ERC sets fund disbursements guidelines

Manila Bulletin

By MYRNA M. VELASCO

May 23, 2011, 10:49pm

 MANILA, Philippines — The Energy Regulatory Commission (ERC) has laid the ground rules for the disbursement of funds from the environmental charge being collected from the electricity consumers and channeled through the Special Environmental Fund Account (SEFA) under the government’s control.

The universal charge (UC) component in the electricity rates for the environment amounting to P0.0025 per kilowatt hour (kWh) has been intended for the rehabilitation and management of watershed areas as espoused under the Electric Power Industry Reform Act (EPIRA) and its implementing rules and regulations.

The accruing collections are being disbursed by the National Power Corporation (NPC) to qualified host communities and projects; but the SEFA is being administered by the Power Sector Assets and Liabilities Management Corporation.

Watershed rehabilitation in particular would refer to the restoration of degraded watershed areas through the application of vegetative and structural rehabilitation measures; while watershed management delves with the process of guiding and organizing land and/or other resource uses in a watershed to provide desired goods and services “without adversely affecting the soil and water resources.”

As far as filing petitions for UC on environmental charge availments are concerned, it will be NPC’s responsibility to secure the approval of the industry regulator.

To facilitate the transfer of the UC-EC collections from PSALM, NPC has been mandated to open a special trust account with the Land Bank of the Philippines (LBP) or any authorized government depository bank.

“The SEFA account shall be credited every time PSALM disburses the UC-EC fund,” the regulator has prescribed.

For availments, the rules specified that “NPC will make disbursements of the EC directly from the SEFA to the respective host watershed areas based on case resolution issuances of ERC.”

It was further noted that “any interest earned on monies of the SEFA shall form part of the UC-EC”; and bank charges arising from it shall also be debited from the account.

On disbursements of the fund, the ERC similarly set conditions that must first be satisfied, such as: that the projects duly approved by the ERC shall also be supported by resolutions and that there should be a plan, terms of reference and contracts specific to the project.

It was similarly required that project implementation shall comply with Republic Act 9184 or the Government Procurement Reform Act of 2003; as well as compliance with internal accounting and auditing rules and regulations of NPC and the auditing manual promulgated by the Commission on Audit.