ESTABLISHING BASIC POLICIES FOR THE ELECTRIC POWER INDUSTRY

WHEREAS, one of the primary concern of the
Government in promoting the economic welfare of the people is to hasten
the electrification of the entire country, more particularly the rural
areas; and

WHEREAS, it is necessary to establish certain basic
policies for the attainment of said objective;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of
the Philippines, by virtue of the powers vested in me by the
Constitution as Commander-in-Chief of all the Armed Forces of the
Philippines, and pursuant to Proclamation No. 1081, dated September 21,
1972, and General Order No. 1, dated September 22, 1972, do hereby order
and decree, as part of the law of the land, the following basic
policies for the electric power industry:

1. The attainment of total electrification on an area coverage basis,
   which is a declared policy of the State, shall be effected primarily
   through:

   a) The setting up of island grids with central/linked-up
   generation facilities.
   
   b) The setting up of cooperatives for distribution of power.

2. The setting up of transmission line grids and the construction
   of associated generation facilities in Luzon, Mindanao and major
   islands of the country, including the Visayas, shall be the
   responsibility of the National Power Corporation (NPC) as the authorized
   implementing agency of the State.

   a) Plant additions necessary to meet the increase in power demand of
   the area embraced by any grid set up by the NPC shall be constructed and
   owned by the NPC.
   b) In areas not embraced by the NPC grid, the State shall permit
   cooperatives, private utilities and local governments to own and operate
   isolated grids and generation facilities, subject to state regulation.

3. The distribution of electric power generated by the NPC shall
   be undertaken by:

   a) Cooperatives
   b) Private utilities
   c) Local governments
   d) Other entities duly authorized subject to state regulation.

4. Within the area embraced by a grid set up by the NPC, the
   State shall determine privately-owned generating facilities which should
   be permitted to remain in operation.
5. It is the ultimate objective of the State for the NPC to own
   and operate as a single integrated system all generating facilities
   supplying electric power to the entire area embraced by any grid set up
   by the NPC.
6. The Power Development Council shall be expanded and
   strengthened to make it more effective in the planning and
   implementation of power and electrification projects and m the
   re-direction and re-orientation of the various sectors of the industry
   towards national development goals.

Done in the City of Manila, this 7th day of November, in the year of
Our Lord, nineteen hundred and seventy-two.

			(Sgd.) FERDINAND E. MARCOS President Republic of the Philippines
	By the President:
	(Sgd.) ALEJANDRO MELCHOR
		Executive Secretary