Aboitiz Power inks deal with host communities

Published September 21, 2019, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2019/09/21/aboitiz-power-inks-deal-with-host-communities/

Aboitiz Power Corporation has recently inked a memorandum of agreement (MOA) with the host communities of its power projects on the latter’s more direct availment of financial benefits due them under the Energy Regulations 1-94 (ER 1-94) of the Department of Energy.

ER 1-94 is a policy setting aside financial benefits to communities hosting power projects — from the provincial to city or municipality and up to barangay (village) levels.

The signing of MOA with its host local government units (LGUs) had been in line with the DOE-amended policy on the “direct remittance of financial benefits” so these can also be immediately utilized by the communities for their own needs.

Aboitiz Power indicated that for its Makiling-Banahaw plants in Batangas and Laguna, the anticipated remittance to the host communities will be P26.6 million; while its Thermal Mobile, Inc. (TMO) facility in Navotas is due to remit P1.3 million; and for its hydro plants under SN Aboitiz Power, Inc.
(SNAP), the host community-benefits due to be released will be P10.5 million.
Last year, the company indicated that it generated P171 million in ER 1-94 funds for its host communities – mainly attributed to the energy sales of its various generation assets.

“The funds will soon be turned over to its other communities all over the country,” the Aboitiz firm said.

On its revised ER 1-94 policy under Energy Regulations (ER) 1-94, the DOE has batted for the direct remittance of financial benefits to the host communities of energy projects.

This modification in policy was recently concretized by the department via a new Circular that it issued on the utilization of collected funds under ER 1-94. It also basically amended Rule 29 (A) of the implementing rules and regulations of the Electric Power Industry Reform Act.

The ER 1-94 policy sets forth that host communities of energy projects be entitled to one centavo per kilowatt hour (kWh) of the energy sales of generation companies or the energy resource developers.

Of the P0.01/kWh collection, at least 50-percent shall be earmarked for electrification fund; 25 percent for development and livelihood; and the other 25 percent for reforestation, watershed management, health and/or environment enhancement fund.

It can be recalled that heaps of host communities of energy projects are having multitudes of complaints because of the layers of approvals and channeling of requests they would need to go through before they can avail of their benefits under ER 1-94.

On that premise, the energy department was prompted on streamlining the release of funding, as such, this will “eliminate the bureaucratic process which hampers socio-economic development of the communities hosting the power plants.”

The department emphasized it had seen the compelling need to amend the policy, so this could also ably support the government’s push for total electrification of households by year 2022.