EDC agrees with Leyte officials on sharing of electricity sales

ENERGY Development Corp. (EDC) has signed a memorandum of agreement with the local governments of Ormoc City and Kananga town in Leyte in compliance with a regulation that requires the Lopez-led company to directly give a portion of electricity sales to communities hosting its power plant.

“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 Allan V. Barcena, head of EDC’s corporate social responsibility and public relations group, in a statement.

Constituents of the two local government units are set to benefit for hosting

EDC’s geothermal plants as the company creates trust accounts for the local government’s access to the accrued monies from Energy Regulation (ER) No. 1-94.

The company said that while the exact amount is still being computed, it will be able to directly remit the benefit to its beneficiaries on a quarterly basis beginning this year once they have opened the trust accounts.

Department of Energy’s (DoE) Circular No. DC2018-08-0021 requires energy generation companies and energy resource developers to directly set aside their ER No. 1-94 benefits, equivalent to one centavo per kilowatt-hour of total electricity sales, to their host communities. The amendment is meant to hasten the local government unit’s socio-economic development and provide a more efficient use of the funds, which used to be released by the DoE.

The MoA states 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.

Under Rule 29(A) of the Electric Power Industry Reform Act of 2001’s Implementing Rules and Regulations (EPIRA–IRR), 25% the P0.01 per kWh of the total electricity sales are to be set aside for development and livelihood fund and another 25% are to be for reforestation, watershed management, health and environment enhancement fund for the host region, province, city or municipality and its barangays, which are required to establish the corresponding trust accounts.

In Leyte, the barangays are hosts of EDC’s 711-megawatt (MW) Leyte geothermal project, the company’s biggest geothermal facility. The project also has the world’s largest geothermal steam field.

“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 Ormoc City Mayor Richard Gomez in his welcome message at the MoA signing ceremony.

Kananga Mayor Manuel Vicente M. Torres said the agreement would enable his town to iron out issues on how funds are released to the beneficiaries.