WHEREAS, under Section 2 of the Republic Act 9136, otherwise known as the “Electric Power Industry Reform Act of 2001” or “EPIRA,” it is declared policy of the State to: (i) ensure and accelerate the total electrification of the country; (ii) ensure the quality, reliability, security and affordability of the supply of electric power; and (iii) enhance the inflow of private capital and broaden the base of the power generation, transmission and distribution sectors.

WHEREAS, pursuant to Section 37(e)(i) and (ii) of EPIRA and Section 1, Rule 3 of the Implementing Rules and Regulations of EPIRA or “EPIRA-IRR,” the Department of Energy (DOE) is mandated to encourage private sector investments in the electricity sector, and to facilitate and encourage reforms in the structure and operation of distribution utilities for greater efficiency and lower costs;

WHEREAS, pursuant to Section 37(e)(p) of EPIRA and Rule 3 of EPIRA-IRR, the DOE has the responsibility to formulate such rules and regulations as may be necessary to implement the objectives of EPIRA;

WHEREAS, pursuant to Section 43 of EPIRA, the Energy Regulatory Commission (ERC) shall, inter alia, promote competition, encourage market development, and ensure customer choice in the restructured electricity industry;

WHEREAS, pursuant to Section 58(b) of EPIRA and Section 3, Rule 3 of EPIRA-IRR, the National Electrification Administration (NEA) is mandated to develop and implement programs to strengthen the technical capability and financial viability of rural electric cooperatives; NOW, THEREFORE, FOR AND IN CONSIDERATION OF THE FOREGOING PREMISES, the DOE hereby promulgates the following guidelines to promote private sector partnership and participation in the operations of rural electric cooperatives or “ECs” toward sustainable financial viability, enhance ECs access to private capital, and to improve services to electricity end-users.