Starting January 2026, communities hosting power plants and energy facilities nationwide will receive five times more financial benefits under the Department of Energy’s (DOE) Energy Regulation (ER) 1-94 Program, which marks a major step toward local empowerment and sustainable development.

Under Department Circular No. 2025-10-0023, signed by Energy Secretary Sharon S. Garin on October 14, 2025, the DOE raised the ER 1-94 benefit from PHP 0.01 to PHP 0.03 per kilowatt-hour (kWh) of electricity generated and sold. The policy aims to ensure that energy-hosting communities are more fairly compensated and better equipped to invest in projects that drive local progress.

“This marks a major turning point for our energy-hosting communities,” Garin said. “We are shifting our approach to focus on empowering people and giving them a greater stake in our country’s energy growth. By reinvesting the benefits of power generation back into local areas, we are building shared prosperity and a stronger foundation for a sustainable future.”

The increased allocation will fund initiatives such as livelihood programs, environmental projects, healthcare, and education, while the existing half-centavo share for electrification projects through distribution utilities (DUs) will remain. The circular also allows funds to be used to lower electricity rates in host areas if unutilized for two years, aligning with President Ferdinand R. Marcos Jr.’s directive to promote inclusive growth and expand electrification.

According to DOE estimates, a 100-megawatt (MW) conventional power plant could now generate about PHP21 million annually in ER 1-94 benefits, while a 100-MW solar facility could yield around PHP5.5 million per year, assuming full capacity operation.

The strengthened ER 1-94 framework also gives local governments and indigenous communities greater control over how funds are spent, requiring project approval through local council resolutions. All funds will be held in dedicated trust accounts — including the Development and Livelihood Fund, the Reforestation, Watershed Management, Health, and Environment Enhancement Fund, and the Electrification Fund — and subject to audits by the DOE and the Commission on Audit (COA).

Beyond financial aid, the program also supports local employment, skills development, and the procurement of locally produced supplies, thus encouraging more inclusive and community-driven growth.

As of December 2024, the ER 1-94 Program had reached 683 local government units, including 321 barangays, 286 municipalities and cities, and 76 provinces. With the new five-fold increase, the DOE expects more community investments, stronger local economies, and wider access to essential services.

“We are investing in the Filipino spirit — in the ingenuity, resilience, and determination of our people,” Garin said. “This is a partnership built on trust and shared progress, ensuring that every community truly benefits from the energy that powers our nation.”

How do you think this expanded program will help local communities share more equitably in the country’s energy growth?

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