectives of the ER Program and develop guidelines and
specific strategies for its implementation;

(b) Conduct regular assessment of the implementation of all program
components and activities, identify gaps and issues, and recommend
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(e)

the continuation or cessation of certain programs as may be
consistent with law and Government policies,

Review existing ER policies and guidelines and evaluate/assess their
effectiveness in ensuring the ER targets are achieved as planned
and in a timely manner;

Develop policies to address the issues/gaps affecting program
implementation; and

Provide institutional support to the program implementation.

Committee on Program Implementation and Operations

(a)
{b)

(h)

Ensure coordination among the ER Team,

Actively monitor the implementation of programs and projects vis-a-
vis the milestones/targets set and, in this regard, prepare and submit
3 monthly monitoring report to the Oversight Committee highlighting
the critical problems/issues that are prevent or hinder the timely
implementation of programs and projects, with copies of such report
provided also to the implementing agency/ies for the project/program
and the Policy Committee;

Coordinate closely with the Policy Committee to ensure that the
necessary adjustments in the ER Program guidelines, strategies, and
targets are made given the problems/issues identified during actual
monitoring:

Plan and set milestones for the implementation of the ER program
components and activities based on the objectives and strategies
developed by the policy committee;

Implement specific objectives and activities of the ER Program;
Assist in the promotion of the ER Program;

Prepare reports, presentation/briefing materials, iEC documents, and
other documentation relevant to the implementation of the ER

Program; and

Coltect information relevant to the ER Program and maintain in a
database.

Committee on Investment and Financing

(a)

(b)

(c}

(d)

Identify budgetary requirements in implementing the ER Program and
coordinate with DBM and other donar agencies;

Identify and harmonize existing financing schemes set by various
players implementing the ER Program;

Identify investment opportunities and assist in the development of
proposals; and

identify financing anc investment issues and propose
policies/strategies to address such issues.
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(C) Secretariat/Support Staff (ER Team-Secretariat

The DOE-REAMD will serve as the ER Team-Secretariat. !t shall be assisted by at
the minimum of two (2) representatives from DOF-EPPB, DOE-EUMB. NEA and
NPC-SPUG.

Section 2. Responsibilities of the ER Program Team. The scope of responsibilities of
the ER Program Team is hereby expanded to include the review and endorsement of projects
and activities in relation to the Qualified Third Party (QTP) pragram that require authorization
from the Energy Regulatory Commission (ERC). In this regard, the Technical Working Group
formed under DOE Department Circular No.DC2005-12-011 shall inform the ER Team OC of
its recommendations and regularly report on the progress and development of the PSP in
rural/missionary areas.

The ER Program Team shall also serve as the clearinghouse of all rurai and
missionary electrification initiatives in the country, including those supported by
bilateral/multilateral agencies and donor entities, for the approval of the DOE Secretary.

The ER Pregram Tear shall request assistance and information from other entities
such as QTPs, financing institutions, non-government: crganizations, and private entities,
whenever necessary, to provide insights and valuable inputs to the ER Program Team in the
exercise of its mandate.

Section 3. Creation of the Unified Electrification Subsidy Sub-Committee (UESC).
in compliance with DOE DC No, 2004-05-005, an UESC was created to operate under the
supervision of the ER Program Team. The UESC shail identify any existing subsidy design in
all rural and missionary electrification projects, including solar PV systerns installations, and
recommend to the ER Oversight Committee a rationalized systern for allocation of project
subsidies, if any. The UESC shall regularly update the ER Oversight Committee on the
appropriate guidelines for the provision of subsidy to rural electrification projects, including
those using solar PV systems, for the formulation of recommendations to and approval of the
DOE Secretary. ;

Section 4. Scope of Coverage. The scope and coverage of the ER Program, as
provided in Section 3 of DOE DC No. 2003-04-004, shall be expanded to include projects and
activities initiated by or involving private sector participants, including QTPs.

Section 5, Miscellaneous. Heads of the concerned divisions/bureaus and agencies in
Section 1 hereof shall inform the DOE in writing, within five (5) days from issuance of the
Circular, of the names of their respective representatives. The Oversight Committee shall
meet at least once every month commencing not Jater than the calendar month immediately
following the effectivity of this Circular. The Gversight Committee shall set the schedule of
meetings of the other committees established under Section 1 of this Circular.

Section 6. No repeal or amendment. Other provisions of DOE DC 2003-04-004 not
otherwise inconsistent with this Circular shall remain valid and in effect until revoked, modified
or further amended.

This amended Department Circular shal! take effect after publication in a newspaper
of general circulation.

Issued thisdth day of Aprif 2006, Taguig City.

RAPHAEL P. M. LOTILLA
Secretary