Energy Efficiency and Conservation Act

Key Definitions and Designations

A Certified Energy Conservation Officer (CECO) is a professional certified after demonstrating experience, competence, proficiency, and ethical fitness, responsible for supervision and maintenance of Type 1 designated establishments’ facilities for proper management of energy consumption (Section 4(a)).
A Certified Energy Manager (CEM) is a licensed engineer certified after demonstrating experience, competence, proficiency, and ethical fitness, chosen by Type 2 designated establishments to plan, lead, manage, coordinate, monitor, and evaluate sustainable energy management within the organization (Section 4(b)).
A Designated establishment is a private or public entity in specified sectors identified by the DOE as energy intensive industries based on annual energy consumption in the previous year (with thresholds and adjustment by the DOE) (Section 4(c)).
DOE refers to the agency created under Republic Act No. 7638 (“Department of Energy Act of 1992”), whose functions were expanded by Republic Act No. 9136 (“Electric Power Industry Reform Act of 2001”) (Section 4(e)).
Energy includes all types of energy available commercially, expressly including natural gas (including liquid natural gas and liquid oil gas), heating and cooling fuels (including district heating and district cooling), coal, transport fuels, and renewable energy sources (Section 4(f)).
Energy audit is the evaluation of energy consumption and review of current energy cost to determine appropriate intervention measures and efficiency projects, and may be a walk-through, preliminary, or detailed audit (Section 4(g)).
Energy conservation is the reduction of losses and wastage in various energy stages from energy production to energy consumption through technologically feasible, economically sound, environmentally-friendly, and socially affordable measures (Section 4(i)).
Energy Consumption and Conservation Report (BCCR) is the periodic report submitted to the DOE by specified entities regarding the National Energy Efficiency and Conservation Plan, including energy consumption, energy loss, and status of energy use, with comprehensive contents specified by the DOE (Section 4(j)).
Energy efficiency is managing and restraining the growth in energy consumption resulting in more services for the same energy input or the same services for less energy input (Section 4(k)).
An ESCO is a juridical entity providing multi-technology services and goods to develop/design energy efficiency projects, deliver/guarantee energy savings, ensure cost-effective and optimal performance, and include financing, engineering, equipment, installation, operation/maintenance/upgrade, and monitoring/verification (Section 4(r)).
Local Energy Efficiency and Conservation Plan (LEECP) is the LGU’s collaborative, multi-stakeholder comprehensive framework and programs with defined targets, feasible strategies, and regular monitoring and evaluation aligned with the Act and the NEECP (Section 4(u)).
National Energy Efficiency and Conservation Plan (NEECP) is the national comprehensive framework with defined targets, feasible strategies, and regular monitoring and evaluation, aligned with the Act and regularly reviewed/revised by the DOE (Section 4(z)).
Minimum Energy Performance (MEP) is the minimum performance standard for covered commercial, industrial, transport sectors and energy-consuming products that must be met or exceeded before sale or use (Section 4(w)).
Transmission utility is a private corporation or government-owned utility with an exclusive franchise to operate the wires system for conveyance through a high voltage backbone line (Section 4(dd)).

Government roles and local implementation

The DOE is the lead agency and is responsible for planning, formulating, developing, implementing, enforcing, and monitoring energy management policies and other energy efficiency and conservation plans and programs (Section 5).
The DOE must spearhead creation and updating of the NEECP in coordination with pertinent government agencies, LGUs, and private corporations/organizations (Section 5(a)).
The DOE must develop and maintain the NEECD with assistance of the Philippine Statistical Authority (PSA) (Section 5(c)).
The DOE must lead efforts to ensure compliance with the Government Energy Management Program (GEMP) in accordance with strategic direction of the IAEECC (Section 5(d)).
The DOE must develop, impose, and review the MEP in consultation with DTI—Bureau of Philippine Standards, and pursuant to Chapter V, Section 14 (Section 5(e)).
The DOE must require manufacturers, importers, and dealers to comply with the MEP and display energy labels showing energy requirement and consumption efficiency on packaging and products (Section 5(f)).
The DOE must periodically review and reclassify designated establishments under rules/regulations (Section 5(g)).
The DOE must enforce prescribed ratings standards for energy performance in buildings and industries in coordination with relevant agencies and LGUs (Section 5(h)).
The DOE must support LGUs on energy efficiency planning, LEECP preparation, and implementation, including providing templates for reports and updates (Section 5(i)).
The DOE must coordinate with the NEECCO to ensure consistency and alignment of LEECPs with the NEECP (Section 5(j)).
All government agencies, including GOCCs, must ensure efficient use of energy in their offices, facilities, transportation units, and in the discharge of functions (Section 6).
The Act allocates specific responsibilities across agencies, including:
- BOI inclusion of energy efficiency projects in annual investment priorities for Executive Order No. 226 incentives (Section 6(a)).
- CCC collaboration with DOE on targets/strategies and monitoring greenhouse gas emission reductions aligned with the NEECP (Section 6(b)).
- COA recognition of government energy efficiency projects as goods/services/consultancy consistent with accounting and auditing rules (Section 6(c)).
- CHED integration of energy management courses and promoting energy efficiency measures in higher education institutions (Section 6(d)).
- DBM preference in funding and energy efficiency as a factor in annual performance evaluation (Section 6(e)).
- DepEd promotion of energy efficiency and conservation practices in curricula (Section 6(f)).
- DOF, in coordination with DOE and concerned agencies, mechanisms to implement fiscal incentives (Section 6(g)).
- DENR guidelines on characterization of wastes from energy-consuming devices and end-of-life vehicles consistent with Republic Act No. 6969 (Section 6(h)).
- DILG responsibility, in coordination with DOE, to ensure LGU compliance (Section 6(i)).
- DPWH implementation of energy-conserving design guidelines as part of National Building Code and related guidelines, consistent with Republic Act No. 6541 (Section 6(j)).
- DOST research and development programs for new and alternative energy efficient technologies (Section 6(k)).
- DTI (through Bureau of Philippine Standards) requiring compliance with MEP and display of energy label/energy efficiency label (Section 6(l)).
- DOTr ensuring compliance with MEP for transport vehicles consistent with Republic Act No. 8749 and display of energy consumption label (Section 6(m)).
- GCG incorporating energy efficiency in GOCC performance evaluation (Section 6(n)).
- GFIs setting aside lending funds at concessional rates and arranging compatible guarantee/insurance products for credit and performance risks in energy efficiency investments (Section 6(o)).
- Insurance Commission ensuring compatible guarantee products in collaboration with GFIs (Section 6(p)).
- NEDA recognizing the role of energy efficiency in national development (Section 6(q)).
- NCC (or successor) as focal point for private sector involvement (Section 6(r)).
- PSA institutionalizing household/establishment energy consumption surveys and assisting DOE on NEECD (Section 6(s)).
- TESDA developing training regulations and implementing skills training, assessment, and certification programs for relevant personnel in energy efficiency and renewable systems (Section 6(t)).
LGUs must establish an EECO headed by an EEC Officer and, through EECOs and planning/development offices with DOE assistance and DILG coordination, develop and implement their LEECP and incorporate it into local development plans (Section 7).
LGUs must assist DOE in monitoring designated establishments’ compliance obligations for input in the NEECD (Section 7).
All energy end users must use every available energy resource efficiently and promote development and utilization of new and alternative energy efficient technologies and systems, including renewable technologies, in compliance with the Act (Section 8).

IAEECC: approvals and strategic direction

An Inter-Agency Energy Efficiency and Conservation Committee (IAEECC) is created to evaluate and approve government energy efficiency projects and to provide strategic direction for implementation of the GEMP (Section 9).
The IAEECC is composed of the Secretaries of DOE, DBM, DOF, DTI, DOTr, DOST, DILG, DPWH, and the Director General of NEDA; the DOE Secretary serves as Chairperson, and DOE’s Energy Utilization Management Bureau serves as Secretariat (Section 9).
The IAEECC prepares annual assessment of opportunities for energy cost reduction in state-owned and leased buildings and facilities it designates, completing the assessment each year and making it available to the public (Section 10(a)).
Each annual assessment must include preceding five (5) years energy consumption and costs and anticipated next three (3) years projections, energy conservation measures deployed in the preceding year, evaluation studies of cost reductions/benefits, and energy conservation opportunities based on audits/technical analysis with associated savings O&M procedures and capital projects (Section 10(a)(1)-(4)).
The IAEECC reviews proposed capital projects and energy cost operating budgets of agencies it designates and recommends energy conservation measures reducing operating costs in state-owned and leased buildings/facilities (Section 10(b)).
The IAEECC provides technical and consultative assistance concerning energy cost management or conservation (Section 10(c)).
The IAEECC annually recommends O&M procedure modifications and capital projects to reduce energy consumption and costs in designated state-owned/leased facilities (Section 10(d)).
The IAEECC conducts surveys, audits, technical analyses, and research/investigations related to government energy efficiency projects and the GEMP as necessary to support the NEECP and Act objectives (Section 10(e)).
The IAEECC issues a report describing the status of government energy efficiency projects and the GEMP, listing obstacles to improvement with recommendations for statutory change, and identifying public sector energy cost reduction opportunities not addressed by the Act or related programs (Section 10(f)).
The IAEECC develops guidelines after studying existing/emerging energy conservation technologies to aid its work toward Act objectives (Section 10(g)).

Certification and accreditation systems

A certification and assessment system for energy conservation officers and energy managers must be established to raise professional standards (Section 12).
The CECO certification system must be developed by DOE and TESDA based on an approved scope of practice, competency standards, and assessment/certification process aligned with the Philippine Qualifications Framework (PQF) and applicable international standards (Section 12).
TESDA must conduct training, assessment, and certification of workers for PQF qualification Levels 1 to 5, and register Technical-Vocational Education and Training programs, including those of nonprofit and other private institutions (Section 12).
The CEM certification and assessment system for registered engineers must be established by CHED, with CHED offering professional certificate programs and developing guidelines in coordination with DOE and TESDA (Section 12).
The ESCO certification system is strengthened by DOE so the market has technically and financially capable entities for energy efficiency projects (Section 13).
ESCOs applying for certification must demonstrate technical and managerial competence including energy audits, design engineering, project financing (providing or arranging), construction management, operations and maintenance of energy efficient technologies, and verifying energy savings (Section 13).

Energy performance standards and labeling

The MEP for commercial, industrial, and transport sectors is developed by the DOE in consultation with relevant stakeholders and guided by a cost-benefit analysis completed by the DOE with assistance of NEDA within one (1) year from Act effectivity (Section 14).
Adoption and enforcement of the MEP must form part of the NEECP (Section 14).
The DOE develops the MEP for energy-consuming products covered under the Philippine Energy Standards and Labeling Program (PESLP) in consultation with stakeholders involved in manufacturing, sale, and use of covered products (Section 14).
The DOE develops energy performance testing guidelines for all energy-consuming products to ensure compliance with the MEP (Section 14).
Manufacturers, importers, distributors, and retailers must comply with the MEP, subject energy-consuming products to energy performance testing, and submit product information to the DOE (Section 14).
No manufacturer, importer, distributor, and retailer may sell, lease, or import any energy-consuming product unless it complies with the MEP and is labeled in accordance with the Act (Section 14).
The DOE prescribes energy labels for all energy-consuming products, devices, and equipment; sellers and supply-chain participants must ensure labels are displayed and provide information assisting consumers in making informed decisions (Section 15).
Energy label information submitted for public availability must maintain integrity, and the DOE defines the nature and scope of required information (Section 15).
The DOE must develop and enforce a mandatory energy efficiency rating and labeling system for identified energy-consuming products, including room air conditioners, refrigeration units, and television sets, to promote efficient appliances and raise awareness (Section 15).
At minimum, the energy efficiency label must reflect the energy efficiency rating, monthly energy consumption based on a specified hour of daily usage, brand name and product model, and the year the energy rating was issued (Section 15).
The calculation method for the energy efficiency rating must be made available to the public and updated as needed to ensure label integrity (Section 15).
The energy efficiency rating calculation must be contained in the Code of Practice on Energy Labeling of Products or other related issuance, updated regularly by the DOE (Section 15).
The DOE regularly selects energy-consuming products and models for examination, testing, and verification (Section 16).
The DOE may require manufacturers, importers, suppliers, distributors, or retailers to make available at a DOE-specified place the number of products reasonably necessary for testing (Section 16).
The DOE is authorized to dismantle and examine products/devices/equipment to determine energy efficiency and then return products after testing, except when the DOE has reasonable grounds a provision was violated and the product will serve as evidence (Section 16).
The DOE may procure qualified services or enter into arrangements to carry out examination/testing following procurement laws and Republic Act No. 9184, unless engagement is covered by public-private partnership arrangements under Republic Act No. 6957 as amended by Republic Act No. 7718, or by joint venture under the 2013 NEDA Joint Venture Guidelines as may be amended (Section 16).
Vehicle manufacturers, importers, and dealers must comply with fuel economy performance labeling requirements set by the DOE with assistance of the DENR and the DOTr, and must provide technical information on the fuel economy rating enabling consumer informed choice (Section 17).
The DOE develops and conducts fuel efficiency testing guidelines to validate information provided by vehicle manufacturers, importers, and dealers (Section 17).

Buildings and energy-conserving requirements

LGUs must implement energy efficiency and conservation measures for new and existing commercial/industrial buildings in accordance with building permit issuances (Section 18).
New building construction must comply with DOE-issued Guidelines on Energy Conserving Design on Buildings issued in consultation with DPWH and may be revised to reflect new/emerging technologies (Section 18(a)).
State-owned buildings and facilities must comply with the GEMP and such other guidelines issued by the IAEECC (Section 18(a)).
Retrofit of buildings must comply with the same DOE guidelines issued in consultation with DPWH and may be revised for new/emerging technologies (Section 18(b)).
State-owned and leased buildings and facilities must comply with the GEMP and other IAEECC guidelines (Section 18(b)).

Designated establishments and compliance duties

Designated establishments are initially classified as Type 1 and Type 2 by annual energy consumption in the previous year (Section 19).
Type 1 designated establishments are those with annual energy consumption of 500,000 kWh to 4,000,000 kWh for the previous year (Section 19(a)).
Type 2 designated establishments are those with annual energy consumption of more than 4,000,000 kWh for the previous year (Section 19(b)).
The DOE must periodically review and adjust thresholds for Type 1/Type 2 if deemed necessary (Section 19).
Designated establishments must integrate an energy management system policy into business operations based on ISO 50001 or any similar framework (Section 20(a)).
Designated establishments must set up programs to develop and design measures promoting energy efficiency, conservation, and sufficiency, which may include installation of renewable energy technologies (Section 20(b)).
Designated establishments must set annual targets, plans, and measurement and verification methods for implementation of energy efficiency and conservation projects (Section 20(c)).
Designated establishments must keep records on monthly energy consumption data and other energy-related data (Section 20(d)).
Designated establishments must improve average specific energy consumption according to annual reduction targets established by the DOE in the NEECP (Section 20(e)).
Designated establishments must submit an annual ECCR to the DOE by 15 April of every year (Section 20(f)).
Designated establishments must conduct an energy audit once every three (3) years, by engaging a certified energy auditor or an accredited ESCO, and submit an energy audit report to the DOE upon completion (Section 20(g)).
Type 1 establishments must employ a CECO, and Type 2 establishments must employ a CEM (Section 20(h)).
CECOs and CEMs may be chosen from within the organization or hired through external recruitment (Section 20(h)).
Designated establishments must notify the DOE within ten (10) working days from effectivity of personnel action regarding appointment or separation of their CECO/CEM (Section 20(i)).
Establishments with annual energy consumption of at least 100,000 kWh but less than 500,000 kWh in the previous year must submit an annual energy consumption report to the DOE and integrate an energy management system policy based on ISO 50001 or another standard identified by the DOE (Section 22).
Thresholds in this lower-tier obligation must be periodically reviewed and adjusted by the DOE (Section 22).
Such establishments may on a voluntary basis submit themselves to external energy audit or quality control assessment (Section 22).
The DOE has visitorial power to inspect designated establishments during office hours in the presence of an authorized representative, to verify compliance, evaluate energy management systems/procedures, identify efficiency improvement areas, and examine energy monitoring records and reports and other compliance documents (Section 23).

Demand Side Management program

The DOE, with assistance of the Energy Regulatory Commission and the Philippine Economic Zone Authority, must pursue a Demand Side Management (DSM) program for the electric power industry to reduce energy consumption via effective load management and migration from peak to off-peak periods, including measures undertaken by distribution utilities to encourage end users to manage their loads (Section 24).

Incentives and financial support

Energy efficiency projects certified by the DOE must be included in the BOI annual investment priorities plan and must be entitled to incentives under Executive Order No. 226 and other applicable laws for ten (10) years from Act effectivity (Section 25).
After the ten (10)-year period, BOI review and possible extension of inclusion in annual priorities must be implemented (Section 25).
Energy efficiency projects are exempt from Article 32(1) of Executive Order No. 226 (Section 25).
Establishments implementing or implementing energy efficiency projects are entitled to awards and recognition for innovations and successful projects/products, and technical assistance from government agencies in developing and promoting energy efficient technologies (Section 26).
GFIs and other financial institutions must provide concessional financial packages for development/utilization/commercialization of renewable energy and energy efficiency projects as allowed by their enabling charters or laws, and as recommended and endorsed by the DOE (Section 27).

Prohibited acts and enforcement process

The following acts are prohibited:
- Failing to comply with energy labeling (Section 30(a)).
- Removing, defacing, or altering any energy label on energy-consuming products before sold to the first retail purchaser or leased to the first lessee (Section 30(b)).
- Failing to provide accurate information or providing false or misleading energy information required to be submitted under the Act (Section 30(c)).
- Selling, leasing, or importing energy-consuming products that do not comply with the MEP (Section 30(d)).
- Failing or willfully refusing to appoint or designate a CECO or CEM (Section 30(e)).
- Willfully refusing to submit to on-site inspection as provided in Section 23 (Section 30(f)).
- Failing or willfully refusing to submit required reports under the Act (Section 30(g)).
- Failing to comply with DOE issued orders in exercising enforcement powers (Section 30(h)).
- Violating any provision of the IRR, codes, and guidelines issued under the Act (Section 30(i)).
Upon determination that a reasonable ground exists that a designated establishment committed any prohibited act, the DOE may consider the following measures prior to imposing fines and penalties:
- Requiring an explanation supported by reports, returns, and other documents to rebut the alleged prohibited act (Section 31(a)).
- In cases where an explanation was issued but the DOE finds violation due to materially insufficient reports, false returns, and non-submission of required documents, providing a recommendation to the establishment (Section 31(b)).
- Disclosing the name of the establishment after it received a recommendation and failed to comply with the recommendation (Section 31(c)).
- Issuing an order when the establishment fails to follow or comply with the recommendation, and non-compliance with the order serves as valid ground for fines and/or penalties under Section 32 (Section 31(d)).

Fines, penalties, and criminal liability

The DOE is empowered to impose fines and penalties for violations of the Act, its IRR, and related issuances (Section 32).
The administrative fines and penalties range from a minimum of PHP 10,000.00 to a maximum of PHP 1,000,000.00 (Section 32).
Administrative fines and penalties do not prejudice penalties provided by existing regulations of other concerned government agencies (Section 32).
The administrative penalties do not prejudice criminal liability under the Act (Section 32).
Willful commission by responsible officers and employees of prohibited acts results, upon conviction, in imprisonment of one (1) year to five (5) years, or a fine ranging from PHP 100,000.00 to PHP 100,000,000.00, or twice the amount of costs avoided for noncompliance, whichever is higher, or both, at the discretion of the court (Section 33).
Persons who willfully aid and abet prohibited acts, or cause the commission by another, are liable in the same manner as principals (Section 33).
For associations, partnerships, or corporations, the penalty is imposed on the partner, president, chief operating officer, chief executive officer, director, or officer responsible for the violation (Section 33).

Appropriations, IRR, guidelines, oversight, and effectivity

Funding for successful implementation comes from existing DOE appropriations, and subsequent amounts for continuous implementation must be included in the annual General Appropriations Act (Section 34).
The DOE must promulgate the IRR within six (6) months from Act effectivity in consultation with concerned agencies and entities, LGUs, commercial/industrial/transport sectors, and other stakeholders (Section 35).
The DOE must develop all codes and guidelines mentioned in the Act within six (6) months from promulgation of the IRR (Section 36).
Upon effectivity, the Joint Congressional Power Commission created under Section 62 of Republic Act No. 9136 is renamed to Joint Congressional, Energy Commission and exercises oversight powers over implementation of the Act (Section 37).
The Act includes a separability clause preserving unaffected portions if any provision is declared unconstitutional or invalid (Section 38).
All laws, presidential decrees, executive orders, issuances, rules, and regulations inconsistent with the Act are repealed or modified accordingly (Section 39).
The Act takes effect fifteen (15) days after publication in at least two (2) newspapers of general circulation (Section 40).