Capitol, firm inks “profit” deal
The Capitol and a coal-fired power plant in Toledo City are set to sign a Memorandum of Agreement (MOA) that would define the sharing of financial benefits from the total electricity sales of the latter.
The Provincial Board yesterday passed a resolution authorizing Governor Gwendolyn Garcia to sign and execute, for and in behalf of the Province of Cebu, the MOA with Therma Visayas, Inc. (TVI).
The resolution was sponsored by Third District Board Member John Ismael Borgonia, chairman of the PB Committee on Environment Conservation and Natural Resources.
TVI is the operator of the 340-megawatt Toledo Baseload Power Plant located in Barangay Bato, Toledo City.
It utilizes the Circulating Fluidized Bed (CFB) technology to ensure that it delivers reliable, reasonable, and responsibly produced power. The facility is an 80-20 joint venture between Aboitiz Power Corporation and Vivant, Corp. respectively.
Together with Therma Luzon, Inc. and Therma South, Inc., the three primarily comprise the Coal Business Unit of Aboitiz Power.
Republic Act No. 7638, otherwise known as the Department of Energy Act of 1992, mandates the DOE to devise ways and means of giving direct benefits to the province, city, or municipality, especially the community and people affected and equitable and preferential to the region that hosts the energy resource and or energy-generating facility.
Energy Regulations (ER) No. 1-94 was promulgated by the DOE on August 1, 1994 to operationalize the implementation of Section 5 (i) of R.A. No. 7638.
R.A. No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001 and Rule 29(A) of its Implementing Rules and Regulations, require all energy generation companies and or energy resource developers to provide financial benefits equivalent to one centavo per kilowatt hour of the total electricity sales of the generation facility to the region, province, city or municipality and barangay that host the generation facility and energy resource facility.
In accordance with RA No. 8371 also known as The Indigenous Peoples’ Rights Act of 1997, the DOE promulgated Department Circular No. DC2018- 03-0005 on March 20, 2018 recognizing the rights of the Indigenous Cultural Communities (ICC) and Indigenous Peoples (IP) to their ancestral domain and the natural resources therein and provides for reasonable share in the development and livelihood fund and for the reforestation, watershed management, health and or environment fund components of the ER 1-94 funds.
On August 7, 2018, the DOE issued Department Circular No. DC2018- 08-0021, amending for the purpose Rule 29 (A) of the EPIRA-IRR, to accelerate socio-economic development and to have a more effective and efficient utilization of the funds and to enforce the immediate provision of benefits to host communities.
Pursuant to Section 6 of DC2018-08-0021 the financial benefit shall be allocated in the following manner: 25 percent of one-centavo per kilowatt-hour for Development and Livelihood Fund (DLF); and 25 percent of P0.0025/kWh for reforestation, watershed, health and or environment enhancement fund (RWMHEEF).
The DLF and RWMHEEF shall be allocated in the following manner: community and people affected (5%); host barangays (20%); host municipalities or cities (35%); host provinces (30%); host ICCs/IPs (5%); and host region (5%).
“In order to implement the aforementioned and formalize the remittance of the share of the Province of Cebu in the DLF and RWMHEEF, there is a need to enter into a Memorandum of Agreement that clearly defines the terms thereof,” Borgonia said.