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orf & Republic of the Philippines
“Sue “ DEPARTMENT OF ENERGY

DEPARTMENT CIRCULAR NO. DC 20/4 -1o 9-00; 8

AL

PRESCRIBING THE POLICIES FOR THE IMPLEMENTATION OF THE HOUSEHOLD
ELECTRIFICATION PROGRAM AND CREATING THE HOUSEHOLD UNIFIED
STRATEGIC ELECTRIFICATION (HOUSE) TEAM FOR THE HURPOSE OF ACHIEVING
THE COUNTRY’S TOTAL ELECTRIFICATION GOALS

WHEREAS, Section 3(a) of the Republic Act No. 9136 or the “Eldctric Power Industry Reform
Act of 2001” (EPIRA) states that it is the policy of the State to emsure and accelerate the total
electrification of the country while Section 23 of the EPIRA fequires all DUs to provide
universal service within their franchise areas, over a reasonable time, including unviable areas,
as part of their social obligations;

WHEREAS, Republic Act No. 10531, or the National Electrifidation Administration (NEA)
Reform Act of 2013, has declared that it is the policy of the State to promote the sustainable
development of the rural areas through rural electrification ani further mandates NEA to
pursue total electrification of the country through the electric cboperatives (ECs) by way of

enhancing distribution development and to ensure their economfe and financial viability and
operation, among others;

WHEREAS, the Government, through the Philippine Developmgnt Plan of 2011-2016, has set
the goal of ninety percent (90%) househoid electrification by 2017 with the ultimate objective of
sustainable and inclusive economic growth and poverty reduction and that, the Government
believes that the provision of the basic electricity services is essenjtial to spur development and
better quality of life for all Filipinos;

WHEREAS, in pursuing household electrification, the Departmeyt of Energy (DOE) must also
consider other equally important goals of the EPIRA such jas security, reliability, and
affordability as well as the relevant provisions of the Renewable Energy (RE) Act of 2008 on the
greater utilization of RE resources and technologies especially in off-grid areas, among others;

WHEREAS, the DOE has estimated that the current household electrification level of the
country is only around seventy nine percent (79%) as of December 2015 based on the
consolidated reports by the Distribution Utilities (DUs) anfl the estimated household
population using the 2010 Census of Population and Housing, excluding at least five percent
(5%) of the households obtaining their electricity from informal or|flying connections;

WHEREAS, while the DOE further estimates that at least |4.3 million new household
connections must be achieved in the next four years in order tb achieve the 90% household
electrification goal by 2017, the existing strategies and activities @re not sufficient to attain the
cited goal;

Energy Center, Bonifacio Global City, Taguig City
www,doe.gov.ph, Tel. No. (632) 479-2800

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WHEREAS, considering the limited government funds to support household electrification, the
Government must formulate innovative strategies and adopt vatious technology options in
order to ensure the least-cost electrification of remaining wnellectrified households in the

country, among which is the promotion of greater public-private partnerships to facilitate
inflow of private capital; and

WHEREAS, on 17 July 2013, the DOE issued the Household Electrification Development Plan
(HEDP) 2013-2017, that laid down the different strategies an programs for fast-tracking
household electrification both in urban and rural areas of the county.

NOW, THEREFORE, for and in consideration of the foregoing premises, the DOE in the

exercise of its supervisory functions in the implementation of the overall electrification activities
in the country, hereby declares the following:

Section 1. Policies and Strategies. In meeting the 90% HH electrifitation by 2017, the DOE shall

vigorously pursue the formulation of policies and implementatioy. of corresponding programs
in accordance with existing laws and regulations, to wit:

a) Provision of Basic Electricity Service as a Social Agenda. It will be a long-term and
consistent policy of the Government to ensure that every Filipino family shall have an
equal opportunity to access basic electricity services aq part of the overall socio-
economic development agenda of the Government.

b) Enforcing the Universal Service Obligation of the Franchised DUs. The Government
will implement specific strategies to require all franchised [DUs to perform their service
obligation in providing universal service to all areas and} customers covered by their
respective franchise area, both viable and unviable.

c) Ensuring Security, Reliability, Quality and Affordability of Electricity Services.
Pursuing household electrification goal shall also consider other equally important
objectives of such as security, reliability, quality and affordability of service to all of its
customers. Every electrification project must be properly assessed to consider its
potential implications to the entire operations of the DU Jsuch as system joss and the
high cost of electricity supply in the area.

d) Preference to Renewable Energy Sources and Techzjologies Where Applicable.
Whenever suitable, the use of commercially-viable renewable energy sources and
technologies especially in off-grid and unviable areas shall be the preferred
electrification solution over conventional systems utilizing imported petroleum
products.

e) Sufficient and Well-targeted Provision of Government Grants and Subsidies. The
Government shall provide sufficient funds to meet the investment requirements of rural
and household electrification projects and activities, including their sustainability.

f) Linking Electrification with Other Development Programs as Government Strategy
. for Inclusive Growth. To ensure the attainment of the overarching goal of enhancing the

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quality of life of every Filipino and the promotion of inclusive erowth, the
Government's electrification program whenever possible shall be interlinked and
converged with other equally important developmental|programs including that of

education, rural health service, basic rural infrastructure) and job creation, whenever
applicable.

Section 2. Definition of Basic Electricity Service. For the purpose of the program, DOE
hereby defines basic electricity service (BES) as “the minim amount of electricity to be
provided as part of social services being provided by the Government to every Filipino family
in order to promote just and equal opportunity for poverty allevidtion and improved quality of
life.”

A household shall be deemed “electrified” if it has access to pasic electricity service on a
sustainable basis and at an affordable basis. All DUs and other proponents must meet the BES

requirements in the design and implementation of their electrificafion projects and activities, as
appropriate.

Section 3. Household Electrification Options and Plans. All DUsjand other project proponents
may adopt both grid and off-grid electrification options as well as centralized, mini-grid, and
even stand-alone systems in pursuing household electrification}in their franchise or service
areas. Under NEA Reform Act of 2013, DUs must ensure the long-term development of their
respective distribution systems for the efficient and least-cost delivery of electricity services to
their respective end-users.

Each DU shall develop a long-term total electrification master-plan that ensures sustainable
operations of the distribution systems and the provision of eleqtricity to all households and
other potential end-users. The masterplan must be made consistent with their respective
individual Distribution Development Plans as well as other relevant factors such as household
population growth, least-cost electrification scheme or option, |and sustainable lifeline rate
policy for marginal end-users connected to the grid, among others

The DOE, in coordination with NEA, the National Power Cprporation {NPC) and other
stakeholders, shall implement a national capacity building program to capacitate all DUs in the
formulation of holistic, least-cost and household electrification plans and projects m their
respective franchise areas in accordance with the policies and strategies of this Circular.

Section 4. The Household Unified Strategic Electrification (HOUSE) TEAM. The HOUSE
Team is hereby established to assist the DOE Secretary in the |implementation of all policy
measures and strategies as well as the management and mowitoring of all programs and
activities as embodied under the HEDP with the overall purpose pf achieving the policy goal of
attaining the 90% HH electrification by 2017 through the mtegrated and synchronized
approach. The HOUSE Team shall also be responsible in re ommending new or revised
policies and strategies to the DOE Secretary in response to emerging development in the electric
power industry and the actual information received from different program implementers, both
at national and local levels.

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a)

7 The HOUSE Team shall meet at least monthly to perfor

b)

Composition of the HOUSE Team. The HOUSE Te shali be composed of the

following officials from key government agencies invadlved in total electrification,
namely:

Chair : DOE Undersecretary for Power
Co-Chair : NEA Administrator

Vice-Chair. : DOE Assistant Secretary for Tower
Members : Director, DOE - Electric Power Industry

Management Bureau (DOE-EPIMB)

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

Director, DOE - Renewable Energy Management Bureau
(DOE-REMB)

Director, DOE ~ Financial Se
Director, DOE ~ Legal Services
Director, NEA CORPLAN
Representative, DBM
Representative, DILG
Representative, NPC-CAG
As may be directed by the DOE Secretary, the HOUSE|Team shall invite additional
permanent members and/or resource persons from other|relevant agencies such as the
Department of Social Welfare and Development (DS ), the National Economic
Development Authority (NEDA), Metro Manila Develgpment Authority, Mindanao
Development Authority, and Autonomous Region in Muslim Mindanao, among others.

All members of the HOUSE Team should be senior officfals with rank not lower than
Director I] or its equivalent.

its duties and responsibilities
stated in this Circular.

Responsibilities of the HOUSE Team. The following
HOUSE Team:

re the responsibilities of the

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1)

2)

3)

4)

5)

6)

8)

9)

In behalf of the DOE Secretary and the IAC oh Electrification, oversee the
implementation of total electrification program of|the Government towards the
attainment of 90% HH electrification by 2017;

Recommend to the DOE Secretary the appropridte level of BES as defined in

Section 3 of this Circular as the basis for determining household electrification
level in the country;;

Recommend to the DOE Secretary various policigs and strategies in support of
the program, as necessary;

Establish the delineation of roles and resvonsibilities of all relevant
stakeholders in the overall implementation of [the household electrification
projects and activities;

Recommend to the DOE Secretary for the approval of plans, programs, projects
and activities towards the attainment of the total qlectrification goals};

Ensure the timely implementation of househol
activities of all the DUs and other project impl
schedules;

electrification projects and
enters according to agreed

Develop strategies to ensure adequate and|timely release of funding
requirements for both grid and off-gerid electrification projects and activities of
the Government, including grants and subsidies for the connection of poor
households to electricity service, among others;

Report to the DOE Secretary the results all household electrification projects
and activities, including the status and key mil¢stones of major projects and
activities and issues and concerns involving the program that require the
immediate action of the DOE Secretary, among others; and,

Perform other activities in the exercise of its
under this Circular.

nections and responsibilities

c) The HOUSE Technical Working Group (HOUSE-TWG)| The HOUSE-TWG is hereby

established with the following composition:

TWG Head : Director, DOE-EPIM

TWG Assistant Head : Director, NEA CORPL:

Members : Representative, DOE EPPB

‘This shall take into account the respective protocols of each concerned government agency in approving and funding projects and
activities, such as the DOE Projects Review Committee (DOE-PRC) for all locally-funded and foreign-assisted projects and activities

by all concerned DOE line units involved in rural/household electrification.

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Representative, DOE IREMB
Representative, DOE 4Financial Services
Representative, DOE 4 Legal Services
Representative, DOE-
Representative, NPC-SPUG
Representative, DBM
Representative, DILG
Representative from Electric
Representative from PIOUs

Subject to the approval of the HOUSE Team, the TWG may also invite additional
representatives from other relevant agencies either as pernjanent member or as resource
person. Unless explicitly specified, al agency representatives stated above must at least
have a position level equivalent to Division Chief. [t shall meet at least quarterly to
perform its duties and responsibilities stated in this Circular

The HOUSE TWG shall be responsible to provide technical and managerial support to
the HOUSE Team by performing the following functions:

1) Review and recommend various policy and regulatory measures and
strategies of the household electrification program of the Government and
develop specific guidelines for its successful imp|ementation;

2) Conduct regular assessment of the implementation of all program
components and activities, identify gaps and]issues, and recommend the
continuation or cessation of certain programs 4s maybe consistent with law
and Government policies;

3) Develop specific strategies or measures to ensu the well-targeted, least-cost,
and equitable provision of government granjs and subsidies to catalyze
household electrification in the country;

4) Review and recommend revisions and other ppecific measures fo existing
policies: and regulatory mechanisms related tp household electrification in
order to improve their effectiveness in supporting the household
electrification program of the Government;

5) Coordinate, review, integrate. and update household electrification plans,
projects and activities of all DUs and other projert implementers, as necessary;

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6) Recommend techno-economic parameters, me odologies and modern tools

to enhance the electrification planning activities bf DOE, NEA, and all project
implementers;

7) Identify, recommend, and monitor the implembniation of various trainings
and other capacity building activities to enhance the capacity of all
stakeholders in all aspects of the household electfification program;

8) Prepare annual budgetary requirements in implementing the overall
household electrification program of the Government and coordinate the same
with the Department of Budget and Managemgnt and other donor agencies
taking into account the respective protocols of the concerned government

_ agencies in approving and funding projects and 4ctivities;

9) Identify and harmonize existing financing schemes set by various players
implementing projects and activities that directly support the attainment of
90% HH electrification by 2017;

10) Actively monitor the implementation of the programs and projects vis-a-vis
the milestones/ targets set and, in this regard, prepare and submit a quarterly
monitoring report to the HOUSE Team} highlighting the critical
problems/issues that prevent or hinder tha timely implementation of
programs and projects;

11) Conduct Information, Education and Commuuhication (IEC) strategies and
other public awareness activities, including promotion of public-private
partnerships on household electrification projects and activities; and,

12) Perform other functions as may be directed by the HOUSE Team.

d) Technical Secretariat. The Rural Electrification Administration Management Division
(REAMD) of DOE-EPIMB shall provide technical secretariat support to the HOUSE
Team and HOUSE-TWG. DOE-EPPB, DOE-REMB, NEA and NPC shall assign
dedicated staff as members of the Technical Secretariat as recessary.

Section 5. The HOUSE Electrification Information System {HEIS). The HEIS shall be
established within DOE in coordination with the DOE’s Information Technology Management
Services to consolidate all information on household electrificatipn and to serve as integrated.
‘monitoring systern for all household electrification projects and activities in the country.

The HOUSE Team shail establish protocols with NEA, DUs, loqal government units (LGUs),
project proponents, and other agencies of the Government in onsolidating and processing
relevant data for the purposes of operationalizing the HEI$ and estimating household
electrification levels both at national and local levels, as appropriafe.

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For this purpose, all DUs and other proponents are hereby required to submit a bi-annual
report to. DOE-EPIMB on the status of their household electrificatlon projects and activities not
later than the 15% day of January and 15% day of July for each calendar year until end of 2017.
NEA is hereby tasked to consolidate the reports of all the ECs for dubmission to DOE-EPIMB on
the said dates. Likewise, NPC-SPUG shall assist DOE-EPIMB in consolidating the reports by

proponents located in its small islands and isolated grids. Specifically, the report should contain
at least the following information, namely:

(i) Name of project or activity;
(ii) Fund source;

Giii) Area coverage of the project (province and franchis owner);

(iv) Type of electrification project (on-grid or off-grid);

(v) Technology or elecirification solution used (grid

extension, muni-grid/ diesel,
mini-grid/renewable, decentralized solar home sys

mi, etc.);

(vi) Specific project location (name of barangay/s), clas
and corresponding number of potential sitios
electrified;

ification (on-grid or off-grid)
and/or households to be

(vit) Total number of sitios and/or households elec
semesier; and,

ified or served durimg the

{vii} Planned number of sitios and/households to be co
among others.

apleted in the next semester,

Section 6. Repealing Clause. Except insofar as that may be m
nothing in this Circular shall be construed as to repeal any of the
or responsibilities already provided for under existing rules.

ifestly inconsistent herewith,
echanisms already existing

Section 7. Separability Clause. If for any reason, any section or [provisions of this Circular is
declared unconstitutional or invalid, such parts not affected shail remain in full force and effect.

Section 8. Effectivity. This Circular shall take into effect immediately following its publication
in at least two (2) newspapers of general circulation and shall remain in effect until otherwise
revoked.

Issued in Bonifacio Global City, Energy Center, Taguig City.

CARLOS JERICHO L. PETILLA g
Secretary f

rexsyery Republiqof the Philipines
ges DEPARTMENT OF ENERGY

bak Bo LH REPLYING PLS CHE:

SEP 29 2014