2018 ANNUAL REPORT ENERGY

ENERGY ANNUAL REPORT 2018 twitter.com/doe_ph facebook.com/doe.gov.ph City, 1632 Philippines City, Taguig DEPARTMENT OF ENERGY DEPARTMENT Tel. Nos.: 840-1780; 479-2900 local 288, 328 288, local 479-2900 840-1780; Nos.: Tel. Energy Center, Rizal Drive, Bonifacio Global City (BGC) City Global Bonifacio Drive, Rizal Center, Energy www.doe.gov.ph MANDATE The Department of Energy is mandated by RA 7638 (DOE Act of 1992) to prepare, integrate, coordinate, supervise and control all plans, programs, projects and activities of the Government relative to energy exploration, development, utilization, distribution and conservation.

MISSION VISION We at the Department of Energy, in partnership A globally-competitive with our stakeholders, shall improve the DOE powering up Filipino quality of life of the Filipino by formulating communities through and implementing policies and programs to clean, efficient, robust and ensure sustainable, stable, secure, sufficient, sustainable energy systems and accessible energy. that will create wealth, propel industries and transform the In pursuit of this mission, we commit to lives of men and women and render efficient service with utmost integrity the generations to come. and professionalism.

VALUES COMMITMENT TO RESPECT TO PEOPLE Kapwa at sarili, igalang sa bawat SERVICE sandali Basta enerhiya, sagot kita

INTEGRITY TEAMWORK Sa publiko, serbisyong marangal at Gawain ay kayang-kaya, kung tayo totoo ay sama-sama CONTENTS

Message from the Secretary Executive Summary 01 National and Regional Energy Planning Program 04 Conventional Energy Development Program 11 National Renewable Energy Program 15 Downstream Energy Development Program 18 Electric Power Industry Development Program 22 Household Electrification Development Program 28 Energy Efficiency and Conservation Program 31 Alternative Fuels and Technologies Program 35 Other Support Programs 38 DOE’s Attached Agencies 39

• Philippine National Oil Company (PNOC)

• PNOC Exploration Corporation

• PNOC Renewables Corporation

• National Electrification Administration

• National Power Corporation

• National Transmission Corporation

• Philippine Electricity Market Corporation Policy Issuances 59 Acronyms 62 Units of Measurements 64

ANNUAL REPORT 2018 i SECRETARY’S MESSAGE ALFONSO G. CUSI

The Department of Energy (DOE) is proud to present the Energy Annual Report for 2018. This report underscores significant developments in the energy sector by highlighting the most recent programs and initiatives of the DOE. Aside from showcasing our key accomplishments, it is also a concrete reflection of the hard work and dedication of the people who are building and ensuring the energy future of our nation.

The reinvigoration of our energy sector’s performance is among the top priorities of the DOE. Excellence is rooted in strong will and sound strategic planning – by consistently striving to surpass our goals, we will be able to leverage progress made within the energy sector and provide Filipinos with energy supply that is stable, secure, and efficient. Our conscientious adherence to the Sectoral Roadmaps 2017-2040, coupled with effective implementation strategies help us fill existing gaps and address challenges posed by the economic pressures we face.

We may still have a long way to go. However, through the collective vision of ensuring energy security and equity among the members of the energy family, the strong collaboration among energy stakeholders, and our effective partnership with the private sector, we will be able to explore more sustainable approaches that would help us achieve our goals.

The DOE remains grateful for the unwavering support and enthusiasm of our stakeholders. Together, let us work harder and continue to make a difference in the lives of our countrymen through a revolutionized perspective and a mindset for learning and innovation.

Onward to a better and brighter Philippines!

ALFONSO G. CUSI Secretary EXECUTIVE SUMMARY

The year 2018 is a FIRST for the DOE: Fostering Innovation, Resiliency, and Sustainability in all areas of energy development.

It was a year of innovation in terms of doing things in the DOE, as well as in forging strategic alliances within the Department and with all energy stakeholders. Heeding the call of the Secretary’s “mindset revolution”, progress was made in the following areas:

ON INNOVATION

To support the economic and infrastructure plans awaiting action from other permitting agencies, as of the Duterte Administration, the country will need well as the provision of Action within 30 Days, which to double its power generating capacities over the shortens the application processing period to 30 next several years. This is one big challenge for the days upon submission of complete documentary energy sector given that it already takes about four requirements. years to construct a power plant, without counting the delays encountered by project proponents in As of end of December 2018, there are 12 projects securing the necessary local and national permits which have been certified as EPNS, including the for its construction. PhP52 billion Mindanao-Visayas Interconnection Project - the first power project to be certified under Thus, the issuance of Executive Order (EO) No. EO 30. 30 in June 2017 was a welcome development for the DOE since it acknowledges the urgency The DOE has also started the implementation of to improve the bureaucratic processes that are the Philippine Conventional Energy Contracting essential for the entry of critical investments in the Program (PCECP) to bolster investments in the energy sector. Under this law, the DOE will endorse upstream oil and gas sector. Under the PCECP, energy projects considered as “Energy Projects petroleum contracts are awarded either through of National Significance” (EPNS). Innovative nomination, which provides investors the option provisions under the EO are the Presumption of to propose potential areas for exploration and/or Prior Approvals, which provides for government development, or via applications made for the Pre- agencies’ processing of EPNS applications without Determined Areas offered by the Department.

ENERGY ANNUAL REPORT 2018 1 Ensuring reliable, sufficient and affordable electricity in the country entails close cooperation and collaboration with all our partners in the industry. We need to step up to further strengthen and sustain our partnerships, especially in the exploration and development of our indigenous energy resources.

Sec. Alfonso G. Cusi

For the coal sector, the DOE issued a Department ON RESILIENCY Circular (DC), DC 2018-03-0006, streamlining the processing and issuance of tax exempt certificates. Recognizing that the Philippines is one of the most vulnerable countries to natural calamities (e.g. In December 2018, the DOE reached a milestone typhoons, flash floods, storm surges, earthquakes as it earned of the ISO 9001:2015 Certification for and landslides), the Energy Resiliency Policy was its Quality Management System (QMS) from AJA signed by Secretary Cusi in January 2018 to help Registrars. The certification covers several frontline strengthen energy systems and facilities, as well as services of the Department, particularly: ensure quick restoration of energy services during and after calamities. This policy will help lessen the

ISO 9001:2015 QUALITY MANAGEMENT SYSTEMS DOE Frontline Services

Application for Registration of ERDB Petroleum Sub-Contracts Energy Resource Application for Safety Engineers and/or Development Bureau Safety Inspectors Permit

OIMB Issuance of Securities and Exchange Oil industry Commision Endorsement Management Bureau

Provision of Philippines Energy Plan EPPB (PEP) Data/Key Energy Statistics and Energy Policy and Other Energy Related Indicators/ Planning Bureau Information to Various Clients

AS Receiving of Incoming Documents Administrative Services

ERTLS Energy Performance Testing of Household Energy Research and Testing Appliances and Lighting Systems Laboratory Services

This development will enable the DOE to consistently provide quality services that meet the demands of its various stakeholders.

2 ENERGY ANNUAL REPORT 2018 adverse effects of disasters to people, the Moreover, the rules for the Renewable Energy environment, and the economy. Trust Fund were also issued to finance the research and development of RE, as well as Another initiative is the passage of Republic the conduct of related resource and market Act No. 11039, which provides financial assessment studies. assistance to electric cooperatives (EC) for disaster mitigation, preparedness, and the These policy issuances are expected to spur rehabilitation of damaged EC infrastructures. countryside development, while promoting the use of clean energy. ON ENERGY SUSTAINABILITY On efficient energy utilization, the DOE Energy supply and utilization should be launched the nationwide E-Power Mo sustainable and efficient. In this regard, the Campaign in July 2017, to promote the DOE encourages stakeholders to make use of intelligent use of energy resources. energy-efficient technologies and renewable energy (RE) sources. The DOE likewise strongly The DOE, through the assistance of the EU- upholds transparent and fair electricity Access to Sustainable Energy (ASEP), is trading among all industry players. likewise working on the development of Particular Product Requirements (PPR) for On the RE front, DC 2018-07-0019 was issued appliances like refrigerators, air-conditioning to promulgate the rules and guidelines units and light-emitting diode (LED) lights. governing the Green Energy Option Program, or GEOP. This will give energy consumers the The Department also moved to further foster option to choose RE as their source of power. competition in the power generation sector through the organization of the Independent The Renewable Portfolio Standards (RPS) Rules Electricity Market Operator of the Philippines for Off-Grid Areas (DC 2018-08-0024), on the Inc. (IEMOP). In 2018, IEMOP was finally able other hand, was adopted to mandate the to takeover the operations of the Wholesale off-grid power industry to obtain a specified Electricity Spot Market (WESM) 17 years after portion of their electricity requirement from RE the enactment of the Electric Power Industry sources. Reform Act (EPIRA). IEMOP will ensure that trading of electricity in the country will be To further ensure the optimal use of RE, DC fair, transparent, competitive, and reliable. 2018-09-0027 was also issued to establish and develop Renewable Energy Zones and expand their required transmission facilities.

ENERGY ANNUAL REPORT 2018 3 NATIONAL AND REGIONAL ENERGY PLANNING PROGRAM

As a policy-making entity, the DOE is mandated to develop long-term and sustainable energy policies, plans and programs to address the energy requirements of all economic sectors. Sustainable energy planning involves the preparation of short-, medium-, and long-term energy policies and plans covering the exploration, development and production of indigenous energy resources from conventional and renewable sources. It also includes critical strategies to increase access to electricity, promote alternative fuels and technologies and the principles of energy efficiency and conservation, and implement key sectoral reforms in the downstream oil and power industries.

4 ENERGY ANNUAL REPORT 2018 EXECUTIVE ORDER NO. 30

President Duterte’s issuance of EO 30 on 28 June 2017 was one of the major energy policy developments to streamline regulatory procedures affecting the timely implementation of energy projects.

To support the implementation of EO 30, related policy issuances include the Implementing Rules and Regulations of EO 30 (DC No. 2018-04-0013) and the Department Order (DO) Operationalizing the Procedures EXECUTIVE ORDER NO. 30 for the Effective and Efficient Implementation of EO 30 Creating the Energy Investment (DO No. 2017-10-0012). Coordinating Council (EICC) in Order to Streamline the Regulatory Procedures Affecting Energy Projects To date, the 12 projects that have been issued with Certificates of Energy Projects of National Significance (CEPNS) are:

PROJECT CEPNS TYPE DATE ISSUED

PROPONENT

National Grid Corp. Mindanao-Visayas Commerciality 08 May 2018 of the Philippines Interconnection Project

Aragorn Power and Kalinga Geothermal Pre-Development 14 August 2018 Energy Corporation Project

Island Wind Energy 151.2 MW Talim Wind Pre-Development 30 August 2018 Corporation Power Project

Atimonan One 2x600 MW Coal-Fired Commerciality 11 September 2018 Energy, Inc. Power Plant

PNOC-Exploration COC 185 Pre-Development 26 September 2018 Corporation COC 186 Pre-Development 26 September 2018

Coheco Badeo 500 MW Kibungan Badeo Corporation Pumped Storage Project Pre-Development 26 October 2018

Energy World Pagbilao 650 MW Corporation Combined Cycle Gas Commerciality 26 November 2018 Limited Turbine Power Plant

DMCI Power 15 MW Masbate Coal Commerciality 26 November 2018 Corporation Power Plant

First Quezon Biogas 1.2 MW Biogas Power Commerciality 26 November 2018 Corporation Plant Project

Green Atom 6 MW Pangasinan Waste- Pre-Development 27 November 2018 Renewable Energy to-Energy Project Corporation Total Power, Inc.- 100 MW TPI Sarangani Pre-Development 20 December 2018 Sarangani Solar Power Project

ENERGY ANNUAL REPORT 2018 5 SECURING ENERGY FACILITIES DURING EMERGENCIES AND DISASTERS

With its commitment to creating a culture of were enjoined to establish and adapt an RCP resilience in the energy sector, the DOE started that will contain both structural and non-structural the year with the issuance of the Energy Resiliency measures to gauge infrastructure and human Policy (ERP) through Department Circular No. resource preparedness during and in the aftermath 2018-01-0001on 17 January 2018. The ERP aims of calamities and other disruptive events. to strengthen existing infrastructure facilities, incorporate mitigation improvements into their As of December 2018, a total of 124 RCPs were reconstruction and rehabilitation plans, improve submitted to the Task Force on Energy Resiliency operational and maintenance standards and (TFER) Secretariat, excluding the submissions of ECs practices, and develop resiliency standards. which are coursed through and compiled by the National Electrification Administration (NEA).

DEPARTMENT CIRCULAR The RCP submissions are subjected to evaluation and validation, if deemed necessary. NO. 2018-01-0001 Adoption of Energy Resiliency in the B. Task Force on Energy Resiliency Planning and Programming of the Energy Sector to Mitigate Potential Impacts of Disasters The geographical location of the Philippines renders it as one of the most vulnerable countries to natural calamities. The country experiences an average of A. Resiliency Compliance Plan 20 tropical cyclones annually, in addition to flash floods, storm surges, earthquakes, and landslides. The Resiliency Compliance Plan (RCP) serves as the basis for all activities concerning the ERP. Under In the second half of 2018, the TFER monitored and Section 5 of the ERP, all energy industry participants, responded to four tropical cyclones that affected from energy resource development to utilization, the country.

INTERNATIONAL POWER TRANSMISSION DISTRIBUTION NAME GENERATION

Typhoon “Ompong” Peak intensity: 205 km/h Mangkhut 9 SPUGs 82 transmission 22 ECs affected Landfall: Sept. 10, 2018 affected lines (Php 296M damage cost) Area(s): Cagayan

Typhoon “Rosita” Peak intensity: 200 km/h Yutu 10 SPUGs 53 transmission 22 ECs affected Landfall: Oct. 27, 2018 affected lines (Php 53.6 damage cost) Area(s): Cagayan

Tropical Depression Samuel Peak intensity: 55 km/h - 14 SPUGs 2 transmission 4 ECs affected Landfall: Nov. 21, 2018 affected lines Area(s): Cagayan

Tropical Depression Usman - 14 SPUGs 12 transmission 14 ECs affected Landfall: Dec. 29, 2018 affected lines

6 ENERGY ANNUAL REPORT 2018 EFFORTS OF TFER MEMBERS

Pushed for Infrastructure Resiliency Policy Promulgated RA 11039 institutionalizing Integration of Contingency Response the Electric Cooperatives Emergency and Manual with requirements for Resiliency Funds on 29 June 2018 Infrastructure Resiliency and Service Continuity

Completed disaster risk assessment for all its 138 substations Operations and Maintenance Agreement Redesigned strength and capacity of with various concerned institutions and transmission towers to withstand environmental safety measures in IPP typhoon wind speed of up to 300 kph Contracts. Established back-up Luzon Regional Control Center

C. Energy Task Force Election in the Synchronized D. Strengthening Partnerships Barangay and Sangguniang Kabataan Elections 2018 To prepare for the anticipated devastation of a 7.2 magnitude earthquake foreseen to affect With the ERP as an overarching policy, the DOE Metro and nearby provinces, the DOE in released Department Circular No. 2018-05-0014, partnership with the Department of Science and Creating the Energy Task Force Election to Ensure Technology - Philippine Institute of Volcanology Adequate and Reliable Energy Supply Before, and Seismology (DOST-PHIVOLCS), signed a During and After Elections. The DC provides the Memorandum of Agreement (MOA) entitled, guidelines in securing energy facilities to maintain “Capacity Enhancement of the Energy Sector on a constant supply of energy during the election Hazard, Risk Assessment and Exposure Database period. Development Through the Use of the REDAS Software” on 16 March 2018. The Energy Task Force Election (ETFE) is composed of the members of the energy family and other This partnership will allow the energy sector to use key government agencies and supporting the locally developed Rapid Earthquake Damage organizations. Assessment System (REDAS) software, which will provide quick and near real-time simulated It can be noted that there was adequate and earthquake hazard information needed by disaster reliable power supply before, during, and after the managers for impact assessments and information nationwide Barangay and Sangguniang Kabataan distribution. Elections (BSKE 2018) held on 14 May 2018. Reported isolated line trippings were immediately addressed To further promote energy resiliency in the country, and restored by relevant agencies. the DOE and the Safety and Health Association of the Philippine Energy Sector, Inc. (SHAPES), entered For this achievement, the DOE received a into a Memorandum of Understanding (MOU) on commendation from the Commission on Elections 17 August 2018. (COMELEC) on April 2018.

ENERGY ANNUAL REPORT 2018 7 Left to right: Aboitiz Equity Ventures CEO Erramon M. Aboitiz, Ayala Corp., CEO Jaime Augusto Zobel de Ayala, DOE Secretary Alfonso G. Cusi, First Pacific Co. Ltd. CEO Manny V. Pangilinan and PDRF President Rene S. Meily during the MOU signing ceremony for intensified energy resiliency efforts between the DOE and PDRF. © DOE Public Affairs Office

The MOU engages different stakeholders to The event served as an avenue for participants support the development and implementation of to share their experiences and best practices in policies, strategies, programs, and activities that enhancing the resiliency of energy infrastructure. would institutionalize the mechanisms to prepare Among the topics discussed during the Plenary for, respond to, and recover from disasters. Recognizing the important role of private industry Session were the DOE’s efforts in the implementation players in the energy sector, TFER of the ERP, the effects of a magnitude initiated a partnership between 7.2 earthquake on the country’s the DOE and the Philippine Disaster energy systems, the Philippine Disaster Resiliency Foundation (PDRF) through an MOU signed on 27 November A country’s energy sector is Risk Reduction and Management 2018. only as strong as the weakest System, and Disaster Risk Financing link in the energy chain. As such, each element in and Insurance Strategies. The MOU highlighted the the energy chain should be implementation of policies, equally resilient to function properly. F. APEC Workshop on Promoting strategies, programs, and activities Resiliency in the Energy Sector that will serve as a framework to link Sec. Alfonso G. Cusi government agencies, private sector organizations, and other partners to The DOE, as Co-Chair of the APEC Task Force on attain a resilient energy sector. Energy Resiliency, hosted a workshop on promoting

E. E-Power Mo Movement: Towards an Energy resiliency in the energy sector from 30 July to 3 Resilient Philippines August 2018 in Cebu City.

An estimated 500 participants attended the The APEC Workshop was attended by 10 APEC 6th E-Power Mo Conference held on 26 June member-economies who actively shared their 2018, which focused on adopting strategies and providing consumers with knowledge in improving experiences and best practices in preparing for the country’s energy resiliency. and responding to emergencies and disasters.

8 ENERGY ANNUAL REPORT 2018 NUCLEAR ENERGY PROGRAM IMPLEMENTING ORGANIZATION (NEPIO)

In a move to explore all available energy supply capability for nuclear power to address negative options, the DOE officially submitted to the Office perceptions of nuclear power. of the President on April 2018, the national position recommending the inclusion of nuclear energy Furthermore, the DOE and the IAEA conducted in the current energy mix. Multi-stakeholder the Integrated Nuclear Infrastructure Review consultations will also be conducted to help the (INIR) Mission on 10 December 2018 at the government reach a consensus and a broad- Shangri-La Hotel. based national decision. During the Mission, the DOE presented its Self- Evaluation Report (SER), outlining progress made ACTION AGENDA FOR PRESIDENT relative to the 19 infrastructure issues that need to be addressed before the Philippines is able to Declare that the Philippines is now open to nuclear power and ready to embark on a embark on a full nuclear energy program. 1 nuclear power program The IAEA delegation for the INIR Mission was

Certify as urgent the approval of headed by Mr. Dohee Hahn, Director of IAEA’s Comprenhensive Nuclear Law or any equivalent law to establish a separate and Nuclear Power Division and Review Team Leader, 2 independent nuclear regulatory authority and Mr. Milko Kovachev, Head of IAEA’s Nuclear Infrastructure Development Section. The event Issue an Executive Order to expand the composition of the NEPIO to include other was likewise attended by officials of the Philippine relevant government agencies, academe and 3 representatives from the private sector Nuclear Research Institute and the members of NEPIO.

As part of the continuing support activities for the The results of the INIR Mission will help the Philippine assessment of nuclear energy feasibility, the DOE energy sector address identified gaps and instituted another technical cooperation project enhance the development of the national decision for the 2018-2019 cycle from the International on nuclear power generation. Atomic Energy Agency (IAEA) under TCP-PHI2016003 entitled, “Development of Nuclear Infrastructure in the Philippines Phase II.” Phase II aims to support the Philippine government as it embarks on its nuclear power program, following an informed decision to include nuclear power in the Philippine Energy Plan. Its main components include: 1) developing nuclear infrastructure; 2) enhancing energy planning studies; and 3) developing a public communication strategy and

ENERGY ANNUAL REPORT 2018 9 INTERNATIONAL RELATIONS

The DOE continues to forge strong international relations and partnerships through various bilateral and multilateral cooperation endeavors.

The DOE’s chairmanship of the 35th ASEAN Ministers on While our backgrounds and nationalities in ASEAN Energy Meeting (AMEM) was followed by its successful may be different, our common denominator has hosting and conduct of other annual ASEAN sub-sector always been a strong commitment to pursue bold ideas and innovative solutions to network meetings, the convening of energy fora under make our tomorrows better than today. the ASEAN+3 Framework, as well as the conduct of high- level assemblies, such as the 35th Senior Officials Meeting Sec. Alfonso G. Cusi on Energy and Associated Meetings.

In October 2018, Sec. Alfonso G. Cusi turned over the The meeting focused on status updates on Cluster AMEM Chairmanship to His Excellency Chan Chun deliverables contained in the Rolling Pipelines of Sing, Singaporean Minister for Trade and Industry, the BIMP-EAGA Vision 2017-2025. There were also during the 36th AMEM held at the Marina Bay Sands discussions on various electricity grid interconnectivity in Singapore. projects and initiatives on renewable energy in the sub-region. The DOE also hosted the 6th Annual Meeting of the Power and Energy Infrastructure Cluster (PEIC) in A Workshop on Biomass was also conducted prior Puerto Princesa City, Palawan on 3 to 4 July 2018. to the Cluster meeting to exchange information on This is in line with the Terms of Reference of the PEIC current policies, best practices and the identification under the Brunei Darussalam-Indonesia-Malaysia- of possible projects for joint collaboration among Philippines East ASEAN Growth Area (BIMP-EAGA). member countries.

10 ENERGY ANNUAL REPORT 2018 PHILIPPINE CONVENTIONAL ENERGY DEVELOPMENT PROGRAM

The DOE and its Attached Agencies are actively pursuing the development of the country’s indigenous energy resources. This is in anticipation of significant energy demand growth and our continued dependence on conventional fuels in the years to come.

23ACTIVE PETROLEUM 62EXISTING COAL SERVICE CONTRACTS OPERATING CONTRACTS ENERGYENERGY ANNUAL ANNUAL REPORT REPORT 20182018111 UPSTREAM OIL AND GAS

2018 PETROLEUM PRODUCTION

OIL GAS CONDENSATE

1.17MMB 126.62BCF 3.43MMB

One of the recent highlights in the country’s China International Mining Petroleum Company upstream oil and gas sector is the discovery Limited, holder of Petroleum Service Contract of a new oil field in Alegria, Cebu, which was No. 49 for Alegria, discovered about 27.93 million inaugurated by President Rodrigo R. Duterte on 19 barrels (MMB) of oil, with a possible production May 2018. recovery of 3.35 MMB. The field also has natural gas reserves of about 9.42 billion cubic feet (BCF), with a recoverable resource estimated at 6.6 BCF which could fuel power plants connected to the local power grid.

This would give Alegria additional income that can be used to improve our social services and for implementation of other projects, especially for the livelihood of our constituents. -Mayor Verna Magallon, Alegria City

12 ENERGY ANNUAL REPORT 2018 To further boost investment opportunities in the sector, the DOE issued a policy adopting the PCECP, an enhanced petroleum service contract awarding mechanism, in 2017. DEPARTMENT CIRCULAR NO. 2017-12-0017 The PCECP kicked off its global roadshow in Singapore in Adopting the Philippine September 2018, showcasing the 14 pre-determined service Conventional Energy Contracting areas to be offered in six petroleum basins, namely: West Program of Awarding Petroleum Service Contracts and Creating Luzon (4 areas), Sulu Sea (3 areas), East Palawan (3 areas), the Review and Evaluation Cotabato (2 areas), Cagayan (1 area) and Agusan-Cotabato Committee (1 area).

Another roadshow was conducted in Cape Town, South Africa in line with the Association of American Petroleum Geologists’ International Conference and Exhibition.

Local roadshows were likewise conducted in Palawan, Davao and Zamboanga in September and October 2018.

President Rodrigo R. Duterte signed Petroleum Service Contract No. 76 covering Area 4 in Eastern Palawan. The first petroleum service contract signed under the Duterte administration, Ratio Petroleum Ltd. would be able to conduct exploration activities for potential energy resources. © DOE Public Affairs Office

Other policy issuances for the petroleum sector in 2018 include the following:

• Department Circular No. 2018-03-0006 “Omnibus Rules and Regulations Governing Tax-Exempt Importations for Petroleum Operations under PD No. 87, as amended, and Coal Operations under PD No. 972, as amended” which was approved and signed on 15 March 2018; and

• Department Circular No. 2018-07-0020 “Prescribing the Guidelines for the Development and Utilization of Small or Sub-Commercial Deposits of Natural Marsh (Methane) Gas in the Philippines,” signed by the DOE Secretary on 18 July 2018.

ENERGY ANNUAL REPORT 2018 13 COAL

As of December 2018, the DOE has continued further streamline and simplify the processing and to administer and monitor 62 existing Coal issuance of tax-exempt certificates, as provided Operating Contracts (COCs) with respect to their under Presidential Decree No. 87 or the “The Oil corresponding work commitments. Exploration and Development Act of 1972” and Presidential Decree No. 972 or the “The Coal There are 31 COCs in the development and Development Act of 1976”. production stage, while another 31 COCs are in the exploration phase. Also administered and monitored were the activities of 68 small-scale DEPARTMENT CIRCULAR coal mining permits, 43 coal traders, and 162 coal NO. 2018-03-0006 end-users nationwide. Omnibus Rules and Regulations Governing Tax-Exempt Importations for Petroleum and Coal Total coal production from January to December Operations 2018 reached 13.06 million metric tons (MMMT), where Semirara Mining and Power Corporation accounted for 99.1 %, or 12.95 MMMT. The Circular shall govern the application, processing, approval, and issuance of tax-exempt On the other hand, the issuance of Department certificates for the importation, exportation, Circular No. 2018-03-0006 on 15 March 2018 will and disposal of machinery, equipment, spare parts and materials used for petroleum and coal operations. 2018 Coal The restructured rules and regulations governing Production tax-exempt importations for both petroleum and coal operations are expected to be more Coal responsive to the needs of industry players. 13.06MMMT

14 ENERGY ANNUAL REPORT 2018 NATIONAL RENEWABLE ENERGY PROGRAM

The National Renewable Energy Program, or NREP, lays the foundation for developing the country’s renewable energy resources. It seeks to stimulate RE investments, promote technological advancements, and provide the impetus for national and local RE planning to help identify the most feasible and least- cost development options.

839 23,254 4,683 TOTAL RE PROJECTS POTENTIAL CAPACITY (MW) INSTALLED CAPACITY (MW) AWARDED ENERGY ANNUAL REPORT 2018 15 The Renewable Energy Act of 2008, or RA No. 9513 centralized, comprehensive and unified data and was enacted to accelerate the exploration and information base on RE resources. This is necessary development of RE resources to achieve energy to ensure the efficient evaluation, analysis and self-reliance. This also supports sustainable energy dissemination of information on the development, development strategies to reduce the country’s utilization, demand, and application of RE dependence on fossil fuels to balance the goals resources. of economic growth and the protection of health and the environment. From the issuance of RA 9513 in 2008 until March 2018, the DOE has awarded a total of 839 RE As the lead agency in the implementation of the RE projects, with the potential capacity of 23,253.95 Act, the DOE is tasked to develop and maintain a MW and the installed capacity of 4,683.23 MW.

Awarded Projects

GEOTHERMAL HYDROPOWER WIND* SOLAR* BIOMASS* OCEAN 40 455 64 216 59 7 *includes own-use

In terms of policy issuances, the DOE Secretary signed Department Circular No. 2018-07-0019 on 18 July 2018, DEPARTMENT CIRCULAR providing the rules and guidelines governing the establishment NO. 2018-07-0019 of the Green Energy Option Program, or GEOP. GEOP aims to empower end-users with additional options by providing RE as Promulgating the Rules and Guidelines Governing the an additional source for their energy requirements. Establishment of the Green Energy Option Program Pursuant to the On the other hand, the Renewable Portfolio Standards (RPS) Renewable Energy Act of 2008 Rules for Off-Grid Areas (Department Circular No. 2018-08- 0024) was signed by the Secretary Cusi on 24 August 2018. RPS would further contribute to the growth of the RE industry DEPARTMENT CIRCULAR in off-grid and missionary areas by mandating electric power NO. 2018-08-0024 industry participants to source or produce a specified portion of their electricity requirements from eligible RE resources. Promulgating the Rules and Guidelines Governing the Establishment of the Renewable To further intensify the planning process and strengthen the Portfolio Standards for implementation of various development plans to include Off-Grid Areas RE in energy distribution and transmission, the DOE issued Department Circular No. 2018-09-0027 on 13 September DEPARTMENT CIRCULAR 2018. This will facilitate the identification and development of NO. 2018-09-0027 Renewable Energy Zones and expand transmission facilities through policy initiatives and activities that will enable the Establishment and Development optimal use of the indigenous RE resources of the country. of Competitive Renewable Energy Zones in the Country

16 ENERGY ANNUAL REPORT 2018 To pursue the DOE’s strong commitment to Recognizing the importance of ARECs in the implement the policy mechanisms embodied in success of its RE Program, the DOE drafted a policy the RE law, the three-year Feed-in-Tariff (FIT) regime in 2018 for the resumption of the implementation which ended in December 2017 was extended for of the AREC Project using its original scheme of two years, or until fully subscribed, whichever may establishment and operation. come first, for the 250 MW installation targets for biomass and hydropower technologies. Household Electrification Program Using RE

In the absence of DOE regional offices1, Affiliated Established in 2010, the Household Electrification RE Centers (ARECs) were established through Program (HEP) was developed to attain a 90% Department Order No. 2013-12-0019 to serve household electrification level in off-grid areas as the DOE’s extension arm in the promotion, which distribution utilities or electric cooperatives development, utilization, and commercialization consider unviable for connection to the grid. of RE technologies. The DOE has entered into The program provides households with access MOAs with 21 ARECs that are strategically located to electricity using mature RE systems such in different State Universities and Colleges (SUCs) as photovoltaic (PV) solar home systems, PV within the countryside for accessibility to clientele. streetlights, and micro-hydro systems.

However, the Department Order was eventually From 2011 to 2017, a total of 38,991 households revoked in 2015 due to the manpower and financial have benefitted from the program and gained constraints of partner SUCs. electricity access through PV solar home systems.

6 technician’s trainings conducted 9,507 PV systems dispatched • 7,117 PV systems inspected (Tuguegarao, Pampanga, Bacolod, • Energization of 8,099 households in Antique, Zamboanga and Davao) North Cotabato proposed/certified

1 Excluding DOE’s three field offices for Luzon, Visayas and Mindanao located in Urdaneta, Pangasinan, Cebu City and Davao City, respectively.

ENERGY ANNUAL REPORT 2018 17 DOWNSTREAM ENERGY DEVELOPMENT PROGRAM

The downstream oil industry covers the importation and processing of crude oil, the direct importation of finished petroleum products, and in making them available to consumers.

On the other hand, the country’s downstream natural gas industry is anchored on the development of additional gas-generated capacity, non-power applications, and the establishment of necessary infrastructure to bring natural gas to potential markets.

8,603 GASOLINE STATIONS SINCE DEREGULATION 18 ENERGY ANNUAL REPORT 2018 DOWNSTREAM OIL

TRAIN Law submit daily summaries of withdrawals beginning 4 January 2018 until the depletion of the declared The DOE aims to ensure the continuous and inventory of 31 December 2017, to be supported adequate supply of petroleum products, as by the Official Registry Book; and 4) advise their well as the proper implementation of the new retailers to post in a conspicuous area, a one excise tax scheme pursuant to the Tax Reform for meter by one meter signage notifying consumers Acceleration and Inclusion (TRAIN) Law. of the additional excise tax implementation.

REPUBLIC ACT NO. 10963 For Tranche 2, a directive by the DOE was likewise issued requesting oil industry players to submit Tax Reform for Acceleration and their per depot inventory status pursuant to the Inclusion (TRAIN) Act implementation of TRAIN 2.

For Tranche 1, DOE directed oil companies to: To help mitigate the impact of the imposition of 1) submit a notarized inventory report as of 31 the new excise tax rates on the commuting public, December 2017, on a per depot and per product the DOE also conducted meetings with several oil basis for effective monitoring; 2) impose additional companies to provide, renew, and/or expand their excise tax only after the 31 December 2017 stocks discount mechanisms to public utility vehicle (PUV) of finished products have been fully exhausted; 3) drivers.

DOE Secretary Alfonso G. Cusi and Pilipinas Shell Petroleum Corp. President and CEO Cesar G. Romero during the MOA signing which will provide PhP1.00 per liter discounts on liquid fuels in selected Shell stations across the country. Other participating oil companies are Petron Corp. and Phoenix Petroleum Philippines, Inc.© DOE Public Affairs Office

ENERGY ANNUAL REPORT 2018 19 As a result, DOE in partnership with several jeepneys and taxis. In addition, oil companies oil companies, signed a MOA to provide fuel provided a designated lane, as well as additional discounts to PUVs as part of their Corporate Social privileges and other promotional offers for PUVs. Responsibility (CSR) programs. These CSR programs will expand the existing discount programs of oil Policy Issuances companies for Public Utility Jeeps, which included an increase in the number of participating retail Several policy issuances were drafted and stations, higher discounts, and the inclusion of issued relevant to the continuous strengthening other PUVs. of the downstream oil industry. Some of these issuances are: Other oil companies extended at least PhP 1.00 discount per liter of liquid fuels to PUVs, including

STANDARDS/POLICIES PURPOSE

DPNS/DOE QS 008:2018 – Petroleum Products Updated the fuel quality specification in terms (E-Gasoline fuel) Specifications of limits and test methods

DPNS/DOE QS 014:2018 – Petroleum Products Setting the statutory requirement for sulphur (Residual marine fuels) Specifications content at 3.0 %, mass

DPNS/DOE QS 006:2018 – Petroleum Products Renaming the product to industrial fuel oils (Industrial fuel) Specifications

Department Circular No. 2018-03-004 “Prohibiting the Sale Distribution of Small-Sized Provides for the mandatory markings as 2.7 kg Capacity and Below LPG Cylinders Without embodied in PNS 03-1:2014, specifically “For the Required “For Outdoor Use Only” Marking Outdoor Use Only” on 2.7 kg capacity LPG tanks in Addition to the Used Mandatory Markings for LPG Cylinders and for Other Purposes”

Other relevant Circulars drafted in 2018 include the following: • Circular on DPNS/DOE QS 004:2017 - CME-blended; • Automotive Diesel Oil and DPNS/DOE QS 013:2017 - CME-Blended Industrial Diesel Oil Implementation of the Corresponding PNS; • Circular on Implementing Proper Retention of Duplicate Liquid Petroleum Fuel Samples in Depots and Retail Outlets; • Circular on Price Unbundling; • Circular on Revised Minimum Inventory Requirement; • Joint Administrative Order No. 18-1 s.2018 Delineating and Providing the Functions of DOE, DILG-BFP/BLGS, DOTR-LTO and MMDA; and • Inspector’s Manual providing uniform understanding and procedures in the conduct of inspections.

20 ENERGY ANNUAL REPORT 2018 DOWNSTREAM NATURAL GAS

A recent development in the implementation of The DOE and UPSCRFI also agreed to jointly conduct the Philippine Downstream Natural Gas Industry specific research activities to provide broader and Regulation (PDNGR) is the signing of a MOA in-depth understanding of the liquefied natural between the DOE and the UP-Statistical Center gas industry and other relevant policies. Research Foundation, Inc. (UPSCRFI). The ceremonial signing was conducted during Under the agreement, UPSCFRI will provide the formal launch of the Gas Policy Development technical assistance to the DOE which will be Project held at Shangri-La at the Fort Hotel in funded by the State Department of the United Taguig City as part of the 2018 National Energy States (US) of America. Policy recommendations Consciousness Month celebrations. and capacity building activities for the evaluation of natural gas investment project applications will DOE Undersecretary Donato D. Marcos and Mr. likewise be provided. Levi White of the US State Department witnessed the MOA signing.

Projects that help develop the country’s LNG industry will bring us closer to attaining our energy goals in the midst of Malampaya’s forthcoming depletion and our ever growing energy demand. -Sec. Alfonso G. Cusi

ENERGY ANNUAL REPORT 2018 21 ELECTRIC POWER INDUSTRY DEVELOPMENT PROGRAM

Keen on its role and mandate, the DOE formulates plans and policies on power systems, transmission highways, and distribution facilities with the overall goal of providing a long-term reliable power supply and improving the country’s transmission and distribution networks.

22 ENERGY ANNUAL REPORT 2018 The Philippine power grid remained generally Power Supply stable in 2018 despite natural calamities and some incidents in the power systems which were resolved. A total of 933 MW new capacities were added to the country’s supply base in 2018, which included A breach in the peak demand forecast of the coal (720 MW), oil (87 MW), geothermal (12 MW), Luzon grid of about 300 MW was observed for 2018. hydro (80 MW), and biomass (34 MW). This was mainly due to the switch of some industries from oil-based power generating sets to sourcing Luzon contributed 659 MW or 71%, and Mindanao power from the grid due to the implementation at 274 MW or 29%. There were no additional of higher excise taxes on petroleum products. On capacities which came online in the Visayas during a positive note, efficient usage of power from the this period. grid will result to a better load factor, which will lower the cost per kilowatt-hour (kwh) for more POLICY ISSUANCES consumers.

The Visayas grid remained stable in 2018 even DEPARTMENT CIRCULAR NO. 2018-07-0019 without additional generating capacities. Adopting and Prescribing the Policy for the Competitive Selection Process in the Procurement However, yellow and red alert notices occurred by the Distribution Utility of Power Supply during evening peak hours due to insufficient Agreement for the Captive Market reserves brought by Variable Renewable Energy, particularly solar power. Compared to its 2017 level, the number of yellow and red alert notices The Circular prescribes the Competitive Selection during evening peak hours for 2018 decreased. Process (CSP) as a transparent system for all distribution utilities (DUs) in procuring their Power With the entry of new power plants in Mindanao, the Supply Agreements. This ensures their ability grid continued to experience excess capacities, to provide least-cost, reliable and adequate making supply more than adequate in 2018. These electricity supply to their consumers. It also promotes surplus capacities are expected to be exported competition among generation companies to to the other grids by 2020 when the Mindanao- provide adequate capacity requirements. Visayas Interconnection Project is completed. Under the CSP circular, all DUs are required to One major development in the power sector is the establish a Third Party Bids and Awards Committee increased installations of solar rooftops in residential (TPBAC)or Joint TPBAC to manage and spearhead houses and commercial establishments. These the conduct of CSP. They could also choose to contribute to the energy efficiency campaign of engage a Third Party Auctioneer in lieu of the the DOE through peak shaving. TPBAC or Joint TPBAC.

Demand The TPBAC or Joint TPBAC shall be composed of three members representing the DU and two In 2018, the country’s peak demand (non- members coming from the DU’s captive customers. coincident) reached 14,782 MW, which is 7.2% Moreover, the DOE needs to approve the selection higher compared to the 2017 level of 13,789 MW. process of the TPBAC or Joint TPBAC’s captive customer representatives. In terms of peak demand by grid, Luzon recorded its highest demand on 28 May 2018 at 10,876 MW, As of 28 November 2018, the DOE has approved the Visayas on 24 May 2018 at 2,053 MW, and the selection process of 13 DUs. Mindanao on 13 December 2018 at 1,853 MW.

ENERGY ANNUAL REPORT 2018 23 functions and continue to administer the WESM to DEPARTMENT CIRCULAR NO. perform its obligations as set out in the WESM Rules 2018-08-0026 and Manuals. The members of the PEM Board shall Adopting Framework for Uniform Monthly continue to protect public interest and ensure the Electricity Bill Format transparency and efficiency of the market.

The framework of the circular provides, among On 6 February 2018, during the membership others, that the electricity bill from entities meeting of PEMC, industry participants endorsed authorized to distribute and/or supply electricity, the transition to IMO thru the ratification of the including the Retail Electricity Suppliers, shall reflect “Plan for Transition to the IMO of the Philippine all corresponding charges. This includes, but is not WESM”. limited to, generation, transmission and ancillary services, distribution, supply and metering charges, On 15 May 2018, the IMO company, IEMOP, was universal charges, and bill deposits, subject to the incorporated under the Securities and Exchange rules and regulations that the ERC may establish. Commission with a Company Registration No. CN201807379, to function separately from PEMC. The policy seeks to empower electricity end-users with greater understanding and transparency Since 26 September 2018, IEMOP assumed and on the charges in its monthly electricity bill by performed all functions of the Market Operator, unbundling electricity charge components, pursuant to the provisions set out in the EPIRA, including those that are not part of the unbundled EPIRA IRR, WESM Rules, WESM Market Manuals, and rates, but were collected from the consumers for other official issuances. the security and reliability of services.

DEPARTMENT CIRCULAR NO. 2018-08-0025 DEPARTMENT CIRCULAR NO. Prescribing the Rules Governing the Review 2018-01-0002 and Evaluation of Direct Connection Adopting Policies for the Effective and Efficient Applications of Industrial, Commercial and Other Electricity End-users Transition to the Independent Market Operator of the Wholesale Electricity Spot Market (WESM)

On the other hand, PEMC retained its governance The DC restated that the Independent Market functions, including, among others, the supervision Operator (IMO) shall be an independent entity and monitoring of the operations of the IEMOP2. incorporated as a private corporation under the Corporation Code of the Philippines. It shall assume Department Circular No.2018-08-0025 prescribes all functions of the Market Operator, as provided that the privilege of a direct connection shall under the EPIRA and its Implementing Rules only be afforded to high demand, energy- and Regulations (IRR), WESM Rules and Market intensive electricity end-users. These industrial and Manuals, and other relevant rules, regulations, and commercial users significantly contribute to the issuances. country’s economy in terms of investments, job creation, and tax generation. On the other hand, the Philippine Electricity Market Corporation (PEMC) shall retain its governance End-users, including Contestable Customers, who are already being provided with distribution 2 Incorporated by individuals who are independent from the wheeling services by their franchised DU shall not electric power industry participants and from the government. On be afforded the privilege of direct connections, 25 June 2018, the initial IEMOP Board was selected and confirmed by the PEM Board and Secretary Alfonso G. Cusi during the first except in cases where the DOE has determined PEMC Annual Membership Meeting. that the concerned DU is not capable of reliably

24 ENERGY ANNUAL REPORT 2018 serving the end-user and has not complied with Department Circular No. 2018-04-0009 operational and technical reliability standards, as “Adopting Further Amendments to the required by the Philippine Distribution Code and Retail Rules and its Market Manual on other applicable rules and regulations. Metering Standards and Procedures for the Implementation of Enhancements to WESM Design and Operations” The Circular likewise calls for the creation of a Direct Department Circular No. 2018-04-0011 Connection Review and Evaluation Committee “Adopting Further Amendments to the to evaluate all applications and recommend WESM Market Manual on Market Operator the DOE Secretary’s approval on any action the Information Disclosure and Confidentiality Committee deems fit for each application. for the Implementation of Enhancements to WESM Design and Operations” As of October 2018, the DOE acted on 15 Department Circular No. 2018-04-0012 applications. Two applications were approved, “Adopting Further Amendments to the namely Summit Iron and Pueblo de Panay Wholesale Electricity Spot Market (WESM) Technopark Market Manuals on Price Determination Methodology and Constraint Violation WESM-RELATED AMENDMENTS Coefficients and Pricing Re-Run for the TO ENHANCE MARKET DESIGNS, Implementation of Enhancements to WESM DISPUTE RESOLUTIONS AND Design and Operations” RULES CHANGE PROCESS Department Circular No. 2018-05-0015 “Adopting Further Amendments to the In accordance with its mandate under the EPIRA, WESM Rules and Market Manuals for the the DOE continues to review and promulgate Implementation of Enhancements to proposed changes to the WESM Rules, Retail WESM Design and Operations (Provisions Rules and Market Manuals to ensure that the for Metering, Market Trading Node and amendments are consistent with the objectives Scheduling Point)” of the EPIRA, WESM, and Retail Competition and Department Circular No. 2018-05-0016 Open Access. “Adopting Further Amendments to the WESM Rules and Market Manual on Dispute The resulting DOE policies address changes brought Resolution” upon by market design enhancements, emerging Department Circular No. 2018-07-0018 technologies, and various issuances relevant to the “Adopting Further Amendments to electric industry. the WESM Rules and Market Manual on Procedures for Changes to the WESM Rules, Department Circular No. 2018-04-0007 Retail Rules and Market Manuals” “Adopting Further Amendments to the Department Circular No. 2018-08-0022 WESM Rules and Market Manual on “Adopting Further Amendments to the Dispatch Protocol for the Implementation WESM Rules and Market Manuals on the of Enhancements to WESM Design and Participation of Battery Energy Storage Operations “ Systems and Pumped-Storage Units in the Department Circular No. 2018-04-0008 WESM” “Adopting Further Amendments to the WESM Market Manuals on Billing and Settlement and Load Forecasting Methodology for the Implementation of Enhancements to WESM Design and Operations”

ENERGY ANNUAL REPORT 2018 25 PRIVATIZATION OF PRIVATIZATION OF GENERATION ASSETS AND IPP CONTRACTS (NOVEMBER 2018) REMAINING NPC ASSETS

The privatization of the government’s power generating facilities and power supply contracts 87.04% 78.27% is a key feature of the EPIRA. It was envisioned that privatization of the government’s assets will introduce competition and level the playing field,

specifically in the power generation and supply NPC GENERATION ASSESTS IPP CONTRACTS sectors. While EPIRA was passed and implemented Capacity for 5,014.30 4,362.92 in the first half of 2001, majority of the privatization Privatization (MW)

activities were conducted from the period 2007- Capacity Privatized 4,364.30 3,415.00 (MW) 2016, with major assets of the National Power Source: PSALM Corporation (NPC), IPP Contracts, and transmission assets turned over to the private sector.

As of November 2018, the privatization level of NPC generating assets in Luzon and Visayas reached ENERGY REGULATION 1-94 87%, having privatized a total of 4,364.30 MW of As mandated by the EPIRA, communities hosting 5,014.30 MW. energy generating facilities or energy resource development projects are entitled to financial With respect to IPP contracts, the government benefits. was able to privatize 78% of the total contracted capacities that include capacities for Sualand The Energy Regulation (ER) 1-94 Program has Pagbilao coal-fired thermal power plants, San been expanded to likewise recognize the rights Roque, and Bakun mini hydroelectric power of indigenous cultural communities/indigenous plants, as well as the Ilijan Natural Gas Combined peoples (ICCs/IPs). ICCs/IPs now have access Cycle Power Plant and the Unified Leyte GPP-Strips to an equitable share of financial benefits from of Energy. energy generating facilities and/or energy resources situated in their ancestral domain. PSALM generated a total revenue of Php910.16 billion from the privatization of generation assets, On 9 February 2018, Secretary Cusi signed the the transmission business, and the IPP contracted Department Circular prescribing the guidelines for capacities. Out of the generated proceeds, the ICCs/IPs as host communities. agency had an actual collection of Php554.77 billion, leaving a collectible balance of Php355.39 This policy supports the DOE’s mandate to ensure billion. PSALM achieved 100% collection from the direct benefits to the people and communities, auctioned generating assets and decommissioned cities, municipalities, and provinces up to the plants, while the remaining collectibles are regional level that host an energy resource balances from TransCo’s transmission assets and and/or an energy-generating facility. This also appointment of IPPAs. strengthened cooperation among the energy resource developers, power producers, and the The disbursement of collected proceeds is solely host local communities, as well as fast tracks the intended for the liquidation of PSALM’s financial process of providing direct benefits to ICCs/IPs. obligations, as provided under the EPIRA

26 ENERGY ANNUAL REPORT 2018 On the other hand, the sharing of DLF and RWMHEEF DEPARTMENT CIRCULAR for highly urbanized cities is as follows: designated NO. 2018-03-0005 resettlement area (10%), host barangay (30%), host cities (55%) and, host organized ICCs/IPs (5%). Inclusion of Indigenous Cultural Communities/ Indigenous Peoples as Host Communities Having taken into account the rights of ICCs/IPs in the ER 1-94 Program, another key policy was issued to focus on the provision of amendments to Rule 29 Part (A) of the EPIRA-IRR. Signed by the Secretary Under the EPIRA, host communities are entitled to on 21 August 2018, DC 2018-08-0021 provides the receive “one centavo per kilowatt-hour (PhP0.01/ rules and guidelines for the effective administration, kWh) of electricity sales,” which is placed in a management, utilization, and implementation of trust fund owned by the power generators and financial benefits to host communities. the recipient communities. The financial benefit is allocated for the Development and Livelihood The Circular states the direct transfer of financial Fund (DLF) and the Reforestation, Watershed benefits under ER 1-94 to DUs/ECs and to host Management, Health and/or Environment LGUs and ICCs/IPs. Enhancement Fund (RWMHEEF).

The Electrification Fund (EF) component will be The DC covers all legitimate ICCs/IPs that are remitted by Generation Companies (GenCos) duly recognized and accredited by the National and/or energy resource developers to the DUs/ Commission on Indigenous People (NCIP), and ECs. have been issued a Certificate of Ancestral Domain Title (CADT) as hosts of the generating Meanwhile, the DLF and RWMHEEF are to be facilities and/or energy resources. remitted to host LGUs and ICCs/IPs. Moving forward, the DOE is committed to issue a Department Order Under the policy, the DLF and RWMHEEF are that will specify the administrative operational allocated as follows: designated resettlement area guidelines of the financial benefits under ER 1-94 (5%), host barangay (20%), host municipality (35%), from DOE to host beneficiaries. host province/s (30%), host region/s (5%), and host organized indigenous cultural communities and indigenous peoples (5%) for non-highly urbanized cities.

ENERGY ANNUAL REPORT 2018 27 © Eco-Business HOUSEHOLD ELECTRIFICATION DEVELOPMENT PROGRAM

With electricity as a major catalyst for improving the lives of Filipinos, the government embarked on a Nationwide Electrification Program. In this regard, the DOE is working hard to achieve the full energization of targeted, as well as unserved and underserved areas across the country.

88.3% ELECTRIFICATION LEVEL 28 ENERGY ANNUAL REPORT 2018 To ensure that Filipinos gain wider access to the project; and f) the identification of potential electricity services, the energy sector is guided partners, specifically in the off-grid electrification of bythe goal of 100% electrification of unserved and the country. underserved areas by 2022. This is also espoused in the Total Electrification Master Plan, and is also The task force identified three electrification consistent with both the PEP 2017-2040 and the strategies, namely household electrification, grid Power Development Plan (PDP) 2016-2040. electrification, and off-grid electrification.

Attaining total electrification by 2020 is a directive Initial household and grid electrification strategies of President Duterte to accelerate the energization include the Nationwide Intensification of Household of the entire archipelago, address ailing ECs, and Electrification (NIHE) scheme, the Enhanced NIHE increase private sector participation. scheme, the Sitio Electrification Program (SEP), and the Barangay Line Enhancement Program (BLEP). One of the concrete steps undertaken in relation to the Total Electrification Master Plan was the signing On the other hand, off-grid electrification strategies of Department Order No. 2018-05-0010 on 24 May include the PV Mainstreaming Scheme, the Mini- 2018 creating the Task Force E-Power Mo (TFEM). Grid/Qualified Third Party Scheme, and the NPC- Small Power Utilities Group (SPUG) Mini-Grid The Task Force is chaired by DOE Senior Scheme. Undersecretary Jesus Cristino P. Posadas, who is responsible for overseeing the government’s Total As of December 2017, a total of 20,936,499 Electrification Program, and ensuring that electricity households of the 23,716,028 potential households access reaches unserved and underserved in the country have access to electricity. This puts communities within the franchise areas of DUs and the country at an 88.3% household electrification ECs. level.

The DOE, through the Task Force, shall also develop Moreover, with the Secretary’s directive to provide the National Unified Strategy for Total Electrification electricity services to identified areas (Bulacan, based on the consolidated and reviewed Total , Manila) within the Manila Electric Electrification Master Plans of the DUs. This strategy Company (Meralco) franchise, 7,933 households will contain the following: a) an inventory and were granted access from July 2016 to 31 October uniform database of all unserved, underserved, 2018. In 2018 alone, 1,259 households (January and unviable areas in the country; b) a list of to 31 October 2018) were energized in areas that electrification projects and number of household were identified by the DOE. beneficiaries; c) a list of proposed programs and actions to ELECTRIFICATION LEVEL address the last-mile stretch of household electrification; d) the budgetary requirements for each LUZON visayas mindanao program/project; e) recommendations 94.8% 88.2% 70.8% on issues that will be encountered by DUs in implementing

ENERGY ANNUAL REPORT 2018 29 Inspection Activities with LEYECO III, ZAMSURECO II, ZANECO, SURSECO I

ACCESS TO SUSTAINABLE ENERGY PROGRAMME

The DOE and the European Union (EU) through 8 November 2018 in Sitio New Mabuhay in Malita, the EU-Access to Sustainable Energy Programme Davao Occidental. The event underscored the (ASEP) are working together to provide electricity productive use of renewable energy for income access to off-grid communities. generation, particularly in rural communities.

More than 100,000 households in the Bangsamoro ASEP’s PV Mainstreaming program aims to install Region are expected to benefit from EU-ASEP about 40,500 solar home systems, each with projects. a 50-watt peak capacity, to remote off-grid communities in various provinces in Mindanao. A switch-on ceremony for the solar power for electrification and livelihood project was held on

30 ENERGY ANNUAL REPORT 2018 ENERGY EFFICIENCY AND CONSERVATION PROGRAM

Initiatives to manage the country’s energy demand remain to be a long-term commitment of the DOE. For over a decade, the Department has been implementing the National Energy Efficiency and Conservation Program, or NEECP. It is the government’s umbrella program to promote sensible and conscientious habits on energy efficiency and conservation in all sectors of society.

ENERGY ANNUAL REPORT 2018 31 The DOE initiated the Energy Efficiency and Issuance of Certificate of Savings Conservation (EE&C) Roadmap to bring energy efficiency at the forefront of the Department’s The DOE has issued 43 Certificates of Savings for strategic direction. government offices after a thorough evaluation of their buildings and facilities. This is in accordance Part of this is the continuous implementation of with Sec. 4.1 of the Procedural Guidelines of the the National Energy Efficiency and Conservation Department of Budget and Management (DBM) Program (NEECP), which seeks to make energy Circular Letter No. 2008-9 on the use of savings. efficiency and conservation a way of life for all Filipinos. In 2018, total claimed savings across the country reached 6,545,655.30 kWh of electricity, equivalent The following NEECP components were to PhP 52.32 million. implemented in 2018: GOVERNMENT ENERGY IEC CAMPAIGNS

MANAGEMENT PROGRAM The dissemination of information and awareness on the judicious use of energy is continuously The Government Energy Management Program or intensified through the conduct of EE&C IEC GEMP was introduced in 2005, under Administrative campaign activities for government offices, Order No. 126. GEMP aims to assist national commercial establishments, manufacturing government agencies cut down on operating industries, households, and academic institutions. costs by reducing their electricity, gasoline, and power consumption. In 2018, 22 regular IEC events were conducted in Legaspi City, Palawan, Vigan, Tacloban, In support of this policy, government offices Tagbilaran, and Dumaguete. have been submitting their electricity and fuel consumption reports to the DOE, which are • E-Power Mo assessed by the Energy Audit Team. The DOE’s E-Power Mo movement continues Energy Audits to empower Filipino consumers in making wise energy decisions through its principles of E-Safety, The DOE conducted monitoring activities, as well E-Secure, and E-Diskarte. as on-the-spot energy audits or spot checks on various government offices, academic institutions, For 2018 the DOE conducted three E-Power Mo and hospitals to verify their compliance to Conferences which were held in Baguio City, the Administrative Order Nos. 110 and 126 and their DOE headquarters in Taguig City, and in Iloilo City. IRRs. These AOs require offices under the executive branch to implement energy conservation • Energy 101 for Media programs and measures to reduce monthly electricity and transport fuels consumption levels by Alongside E-Power Mo Conferences, Energy 101 for at least 10%, relative to their average consumption Media workshops were also conducted to explain from the baseline year 2004. the DOE’s policies and initiatives, current sector developments, and explain the various functions In 2018, energy audits were conducted on 63 of members of the energy family. entities (60 from the government and three from the private sector) across the country.

32 ENERGY ANNUAL REPORT 2018 The workshops likewise oriented members of the under review. Once finalized, the approved media on topics which included the basics of guidelines will be published in three major energy production and energy consumption data. broadsheets prior to implementation.

In 2018, Energy Media 101 workshops were held in On the other hand, the Standard and Labelling the cities of Tagaytay and Iloilo. Program for Motor Vehicles is currently being developed through the technical assistance of • Mainstreaming of EE&C at the Local Clean Air Asia, the United Nations Environment Government Unit Level Programme, and the Deutsche Gesellschaftfür Internationale Zusammenarbeit. Among the The DOE partnered with the Development deliverables of this combined technical assistance Academy of the Philippines (DAP), to assist local is the formulation of the Implementing Guidelines government units (LGUs) integrate concrete on Vehicle Fuel Economy Label. energy efficiency and conservation programs, projects, and supporting policies into their local The first consultation meeting was held on9 planning strategies, through the creation of the November 2018 at the DOE with participants from Local Energy Efficiency and Conservation Plan. Its CAI-Asia, DENR, DOTR, and LTO. objectives are:

1) promote the mainstreaming of EE&C in all ENERGY SERVICE COMPANY LGU energy-demand sectors; 2) guide LGUs in ACCREDITATION developing EE&C action plans and policies for implementation and integration into their local An energy service company (ESCO) is a service development plans; and 3) monitor and document provider that develops and implements projects LGUs’ best EE&C practices. designed to improve energy efficiency in various facilities at no-cost to the company. There were five seminar-workshops conducted in the cities of Cebu, Baguio, Batangas, Iloilo, and ESCOs recover their expenses through savings Dumaguete. generated from energy efficiency improvements implemented in their facilities. • Behavioral Change Communication-Based EE&C Campaign in Schools: Usapang Klima The DOE is currently implementing an ESCO at Enerhiya Accreditation Program to assess the technical, financial and legal capabilities of ESCOs. To date, The general objective of this training program is to there are currently 17 ESCOs accredited by the build the capability of school facilitators, particularly DOE. science high school teachers to conduct EE&C workshops in their respective schools. Five ESCOs were accredited in 2018, namely:

PHILIPPINE ENERGY • Econoserv Solutions International, Inc. • Hi-Cool Engineering Corporation STANDARDS & LABELING • Upgrade Energy Philippines PROGRAM • Digital Marketing • Azbil Philippines Corporation

The draft Philippine Energy Standards and Labeling Program – Implementing Guidelines is currently

ENERGY ANNUAL REPORT 2018 33 EU–ASEP UNIDO-PHILIPPINE INDUSTRIAL ENERGY The DOE, in partnership with EU-ASEP, is continuously implementing activities related to the Appliance EFFICIENCY PROJECT Standards and Labeling Program, particularly: 1) the review of the draft implementing guidelines The DOE, in partnership with the Department and public consultation meetings; 2) the review of of Trade and Industry (DTI), the United Nations Particular Product Requirements for Refrigerators, Industrial Development Organization (UNIDO) and Air conditioners, and Light-Emitting Diode (LED) the Global Environment Facility (GEF) implemented lights; 3) the conduct of an LED market survey; and the Philippine Industrial Energy Efficiency Project 4) the preparation of the Energy Label Design, and (PIEEP), which will promote sustainable energy review of the Energy Efficiency and Conservation management systems, as well as gather and Bill. formulate energy efficiency best practices within the Philippine industrial setting. On efficiency improvement, the generation system facilities of 10 NPC-SPUG Diesel-Power Plants and The PIEEP implements energy management privately owned Diesel-Power Plants nationwide schemes on buildings based on the ISO 5001 were subjected to performance assessments. Energy Management System Standard Framework for Philippine industries together with a systems optimization approach, specifically on steam, compressed air, and pumping systems.

This is seen to improve industrial companies’ energy efficiency levels through awareness workshops and capacity building training activities for manufacturing companies in the country.

To date, there are different implementation levels for the two components of the project. These are Component 1 or the Energy Management System, and Component 2 or Systems Optimization.

34 ENERGY ANNUAL REPORT 2018 ALTERNATIVE FUELS AND TECHNOLOGIES PROGRAM

The DOE is determined to promote the utilization of alternative fuels, as well as new and advanced energy technologies not only to diversify the country’s energy sources, but also to mitigate the adverse impact of energy use on the environment.

ENERGY ANNUAL REPORT 2018 35 In line with the DOE’s thrust to improve the To promote alternative fuels mainstreaming, country’s energy security and mitigate the adverse the DOE drafted various issuances to pave the environmental effects of energy utilization, the way for the procurement and institutionalized Department is continuously implementing programs patronage of alternative fuel vehicles (AFVs) that promote the utilization of alternative fuels and among government agencies and government- energy technologies (AFETs). AFET development managed institutions and corporations. These leads to greater energy supply diversity and energy draft issuances set the guidelines in the acquisition sustainability. It also contributes to the reduction of of alternative fuel-fed vehicles. carbon dioxide emissions. In support of electric vehicle (EV) technologies, Key initiatives under these programs include the DOE also drafted an issuance that provides the conduct of nationwide information and the framework for EV charging stations. awareness campaigns on AFETs, the formulation of related policies, the promotion of indigenous and In compliance with Revenue Regulation 05- emerging energy technologies and innovations, 2018 issued by the Bureau of Internal Revenue, and the implementation of the locally funded which delegates the DOE as authorized agency “Alternative Fuels for Transportation and Other in certifying vehicles as hybrid or pure electric, a Purposes” project. It also calls for the promotion Department Circular was drafted to establish the and mainstreaming of alternative fuels and guidelines and process flow for the certification of advanced transportation technologies, such as vehicles and excise tax exemption purposes. liquefied petroleum gas (autoLPG), compressed natural gas (CNG), hybrid, plug-in hybrid, and Based on inputs gathered during the public electric vehicles. These measures will reduce the consultation on the issuance, the DOE submitted country’s dependence on imported oil by providing a position paper to the Department of Finance, energy consumers options on advanced energy recommending the use of the existing Certificates technologies and more environment-friendly fuel of Compliance issued by the DENR. alternatives to conventional fuels.

Scaled- Down E-Trike Project # OF UNITS PROJECT COST INVESTMENTS* JOB GENERATED** 3,000 Php1.73B Php3.7B 14,840

*Investments recorded in e-trike manufacturing and support ** Estimate based on BOI-DTI information on infused investments from e-trike manufacturers/assemblers

36 ENERGY ANNUAL REPORT 2018 Left to right: Mayor Miguel “Ike” Ponce III, Valenzuela Mayor Rexlon Gatchalian, Muntinlupa Mayor , Las Piñas Mayor Imelda Aguilar and DOE Secretary Alfonso G. Cusi

One of the major legislative issues on the matter The resulting increase in AFV prices defeats the is the proposed increase in excise tax of AFVs purpose of promoting and mainstreaming a more under the TRAIN law. It stipulates that the increase efficient transportation technology in the country. in excise tax for vehicles would also cover AFVs, Thus, the DOE came up with a position paper which making these vehicles even more expensive than consequently granted incentives for AFVs to make they already are. them more competitive. In the position paper, pure electric vehicles will be tax exempt, while excise taxes for other alternative fuel vehicles will be 50% lower than conventional vehicles.

ENERGY ANNUAL REPORT 2018 37 OTHER SUPPORT PROGRAMS ENERSMART PROGRAM

Under the EnerSmart program, a total of 13 Information, On the other hand, ENEReady participants are Education, and Motivation (IEM) Campaigns for 2,000 made aware of the influential factors that lead Grade 5 (EnerKids) and Grade 10 (ENEReady) students, to gender stereotyping and the different gender including members of the Girl Scouts of the Philippines, roles that are taught, sanctioned, maintained, were conducted this year in the Luzon and Visayas and reinforced by social institutions, such as one’s regions. family, school, mass media, church, and even the government. The program aims to inform students by making them aware of their role and potential contributions The ENEReady team consists of geologists, as to the energy sector. Modules cover basic electricity well as petroleum, chemical, mechanical, and concepts, renewable energy, as well as fun facts electrical engineers, who share their experiences about oil and saving energy and the planet earth. in the field to encourage students to take up Science and Technology, Engineering, and The IEM for EnerKids is further reinforced with Mathematics courses. The speakers would describe either science experiments or desk exercises, such their respective responsibilities and their noble as Sources of Electricity Word Search, Who Left contributions to the country from upstream (i.e., the Lights on, and Energy Waste. These half-day exploration, drilling, extraction, and production) to sessions culminate with the Pledge of Commitment downstream activities (i.e., transmission, distribution, as Energy Cost Busters to teach them how to and utilization). become responsible stewards of energy and the environment.

DOE’s Renewable Energy Management Bureau leads the ENEREADY activity in Pag-asa National High School in Legazpi City © DOE Public Affairs Office

38 ENERGY ANNUAL REPORT 2018 PHILIPPINE NATIONAL OIL COMPANY

In 2018, the Philippine National Oil Company (PNOC) after selling 4.61 PJ to PSALM in 2013, and another implemented a paradigm shift and transformed portion, equivalent to 6.324 PJ to Pilipinas Shell from a holding company to an operating company. Corporation in 2014.

BATANGAS LIQUEFIED NATURAL GAS HUB PROJECT With its continuing efforts in exhausting all possible ways to monetize its banked gas, the Banked Gas The Project is a complete value chain liquefied Disposal Committee was activated by the PNOC natural gas (LNG) facility that will be used to in April 2018. receive, store, re-gasify, and distribute imported LNG. The PNOC Board approved the Project’s ENERGY SUPPLY BASE OPERATIONS Framework Study in December 2017. Located in Mabini, Batangas, the PNOC’s Energy On 15 August 2018, the Board approved the Supply Base (ESB) property has a total area of 19.2 Solicited Proposal Scheme under the National hectares and provides berthing, cargo handling, Economic and Development Authority’s (NEDA) storage, and warehousing facilities to its energy Revised Guidelines and Procedures for Entering into and commercial clients. Joint Venture Agreements between Government and Private Entities (NEDA JV Guidelines). A Joint Venture Selection Committee was also created, PNOC’s ESB VISION 2024 as required by these Guidelines. There will be two To provide world class energy stages in this scheme, namely: the pre-qualification supply base port facilities and stage and the request for proposals stage. offer services compliant with international standards On 19 October 2018, PNOC submitted to the EICC Secretariat an application for its LNG Project to be certified as an Energy Project of National Significance. Likewise, a letter of request to the ESB’s permit to operate as a private commercial DOE Secretary was submitted on 7 November port (under Certificate of Registration No. 291) was 2018, to issue a directive designating PNOC as the granted on October 1996 by the Philippine Ports qualified government agency to spearhead the Authority. development of the downstream gas value chain through the pioneering PNOC LNG Hub Project. The PNOC-Exploration Corporation (PNOC-EC) was in-charge of ESB Operations until the Board MONETIZATION OF PNOC BANKED GAS approved the transfer of operations of the ESB to PNOC on 3 February 2017 (PNOC Board Resolution Currently, the total remaining volume of the PNOC No. 2416 s. 2017) and 23 February 2017 (PNOC EC banked gas is equivalent to 97.67 Petajoules (PJ) Board Resolution No. 2-1 s. 2017), respectively.

ENERGY ANNUAL REPORT 2018 39 The transition and turnover of ESB’s operations and Guidelines for the Selection of a Private Sector corporate services functions from PNOC-EC to Partner for the LNG Hub Project PNOC was completed on 31 December 2017, while its administration and operations were assumed by Relevant provisions of the Build-Operate- PNOC on 1 January 2018. Transfer Law and the 2013 Revised Guidelines and Procedures for Entering into Joint Venture As of November 2018, the PNOC Board approved Agreements between the Government and the ESB Master Development Plan. To date, the Private Entities issued by NEDA were the bases of bidding process for the conduct of a Detailed the specific criteria for its earlier selection process Feasibility Study to implement the ESB Master of unsolicited proposals. Development Plan has started. These criteria were presented and approved by POLICY ISSUANCES the PNOC Board during its meeting on 27 April 2018 and 28 September 2018 respectively. Policies adopted/issued considered as part of PNOC’s significant accomplishments and Adoption of the Guidelines for Pursuing developments for FY 2018 are as follows: a Public-Private Partnership for progress approach towards development, particularly Continued certification of the PNOC in on concessions and leases, providing the accordance with the requirements of ISO procedure for selecting the private sector 9001:2015, as it has successfully undergone proponent and, adopting a contract the first surveillance audit conducted by AJA management framework (approved on 9 Registrars, Inc. on 26 June 2018. March 2018 and adopted by the Board of Directors under Resolution NO. 2487, s. 2018). The scope of certification covers “management of the provision of vital energy resource development Adoption of a standard lease agreement for and energy infrastructure conducive to a clean future PNOC land leases, including the lease environment and balanced and sustainable of properties of subsidiaries administered by economic growth.” PNOC, as well as the adoption of a standard formula in setting the floor rental value in future Guidelines for the Sale of Banked Gas lease agreements, without prejudice to COA guidelines on setting lease rates (adopted by Adoption of the revised guidelines for the sale the Board of Directors under Resolution No. and/or disposal of the banked gas, subject to the 2500, s. 2018). approval of the DOE (adopted by the Board of Directors under Resolution No. 2488, s. 2018). Policy on Accreditation and increase of tariff rate for the service fee/royalty of the Cargo Part of the guidelines was the creation of the Handler Operators. Banked Gas Disposal Committee. The Committee then formulated the Detailed Procedures for the Sale of PNOC Banked Gas and the Invitation to Submit Offers to Buy.

40 ENERGY ANNUAL REPORT 2018 PHILIPPINE NATIONAL OIL COMPANY EXPLORATION CORPORATION

The PNOC-Exploration Corporation is the upstream it continues to conduct various geological and oil, gas, and coal subsidiary of the state-owned geophysical studies for SC 37and SC 59. PNOC. A government-owned and controlled corporation, the Company was incorporated on Following the exploration drilling of the Mangosteen-1 20 April 1976 and is mandated by the government well in 2015, the PNOC-EC still pursues evaluation of through the DOE to take the lead in the exploration, prospects in Cagayan as potential drilling targets. development, and production of the country’s Gravity and magnetic surveys were conducted in petroleum and coal resources. the second quarter of 2018, covering a total of 251 stations in Santiago City and the municipalities of At present, the PNOC-EC has eight petroleum Ramon and San Isidro, Isabela, and Diffun, Quirino. Service Contracts (SCs), namely: SC 37 (Cagayan), SC 38 (Malampaya), SC 57 (Calamian), SC 58 (West In the previous year, a MOA was signed between Calamian), SC 59 (West Balabac), SC 63 (East the PNOC-EC and the Philippine Council for Industry, Sabina), SC 74 (Northwest Palawan) and SC 75 Energy, and Emerging Technology Research and (Northwest Palawan). The Company is the operator Development of the DOST for the conduct of in SC 37, SC 57, and SC 59 and an active partner in Passive Seismic Tomography (PST) survey in SC 37. SC 38, SC 58, SC 63, SC 74, and SC 75. Currently, the PST survey over the Mangosteen- Mabolo structure is ongoing, while the review of the The PNOC-EC used to operate the very first evaluation of Chico prospect as a potential drilling natural gas facility in the country, the San Antonio target has been completed during the year. Gas Power Plant within SC 37, before joining the Malampaya consortium (SC 38) in 1999 with a 10% The 2016 multi-client seismic data and interpretation stake. Malampaya is the country’s single biggest to identify shallow water prospect, complemented investment of its kind. the deep-water prospects earlier identified within West Balabac. The PNOC-EC plans to conduct The PNOC-EC also holds 4 COCs, namely: COC 41 interpretation of gravity and magnetic data, to (Malangas), COC 122 (Isabela), COC 185 (Buug- supplement the seismic data interpretation and Malangas) and COC 186 (Imelda-Malangas). As improve understanding of its geology. During the part of its coal business, the Company also trades year, the PNOC-EC started the procurement process coal through its coal terminal located in Malangas, for the engagement of a contractor for this activity. Zamboanga Sibugay. For SC 74 (Northwest Palawan), the PNOC-EC PETROLEUM EXPLORATION AND PRODUCTION assisted PXP Energy Corporation, the operator of the SC, in the conduct of the geological field mapping of The PNOC-EC continues to fulfill its mandate to the Calamian Group of Islands in Palawan. Among explore, develop, and produce indigenous sources the activities were data gathering for the Palawan of energy to help meet the country’s soaring gas market study, and an engineering study of energy demand. While some of the Company’s SCs the Linapacan field development to evaluate the are under moratorium due to some external issues, project’s economics.

ENERGY ANNUAL REPORT 2018 41 in four exploration areas, increasing potential coal reserves to about 9.9 million metric tons.

During the year, the Board of Directors approved the Mine 3 Development Project within COC 41. In preparation for this, the PNOC-EC conducted the rehabilitation of surface and underground mining equipment, which can be used for future development activities. The Company also started the procurement process for the necessary blasting and shafting services. IEC campaigns were also conducted in Barangay Malongon of Malangas and Barangay Little Baguio of Imelda. Currently, the process of securing the Free and Prior Informed Consent of the Subanen and Samal tribes as a requirement for the issuance of the Certification of Precondition (CP) from the NCIP is being conducted in the municipalities of Diplahan, Imelda, Malangas, and Siay.

For COC 185 in Buug-Malangas and COC 186 in Aside from the exploration works being conducted Imelda-Malangas, the PNOC-EC together with in existing Service Contracts, the PNOC-EC NCIP presented before the Commission En Banc evaluates farm-in opportunities both in domestic the application for CP on 11 October 2018. The CEB and overseas areas. An Asset Acquisition Team granted the issuance of CP pending submission and was formally established to formulate strategies completion of other documentary requirements. and criteria in acquiring equity in development IEC campaigns in the Local Government Units and production blocks. of Buug, Malangas and Imelda were likewise conducted to secure their endorsement for the The Malampaya Gas-to-Power project of the exploration project. SC 38 Consortium, composed of Shell Philippines Exploration B.V., the Operator (45%), Chevron The PNOC-EC is conducting geomorphological Malampaya LLC (45%), and PNOC-EC (10%), and lineament analysis of COC 185 and COC 186 continued to provide the natural gas fuel using the interferometric synthetic aperture radar requirement of five power plant customers with or IFSAR-derived digital terrain model and ortho- a total capacity of 3,200 MW. These natural gas rectified radar images obtained from the National power plants – Sta. Rita, Sta. Lorenzo, Ilijan, San Mapping and Resource Information Authority. Gabriel, and Avion, provide around 30% of the power requirements in Luzon. As part of our standard industry practices, the COAL EXPLORATION AND PRODUCTION PNOC-EC continues to attract partners through its efforts in farming out existing Service Contracts and On coal exploration, the PNOC-EC undertook Coal Operating Contracts. This strategy is being various activities in COC 41 Malangas, covering considered as exploration projects in general are Malongon, Sta. Barbara, Lower Butong, Lumbog, capital-intensive and are high risk investments. In and Gotas areas. From 2007 until 2017, the the future, the Company will engage in building Company drilled a total of more than 29,000 meters meaningful relationships with all stakeholders in

42 ENERGY ANNUAL REPORT 2018 the fulfillment of its mandate and in pursuit of its Venture partners, and community. In 2018, the vision of becoming the country’s leading energy PNOC-EC was given the rating of “Very Satisfied” exploration company. by its stakeholders.

QUALITY MANAGEMENT SYSTEM AND STAKEHOLDERS’ CORPORATE SOCIAL RESPONSIBILITY SATISFACTION SURVEY Various Corporate Social Responsibility (CSR) The PNOC-EC recognizes the need to improve the programs and activities were conducted in different quality of its operations and service delivery in light of project areas. In Isabela Province, where COC 122 and SC 37 are located, livelihood projects and skills the government’s thrust to adopt transformational training programs were provided to assist women’s leadership through the implementation of the organizations in generating their own income. Government Quality Management Program. Scholarships were granted to the students from Cauayan and Benito Soliven to help them pursue With this objective, the PNOC-EC partnered with their dreams of earning a college degree. DAP to align its Quality Management System (QMS) to the requirements of ISO 9001:2015, as In October 2018, a total of 300 species of fruit- the Company worked on its transition and re- bearing and hardwood trees were planted in certification to the new version of the ISO 9001 the barangays of Cauayan and Benito Soliven as Standard. part of the Company’s initiative to augment the National Greening Program of the government. As the PNOC-EC’s core mandate is to explore for indigenous sources of energy, the core process Moreover, 50 mothers and mothers-to-be were of the QMS is the Petroleum and Coal Exploration educated on maternal and child health care and Reporting System. The QMS aims to ensure provided with maternity supplies during the Buntis the quality of exploration reports submitted to Congress. the Department of Energy during the different phases of the petroleum and coal exploration In Zamboanga Sibugay, among the CSR programs process, in consideration of the expectations and conducted for COCs 41, 185 and 186 were the free commitments to its partners, to the community circumcision program for 382 beneficiaries and where the company operates, and other interested trainingson project proposal formulation for the parties. seven partner women’s organizations. Currently, the Gmelina plantations with partner farmers and To validate the PNOC EC’s compliance to ISO livelihood projects with women’s organizations are 9001:2015 Standard, the Company engaged the continuously being monitored. services of TUV Rheinland Philippines Incorporated as the Certifying Body. The certification audit was conducted in August 2018. The Company was officially certified on 28 October 2018 to Management Systems, ISO 9001:2015.

PNOC-EC also engaged the services of UP Los Baños, College of Human Ecology on the conduct of Stakeholders’ Satisfaction Survey for its 2018 performance. The survey aims to determine the level of satisfaction of the Company’s various stakeholders which include the DOE, PNOC, Joint

ENERGY ANNUAL REPORT 2018 43 PHILIPPINE NATIONAL OIL COMPANY RENEWABLES CORPORATION

The PNOC Renewable Corporation (PNOC RC) Recently the Company signed a MOA with the has been proactive in partnering with government Landbank of the Philippines for the financing institutions to explore the untapped potential of program of renewable energy and energy the country’s clean energy resources. efficiency and conservation projects for Local Government Units. Among the accomplishments of the Company were the construction of its biggest solar rooftop project, As it continues its journey, the PNOC RC is motivated the 1.050MW Philippine International Convention to pursue its goals with enthusiasm together with Center, and the inclusion of the Technical Education partner government agencies that have chosen to and Skills Development Authority and Mariano join its worthwhile undertakings. It is optimistic that Marcos State University as partner agencies in its reaching the summit of climate change mitigation Solar PV Rooftop Projects portfolio. through sustainable development will be a shared goal for everyone. It also inked a deal with the National Irrigation Administration for the development and As of December 2018, the company was able to implementation of the 1-MW Agno River Irrigation build a total of 5.72MW of energy from Solar PV System Mini Hydropower Project. and renewable energy projects, as shown below:

Capacity (MW) Status/Remarks

Solar Rooftop Installations 1.52 On-going commercial operations

On-going commercial operations, Maibarara Geothermal 3.20 (10% share)

Rizal Hydropower 1.00 On-going commercial operations

ISO CERTIFICATION maintains the requirements of the standards set by the latest version of ISO 9001. There was zero The PNOC-RC has successfully maintained its non-conformity found and the organization was ISO 9001:2015 Certification for core process – the able to address all Opportunities for Improvement Preparation of Feasibility Studies for Renewable (OFI) noted during the previous audit, and showed Energy and Energy Efficiency Projects. The results of its commitment towards its goal of continuously the second surveillance audit conducted by TUV improving its QMS and maintaining ISO 9001:2015 Rheinland on 5November 2018 concluded that Certification for the years ahead. the organization complies with, and adequately

44 ENERGY ANNUAL REPORT 2018 PNOC RC employees in action during the coastal clean-up activity and post planting care and maintenance activity

CORPORATE SOCIAL RESPONSIBILITY part of the continuing program of the previous year’s tree planting. The site within the La Mesa Corporate Social Responsibility is integrated in Watershed Reservation planted in the past two PNOC RC’s business operations as stipulated years was visited for maintenance activities. under its corporate vision and mission. PNOC RC ensures that its project beneficiaries and partners ORGANIZATIONAL DEVELOPMENT are aware of its commitments and contributions towards carbon offsetting and reduction of PNOC RC, through its Human Resources carbon footprint through its RE project portfolio Department, provides support by addressing in geothermal, hydropower, solar farm, biomass, manpower development needs of the organization. wind and ocean, including solar rooftop for government facilities. In 2018, PNOC RC worked on improving human capital through the conduct and facilitation of In 2018, PNOC RC along with other government learning interventions targeted at enhancing and private organizations joined the annual compliance and the implementation of the Quality Management System, strengthening collaboration and group dynamics, promoting gender perspective in company processes, and advancing knowledge and skills of employees in their respective functions.

As a lean organization where employees assume other roles over and above the duties required of their positions, PNOC RC puts emphasis on enhancing the functional competencies of MOA Signing between PNOC RC and MMSU for the installation employees in their respective areas of assignment of 200kWp Solar Rooftop Project at the Administration, Engineering and Library Building of the university. or profession.

Coastal Clean-Up Activity in Mariveles, Bataan. For 2018, about 38 out of 47 employees met the The activity was able to collect 16,752.50 kgs. required relevant competencies, equivalent to of garbage which can displace approximately 80.9%. This score is influenced by various factors

57 tons of CO2-equivalent. Aside from this, the including cancellation of attendance to planned company also conducted a post planting care training due to work demands and changes in and maintenance activity on 31 August 2018 as schedule of company activities/operations.

ENERGY ANNUAL REPORT 2018 45 NATIONAL ELECTRIFICATION ADMINISTRATION

SITIO ELECTRIFICATION PROGRAM With the ECs as its implementing arm in the mandated mission of rural electrification, even in The NEA has been the forerunner of the country’s missionary or economically unviable areas, the electrification program since its creation in 1969 NEA continues to implement the Sitio Electrification by virtue of R.A. 6038. For nearly five decades, the Program (SEP). NEA has stayed true to its mandate of lighting up provincial towns and the remotest of villages in our As of 6 December 2018, a total of 1,561 sitios out of country. the targeted 1,817 sitios were energized, equivalent to an 85.9% accomplishment. The construction As of October 2018, the data on the electrification of distribution lines for the remaining 256 sitios is status of the franchise areas of the ECs show on-going and expected to be completed on or that 78 provinces, 90 cities, 1,385 municipalities, before end of December 2018. This contributed to 36,057 barangays, 123,182 sitios, and 12.647 million the connection of 460,954 additional consumers households have been provided with electricity, (from January to October) which is in line with the benefitting about 60 million Filipinos. President’s directive to provide electricity access for all.

MOBILIZATION OF TASK FORCES

A. Task Force Ompong

In September 2018, Typhoon Ompong (Mangkhut) made landfall in Baggao, Cagayan. Though it was not a super typhoon under PAGASA’s classification system, it was a powerful tropical cyclone with a diameter of 900 kilometers.

A task force composed of ECs from Central Luzon headed north to help restore power in areas left in the dark. Dubbed as “Power Restoration Rapid Deployment Task Force Ompong,” the team augmented the manpower requirement of the typhoon-affected ECs and provided the necessary assistance to restore the electricity services as safely and as quickly as possible.

46 ENERGY ANNUAL REPORT 2018 B. Task Force Rosita Fund for proper release to qualified ECs. In case of fund deficiency, the NEA may seek the allocation of Typhoon Rosita (Yutu) made landfall in Dinapigue, a supplementary budget, subject to the approval Isabela on 30 October 2018. The storm came more of the President. than a month after Typhoon Ompong left a path of destruction in 19 provinces in Luzon, including The NEA may also accept donations in the form of Isabela and Quirino. This prompted NEA and ECs funds, materials and equipment intended for the to mobilize the “Task Force Kapatid” (TFK) to help restoration and rehabilitation of the ECs’ damaged restore power in the provinces of Isabela and infrastructure, subject to existing auditing rules Quirino. and regulations and shall be exempt from taxes and duties. In turn, the ECs shall implement the TFK embodies the spirit of Bayanihan among ECs’ rural electrification program nationwide as well as Compact of Cooperation. TFK pools together ensure the preparedness and mitigation measures volunteers from different ECs to render volunteer to protect the infrastructure from the adverse service to other affected ECs which need technical impact of any fortuitous event or force majeure. help like energization of hard-to-reach places, to the rehabilitation of dilapidated or damaged The Proposed IRR of ECERF was approved by the electric distribution lines. NEA Board of Administrators on 7 December 2018 under Board Resolution No. 208.

PROVISION OF LOAN FACILITIES TO ECS

The NEA has achieved its full-year loan availment target of PhP1.7 billion by the ECs three months ahead of schedule. Latest data shows PhP1.8 billion worth of loans, including calamity loans, has been extended to 57 ECs as of end-September. The agency released a total of PhP1.049 billion to 45 ECs to finance capital expenditure projects and PhP99 million to six other ECs for the repair and rehabilitation of damaged distribution facilities due to previous typhoons Lawin, Urduja and Vinta, and other calamities. PASSAGE OF ELECTRIC COOPERATIVES EMERGENCY AND RESILIENCY FUND ACT (ECERF) POLICY ISSUANCES

Passed into law on 29 June 2018, RA 11039 provides In accordance with its expanded powers, functions an orderly and continuing means of financial and privileges under Section 5 of RA 10531 and assistance to electric cooperatives in the form of Section 5 of the IRR (An Act Strengthening the grants for disaster mitigation, preparedness and National Electrification Administration), the NEA rehabilitation of damaged infrastructure after a has formulated several policies and guidelines fortuitous event or force majeure. geared towards the fulfillment of NEA’s mandate and to provide assistance and guidance to the ECs Under the law, the NEA will manage and administer in the performance of their franchise obligations as the ECERF, which will have an initial amount of distribution utilities: PhP750 million to be taken from the National Disaster Risk Reduction and Management (NDRRM) Fund • Revised Policy on Retirement Plan for General and will be released to the NEA Quick Response Managers of ECs (3rd Revision)

ENERGY ANNUAL REPORT 2018 47 • Policy Guidelines on the Conduct of The AAA rating is the highest score given by the Examination and Interview for Applicant to NEA to ECs that indicates the power distributors’ the Position of General Managers of Electric full compliance on four parameters, namely: Cooperatives financial, institutional, technical and reportorial • Policy Amending NEA Memorandum No. requirements. The D rating is the lowest. Scores and 2015-007 on “Revised Guidelines on Benefits, their corresponding ratings are as follows: 95-100 = Allowances and Incentives of Electric AAA; 90-94 = AA; 85-89 = A; 75-84 = B; 50-74 = C; Cooperative Officials and Employees” and 49 and below = D. • Policy on Assignment of Acting General Manager and/or Project Supervisor to Electric Results of the recent assessment also showed that Cooperatives 83% or a total of 101 out of the 121 ECs supervised • Revised Guidelines for the Selection and by the agency have notched AAA, AA or A status Appointment of NEA Representative to the last year. Of the remaining 20 ECs, four improved Electric Cooperative Board of Directors their performance either from C to B or D to C; 13 • Policy Guidelines on the Implementation of ECs manifested improvement in total scores while Strategized Electrification Program (STEP) three retained their performance level.

2017 EC OVERALL PERFORMANCE ASSESSMENT CORPORATE GOVERNANCE

The 2017 EC Overall Performance Assessment A. ISO 9001:2015 Certification showed an increase in the number of power distribution utilities that are fully compliant with the Anchored on its Good Governance Agenda, the key performance standards (KPS) of the NEA. Agency was able to hurdle the ISO 9001:2015 Surveillance Audit conducted by TÜV Rheinland Based on the results, the ECs that were rated AAA Philippines, Inc. on 5 December 2018 covering rose to 87 from 78 in 2016. Of these, 33 ECs received the scope “Provision of Financial, Institutional, an overall score of 100, which is higher than the 24 Technical and Legal Assistance to the ECs, which ECs that garnered 100 points from the previous in turn undertake power distribution on an area assessment. coverage basis”.

Meanwhile, all ECs in Regions VI (Western Visayas), B. Customer Satisfaction Survey VII (Central Visayas) and CARAGA attained AAA rating, making them the highest performers. Region The NEA continuously espouses good corporate VIII is the most improved region with 10 of its 11 ECs governance in order to provide better service to earning the AAA categorization from the state-run the ECs. This was clearly manifested in the result/ agency. report submitted by Contact Asia Services, Inc. Research, the third-party service provider for the Further, the assessment revealed 76 ECs conduct of the EC Customer Satisfaction Survey. maintained their AAA status while 20 ECs showed The overall satisfaction rating garnered by NEA is improvement in ratings, 11 of which were given at 4.5 or 90%; both scores translate to the verbal AAA categorization level. The NEA evaluates and interpretation of “Very Satisfied”. determines the overall performance ratings of all ECs annually using the two criteria - KPS (80%) and EC Classification (20%).

48 ENERGY ANNUAL REPORT 2018 NATIONAL POWER CORPORATION

FINANCIAL

NET INCOME COLLECTION EFFICIENCY* Php1.29B 97.66%

*Missionary areas of Luzon, Visayas and Eastern Mindanao

MISSIONARY ELECTRIFICATION • NPC commissioned a total capacity addition of 980 kW which benefited households as follows:

Capacity (MW) Households

1 x 90 kW Cinco Rama, Western Samar 660

2 x 200 kW Languyan, Tawi-tawi 135

2 x 150 kW Pandami, Sulu 2,300

1 x 90 kW Calaguas, Camarines Norte 697

1 x 100 kW Camandag, Sto. Niño, Samar 700

TOTAL 4,492

• Increased service hours in six existing areas • Completed the following transmission line (Banton and Corcuera in Romblon, Cuaming projects: and Cabul-an in Bohol, Almagro in Western ◘ Rehabilitation of 85 ckt.-km. of transmission Samar and Tagapul-an, Eastern Samar to 24 lines in Mindoro hours. ◘ Energization of 41 ckt.km. Calapan-Puerto

ENERGY ANNUAL REPORT 2018 49 Galera, 14.42 ckt.-km. Calapan-Naujan T/L • Completed the semi-annual mandatory section and 14 ckt-km. upgrading of the integrity and safety inspections for 12 dams 13.8 kV distribution line in Divilacan, Isabela to ensure the structural and operational safety to mitigate flooding in the • Signed UCME Subsidy Agreement with Kaltimex downstream communities Rural Energy Corp. for power supply to Tawi- tawi Electric Cooperative, Inc. in Mindanao • Conducted 30 information education beginning 25 July 2018 campaign programs/lectures on Dams Safety for downstream communities/ • Processed subsidy payments for New Power stakeholders Providers/Qualified Third Parties in the total amount of Php 5.90 billion AWARDS

MAIN GRID OPERATIONS • Awarded certification of QMS-ISO 9001:2015 dated 15 April 2018 by SOCOTEC • Completed Pulangi IV HEP Reservoir Certification International Dredging Project Phase 3, resulting in larger reservoir capacity and higher plant INSTITUTIONAL generation • Awarded the filed petitions with ERC to • Completed establishment of ensure the 2018 funding requirements for Hydrometeorological Monitoring and Data missionary electrification in the amount of Acquisition for Mindanao Generation to approximately PhP 12.46 billion aid in hydropower plant operation and flood forecasting. • Transferred certificates of titles/decrees and land registration case decisions to • Completed rehabilitation of Agus 6 HEP Unit PSALM, and filed applications for titling/ 3 Draft Tube Liner, resulting in more efficient issuance of certificates of titles/decrees and reliable hydro power plant generation of unregistered/untitled lots for OMA and Non-OMA properties for a total of 97 lots • Awarded outstanding rating of 100% to Agus (52 for OMA and 45 for non-OMA) 4 and 5 HEPC during plant performance (operation and maintenance, safety, • Conducted the Customer/Stakeholder environmental and documental Satisfaction Rating Survey for CY 2017 compliance, etc.) conducted by PSALM through a Third Party Contractor with a for the 1st semester of 2018. rating of 4.39 (on a scale of 1 to 5, with 5 as the highest point of satisfaction) WATERSHED AND DAMS MANAGEMENT • Successfully organized the 34th Heads of • Rehabilitated 955 hectares of open and ASEAN Power Utilities Authorities (HAPUA) denuded NPC-managed watershed areas Council Meeting and Associated Meetings using UC-EC funds in Bohol in November 2018

50 ENERGY ANNUAL REPORT 2018 NATIONAL TRANSMISSION CORPORATION

MONITORING OF ASSETS OPERATED AND MAINTAINED pertinent to its operation and maintenance BY NGCP of transmission facilities in Luzon, Visayas and Mindanao. In 2018, the environmental inspectors Inspection of Transmission Assets and Projects checked for the availability of relevant permits, assessed the sufficiency of structures that conform to For 2018, TransCo conducted a total of 68 inspections environmental protection requirements, looked at of transmission facilities and transmission projects, proper storage of hazardous/chemical substances which include Projects Under Construction (PUCs). and availability of required storage facilities, and validated NGCP’s corrective actions done to Of the 6,215 open observations noted during the address previous observations. The environmental inspection of transmission facilities, a total of 4,314 inspections were carried out together with technical observations were corrected or closed by NGCP in 2018. inspections of facilities and projects.

In addition, TransCo Inspectors conducted site Transmission Development Monitoring inspections on NGCP substations and transmission line facilities that were affected by natural calamities that TransCo continuously carries out its mandate to occurred on 2018. The TransCo Inspectors submitted oversee the upgrading and expansion of the nation’s inspection reports regarding the equipment and power transmission asset by regularly monitoring transmission facilities that were affected or damaged. NGCP’s project applications filed before the ERC as stated with the Concession Agreement. The natural calamities that affected the transmission facilities are as follows: TransCo conducted a technical review and • Typhoon Urduja assessment of NGCP’s proposed Capex projects Inspection Date: 9-11 January 2018 for calendar years 2017-beyond 2020 under ERC • Typhoon Vinta Case No. 2017-110 RC. These proposed projects Inspection Date: 9-11 January 2018 are categorized and driven as Generation Entry, • Typhoon Ompong Load Growth, Power Quality, Network and System Inspection Date: 19-20 September 2018 Reliability. The TransCo Team produced technical • Landslide in Naga, Cebu analysis and reports using the PSS/E simulation Inspection Date: 20-25 September 2018 software, providing technical recommendations and comments for the 23 Transmission Network Environmental Compliance Assessment of NGCP- Development projects (11 for Luzon, 7 for Visayas, Operated Facilities and 5 for Mindanao) which were used as basis for filing petitions for intervention. TransCo’s asset inspection teams continuously monitor the environmental compliance of NGCP

ENERGY ANNUAL REPORT 2018 51 TRANSMISSION NETWORK DEVELOPMENT PROJECTS TransCo also conducted technical review and Project Name (Luzon) evaluation on NGCP’s Tower Structure Upgrading of Bicol Transmission Facilities Concepcion-Sta. Ignacia 69 kV Transmission Line Project proposed amendments to Marilao EHV Substation Project San Simon 230 kV Transmission Line Project OATS Rules and AS-CRM Nagsaag-Tumana 69 kV Transmission Line Project Tuy 500/230 kV Substation Project Stage 1 which were filed before the Pagbilao-Tayabas 500 kV Transmission Line Project Energy Regulatory Commission Pinili 230 kV Substation Project San Manuel-Nagsaag 230 kV Transmission Line Project through ERC Case No. 2018- Taguig-Taytay 230 kV Transmission Line Project Tanauan 230 kV Substation Project 005 RM entitled “In the Matter Project Name (Visayas) of the Petition for the Approval Panay-Guimaras 138 kV Interconnection Project of Amended Ancillary Services Laray 230 KV Substation Project Babatngon-Palo 138 kV Transmission Line Project – Costs Recovery Mechanism” Calbayog-Allen 69 kV Transmission Line Visayas Substation Upgrading Project and ERC Case No. 2017-010 RM Amlan-Dumaguete 138 kV Transmission Line Project Barotac Viejo-Natividad 69 kV Transmission Line Project entitled “In the Matter of the Project Name (MIndanao) Petition for the Adoption of the

Kabacan Substation Project Proposed Amendments to the Nasipit Substation Bus-in Project 2006 Open Access Transmission San Francisco-Tandag 138 kV Transmission Line Project Maco-Mati 138 kV Transmission Line Project Services Rules (OATS Rules)”. Mindanao Substation Expansion 3 Project TransCo’s comments and queries were submitted to ERC and were discussed during ERC Further, TransCo also conducted power flow simulations hearings and public consultations. and technical assessments in order to provide technical comments, inputs, inquiries and recommendations Power System Performance Monitoring in the preparation of the draft 2016-2040 Transmission Development Plan (TDP) during TransCo consultation As the owner of the transmission assets, TransCo as stated in Concession Agreement. monitored in 2018 the quality, reliability and security of the grid through the following System Operation In addition to the above-mentioned reports: Regional Daily Operations Reports (DOR) accomplishments, TransCo actively participated & Daily Operations Highlights (DOH), Consolidated in the Technical Working Group on Competitive DOR & DOH, Daily Consolidated Interruption Renewable Energy Zones (CREZ) process Reports, Weekly Grid Operations Reports, Monthly spearheaded by the DOE. TransCo is a member Outage Summary Report, Day-Ahead Ancillary of the Zone and Transmission Modelling Working Services Schedule, Compliance Monitoring group of CREZ that will identify candidate RE Zones of Ancillary Services Providers, Grid 1-second that are characterized by theoretical availability of Frequency, and Significant Incident Reports. The resource potential, technical potential, economic quarterly technical assessment reports on System potential and market potential. It will also identify Reliability, Ancillary Services Availability, and a set of transmission expansion and upgrades Frequency Control were used in the evaluation of scenarios that enhance delivery of energy and the performance of TransCo’s concessionaire. analyze its corresponding economic, operational, environmental and other cost benefit analysis with Regulatory Compliance and Monitoring of NGCP the required transmission enhancement scenarios. Rate Cases These specified least-cost effective transmission enhancements are then proposed for inclusion in In accordance with the Concession Agreement, the TDP as reviewed and approved by the DOE. NGCP shall be the sole regulated entity before

52 ENERGY ANNUAL REPORT 2018 the ERC. Hence, all rate cases are now being filed The Joint TRFLAT has so far conducted assessments for the and attended to by NGCP. For its part, TransCo years 2009, 2010 to 2011, 2012, 2013 to 2015, and 2016. regularly monitors NGCP’s applications filed with ERC and participates in the conduct of hearings For the Concession Year 2017, the Joint PSALM and public consultations on major rate cases as and TransCo TRFLAT and Inspection of Books and well as other applications. Whenever necessary, Records re-convened pursuant to Office Order TransCo files petitions for intervention, conducts No. 2018-200 dated 5 April 2018. The IBR is a joint reviews, provides comments, and submits the undertaking of TransCo and PSALM which covers same to ERC. the areas of Technical, Regulatory, Financial, Legal and Right of Way, and Administrative, IT, QA, Safety As for the Regulatory Reset for the transmission and Security, with the Compliance Monitoring business covering the Fourth Regulatory Period (CY Department as the lead Technical Secretariat. 2016 to CY 2020), TransCo attended and participated in the Public Consultations conducted by the ERC The joint TransCo and PSALM Teams conducted in 2014 and 2015. Following the ERC’s release on 7 the inspection and checking of NGCP books June 2018 of its Draft Resolution on the Issues Paper of and records for the year 2017 in various dates in the Regulatory Transmission Services for 2016 to 2020 September to November 2018 in its Technical of the National Grid Corporation of the Philippines Document Centers located at the NGCP Head (NGCP), TransCo submitted its comments thereto to Office and in Mexico Substation, Pampanga. the ERC on 27 July 2018. To date, the ERC has yet to issue its Position Paper for the regulated entity to The IBR Report which contains the TRFLAT begin with the reset process for the 4th Regulatory assessment findings has been completed and Period and the subsequent 5th Regulatory Period provided to NGCP for it to address the deficiencies (CY 2021 to CY 2025). Further, TransCo likewise or implement corrective actions. Said report was submitted to the ERC on 27 July 2018 the paper on transmitted to NGCP on 20 December 2018. the Weighted Average Cost of Capital. TransCo Copies of the IBR report were likewise provided to offered a discussion with its consultant should the the Department of Energy, Department of Finance, Commission deemed it necessary. Energy Regulatory Commission and the TransCo Board thru the Corporate Secretary. Inspection of NGCP Books and Records FIT ALLOWANCE FUND ADMINISTRATION Every year, the Joint TransCo-PSALM Technical, Regulatory, Financial, and Legal and Right-of- In addition to TransCo mandates, ERC Resolution Way Assessment Team (TRFLAT) and Inspection of No. 15, Series of 2012 dated 19 November Books and Records aims to conduct an assessment 2012 designated TransCo as the Feed-in-Tariff of the compliance of NGCP with each relevant Allowance (FIT-All) Fund Administrator. TransCo provision of the Concession Agreement and is tasked with the establishment, management, conduct inspections of NGCP’s books and records administration and disbursement/settlement (thru in accordance with the provisions of Section 10.01 the trustee bank) of the FIT-All Fund for the benefit of the Concession Agreement. The inspection of FIT-eligible RE developers. TransCo is likewise of books and records (IBR) covers the areas of tasked to file the rate application before the ERC Technical, Regulatory, Financial, Legal and Right for the annual FIT-All Rate determination. of Way, and Administrative, IT, QA, Safety and Security. NGCP’s Operation and Maintenance, Status of RE Payment Agreement (REPA) Engineering and Construction, and System Operations Groups are included here. For the payment of FIT-eligible RE generators, TransCo entered into REPA with 59 RE developers

ENERGY ANNUAL REPORT 2018 53 as of 31 December 2018. And with 52 of these amounting to PhP261.47 million disapproved as of REPAs being effective, in this case, these eligible 31 December 2018 posting in the ERC website. The RE Developers have secured all necessary permits rest of the sale contracts are for filing with the ERC and are being paid/can already be paid for actual and for ERC’s evaluation and approval. eligible energy generated. The total ERC approved/disapproved amount The total FIT Revenue billed to the Fund as of 31 of PhP3.276 Billion is lower compared to the total December 2018 amounted to PhP59.28 Billion. approved/disapproved contract amount of PhP About 94.41% of this has been paid, with an 4.335 Billion due to the following reasons: outstanding balance of PhP3.31 Billion. Said amount does not include any late payment interest that 1. Exclusion of some assets from ERC approval the eligible FIT generators may be entitled to. due to reclassification from sub-transmission to transmission assets The collection efficiencies for FIT-All and Cost 2. The lower amount of valuation was used as Recovery Revenue (mostly from PEMC) as of basis of the ERC approval 30 November 2018 are 93.60% and 98.22%, 3. Exclusion of some assets from the ERC respectively. approval since said assets are not yet connected to the sold assets Audit of Collection Agents 4. Exclusion of some assets from the ERC approval due to decommissioning TransCo was able to jump start this activity in 2018. 5. DU withdrawal from sale contract after It targeted an audit of one Collection Agent per filing of the ERC Joint Application quarter and was able to conduct five audits, with two audits conducted in the last quarter. The audits Following the EPIRA provision to extend concessional are aimed at further improving the efficiency of the financing to electric cooperatives, TransCo FIT-All collection/remittance. implemented lease purchase arrangements with a term of 20 years. Of the 114 sale contracts already DIVESTMENT OF SUB-TRANSMISSION ASSETS signed, 77 are under lease purchase agreements with 66 electric cooperatives/consortia, valued at The sale of TransCo’s sub-transmission assets (STA) about PhP4.122 billion. The remaining 37 involved involves 123 sale contracts with 107 interested sales to private distribution utilities/consortia. distribution utilities, most of which are electric cooperatives. The sub-transmission assets include MANAGEMENT AND OPERATION OF ELECTRICAL around 4,092 ckt-km of mostly 69 kV transmission DISTRIBUTION SYSTEMS AT BAGUIO CITY ECONOMIC lines and 860 MVA of substation capacity. ZONE (BCEZ) AND THE FREEPORT AREA OF BATAAN (FAB). As of 31 December 2018, TransCo has signed 114 sale contracts with 93 distribution utilities/electric In line with its mandate to operate and maintain the cooperatives/consortia amounting to about PhP electrical systems of BCEZ and FAB, TransCo’s Utility 6.052 billion. These sales cover an aggregate Management Department (UMD) performed the length of about 3,833ckt-kms of sub-transmission following upgrading works, preventive/ predictive lines and about 34,153 sub-transmission structures maintenance, corrective maintenance, and and 830 MVA of substation capacity. Of the 114 energy audits. sale contracts, 72 contracts with a total sale price of about PhP4.335 Billion have been approved, approved with modification and disapproved. Included in the 72 contracts are eight contracts

54 ENERGY ANNUAL REPORT 2018 SETTLEMENT OF RIGHT-OF-WAY (ROW) CLAIMS the TransCo-approved valuation is accepted by the landowner or if the court-decision or order is Validation of ROW Claims found in accordance with law and jurisprudence, TransCo policies and government accounting and TransCo is principally in charge of validating all auditing rules, an Authority to Pay is prepared and ROW claims involving transmission facilities existing submitted for approval by TransCo Management. prior to the Commencement Date (15 January 2009), except those identified as Projects Under In cases where an ejectment or recovery of Construction (PUCs), which are handled by NGCP. possession action is instituted against TransCo, an adverse decision thereon would mean that The following general activities are part and parcel TransCo would be compelled to remove the of TransCo’s regular validation process: transmission structures, vacate the premises and pay rentals and damages until such time that 1. Authentication of ownership of landowner- the structures are completely dismantled, to the claimant detriment and prejudice of both the government 2. Determination as to whether or not there and the general public. are existing right-of-way documentation covering the affected property On the other hand, there are cases where 3. Ascertainment of the land classification of TransCo’s offer of compensation is rejected by the the said properties, both current and at the landowner who then prevents TransCo and NGCP time of taking entry to the premises which would compromise the 4. Identification of the transmission project operation and maintenance of the transmission involved and the year the said project was line. In such cases, the filing/institution of an constructed or commissioned expropriation case is indispensable in order to 5. Conduct of the verification survey to secure TransCo’s authority/title/possession over the determine whether the property is affected affected property, as well as to ensure the smooth and, if in the affirmative, determination of and unhampered operation and maintenance of the actual area affected the particular transmission line/s. 6. Establishment of the appropriate valuation of the affected property As approved by the TransCo Board and the GCG, RLMSD’s target for 2018 is 160 right-of-way claims/ In 2018, TransCo was able to validate a total of 227 cases approved for settlement and expropriation ROW claims, exceeding its target of 220 claims as cases initiated. approved by the TransCo Board and the GCG. In 2018, TransCo was able to file 134 new Filing of Expropriation Cases expropriation cases and 26 ROW claims/cases approved for settlement for a total of 161 claims/ TransCo regularly receives claims and demands cases for a 100% accomplishment rating. for payment of just compensation involving lands affected by transmission lines and other transmission- Parcellary Survey (As-Built) of Transmission Lines related facilities constructed/ commissioned by and Substations its predecessor-in-interest, the National Power Corporation (NPC). TransCo submitted to the GCG a Board-approved, comprehensive and time-bound action plan for As part of its regular validation process, once the the settlement of ROW claims. Part of the GCG- claim is found in order, TransCo negotiates with approved plan is the outsourcing the land parcel the affected landowner for compensation, and if survey activities (parcellary survey) of all existing

ENERGY ANNUAL REPORT 2018 55 transmission facilities nationwide that will result in 1. Verified/validated properties subject of the complete and proper documentation of said real property tax assessments; facilities, including all affected lands and structures. 2. Evaluated requests for cancellation of right-of-way grants/annotations; The outsourcing of the parcellary survey is aimed at 3. Handled requests for the use of or to have speeding up the process of identifying and profiling access to NPC/TransCo properties as well the affected properties which is a very critical part as requests to buy back properties no of TRANSCO’s Right-of-Way activities. The survey of longer utilized as transmission line right-of- the entire 12,796 linear kilometers of transmission lines way corridor/route; is expected to be completed by 2020. The initiative 4. Evaluated/validated of requests for will allow a proactive approach in the settlement subdivision/partition of lots which were of ROW claims which translates to reduced interest partially acquired by NPC/TransCo or payments. partially-affected by transmission lines and asset boundaries, verification/research on By the end of 2018, TransCo was able to survey right-of-way issues/documents involving (as-built) and verify approximately 5,233 kilometers the divestment of sub-transmission assets; of affected properties, resulting in a 100% 5. Conducted inspection of books and accomplishment rate. records of the Concessionaire involving PUCs and New Projects involving right-of- MOA with LRA way; 6. Evaluated requests for relocation of To significantly reduce the processing time in transmission towers and poles, inspection validating ROW claims and at the same time, and evaluation of projects affecting the reduce interest payments, TransCo signed a transmission lines; MOA with the Land Registration Authority (LRA) 7. Prepared Commissioner’s Reports and on 12 December 2017 for the supply and delivery comments to Commissioner’s Reports on of datasets for land parcels affected by existing just compensation for litigated cases; transmission lines and substations in Luzon, Visayas 8. Validated ROW cases for possible and Mindanao. compromise; 9. Reviewed, prepared various agreements Under the agency to agency MOA, LRA is tasked to and contracts with NPC, NGCP and other deliver all the titles under the names of TransCo, NPC government and private entities relating to and NGCP to allow a proper inventory. Moreover, rights-of-way; LRA is responsible for the delivery of certified true 10. Updated Transmission Line and Substation copies of the titles, including electronic maps of all Profiles; affected properties throughout the country. 11. Conducted inventory, scanning, filing and linking ROW documents to the e-copy of As of end December 2018, LRA has submitted a Masterlists of project-affected landowners; total length of 2,253.77 kilometers of Geospatial 12. Managed and consolidated land titles, Query System, 42,685 Parcel Verification System easement rights/grants and other ROW and 41,922 certified true copies of TCTs. agreements in the name of TransCo/NPC; and, Other ROW Accomplishments 13. Collected various receivables pertaining to ROW. Aside from those mentioned above, TransCo continued to handle all other right-of-way-related issues, such as, but not limited to the following:

56 ENERGY ANNUAL REPORT 2018 PHILIPPINE ELECTRICITY MARKET CORPORATION

Incorporated in November 2003, the Philippine • Completed the development and internal Electricity Market Corporation (PEMC) serves as consultations on the MOPS amendments as the Market Operator (MO) responsible for the part of the Operating Agreement for the day-to-day operations of the WESM, as well as the IMO Transition registration of WESM members. • Completed the conduct of the 2018 The following are the accomplishments of PEMC Business Continuity Management System focusing on efforts and initiatives towards efficient (BCMS) Simulation Drill wholesale and retail market operations, sustaining stakeholder engagement, implementing market TRANSITIONING TO THE IMO development programs and activities enabling the completion of the transition to the Independent • Presented and obtained approval from Market Operator: the PEM Board and the WESM Members the IMO Transition Plan along with the EFFICIENT WHOLESALE AND RETAIL MARKET proposed amendments to the PEMC AOI OPERATIONS and By-Laws pursuant to DOE Department Circular No. 2018-01-0002 • Achieved a “Very Satisfactory” performance rating based on the • Completed the incorporation of the Performance Indicators for Market IEMOP with the Securities and Exchange Operations” Commission

◘ High Market Management System • Approved the IEMOP and PEMC tables Availability (99.996%) of organization and the compensation structure (consistent with the ERC approved ◘ No delay in the issuance of Settlement Market Fees) Statements • Completed the manning of PEMC and ◘ Timely response to customer queries/ IEMOP positions leading to the eventual concerns and data requests transfer of the market operations function to the IEMOP • Prepared and submitted to the PEM Audit Committee (PAC) PEMC’s Action Plan • Finalized the Operating Agreement and addressing the recommendations of the successfully executed the same market operations audit

ENERGY ANNUAL REPORT 2018 57 STRENGTHENED STAKEHOLDER ENGAGEMENT Registration and Settlement System towards • Conducted several training sessions on basic Enhanced WESM design implementation and advanced topics for WESM and RCOA to all regions • Collaborated with DOE on market structure development and capacity-building for • Implemented policy development and WESM Mindanao process improvement as part of the WESM Stakeholder Engagement Action Plans • Submitted to DOE the updated RE Market Rules based on the inputs from the Public • Innovations on engagement to encourage Consultations and participated in UNDP’s compliance to protocols and to solicit Procurement of the Philippine RE Market customer feedback System

SPEARHEADING MARKET DEVELOPMENT PROGRAMS • Obtained PEM Board approval on the Wholesale Electricity Market Trader as a new • Completed preparations for the commercial participant category and RES participation operations of the New Market Management in BCQ declaration System and core modules of the Central

58 ENERGY ANNUAL REPORT 2018 POLICY ISSUANCES

DEPARTMENT CIRCULAR NO. DC2018-01-0001 Adoption of Energy Resiliency in the Planning and Programming of the Energy Sector to Mitigate Potential Impacts of 01 Disasadasters

DEPARTMENT CIRCULAR NO. DC2018-01-0002 Adopting Policies for the Effective and Efficient Transition to the Independent Market Operator for the Wholesale Electricity 02 Spot Market

DEPARTMENT CIRCULAR NO. DC2018-01-0003 Adopting and Prescribing the Policy for the Competitive Selection Process in the Procurement by the Distribution Utilities of 03 Power Supply Agreement for the Captive Market

DEPARTMENT CIRCULAR NO. DC2018-01-0004 Prohibiting the Sale and Distribution of Small-sized 2.7 Kg Capacity and Below LPG Cylinders Without the Required “For 04 Outdoor Use Only” Marking in Addition to the Usual Mandatory Markings for LPG Cylinders, and for Other Purposes

DEPARTMENT CIRCULAR NO. DC2018-01-0005 Prescribing the Guidelines Recognizing the Rights of Indigenous Cultural Communities (ICCs)/Indigenous Peoples (IPs) in 05 their Ancestral Domains and Access to the Financial Benefits as Host Communities under the ER 1-94 Program and Rule 29 (A) of the Implementing Rules and Regulations of Republic Act No. 9136, Otherwise Known as “Electric Power Industry Reform Act of 2001”

DEPARTMENT CIRCULAR NO. DC2018-01-0006 Omnibus Rules and Regulations Governing Tax-Exempt Importations for Petroleum Operations under Presidential Decree No. 06 87, as amended and Coal operations under Presidential Decree No. 972, as amended

DEPARTMENT CIRCULAR NO. DC2018-01-0007 Adopting Further Amendments to the Wholesale Electricity Spot Market (WESM) Rules and Market Manual on Dispatch 07 Protocol for the Implementation of Enhancements to WESM Design and Operations

DEPARTMENT CIRCULAR NO. DC2018-01-0008 Adopting Further Amendments to the Wholesale Electricity Spot Market (WESM) Market Manuals on Billing and Settlement 08 and Load Forecasting Methodology for the Implementation of Enhancements to WESM Design and Operations

ENERGY ANNUAL REPORT 2018 59 DEPARTMENT CIRCULAR NO. DC2018-01-0009 Adopting Further Amendments to the Retail Rules and Its Market Manual on Metering Standards and Procedures for the 09 Implementation of Enhancements to WESM Design and Operations

DEPARTMENT CIRCULAR NO. DC2018-01-0010 Adopting Further Amendments to the Wholesale Electricity Spot Market (WESM) Rules, Retail and Retail Market Manual on 10 Metering for Clarifications on Retail Market Integration

DEPARTMENT CIRCULAR NO. DC2018-01-0011 Adopting Further Amendments to the Wholesale Electricity Spot Market (WESM) Market Manual on Market Operator 11 Information Disclosure and Confidentiality for the Implementation of Enhancements to WESM Design and Operations

DEPARTMENT CIRCULAR NO. DC2018-01-0012 Adopting Further Amendments to the Wholesale Electricity Spot Market (WESM) Market Manuals on Price Determination 12 Methodology and Constraint Violation Coefficients and Pricing Re-Run for the Implementation of Enhancements to WESM Design and Operations

DEPARTMENT CIRCULAR NO. DC2018-01-0013 Implementing Rules and Regulations of Executive Order No. 30, series of 2017, Creating the Energy Investment Coordinating 13 Council in Order to Streamline the Regulatory Procedures Affecting Energy Projects

DEPARTMENT CIRCULAR NO. DC2018-01-0014 14 Creating the Energy Task Force Election to Ensure Adequate and Reliable Energy Supply Before, During and After Elections

DEPARTMENT CIRCULAR NO. DC2018-01-0015 Adopting Further Amendments to the Wholesale Electricity Spot Market (WESM) Rules and Market Manuals for the 15 Implementation of Enhancements to WESM Design and Operations

DEPARTMENT CIRCULAR NO. DC2018-01-0016 Adopting Further Amendments to the Wholesale Electricity Spot Market (WESM) Rules and Market Manual on Dispute 16 Resolution

DEPARTMENT CIRCULAR NO. DC2018-01-0017 Adopting Further Amendments to the Wholesale Electricity Spot Market (WESM) Rules and Market Manuals (Transitory 17 Provisions for the Implementation of WESM in Mindanao)

60 ENERGY ANNUAL REPORT 2018 DEPARTMENT CIRCULAR NO. DC2018-01-0018 Adopting Further Amendments to the Wholesale Electricity Spot Market (WESM) Rules and Market Manual on Procedures for 18 Changes to the WESM Rules, Retail Rules and Market Manuals

DEPARTMENT CIRCULAR NO. DC2018-01-0019 Promulgating the Rules and Guidelines Governing the Establishment of the Green Energy Option Program Pursuant to the 19 Renewable Energy Act of 2008

DEPARTMENT CIRCULAR NO. DC2018-01-0020 Prescribing the Guidelines for the Development and Utilization of Small or Sub-Commercial Deposits of Natural Marsh Gas or 20 Methane Gas in the Philippines, and Granting Gratuitous Permits Thereof

DEPARTMENT CIRCULAR NO. DC2018-01-0021 21 Providing for the Amendments to Rule 29 Part (A) of the Implementing Rules and Regulations of Republic Act No. 9136

DEPARTMENT CIRCULAR NO. DC2018-01-0022 Adopting Further Amendments to the Wholesale Electricity Spot Market (WESM) Rules and Market Manuals on the 22 Participation of Battery Energy Storage Systems and Pumped-Storage Units in the WESM

DEPARTMENT CIRCULAR NO. DC2018-01-0023 23 Promulgating the Rules and Guidelines Governing the Establishment of the Renewable Portfolio Standards for Off-Grid Area

DEPARTMENT CIRCULAR NO. DC2018-01-0024 Prescribing the Rules Governing the Review and Evaluation of Direct Connection Applications of Industrial, Commercial and 24 Other Electricity End-Users

DEPARTMENT CIRCULAR NO. DC2018-01-0025 25 Adopting Framework for Uniform Monthly Electricity Bill Format

DEPARTMENT CIRCULAR NO. DC2018-01-0026 26 Establishment and Development of Competitive Renewable Energy Zones in the Country

ENERGY ANNUAL REPORT 2018 61 ACRONYMS

AFET Alternative Fuels and Energy Technologies

AFV Alternative Fuel Vehicles

AMEM ASEAN Ministers on Energy Meeting

AREC Affiliated RE Centers

ASEP Access to Sustainable Energy Programme

BIMP-EAGA Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area

BLEP Barangay Line Enhancement Program

CEPNS Certificate of Energy Project of National Significance

CNG Compressed Natural Gas

COC Coal Operating Contracts

CP Certification of Precondition

CSR Corporate Social Responsibility

CSP Competitive Selection Process

DAP Development Academy of the Philippines

DBM Department of Budget and Management

DENR Department of Environment and Natural Resources

DLF Development and Livelihood Fund

DPNS Draft Philippine National Standards

DU Distribution Utility

EC Electric Cooperative

EE&C Energy Efficiency and Conservation

EF Electrification Fund

EICC Energy Investment Coordinating Council

EPIRA Electric Power Industry Reform Act of 2001

EO Executive Order

ESB Energy Supply Base

ESCO Energy Service Company

EU European Union

EV Electric Vehicles

62 ENERGY ANNUAL REPORT 2018 GEMP Government Energy Management Program

HEP Household Electrification Program

IAEA International Atomic Energy Agency

IEM Information, Education and Motivation

IEMOP Independent Electricity Market Operator of the Philippines

IMO Independent Market Operator

INIR Integrated Nuclear Infrastructure Review

MERALCO Manila Electric Company

MMSU Mariano Marcos State University

MOA Memorandum of Agreement

MOU Memorandum of Understanding

NCIP National Commission on Indigenous People

NEA National Electrification Administration

NEECP National Energy Efficiency and Conservation Program

NEPIO Nuclear Energy Program Implementing Organization

NIHE Nationwide Intensification of Household Electrification

NPC National Power Corporation

PCECP Philippine Conventional Energy Contracting Program

PEMC Philippine Electricity Market Corporation

PEP Philippine Energy Plan

PDNGR Philippine Downstream Natural Gas Industry Regulation

PDP Power Development Plan

PDRF Philippine Disaster Resiliency Foundation, Inc.

PIEEP Philippine Industrial Energy Efficiency Project

PNOC Philippine National Oil Company

PNOC EC PNOC Exploration Corporation

PNOC RC PNOC Renewables Corporation

PNS Philippine National Standards

PST Passive Seismic Tomography

PV Photovoltaic

RA Republic Act

RE Renewable Energy

ENERGY ANNUAL REPORT 2018 63 RPS Renewable Portfolio Standards

RWMHEEF Reforestation, Watershed Management, Health and/or Environment

Enhancement Fund

LGU Local Government Unit

LNG Liquefied Natural Gas

SEP Sitio Electrification Program

SHAPES Safety and Health Association of the Philippine Energy Sector, Inc.

SPUG Small Power Utilities Group

SUC State Universities and Colleges

TFEM Task Force E-Power Mo

TFK Task Force Kapatid

TPBAC Third Party Bids and Awards Committee

TRAIN Tax Reform for Acceleration and Inclusion

UKE Usapang Klima at Enerhiya

UPSCRFI UP-Statistical Center Research Foundation, Inc.

WESM Wholesale Electricity Spot Market

UNITS OF MEASUREMENTS

BCF Billion Cubic Feet

kWh Kilowatt-hour

MMB Million Barrel

MMMT Million Metric Ton

MW Megawatt

PJ Petajoule

TCF Trillion Cubic Feet

64 ENERGY ANNUAL REPORT 2018 DOE OFFICIALS

SECRETARY Alfonso G. Cusi

SENIOR UNDERSECRETARY HEAD EXECUTIVE ASSISTANT Jesus Cristino P. Posadas Ma. Teresa F. Medoza

UNDERSECRETARIES ASSISTANT SECRETARIES Raul B. Aguilos, CESO I Redentor E. Delola Felix William B. Fuentebella Gerardo D. Erguiza, Jr. Alexander S. Lopez Caron Aicitel E. Lascano Donato D. Marcos Leonido J. Pulido III Benito L. Ranque Robert B. Uy

BUREAUS Dir. Patrick T. Aquino, CESO III Dir. Cesar G. Dela Fuente III Asst. Dir. Melita V. Obillo Asst. Dir. Jesus C. Anunciacion Energy Policy and Planning Bureau Energy Utilization Management Bureau

Dir. Mylene C. Capongcol Dir. Rino E. Abad Asst. Dir. Marissa P. Cerezo Asst. Dir. Rodela I. Romero Renewable Energy Management Bureau Oil Industry Management Bureau

Dir. Mario C. Marasigan, CESO III Dir. Jesus T. Tamang Asst. Dir. Irma C. Exconde Asst. Dir. Ismael U. Ocampo Electric Power Industry Management Bureau Energy Resource Management Bureau

SERVICES FIELD OFFICES Dir. Amelia M. de Guzman Energy Research and Testing Laboratory Services Dir. Renante M. Sevilla Dir. Herminio A. Ariola, CESO IV Information Technology Management Services Luzon Field Office

Dir. Araceli S. Soluta Dir. Jose Rey C. Maleza (OIC) Financial Services Visayas Field Office

Dir. Angelina V. Manga, CESO IV Dir. Nilo J. Geroche Administrative Services Mindanao Field Office Dir. Arthus T. Tenazas, CESO IV Legal Services ANNUAL REPORT 2018 ENERGY

ENERGY ANNUAL REPORT 2018 twitter.com/doe_ph facebook.com/doe.gov.ph Taguig City, Philippines 1632 Philippines City, Taguig DEPARTMENT OF ENERGY DEPARTMENT Tel. Nos.: 840-1780; 479-2900 local 288, 328 288, local 479-2900 840-1780; Nos.: Tel. Energy Center, Rizal Drive, Bonifacio Global City (BGC) City Global Bonifacio Drive, Rizal Center, Energy www.doe.gov.ph