DOE sets release of ₱5.2 B to LGUs hosting power plants

By MYRNA M. VELASCO – March 7, 2020, 10:00 PM
from Manila Bulletin

Local government units (LGUs) hosting power facilities would be able to beef up their cash resources for specified projects and programs as the Department of Energy (DOE) announced the release of ₱5.2 billion from the Energy Regulations (ER) No. 1-94 (ER 1-94) fund.

The ER 1-94 policy prescribes that host communities of energy projects be entitled to one centavo per kilowatt-hour (kwh) of the energy sales of generation companies or the energy resource developers.

Of the ₱0.01/kwh collection, at least 50 percent shall be earmarked for electrification fund; 25 percent for development and livelihood; and the other 25 percent for reforestation, watershed management, health and/or environment enhancement fund.

To hasten benefits to host communities, the DOE said it will “expedite the settlement of previously stranded ER 1-94 funds,” with a target to complete it by June this year.

The fund, it said, currently has ₱6.4 billion. And of the total, ₱5.2 billion has already been earmarked for release by the department’s ER 1-94 reconciliation team.

Such funds shall be funneled to a region, province, city, municipality and/or barangay that have been hosts to projects of generation companies and energy resource developers.

Energy Secretary Alfonso G. Cusi said “notable progress has been made, particularly in the administration of financial benefits to host communities,” hence, he had given word that the department “will continue to ensure the speedy and sustained regulation, settlement and full remittance of these funds that are urgently needed by LGUs to help address their respective needs.”

Presently, the DOE said ₱432 million is under processed for immediate fund transfer to beneficiary LGUs. And so far, the agency noted ₱750 million had already been remitted to the accounts of beneficiaries nationwide.

The energy department emphasized its reconciliation team has been validating “the total amount of financial benefits due to the concerned recipients of power generating facilities in the country.” The team is co-lead by the department’s financial services and Electric Power Industry Management Bureau.

Two years ago, the DOE modified the policy on the ER 1-94 fund release, setting a direct remittance of financial benefits to the host communities of energy projects.

It must be culled that heaps of host communities of energy projects are having multitudes of complaints because of the layers of approvals and channeling of requests they would need to go through before they can avail of their benefits under ER 1-94.