Constituents of Ormoc City and the municipality of Kananga in Leyte will soon reap the benefits of hosting Lopez-owned geothermal energy leader Energy Development Corporation’s (EDC) geothermal plants as the company establishes trust accounts for the local government’s access to the accrued monies from Energy Regulation (ER) No. 1-94.
A memorandum of agreement (MOA) was signed recently between EDC and its beneficiaries in compliance with the Department of Energy’s (DOE) Circular No. DC2018-08-0021 that requires energy generation companies and energy resource developers to directly provide their ER No. 1-94 benefits, equivalent to one centavo per kilowatt-hour (PhP 0.01/kWh) of total electricity sales to their host communities. The amendment intends to accelerate the LGUs’ socio-economic development and provide more efficient utilization of the funds, which used to be released by the DOE.
While the exact amount is still being computed, EDC will be able to directly remit this benefit to its beneficiaries on a quarterly basis beginning this year once they have opened the trust accounts.
Ormoc City Mayor Richard Gomez and Municipality of Kananga Mayor Manuel Vicente M. Torres were present for the ceremonial MOA signing that was held at the Ormoc City Government’s Multipurpose Hall. Signatories to the memorandum included: Hon. Eric Gonzaga, barangay captain of Lim-ao, Kananga, Leyte; Hon. Angelito Napoles, barangay captain of Tongonan, Kananga; Hon. Wilma Taneo, barangay captain of Tongonan, Ormoc City; Hon. Hilario Singson, barangay captain of Milagro, Ormoc City; Hon. Richard Impas, barangay captain of Lake Danao, Ormoc City; and Hon. Rodelito Cantay, barangay captain of Cabintan, Ormoc City.
These barangays are hosts of EDC’s 711-megawatt (MW) Leyte Geothermal Project, the company’s biggest geothermal facility that also possesses the world’s largest geothermal steamfield.
“Being able to directly disburse our partner communities’ benefits as hosts of our geothermal facilities will also help us strengthen our relationship with them as we provide them with the necessary guidance on the use of the funds for community projects” said Atty. Allan V. Barcena, head of EDC’s corporate social responsibility (CSR) and public relations group.
Under Rule 29(A) of the Electric Power Industry Reform Act of 2001’s Implementing Rules and Regulations (EPIRA–IRR), 25 percent the PhP 0.01/kWh of the total electricity sales shall be set aside for Development and Livelihood Fund (DLF) and another 25 percent shall be set aside for the Reforestation, Watershed Management, Health and Environment Enhancement Fund (RWMHEE”) for use by the host region, province, city or municipality and its barangays, which are required to establish the corresponding trust accounts.
The MOA specifies that the host barangays are to submit their annual work program for the tangible projects where the funds will be used, as well as report on the status of the said projects at the end of each year.
“The bottomline is we have to make everything efficient. This new set-up will enable us to release the funds to our beneficiaries right away,” said Gomez in his welcome message at the signing ceremony.
Torres added: “I look forward to working with EDC, our partners in progress. This MOA will enable us to iron out issues on how funds are released to our beneficiaries.”
EDC’s Leyte geothermal facility that straddles Ormoc City and the Municipality of Kananga currently supplies more than 30 percent of the country’s installed geothermal capacity. It is also responsible for putting EDC and the Philippines on the map as the world’s third largest geothermal producer.