DOE draft circular, host community benefits, energy generation facilities, resource development, electrification fund, development and livelihood fund, environmental enhancement fund, renewable energy policy, Philippine energy sector, public consultations

The Department of Energy (DOE) has made a proposal for a substantial increase in benefits for communities hosting energy generation and resource development facilities. The move seeks to amend the existing Energy Regulations No. 1-94 (ER-1-94), which currently allocates PHP 0.001 per kilowatt-hour (kWh) of electricity sales to host local government units (LGUs), indigenous cultural communities (ICCs), and designated distribution utilities.

In its proposal, the DOE would require generation companies (GenCos) and energy resource developers (ERDs) to set aside PHP 0.03 per kWh of electricity sales. Of this, PHP 0.005 per kWh would go to an electrification fund, while the remaining PHP 0.025 per kWh would be equally split between development and livelihood funds and environmental enhancement initiatives.

The draft circular also introduces non-fiscal benefits such as skills development, employment opportunities for local residents, and preferential procurement of supplies and services from host communities. Additionally, it proposes granting electric cooperatives or distribution utilities the right of first refusal for renewable energy generated within their service areas, although Secretary Garin noted potential legal limitations due to existing power supply contracts.

The DOE is holding public consultations on the proposed policy, with the aim of finalizing and issuing it before the end of the month.  

Energy sector stakeholders and local communities hosting power projects should engage in the consultation process to shape a policy that balances development, sustainability, and fair compensation.

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