Senate OKs bill allowing LGUs access to proceeds of energy resource development

Basic Energy sells unissued shares to VTE for strategic partnership

The Senate has approved Senate Bill No. 1789 on third and final reading, which allows local government units (LGUs) to have access to proceeds of development and usage energy sources.

Sen. Juan Edgardo “Sonny” Angara sponsored the bill that seeks to change the provisions of Republic Act 7160 or the Local Government Code of 1991, improving the use of national wealth for the development purposes of the LGUs.

“At least 80 percent of the proceeds derived from the development and utilization of hydrothermal, geothermal and other sources of energy shall be applied solely to lower the cost of electricity in the LGU where a source of energy is located,” Angara told Manila Bulletin as chair of the Senate committee on local government.

“The restriction has not only limited the efficient use of the resource but may have led to nonpriority projects aimed at lowering the cost of electricity if only to utilize the funds,” Angara added.

According to Angara, the collections from the earnings of said development energy sources should be used by LGUs to fund what they identify as critical projects.

Under the new bill, LGUs through its council or Sanggunian would have full control on how their share from the national wealth would be used.

He added that this would revive fiscal autonomy under the Local Government Code for LGUs, especially those that have hydrothermal, geothermal, and other energy sources within their jurisdiction.

“Ano nga naman ang saysay ng pagbukod ng hati mula sa pambansang yaman o national wealth para sa mga LGUs kung hindi nila matutukoy kung papaano ito gagamitin at gagastusin?” he said.