THE Department of Energy (DoE) is proposing an increase in the share of electricity sales that power companies must allocate to host communities.
In a draft department circular, the DoE said the move aims to enhance existing energy regulations to benefit communities hosting generating facilities, energy resources, and energy storage system facilities.
“The provision thereof shall contribute to the acceleration of total electrification in the country and lowering of electricity rates for end-users hosting the energy facilities,” the DoE said.
Energy Regulation 1-94 is the current policy designed to compensate communities for hosting energy projects.
Under the proposal, generation firms and energy resource developers must allocate P0.03 per kilowatt-hour (kWh) of electricity sales as financial benefits, higher than the P0.01 per kWh currently mandated.
The allocation is broken down as follows: P0.005 per kWh for electrification funding, and P0.025 per kWh equally divided to development and livelihood programs; reforestation and watershed management; and health and environment enhancement.
Energy Undersecretary Mylene C. Capongcol said the increase in financial benefits is intended “to provide more flexibility to support the requirements of the host communities.”
Facilities operated by microgrid system providers, small power utilities, and power generation firms with a capacity of 5 megawatts and below are exempted from the obligation.
The DoE said the financial benefits must be remitted to host local government units (LGUs) and/or indigenous cultural communities or indigenous peoples (ICC/IPs). A portion of the fund allocated for electrification should be given to the designated distribution utility.
The benefits will automatically be allocated as an electricity tariff subsidy if the host LGU or ICC/IP fails to submit the required reports or issue a council resolution. Benefits may also be reallocated if the host LGU or ICC/IPs refuse to accept or utilize the funds for up to two consecutive years.
Energy Secretary Sharon S. Garin said the agency is targeting to finalize and issue the enhanced policy “within the month.”
“We understand that the benefits are still lacking, but we are working on it,” she said.—Sheldeen Joy Talavera
