HB 2027 – Renewable Energy Act

FOURTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

House Bill No. 2027

 

Introduced by Representative Lorenzo R. Tañada III


AN ACT

PROMOTING THE DEVELOPMENT, UTILIZATION AND COMMERCIALIZATION OF RENEWABLE ENERGY RESOURCES AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:

CHAPTER I

TITLE AND DECLARATION OF POLICIES

SECTION 1. Short Title. This Act shall be known as the “Renewable Energy Act of 2007”. It shall hereinafter be referred to as the “Act”.

SEC. 2. Declaration of Policies. – It is hereby declared the policy of the State to:

a) Accelerate the development and increase the share of renewable energy resources in the country’s energy consumption to achieve energy self-reliance through the exploration, development and utilization of renewable energy resources such as, but not limited to, biomass, solar, wind, hydro, geothermal, and ocean energy sources or hybrid systems;

b) Increase the utilization of renewable energy with due regard to gender-sensitive approaches by institutionalizing its use, developing national and local capabilities in the use of renewable energy systems, and promoting its efficient utilization and widespread application by providing fiscal and non-fiscal incentives;

c) Establish the necessary infrastructure to carry out the mandates specified in this Act and other relevant existing laws; and

d) Promote sustainable development of energy supply, with due regard to protecting the climate, nature, and environment..

SEC. 3. Scope. – This Act shall establish the framework for the accelerated development and advancement of renewable energy resources, through the grant of fiscal and non-fiscal incentives to all Renewable Energy activities; and the development of a strategic program to increase its share and utilization.

SEC. 4. Definition of Terms. – As used in this Act, the following terms are herein defined:

(a) “Biofuels” refers to bioethanol, biodiesel and other fuels made from biomass and primarily used for thermal and power generation;

(b) “Biomass Energy Systems” refers to energy systems which use biomass resources to produce heat, steam, mechanical power or electricity;

(c) “Biomass Resources” refers to non-fossilized, biodegradable, organic material originating from plants, animals, and micro-organisms. Also products, by-products, residues from agriculture such as but not limited to biofuels, bagasse, rice hulls, coconut husks and shells, corn stovers, non-fossilized and biodegradable organic fractions of industrial and municipal wastes, as well as gases and liquids recovered from the decomposition and/or extraction of non-fossilized and biodegradable organic material.

(d) “Board of Investments” or “BOI” refers to an attached agency of the Department of Trade and Industry created under Republic Act No. 5186, as amended;

(e) “Cogeneration systems” refers to facilities which produce electrical and/or mechanical energy and forms of useful thermal energy such as heat or steam which are used for heating or cooling purposes through the sequential use of energy;

(f) “Department of Energy” or “DOE” refers to the government agency created pursuant to Republic Act No. 7638 whose functions were expanded in R.A. 9136 and further expanded in this Act;

(g) “Department of Environment and Natural Resources or DENR” refers to the government agency created pursuant to Executive Order No. 192;

(h) “Department of Finance” or “DOF” refers to the government agency created pursuant to Executive Order No. 127, as amended;

(i) “Department of Science and Technology” or “DOST” refers to the government agency created pursuant to Executive Order No. 128;

(j) “Department of Trade and Industry” or “DTI” refers to the government agency created pursuant to Executive Order No. 133;

(k) “Distribution of Electricity” refers to the conveyance of electric power by a Distribution Utility through its distribution system pursuant to the provision of Republic Act No. 9136 and its implementing rules and regulations;

(l) “Distribution Utility” refers to any electric cooperative, private corporation, government-owned utility or existing local government unit which has an exclusive franchise to operate a distribution system in accordance with its franchise and Republic Act No. 9136;

(m) “Energy Regulatory Commission” or “ERC” refers to the independent quasi-judicial regulatory agency created pursuant to Republic Act No. 9136;

(n) “Generation Company” refers to any person or entity authorized by the Energy Regulatory Commission (ERC) to operate facilities used in the generation of electricity;

(o) “Generation Facility” refers to a facility for the production of electricity and/or thermal energy such as, but not limited to, steam, hot or cold water;

(p) “Geothermal Energy” refers to all geothermal fluids whether existing naturally or formed by the artificial introduction of fluids into naturally hot formation, heat energy in the earth, and any by-product derived from them;

(q) “Geothermal Energy Systems” refer to machines or other equipment that converts geothermal energy into useful power;

(r) “Geothermal Resources” refers to mineral resources, classified as renewable energy resource, in the form of: (1) all products of geothermal processes, embracing indigenous steam, hot water and hot brines; (2) steam and other gases, hot water and hot brines resulting from water, gas, or other fluids artificially introduced into geothermal formations; (3) heat or associated energy found in geothermal formations; and (4) any by-product derived from them;

(s) “Government Share” refers to the amount due the National Government and Local Government Units from the exploitation, development and utilization of naturally-occurring renewable energy resources;

(t) “Grid” refers to the high voltage backbone system of interconnected transmission lines, substations and related facilities, located in each of Luzon, Visayas, and Mindanao, or as may otherwise be determined by the ERC in accordance with the implementing rules and regulations of Republic Act No. 9136;

(u) “Hybrid System” refers to any power or energy generation facility which makes use of two or more types of technologies utilizing both conventional and/or renewable fuel sources such as, but not limited to, integrated wind/diesel systems, integrated solar/wind systems, biomass/fossil fuel systems, hydro/fossil fuel systems, integrated solar/biomass systems, integrated wind/fossil fuel systems, based on ten percent (10%) of the annual energy output provided by the RES components of the hybrid systems;

(v) “Hydroelectric Power Systems” or “Hydropower Systems” refers to water-based energy systems which produce electricity by utilizing the kinetic energy of falling or running water to turn a turbine generator, compliant with World Commission on Dams standards;

(w) “Hydroelectric Power Development” or “Hydropower Development” refers to the construction and installation of a hydroelectric power-generating plant and its auxiliary facilities, such as diversion structure, headrace, penstock, substation, transmission, and machine shop, among others;

(x) “Hydroelectric Power Resources” or “Hydropower Resources” refers to water resources found technically feasible for development of hydropower projects which include rivers, lakes, waterfalls, irrigation canals, springs, ponds and other water bodies;

(y) “Market Operator” refers to an autonomous group, constituted by the DOE, with equitable representation from electric power industry participants, that undertake the preparatory work and initial operation of the wholesale electricity spot market;

(z) “Missionary Electrification” refers to the provision of basic electricity service in unviable areas with the aim of bringing the operations in these areas to viability levels;

(aa) “National Power Corporation” or “NPC” refers to the government corporation created under Republic Act No. 6395, as amended;

(bb) “National Transmission Corporation” or “TRANSCO” refers to the corporation created pursuant to Republic Act No. 9136 responsible for the planning, construction, and centralized operation and maintenance of high-voltage transmission facilities, including grid interconnection and ancillary services;

(cc) “Net Metering” refers to a system, , in which grid user has a two-way connection to the grid and is only charged for his net electricity consumption and is credited for any overall contribution to the electricity grid;

(dd) “Ocean Energy Systems” refers to energy systems which convert ocean or tidal current, ocean thermal gradient or wave energy into electrical or mechanical energy;

(ee) “Off-Grid Systems” refers to electrical systems not connected to the wires and related facilities of any Mini-Grid System or the On-Grid Systems of the Philippines;

(ff) “On-Grid System” refers to electrical systems composed of interconnected transmission lines, distribution lines, substations and related facilities for the purpose of conveyance of bulk power on the Grid of the Philippines;

(gg) “Renewable Energy (Systems) Developers” or “RE Developers” refers to individual/s or a group of individuals formed in accordance with existing Philippine Laws and duly registered with the DOE engaged in the exploration, production, development and utilization of renewable energy resources and/or actual operation of renewable energy systems/facilities;

(hh) “Renewable Energy Policy Framework” or “REPF” refers to the long-term policy developed by the DOE which identifies among others, the goals and targets for the development and utilization of renewable energy in the country;

(ii) “Renewable Energy Service (Operating) Contract or RE Contract” refers to the service agreement between the Government, thru the Department of Energy, and RE Developer and/or the RE Developer and other private entity over a period in which the RE Developer has the exclusive right to a particular RE area for exploration and development. The RE Contract shall be divided into two (2) stages, the pre-development stage and the development/commercial stage. The preliminary assessment and feasibility study up to financial costing shall refer to the pre-development stage. The construction and installation of facilities up to operation phase shall refer to the development stage;

(jj) “Renewable Energy Resources” or “RE Resources” refers to energy resources that do not have an upper limit on the total quantity to be used. Such resources are renewable on a regular basis, and whose renewal rate is relatively rapid to consider availability over an indefinite period of time. These include, among others, biomass, solar, wind, hydropower, geothermal, and ocean energy, and other emerging energy sources;

(kk) “Renewable Energy Systems” or “RES” refers to energy systems which convert renewable energy resources into useful energy forms, like electrical, mechanical, etc.;

(ll) “Republic Act No. 9136” or “Electric Power Industry Reform Act of 2001” refers to the law mandating the restructuring of the electric power sector and the privatization of the NPC;

(mm) “Rural Electrification” refers to the delivery of basic electricity services, consisting of power generation, subtransmission, and/or extension of associated power delivery system that would bring about important social and economic benefits to the countryside;

(nn) “Small-Scale Distributed Generation” refers to a system of small generation entities supplying directly to the distribution grid, any one of which shall not exceed 100 kW in capacity;

(oo) “Solar Energy” refers to the energy derived from solar radiation that can be converted into useful thermal or electrical energy;

(pp) “Solar Energy Systems” refers to energy systems which convert solar energy into thermal or electrical energy;

(qq) “Small Power Utilities Group” or “SPUG” refers to the functional unit of the National Power Corporation mandated under Republic Act No. 9136 to pursue missionary electrification function;

(rr) “Transmission of Electricity” refers to the conveyance of electricity through the high-voltage backbone system;

(ss) “Wind Energy” refers to the energy that can be derived from wind that is converted into useful electrical or mechanical energy;

(tt) “Wind Energy Systems” refers to the machines or other related equipment that convert wind energy into useful electrical or mechanical energy;

(uu) “Wholesale Electricity Spot Market” or “WESM” refers to the wholesale electricity spot market created pursuant to Republic Act No. 9136;

CHAPTER II

ORGANIZATION

SEC. 5. Lead Agency. – The DOE shall be the lead agency mandated to implement the provisions of this Act.

CHAPTER III

ON-GRID RENEWABLE ENERGY DEVELOPMENT

SEC. 6. Time Bound Renewable Energy Targets – All stakeholders in the electric power industry shall contribute to the growth of the renewable energy market of the country. Towards this end, the National Renewable Energy Board (NREB), created under Section 19 of this Act, shall set time bound renewable energy targets, subject to the approval of the Joint Congressional Power Commission under Section 23 of this Act.

SEC. 7 Feed-In System – To stimulate the economic development of renewable energy, a Feed-In System for electricity produced for each type of renewable energy technology is hereby mandated. Towards this end, the NREB created under Section 19 of this Act, shall:

a) Prioritize connections to the grid for general electricity supply of power plants generating electricity from renewable energy sources within territory of the Philippines;

b) Prioritize the purchase and transmission of and payment for, such electricity by grid market operators;

c) Determine the fixed tariff to be paid to electricity produced from each type of renewable energy and mandated number of years within a minimum of twelve (12) years;

d) Formulate the tariff that will allow the economic operation of the renewable energy sources;

e) Establish the Feed-In System to be unbureaucratic as possible to allow efficient use of financial resources and to attract RE industry investors for the development of manufacturing facilities; and

f) Implement a nationwide equalization scheme for the quantity of electricity purchased and paid for.

SEC. 8. Green Energy Option. A Green Energy Option Program, which shall provide end-users the option to choose renewable energy resources, shall be made available to all end-users. Towards this end, the ERC shall, in collaboration with the National Renewable Energy Board, the PEMC and the industry players, cause the necessary modification of the Implementing Rules and Regulations, WESM Rules or any relevant Rules or Regulations.

End users with a monthly average peak demand of at least 100kW may directly contract for RE-based energy with the power generator. Provided that end-users with a monthly average peak demand of less than 100kW may contract for RE-based energy with the distribution utility.

Consistent herewith, the National Transmission Corporation, the Distribution Utilities, the PEMC, and all relevant parties are hereby mandated to provide the appropriate mechanisms for the physical connection and commercial arrangements necessary to ensure the success of the Green Energy Option.

SEC. 9. Net-metering and Distributed Generation for Renewable Energy. – The distribution utilities shall, upon request and subject to technical considerations and without discrimination, enter into net-metering agreements with distribution grid users.

The distribution utility shall charge qualified users their net energy consumption at the standard retail rate and shall credit net contributors of energy from renewable sources at the prevailing average bulk generation rate.

The distribution utility shall be entitled to any renewable energy production certificate resulting from distributed RE generation for sale or use in the RPS.

Consistent herewith, the National Transmission Corporation, the Distribution Utilities, PEMC and all relevant parties are hereby mandated to provide the mechanisms for the physical connection and commercial arrangements necessary to ensure the success of the Net-metering and Distributed Generation for Renewable Energy program.

CHAPTER IV

OFF-GRID RENEWABLE ENERGY DEVELOPMENT

SEC. 10. Off-Grid Areas. – In the performance of its mandate to provide missionary electrification, the SPUG, successors-in-interest and/or qualified third party in off-grid areas shall, within two (2) years from the effectivity of this Act, source a minimum percentage of its total annual generation from available RE resources in the area concerned, as may be determined by the DOE through its Renewable Energy Policy Framework.

As used in this Act, successors-in-interest refers to an entity deemed technically and financially capable to serve/take over existing NPC-SPUG areas, through open and competitive bidding.

CHAPTER V

GOVERNMENT SHARE

SEC. 11. Government Share. – The government share on RE development projects shall be equal to at least one and one-half percent (1.5%) of the gross proceeds for all RE resources except for geothermal which shall be at least two percent (2%) of the gross proceeds. Provided further that the government share shall be collected ten (10) years from the commencement of commercial operations of the RE development projects.

CHAPTER VI

ENVIRONMENTAL COMPLIANCE

SEC. 12. Compliance with Environmental Regulations. – All renewable energy explorations, development, utilization, and RES operations shall be conducted in accordance with existing environmental regulations as prescribed by the DENR and/or any other government agency.

CHAPTER VII

GENERAL INCENTIVES

SEC. 13. Incentives for Renewable Energy Projects and Activities. RE developers of renewable energy facilities, including hybrid systems, in proportion to their RE component, for both power and non-power applications, as duly certified by the DOE, shall be entitled to the following privileges:

(a) Tax and Duty-free Importation of RE Machinery, Equipment and Materials. – Within the first ten (10) years upon issuance of a certification of an RE developer by the DOE, the importation of machinery and equipment, and materials and parts thereof, including control and communication equipment, shall not be subject to tariff duties and value-added tax: Provided, however, That the said machinery, equipment, materials and parts are:

(1) not manufactured domestically nor locally available in reasonable quantity and quality;

(2) directly and actually needed and used exclusively in the RE developer’s facilities for transformation into energy, and transmission of electric energy to the point of use; and

(3) covered by shipping documents in the name of the duly registered RE developer to whom the shipment will be directly delivered by customs authorities:

Provided further, That the above-mentioned certification is obtained before the importation of such machinery, equipment, materials and parts are made;

Such certification by the DOE must be secured before any sale, transfer or disposition of the imported capital equipment, machinery or spare parts is made: Provided, That if such sale, transfer or disposition is made within the first five (5) years from date of importation, any of the following conditions must be present:

(i) If made to another RE developer enjoying tax and duty exemption on imported capital equipment;

(ii) If made to another RE developer, upon payment of any taxes and duties due on the net book value of the capital equipment to be sold;

(iii) Exportation of the capital equipment, machinery, spare parts or source documents or those required for RE development; and

(iv) For reasons of proven technical obsolescence.

When the aforementioned sale, transfer or disposition is made under any of the conditions provided for in the foregoing paragraphs other than paragraph (ii), the RE developer shall not pay the taxes and duties waived on such items: Provided further, That if the RE developer sells, transfers or disposes the aforementioned imported items without prior approval within five (5) years from the date of importation, the RE developer and the vendee, transferee, or assignee shall be solidarily liable to pay twice the amount of tax and duty exemption given it: Provided, finally, That even if the sale, transfer or disposition of the capital equipment, machinery or spare parts is approved after five (5) years from the date of importation, the RE developer is still liable to pay the taxes and duties based on the net book value of the capital equipment, machinery or spare parts if it has violated any of its registration terms and conditions. Otherwise, it shall no longer be subject to the payment of the taxes and duties waived thereon.

(b) Tax Credit on Domestic Capital Equipment and Services. – A tax credit equivalent to one hundred percent (100%) of the value of the value-added tax and custom duties that were paid on the RE machinery, equipment, materials and parts had these items been imported shall be given to a duly registered RE developer who purchases machinery, equipment, materials and parts from a domestic manufacturer for purposes set forth in this Act: Provided, That prior approval by the DOE was obtained by the local manufacturer: Provided further, That the acquisition of such machinery, equipment, materials, and parts shall be made within the validity of the DOE certification;

(c) Special Real Property Tax Rates on Machinery, Equipment and Other Improvements. – Any law or local ordinance to the contrary notwithstanding, real property tax on machinery, equipment and other improvements of a registered RE developer actually and exclusively used for RES facilities shall not exceed two and a half percent (2.5%) of their original cost;

(d) Income Tax Holiday and Exemption. – For the first six (6) years of its commercial operations, the duly registered RE developer shall be exempt from income taxes levied by the National Government.

Additional investments in the project shall be entitled to income tax holiday equivalent to such investments and may be entitled to additional income tax holiday for as long as investment is made in the same project; Provided, That the entitlement period for additional investments shall not exceed three times the period of the initial availment of the ITH.

An RE developer availing of the ITH or NOLCO shall be required to secure a certificate of eligibility from the DOE before filing an official copy of its Income Tax Return (ITR) with the Bureau of Internal Revenue (BIR).

Failure to secure certification and/or file the ITH or NOLCO availment for validation by the DOE within forty-five (45) days from the last day of statutory filing date for ITR shall cause the forfeiture of the availment for the taxable period.

(e) Net Operating Loss Carryover (NOLCO). – The net operating loss of the RE developer during the first three (3) years from the start of commercial operation which had not been previously offset as deduction from gross income shall be carried over as a deduction from gross income for the next five (5) consecutive taxable years immediately following the year of such loss: Provided, however, That operating loss resulting from the availment of incentives provided for in this Act shall not be entitled to NOLCO.

RE developers availing of the ITH as provided in this Act shall not be entitled to avail of the NOLCO.

(f) Accelerated Depreciation. – Accelerated depreciation of plant, machinery, and equipment that are reasonably needed and actually used for the exploration, development and utilization of renewable energy resources may be depreciated using a rate not exceeding twice the rate which would have been used had the annual allowance been computed in accordance with the rules and regulations prescribed by the Secretary of Finance and the provisions of the National Internal Revenue Code (NIRC) of 1997, as amended.

(g) Exemption from the Universal Charge. – Power and electricity generated through the RES for the generator’s own consumption and/or for distribution in the off-grid areas shall be exempted from the payment of the Universal Charge provided for under Section 34 of Republic Act No. 9136.

(h) VAT Zero-Rated. – The sale of power or fuel generated from renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy, and other emerging energy sources using technologies such as fuel cells and hydrogen fuels, shall be VAT zero-rated, pursuant to Section 6, paragraph B, sub-paragraph 7 of Republic Act No. 9337: Provided. That the sale of such renewable sources of energy as fuel shall likewise be VAT zero-rated.

(i) Exemption from TRANSCO’S Wheeling Charge. – Power and electricity generated through the RES for the generator’s own consumption and/or for distribution in the grid areas shall be exempted from the payment of the relevant transmission and sub-transmission wheeling charges as provided for under Sections 19 and 24 of Republic Act No. 9136.

SEC. 14. Hybrid and Cogeneration Systems. – The tax exemptions and/or incentives provided for in Section 13 of this Act shall be availed of by duly registered RE developers of hybrid and cogeneration systems, utilizing both RE sources and conventional energy: Provided, however, That the tax exemptions and incentives shall apply only to the equipment, machinery and/or devices utilizing renewable energy resources.

SEC. 15. Carbon Monoxide Emission Standard for Biomass Fuels. – Any law to the contrary notwithstanding, the processes, fuel burning equipment and/or industrial plants that use biomass shall comply with the carbon monoxide emission standard to be set by the DENR upon prior consultation with various stakeholders.

SEC. 16. Intermittent RE Resources. – As used in this Act, RE generating unit with intermittent RE resources refers to a renewable energy generating unit or group of units connected to a common connection point whose energy resource is location-specific and has a natural variability which renders the output unpredictable and the availability of the resource inherently uncontrollable, which include plants utilizing runoff river hydro, wind, ocean energy.

Subject to technical and financial feasibility considerations, qualified RE generating units with intermittent RE resources shall enjoy the benefit of priority dispatch in accordance with the rules and regulations to be promulgated by the DOE, in consultation with the RE developers.

SEC. 17. Incentives for RE Commercialization. – All manufacturers, fabricators and suppliers of locally-produced RE equipment, components and materials duly recognized and accredited by the DOE, in consultation with DOST, DOF and DTI, shall be entitled to the following privileges:

(a) Tax and Duty-free Importation of Components, Parts and Materials. – All shipments necessary for the manufacture and/or fabrication of RE equipment and components shall be exempted from customs duties and value added tax: Provided, however, That the said components, parts and materials are: (a) not manufactured domestically in reasonable quantity and quality at competitive prices; (b) directly and actually needed and shall be used exclusively in the manufacture/fabrication of RE equipment; and (c) covered by shipping documents in the name of the duly registered manufacturer/fabricator to whom the shipment will be directly delivered by customs authorities: Provided further, That prior approval of the DOE was obtained before the importation of such components, parts and materials were made;

(b) Tax Credit on Domestic Capital Components, Parts and Materials. – A tax credit equivalent to one hundred percent (100%) of the amount of the value-added tax and custom duties that were paid on the components, parts and materials, had these items been imported shall be given to a RE equipment manufacturer, fabricator, and supplier duly recognized and accredited by the DOE, who purchases RE components, parts and materials from a domestic manufacturer: Provided, That such components, materials and parts are directly needed and shall be used exclusively by the RE manufacturer, fabricator and supplier for the manufacture, fabrication and sale of RE equipment. Provided further, That prior approval by the DOE was obtained by the local manufacturer;

(c) Income Tax Holiday and Exemption. – For six (6) years starting from the date of recognition/accreditation, an RE manufacturer, fabricator and supplier of RE equipment shall be fully exempt from income tax levied by the National Government.

SEC. 18. Application of Fiscal Incentives. – Renewable energy shall be automatically included in the list of industries under the Investment Priorities Plan (IPP) upon the effectivity of this Act.

CHAPTER VIII

GENERAL PROVISIONS

SEC. 19. Creation of the National Renewable Energy Board (NREB). – The National Renewable Energy Board is hereby created. It shall be composed of the Secretary of the Department of Energy or his designated Undersecretary as chairman and the Secretaries or the designated undersecretaries or assistant secretaries of the Department of Trade and Industry (DTI), Department of Finance (DOF) and Department of Environment and Natural Resources (DENR); the Presidents or the duly designated representatives of the National Power Corporation (NPC), National Transmission Corporation (TRANSCO), and PEMC; and one (1) representative each from the renewable energy developers, Government Financial Institutions (GFIs), and non-governmental organizations, duly endorsed by their respective industry associations and appointed by the President of the Republic of the Philippines, as members.

The DOE Secretary or his designated Undersecretary, in his capacity as Chairman, shall, within one (1) month from the effectivity of this Act, convene the NREB.

The NREB shall be assisted by a Technical Secretariat from the Energy Utilization Management Bureau of the DOE, thru the Renewable Energy Management Division, and shall directly report to the Office of the Secretary or the Undersecretary of the Department, as the case maybe, on matters pertaining to the activities of the NREB. The number of staff of the Technical Secretariat and the creation of corresponding positions necessary, to complement and/or augment the existing plantilla of the Renewable Energy Management Division shall be determined by the Board, subject to approval by the Department of Budget and Management (DBM) and existing civil service rules and regulations.

The NREB shall have the following powers and functions:

a) Approve the National Renewable Energy Program, as formulated by the DOE;

b) Formulate and promulgate the Fixed Tariff System Rules within one (1) year upon the effectivity of this Act;

c) Recommend specific actions in facilitating the implementation of the National Renewable Energy Program to be executed by the DOE and other appropriate agencies of government;

d) Monitor and review the implementation of the National Renewable Energy Program, including the compliance with the Renewable Portfolio Standards and minimum RE generation capacities in off-grid areas;

e) Oversee and monitor the collection and utilization of the Renewable Energy Trust Fund as administered by the Department;

f) Formulate and oversee the implementation of a program which shall fast-track investments in Renewable Energy;

f) Perform such other functions, as may be necessary, for the effective implementation of this Act.

SEC. 20. Renewable Energy Trust Fund (RETF). – A Renewable Energy Trust Fund is hereby established to enhance the development and greater utilization of Renewable Energy. It shall be administered by the DOE as a special account in any of the GFI. The RETF shall be exclusively used to:

(a) Finance the research, development, demonstration and promotion of the widespread and productive use of renewable energy systems for power and non-power applications;

(b) Support the development and operation of new RE resources to improve their competitiveness in the market: Provided, That the grant thereof shall be done through a competitive and transparent manner;

(c) Conduct nationwide resource and market assessment studies for biomass, solar, wind, hydro, tidal current, and ocean energy;

(d) Propagate RE knowledge by accrediting, tapping, training, and providing benefits to institutions, entities and organizations which can extend the promotion and dissemination of RE benefits to the national and local levels; and

(e) Fund such other activities necessary or incidental to the attainment of the objectives of this Act.

Use of the fund may be through grants, loans, equity investments, loan guarantees, insurance, counterpart fund or such other financial arrangements necessary for the attainment of the objectives of this Act: Provided, That the allocation thereof shall, as far as practicable, be done in a competitive and transparent manner.

The RETF shall be funded from:

(a) Proceeds from the emission fees collected from all generating facilities consistent with Republic Act No. 8749 or the Philippine Clean Air Act;

(b) Fifty percent (50%) of the national government share from geothermal operations;

(c) Contributions, grants and donations: Provided, That all contributions, grants and donations made to the RETF shall be tax deductible subject to the provisions of the National Internal Revenue Code. Towards this end, the Bureau of Internal Revenue shall assist the DOE in formulating the Rules and Regulations to implement this provision;

(d) One and one half percent (1.5%) of the proceeds of the national government share collected from the development and use of indigenous non-renewable energy resources;

(e) Any revenue generated from the utilization of the RETF; and

(f) Proceeds from the fines and penalties imposed under this Act.

SEC. 21. Financial Assistance Program. – Government financial institutions such as the Development Bank of the Philippines (DBP), Land Bank of the Philippines (LBP), Phil-Exim Bank and other government financial institutions shall, in accordance with and to the extent allowed by the enabling provisions of their respective charters or applicable laws, provide preferential packages for the development, utilization and commercialization of RE projects as duly recommended and endorsed by the DOE.

CHAPTER IX

FINAL PROVISIONS

SEC. 23. Implementing Rules and Regulations. – Within six (6) months from the effectivity of this Act, the DOE shall, in collaboration with relevant government agencies and all RE developers, promulgate the Implementing Rules and Regulations (IRR) of this Act, subject to the approval by the Joint Congressional Power Commission.

SEC. 24. Congressional Oversight. – Upon the effectivity of this Act, the Joint Congressional Power Commission created under Section 62 of R.A. No. 9136, otherwise known as the “Electric Power Industry Reform Act of 2001” shall, in addition to its existing functions, oversee the implementation of this Act.

SEC. 25. Penalty Clause. – Any person found in violation, through an act of commission or omission, of the provisions of this Act shall pay a minimum penalty of One Hundred Thousand Pesos (P100,000.00) or twice the amount of damages or costs avoided for non-compliance, whichever is higher.

SEC. 26. Official Development Assistance. – The provision of Executive Order No. 230 of 1986 and the rules and regulations governing the evaluation and authorization for the availment of Official Development Assistance notwithstanding, the privatization of renewable energy facilities as provided for in this Act shall be eligible for foreign loans and grants without further evaluation by the NEDA Board, subject to Section 21, Article XII of the Constitution.

SEC. 27. Separability Clause. – If for any reason, any provision of this Act or any part thereof shall be held unconstitutional or invalid, the other parts or provisions of this Act, which are not affected thereby, shall remain in force and effect.

SEC. 28. Repealing Clause. – All laws, decrees, orders, rules and regulations or parts thereof, inconsistent with any of the provisions of this Act are hereby repealed, amended or modified accordingly.

SEC. 29. Effectivity Clause. – This Act shall take effect fifteen (15) days after its complete publication in at least two (2) newspapers of general circulation.

APPROVED,

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