The Department of Energy (DOE) is proposing to triple the financial benefits for communities that host power facilities, increasing the allocation to P0.03 per kilowatt-hour (kWh) from the current P0.01 per kWh.
The move aims to provide a more substantial incentive for local governments and communities. “We understand that there is not enough. There is no proper incentive,” Energy Secretary Sharon Garin said, adding that the DOE is conducting public consultations and expects to issue a new regulation within the month.
The DOE’s existing regulation provides financial benefits to barangays, municipalities, cities and provinces that host energy-generating facilities or resource development entities. This is based on Section 66 of the Electric Power Industry Reform Act of 2001 (EPIRA). The DOE has released a draft circular to amend Rule 29(a) of the EPIRA’s implementing rules and regulations.
The new circular seeks to provide a transparent, holistic, and collaborative framework for all energy stakeholders, ensuring benefits have a direct and significant impact on local government units, communities and indigenous peoples.
Under the proposal, power developers would set aside P0.03 per kWh of electricity sales as financial benefits.
The new allocation would be split between two funds: P0.005 per kWh for the electrification fund AND P0.025 per kWh for the development and livelihood fund (DLF), which also covers reforestation, watershed management and environmental enhancement.
The DOE said the new rate would be subject to periodic review and adjustment based on prevailing rates and economic indicators to protect host communities from the effects of inflation.
Garin said the DOE also plans to issue a policy that would give cooperatives “the right of first refusal” for power generated by renewable energy plants located within their area.
“But that’s with risk. We have to respect the current contracts already,” Garin said.
“But forwarding looking, we want to give the coop host the option that they should be the first to offer the power generated by the renewable energy plant,” she said.
