Question & AnswerQ&A (EXECUTIVE ORDER NO. 232)
The main purpose is to amend Executive Order No. 462, series of 1997, to enable private sector participation in the exploration, development, utilization, and commercialization of ocean, solar, and wind (OSW) energy resources for power generation and other energy uses.
The Department of Energy (DOE) is primarily responsible for the assessment, field verification, harnessing, development, and utilization of OSW energy resources under this Executive Order.
Production sharing contracts are agreements awarded by the DOE Secretary to private sector participants to explore, develop, and utilize OSW resources, subject to technical and financial standards and after consultation with host communities and local government units.
Projects must harness OSW resources located on public domain lands and/or offshore waters within Philippine territory, contiguous zone, and exclusive economic zone, and have a net electric output of more than 1 MW for sale to an electric utility.
They are considered Private OSW Projects and are subject to Section 3 of Executive Order No. 462, series of 1997.
The government share includes a signature bonus and a production bonus, which are determined through bidding or negotiation and are subject to conditions protecting electricity consumers.
The signature bonus is paid to the DOE at the signing of the Pre-Negotiated Commercial Contract upon issuance of a 'Letter of Confirmation' by the DOE Secretary confirming the commercial feasibility of the project.
Yes, the government shall waive the signature bonus on the first production sharing project to reduce the pre-operating cost burden on the contractor.
The production bonus shall not result in electricity prices higher than the contracted selling rates to electric utilities and shall not exceed 15% of net proceeds, calculated as gross sales less operating and maintenance costs.
The DOE assists developers in obtaining fiscal and non-fiscal incentives, registering as pioneer industries, charging assessment costs to current projects, securing access to lands or offshore areas, and conducting studies for proper valuation of intermittent electrical energy generation.
It takes effect fifteen (15) days after its publication in at least two newspapers of general circulation.