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oe Republic of the Philippines

ee) DEPARTMENT OF ENERGY
(Kagawaran ng Enerhiya)

Na 4 bY,

sge

BAGONG PILIPINAS

DEPARTMENT CIRCULAR NO. Dc <2 <4— oN — a

RULES ON THE ADMINISTRATION AND ENFORCEMENT OF THE
OBLIGATIONS OF DESIGNATED ESTABLISHMENTS UNDER THE ENERGY
EFFICIENCY AND CONSERVATION ACT

WHEREAS, Republic Act (RA) No. 7638, otherwise known as the “Department of
Energy (DOE) Act of 1992,” states that it is the policy of the State to ensure continuous,
adequate, and economic supply of energy with the end in view of ultimately achieving
self-reliance in the country’s energy requirements through the integrated and intensive
exploration, production, management, and development of the country’s indigenous
energy resources, and through the judicious conservation, renewal, and efficient
utilization of energy to keep pace with the country’s growth and economic
development;

WHEREAS, RA 11285, otherwise known as the “Energy Efficiency and Conservation
Act" (EEC Act), provides the establishment of a framework for introducing and
institutionalizing fundamental policies on energy efficiency and conservation (EEC),
including the promotion of efficient and judicious utilization of energy, increase in the
utilization of energy efficiency and renewable energy technologies, and the delineation
of responsibilities among various government agencies and private entities;

WHEREAS, Section 5 of the EEC Act provides that the DOE shall be the lead agency
in the implementation of the EEC Act with the responsibility for the planning,
formulation, development, implementation, enforcement and monitoring of energy
management policies and other related energy efficiency and conservation plans and
programs;

WHEREAS, Section 23 of the EEC Act provides that the DOE shall have the authority
to visit Designated Establishments (DEs) to inspect energy-consuming facilities,
evaluate energy management systems and procedures, identify areas for efficiency
improvement, verify energy monitoring records, reports, and other documents related
to the compliance requirements of the EEC Act within office hours and in the presence
of authorized representative/s of the DEs;

WHEREAS, under Section 5 of the Implementing Rules and Regulations of the EEC
Act (EEC-IRR), the DOE shall issue the corresponding guidelines to implement this
Section which may include, among others, the manner of inspections and notice
requirements;

WHEREAS, Department Circular (DC) No. DC2023-05-0018 adopts the National EEC
Program (NEECP) and Roadmap 2023-2050 where conservation and efficient
utilization of energy are among the major strategies of the Government to realize
energy self-sufficiency and reduce the environmental impact of energy generation and
utilization as set out in the Philippine Energy Plan (PEP);

Energy Center, Rizal Drive cor. 34th Street, Bonifacio Global City, Taguig City, Philippines 1632
Tel. No. (Trunkline) (632) 8479-2900

Website: http://www.doe.gov.ph; Email: infocenter@doe.gov.ph
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DC re: Rules on the Administration and Enforcement of the Obligations of DEs under the EEC Act
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WHEREAS, Section 18 of DC No. DC2023-12-0036 (Reclassifying DEs in the
Commercial, Industrial, and Transport Sector), DC No. DC2023-12-0037 and DC No.
DC2023-12-0038 (Adjusting their Threshold, and Providing Compliance Guidelines
Therefor Pursuant to the EEC Act) cover the conduct of on-site inspection of DEs; and

WHEREAS, the DOE conducted a public consultation attended by various
stakeholders on 30 November 2023 to solicit inputs and incorporate them into this DC.

NOW, THEREFORE, pursuant to its authority under the EEC Act, the DOE hereby
adopts and issues the following guidelines:

Section 1. Scope. This DC shall govern all matters relating to the inspection and
enforcement power of the DOE under the EEC Act, EEC-IRR, and other relevant
issuances.

Section 2. Definition of Terms. For purposes of this DC, the terms shall be defined
as follows:

a. Authority to Inspect (ATI) refers to the written authority issued by the Director
of the Energy Utilization Management Bureau (EUMB) to the EEC Monitoring
Team authorizing the latter to carry out on-site inspection of identified DEs at a
specified date and time.

b. Authorized Representative refers to a person or entity authorized by a DE to
act for and on behalf of the DE.

c. Compliance Order refers to the directive, as stated under Section 31 of the
EEC Act in relation to Section 81(b) of the EEC-IRR, to the relevant DE
following the finding of the DOE of a violation because of materially insufficient
reports, false returns, or non-submission of required documents for purposes
of compliance.

A Compliance Order shall specify the action/s to be undertaken, including
corrective measures, by the DE within thirty (30) calendar days upon receipt of
the Compliance Order. It shall require the submission by the DE of proof of its
compliance.

d. EEC Monitoring Team refers to the personnel from the DOE tasked to conduct
Inspections as specified in this DC. Members of the team shall be
recommended to and approved by the EUMB Director through a memorandum
from the EEC Monitoring Team Lead.

e. Inspection refers to the conduct of site inspection of a DE under Section 23 of
the EEC Act in relation to Section 5 of the EEC-IRR to determine compliance
with the DE’s obligations under Section 66 of the EEC-IRR and other relevant
issuances. Inspection shall be within office hours and conducted in the
presence of an authorized representative of the DE.

Inspection activities include the inspection of energy-consuming facilities,
evaluation of energy management systems and procedures, identification of
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areas for efficiency improvement, verification of energy monitoring records and
reports and other documents related to the compliance requirements under the
EEC Act and the evaluation, assessment and verification of the DE’s
compliance with its regulatory obligations.

Inspections are classified as follows: 1) routinary — conducted annually, or more
frequently, as may be determined by the DOE; 2) complaint-related —
conducted in response to a complaint submitted to the DOE in accordance with
the EEC Act, EEC-IRR, and other relevant issuances; and/or 3) special
instruction — conducted upon the written instruction of an appropriate authority.

f. Office Hours refers to the time of the conduct of onsite inspection in
accordance with the Civil Service Commission (CSC) Memorandum Circular
(MC) No. 21, Series of 1991 or the “Policy on Government Working Hours for
Government Officials and Employees” and aligned with the business hours of
the DE.

g. Show Cause Order refers to the order stated under Section 31 of the EEC Act
in relation to Section 81(a) of the EEC-IRR, requiring a DE to submit an
explanation with supporting reports, returns, and other documents to rebut any
alleged non-compliance or commission of a prohibited act.

h. Notice of Inspection refers to a document informing the DE of the conduct of
the Inspection, which shall indicate the schedule of Inspection and the name/s
of the EEC Monitoring Team.

i. Inspection Report refers to a document generated by the EEC Monitoring
Team after the Inspection of the DE and reporting observations during, and the
results of the Inspection.

Section 3. Inspection Process. The following shall be observed for Inspections
conducted by the EEC Monitoring Team under this DC:

a. Identification of DEs. The list of DEs for Inspection shall be prepared by the
EUMB - EEC Program Management and Technology Promotion Division
(EPMPD) through a preliminary assessment of DEs in specific locations. The
preliminary assessment of the EUMB - EPMPD may be guided by the
submissions in the DE Online System or other reports received as compliance
with the EEC Act, EEC-IRR, and other relevant issuances.

b. Approval of Inspection. The EUMB Director shall approve the DEs for
Inspection from the list submitted by EUMB-EPMPD and shall issue the ATI to
the EEC Monitoring Team. The ATI shall contain the names of the EEC
Monitoring Team conducting the Inspection, the name and location of the DE,
and the schedule of the Inspection, among others.

c. Issuance of Notice of Inspection. From the list of DEs for Inspection prepared
by the EUMB-EPMPD, the EUMB Director shall issue the Notice of Inspection
of a DE. The Notice of Inspection shall contain the necessary documents and
information to be prepared by the DE for the conduct of Inspection by the EEC
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Monitoring Team. The Notice of Inspection shall inform the DE of the schedule
of the Inspection five (5) working days prior to its conduct.

d. Conduct of Inspection. The EEC Monitoring Team shall conduct the
Inspection within office hours and in the presence of the DE’s authorized
representative/s. The EEC Monitoring Team shall complete the Inspection on
the date/s indicated in the Notice of Inspection.

The EEC Monitoring Team shall proceed with the scheduled Inspection of a DE
covered by a Notice of Inspection notwithstanding the following:

e DE’s outright refusal to allow access to the DE’s premises; and
e DE’s refusal to allow access to the records, whether indicated in the
Notice of Inspection or requested during the conduct of the Inspection.

The EEC Monitoring Team shall provide in the Inspection Report the details of
the Inspection and any relevant information shared by the DE during the
Inspection. The EEC Monitoring Team shall indicate that the Inspection
proceeded based on available or preliminary data on the DE and the results of
any interview of any Authorized Representative of the DE.

Inspections shall be completed within a reasonable period, which will cover the
following activities:

. Opening/Introductions

. Presentation of the DE Obligations and Requirements under the EEC
Act

. Validation of Annual Energy Efficiency and Conservation Report
(AEECR) and Annual Energy Utilization Report (AEUR)

. Validation of Energy Audit Report

. Assessment of Energy Management System Implementation (or other
similar framework)

. Validation of Significant Energy Uses (SEUs) in the facility/building

. Closing ;

“OD ah oo N=

e. Conclusion of Inspection. Following the conclusion of the Inspection, the EEC
Monitoring Team shall inform the DE that the results will be sent to the DE within
twenty (20) working days. The written result may provide the DE’s compliance
or a Show Cause Order to address any finding of non-compliance.

The process for the conduct of Inspections shall follow the procedures stated in Annex
A. The EUMB may issue advisories or implementing guidelines for the effective and
efficient implementation of this DC: Provided, That the guidelines shall only be issued
after public consultation.

Section 4. EEC Monitoring Team. To carry out the conduct of Inspections of the DEs,
the EEC Monitoring Team shall be composed of representatives from the following
DOE units:
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Team Lead : EUMB-EPMPD

Members : Legal Services
Financial Services
Luzon Field Office (LFO)
Visayas Field Office (VFO)
Mindanao Field Office (MFO)

Section 5. Responsibilities of the EEC Monitoring Team. The following shall be the
responsibilities of the EEC Monitoring Team under this DC:

a. observe the Inspection Procedures under Section 3 of this DC and its
implementing guidelines;

b. evaluate the DEs energy management systems and procedures, and identify
key areas for efficiency improvement, as applicable;

c. verify energy monitoring records/reports, DE program and plans to improve
energy performance versus baseline, and other documents related to the DE’s
compliance with its obligations under the EEC Act, EEC-IRR, and other relevant
issuances;

d. submit the Inspection Report to the EUMB Director within seven (7) calendar
days from the conclusion of the Inspection of a DE with an endorsement for the
issuance of a written compliance or Show Cause Order to the DE;

e. recommend to the EUMB Director the endorsement of administrative
proceedings against a DE for non-compliance with the Show Cause Order; and

f. prepare feedback on the conducted inspections.

Section 6. Administrative Proceedings. Administrative proceedings arising from the
Inspection may be initiated by the transmittal of the EUMB Director to the DOE-LS of
the ATI, and Inspection Report, and all supporting documents of a DE for non-
compliance with the Show Cause Order within seven (7) calendar days from the
expiration of the period indicated in the Show Cause Order.

The DOE may initiate, mofu proprio, an administrative proceeding against any person
or entity who commits any of the prohibited acts under the EEC Act, EEC-IRR, this
DC, and any of its subsequent issuances pursuant to the prevailing rules of procedure
for administrative cases before the DOE for violations of the EEC Act.

Section 7. Prohibited Acts. Any person or entity who violates the following shall be
subject to the penalties under Section 8 of this DC. For purposes of this DC, the
following shall be deemed as Prohibited Acts:
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a. Failure to submit annual energy consumption reports to the DOE;

b. Forge, alter, counterfeit, or falsely make any submission for the purpose of
compliance;

c. Failure to comply with the obligations under Section 66 of the EEC-IRR; and
d. Failure to submit to an on-site inspection.
Section 8. Fines and Penalties. Pursuant to Section 30 of the EEC Act and without
prejudice to fines and penalties, including criminal liability, under applicable laws, the

following shall be the penaities for violations of the prohibited acts enumerated under
Section 7 of this DC as follows:

Violati Penalties and Fines (in PhP
named 3" Offense

Failing or willfully 10,000.00
refusing to submit

any reports required

by the DOE

100,000.00 to
500,000.00

1,000,000.00
with endorsement
to Local
Government Units
(LGUs) for
Administrative
Sanctions

Forge, alter, 100,000.00 to 1,000,000.00
counterfeit, or falsely 500,000.00 with
make any endorsement to
submission for the LGUs for
purpose of Administrative
compliance Sanctions
100,000.00 to 1,000,000.00
Willfully refusing to 500,000.00 with endorsement
submit to an on-site to LGUs for

Administrative
Sanctions
1,000,000.00
with endorsement
to LGUs for
Administrative
Sanctions
1,000,000.00
with endorsement
to LGUs for
Administrative
Sanctions

inspection

10,000.00
10,000.00
10,000.00

Section 9. Repealing Clause. The provisions of other orders, issuances, rules, and
regulations, which are inconsistent with the provisions of this DC, are hereby repealed,
amended, modified, or superseded accordingly.

100,000.00 to

Failing or willfully 500,000.00

refusing to appoint
or designate a CECO
or CEM

Failing to comply
with issued orders of
the DOE in the
discharge of its
enforcement powers

100,000.00 to
500,000.00

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Section 10. Separability Clause. If any section or provision of this DC is declared
unconstitutional or invalid, such parts not affected shall remain valid and subsisting.

Section 11. Effectivity. This DC shall take effect immediately upon its publication in
two (2) newspapers of general circulation. A copy of this DC shall be filed with the
University of the Philippines Law Center — Office of National Administrative Register
(UPLC-ONAR).

Issued on MAY 07 2024 at the DOE, Energy Center, Rizal Drive cor. 34'" Street,
Bonifacio Global City, Taguig City.

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TECHNOLOGY PROMOTION DIVISION

ENERGY EFFICIENCY AND CONSERVATION PROGRAM MANAGEMENT AND

QUALITY MANAGEMENT SYSTEM Doc. ID =| EPMPD-QF-01
FORMS MANUAL Effectivity 07 May 2024
date:
Document Name:
Page no. 1 of 3 | pesiGNATED ESTABLISHMENT ON-SITE INSPECTION | Rev: "9. | 0
PROCESS

ON-SITE INSPECTION PROCESS

The DOE shall observe the following procedures in the conduct of inspections:

1.

Notification to the DE

DEs will be notified through a formal letter (Notice of Inspection’) that an
inspection will be conducted by the DOE. The Notice of Inspection will be sent
through email using doe.epmpd@gmail.com five (5) calendar days prior to the
date of on-site inspection.

The Notice of Inspection shall be signed by the DOE — EUMB Director and
include the following details:

a. Date and time of the On-site Inspection;

b. | Names of the representatives from the EEC Monitoring Team;

c. List of documents that the DE is required to present to the EEC
Monitoring Team; and

d. Duration of the On-Site Inspection.

Conduct of On-Site Inspection

At least two (2) members of the EEC Monitoring Team? will be present during
the On-Site Inspection. Members of the EEC Monitoring Team are expected to
be in the DOE Field Uniform and must present the following items to the DE
representative at the beginning of the on-site inspection:

a. Authority to Inspect? (ATI) duly signed by the EUMB Director;
b. Copy of the notification letter; and
c. DOEID.

In the event of a refusal by the DE, the EEC Monitoring Team will document
the details/reasons for the refusal in the On-Site Inspection Report.

DEs are required to prepare and present the following documents encoded in
the DE Online Submission Portal to the EEC Monitoring Team during the On-
Site Inspection:

' Notice of On-Site Inspection refers to a document informing the DE prior to the conduct of the actual On-Site Inspection including
the date thereof and name/s of the EEC Monitoring Team signed by the EUMB Director.

? EEC Monitoring Team refers to personnel from the DOE tasked to conduct On-Site Inspection as specified in this DC. Members
of the team shall be recommended to and approved by the EUMB Director through a memorandum from the EEC Monitoring

Team Lead.

3 Authority to Inspect (ATI) refers to the written authority, issued by the Energy Utilization Management Bureau (EUMB) Director
to the EEC Monitoring Team authorizing them to carry out On-Site Inspection of identified DEs at a specified date and time.

Reproduction of this Document is not allowed, unless approved by the DOE-EUMB Office of the Director

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ENERGY EFFICIENCY AND CONSERVATION PROGRAM MANAGEMENT AND
TECHNOLOGY PROMOTION DIVISION

QUALITY MANAGEMENT SYSTEM Doc. ID | EPMPD-QF-01
FORMS MANUAL Eneotvity 07 May 2024

Document Name:

Page no. 2 of 3 | nesiGNATED ESTABLISHMENT ON-SITE INSPECTION
PROCESS

Rev. no. 0

a. — Electricity and Fuel Billing Statement or any related documents that
can substantiate their electricity and fuel consumption;

b. Energy Management System Manual/ Policy/ Framework or any
other similar document/s that are being implemented by the DE;

c. Energy Audit Report; and

d. Documents related to the reported energy efficiency projects,
measures, and initiatives of the DE.

iv. Should the DE fail to present the required document/s during the On-Site
Inspection, the EEC Monitoring Team will record the absence of the
document/s in the On-Site Inspection Report.

v. | The EEC Monitoring Team shall conduct the On-Site Inspection within office
hours and in the presence of the DE’s authorized representatives. Inspections
are to be completed within a reasonable period, covering the following
activities:

a. Opening/Introductions

b. Presentation of the DE Obligations and Requirements under the
EEC Act

Cc. Validation of the Annual Energy Efficiency and Conservation
Report (AEECR) and Annual Energy Utilization Report (AEUR)

d. Validation of Energy Audit Report

e. Assessment of Energy Management System Implementation (or
other similar framework)

f. Validation of Significant Energy Uses (SEUs) in the facility/building

g. Closing

3. Results

i. An On-Site Inspection Report will be prepared by the EEC Monitoring Team
upon returning to the DOE Central Office. The EEC Monitoring Team shall also
prepare a report for the DE, which shall include details on the DE’s compliance,
a recommendation for the issuance of a Show Cause Order to address any
non-compliance, and/or information on the alleged commission of prohibited
act/s under this DC. Recommendations for improved compliance with the DE’s
obligations may also be included in the Show Cause Order.

ii. | The DEs shall receive the report of the On-Site Inspection twenty (20) working
days following the team’s return to the DOE Central Office.

Reproduction of this Document is not allowed, unless approved by the DOE-EUMB Office of the Director

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ENERGY EFFICIENCY AND CONSERVATION PROGRAM MANAGEMENT AND
TECHNOLOGY PROMOTION DIVISION

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PROCESS

QUALITY MANAGEMENT SYSTEM Doc. ID | EPMPD-QF-01
FORMS MANUAL Effectivity | 97 way 2024
date:
Document Name:
Rev. no. | 0

4. End of Activity

i. The EEC Monitoring Team shall evaluate the DE’s response to the Show
Cause Order within twenty (20) calendar days from its receipt. A written
confirmation will be sent to the DE if its responses satisfactorily address the
issues raised in the Show Cause Order, or the EEC Monitoring Team may
recommend that the EUMB Director initiate administrative proceedings.

ii. The EUMB Director shall transmit to the DOE-LS the ATI, and On-Site
Inspection Report, and all supporting documents of a DE for non-compliance
with the Show Cause Order within seven (7) calendar days following the
expiration of the period indicated in the Show Cause Order.

Reproduction of this Document is not allowed, unless approved by the DOE-EUMB Office of the Director