8 Accessing Funds From ER 1-94 - Leo Carias

BRIEFING/ORIENTATION ON

By:Mr. Leo S. Carias/Ms. Lenny B. Del Rosario

Rural Electrification Administration and Management Division

Electric Power Industry Management Bureau

Department of Energy

Legal & Operational Basis

Attendant Rules and ProceduresEnergy Regulations No. 1-94Department Circular No. 95-11-009Energy Regulations No. 1-94-ADepartment Circular No. 96-08-009Department Circular No. 98-05-007Department Circular No. 98-11-010Department Circular No. 2000-03-003Department Circular No. 2000-10-011Rule 29, Part A of EPIRA-IRRDepartment Order No. 2002-06-007

Section 5 (i) R. A. No. 7638, “DOE Act of 1992”

Section 66 of R. A. No. 9136, “EPIRA of 2001”

Policy Objectives

To recognize the contributions made by the communities and people affected;

SEC. 5 (i), R.A. 7638

To lessen conflict of rights; and

To promote harmony and cooperation among the LGUs/Region and the energy resource developers and/or power producers.

What is Energy Regulations No. 1-94?

It is the implementing rules and regulations of Section 5 (i) of R. A. No. 7638, or the “DOE Act of 1992”Sec. 5(i) of R.A. 7638 provides,

That the Department shall ”devise ways and means of giving direct benefits to the province, city, or municipality, especially the community and people affected, and equitable preferential benefit to the region that hosts the energy resource and/or energy-generating facility:Provided, however, that the other provinces, cities, municipalities, or regions shall not be deprived of their energy requirements”.

Sec. 66 of R.A. 9136 provides,That the provision of financial benefits to host communities and the obligations of the power generating facilities and/or energy resource developers as defined in R.A. 7638 and its IRR shall continue.

ER 1-94 is part of the rate imposed on the electricity end-users, duly approved by the ERC.

Who are the entitled to avail of this benefit?

A local government unit (barangay, municipality, city or province) where the energy resource and/or energy generating facility is physically located.

EPIRA-IRR

A region where the energy resource and/or energy generating facility is physically located.

What is the “obligation of the power generating facilities and/or energy resource developers to host communities?”

SEC. 4, RULE 29 (A) EPIRA-IRR

The Generation Company and/or energy resource developer should set aside one centavo per kilowatt hour (P0.01/kWh) of the total electricity sales as financial benefits to host communities.

What agency will administer the “P0.01/kWh financial benefits?”

The administration of EF, DLF, and RWMHEEF shall be undertaken by the DOE.

Sec. 7 of EPIRA-IRR provides,The administration of EF, DLF, RWMHEEF shall be undertaken by the DOE. All funds administered by NPC with regard to DLF and RWMHEEF shall be transferred to DOE for administration within 120 days from the effectivity of these Rules.

Item 2.2.4 of the Joint DOF-DBM-COA Circular No. 1-97Exempts from the coverage cash accounts owned by government-owned and/or controlled corporations and local government units.

COA Decision No. 2002-240The DOE is only allowed directly to apply the Trust and its income for the purpose for which it was created.


How shall the P0.01/kWh financial benefits be monitored?

Trust accounts shall be established specific for EF, DLF, and RWMHEEF in the name of DOE and the Generation Company.

Sec. 5 of the EPIRA-IRR provides,The DOE shall establish trust accounts specific for EF, DLF and RWMHEEF in the name of DOE and the Generation Facilities or Generation Company and/or energy resource developer.

Sec. 8(a) of the EPIRA-IRR provides,The DOE shall review and audit the source of fund, particularly on the total electricity sales of the Generation Facility to determine the financial benefits due to the host LGUs and host Regions.


Establishment of Trust Accounts

GC DOE

•Shall provide DOE the Financial Documents fromwhere the ElectricitySales shall be validated

GC and DOE GC

•Shall enter into a MOA on theEstablishment of EF, DLF, and RWMHEEF

•Shall remit 31K toDOE as Initial Depositand Checkbook Fee•Only 30K shall formpart of AFB

•Shall inform the GCof the Account Name And Number

Actual Generation

Station Use

Systems Loss

Electricity Sales/kWh

Other Relevant Documents

What are the nature of this P0.01 financial benefits?


ElectrificationReforestation,

Watershed Management, Health and/or Environment

Enhancement

Development & Livelihood

What is “radiating order of application” on Electrification Fund (EF)?

This means that the EF shall be applied in the following manner:

Designated resettlement area/s;

Host barangay/s;

Host municipality/ies of city/ies;

Host region/s

And other areas as maybe determined/prioritized by the DOE

Host Region/s

Host Province/s

Host City/ies

Host Barangay/s

Resettlement Area/s

Non-Highly Urbanized Area

25%

25%50%

RWMHEEF

DLFEF

Note: EF – Electrification Fund DLF – Development and Livelihood Fund RWMHEEF – Reforestation, Watershed Management, Health and/or Environment Enhancement Fund

Application Scheme for

DLF & RWMHEEF

Allocation Scheme of

P.01/kWh

30%

20%

10%

35%

5%

Host Provinc

e

Host Baranga

y

Host Municipalit

y

Host Region

Resettlement

Role of the CRO

Designation of Community Relations Officer (CRO)Coordinate with the LGUs/Region on the preparation

of annual work program;Assist in the preparation of all work

programs/project proposals prior to the release of project fund/s;

Monitor and report to DOE the implementation/status of work program/project implementation;

Shall provide the LGUs/Region updated status of accrued financial benefits;

Act as liaison officer to all concerned government agencies relative to project implementation.

DC 2000-03-003All power producer and/or energy resource developer is hereby required to designate one ComRel for each power plant.

SEC. 6a, RULE 29 (A) EPIRA-IRR

Process of Availment - EF

HOST LGU/PP DU DOE

Note: * MOA is entered into by and between the DOE and FDU * The project fund to be released shall be based on the result of public bidding/canvass by FDU * All project funds shall be subject to liquidation prior to the approval of succeeding project/s

Submits project proposal/s

•Reviews/submits proposal/s•Implements project

Case 1 DU DOE

•Submits proposal/s•Implements the project

•Evaluates/Process proposal/s•Releases Fund•Audits disbursement•Inspects project

•Evaluates/Process proposal/s•Releases Fund•Audits disbursement•Inspects project

Case 2

Process of Availment on DLF & REFOThe Host Communities submits project proposal/s duly supported by a

Resolution from the Sanggunian with the necessary documents and endorsed by the Power Plant and/or energy resource developer to DOE for evaluation/approval.

HOST LGU/Region Power Plant DOE

Note: * MOA is entered into by and among the DOE, P/P, and LGU/Region * The project fund to be released shall be based on the result of public bidding/canvass (under R.A. 9184) * All project funds shall be subject to liquidation prior to the approval of succeeding project/s

Submits project proposal/s

•Evaluates proposal/s•Coordinates with the LGUs & Region/s•Endorses proposal to DOE

•Process proposal/s•Forges MOA with the LGUs/Region & P/P•Facilitates release of project fund

Approval of Proposal and Release of Project

Fund

Approving Authority

Previous ProcedureOn the approval of project proposal and approval on the release of project fund are classified according to project cost:

P1M and below = Bureau Director

P1M > P5M = Undersecretary

P5M and above = SecretaryDOE 2002-06-007 “MEASURES ADOPTED TO REDUCE RED TAPE IN THE DEPARTMENT OF ENERGY”

Approving Authority

Approval of project proposal regardless of amount shall be undertaken by the Office of the Secretary

Current Procedure

MEMORANDUM FROM THE SECRETARY DATED AUGUST 29, 2007 “SIGNING OF CONTRACTS, MEMORANDA OF AGREEMENT/UNDERSTANDING, PERMITS, DEEDS, ETC.”

Approving Authority

Current Procedure

MEMORANDUM FROM USEC. KYAMKO DATED 16 JULY 2008 “DELEGATION OF AUTHORITY”

On the release of project fund, the level of approval are as follows:

P5.0M and aboveP3.0M -below P5.0M P1.0M -below P3.0M

Below P1.0M

Concerned Usec.Concerned A.Sec Concerned Bu Dir/Service Dir Concerned Div. Chief

SecretarySr. Undersecretary Concerned Usec.

Concerned Bureau/Service Dir

AMOUNT Recommending Official Approving Authority

Release of Project Fund to LGUs/RDC (DOE

Administered Funds of IPPs)

DOE/COALGUs/RDC

DOE

•LGUs Resident COA audits utilizationof funds•DOE-IAS validates disbursements•DOE-REAMD conductsTechnical inspection

Implements the project

DOE LGUs/RDC

Informs projectProponent on the

approval of proposal thru NTP

Submits bid result& supporting documents

as a basis for therelease of

project fund

Facilitates remittance of

project fund directlyto LGUs account as

provided in the MOA

Release of Project Fund to LGUs/RDC (NPC-Administered Funds of NPC

IPPs)

DOE/COALGUs/RDC

DOE

•LGUs Resident COA audits utilizationof funds•DOE-IAS validates disbursements•DOE-REAMD conductsTechnical inspection

Implements the project

DOE LGUs/RDC

•Informs projectproponent on the approval ofproposal thruNTP•Notifies NPC to remit theproject fund directly to DOE

Submits bid result& supporting documents

as a basis for therelease of

project fund

Facilitates remittance of

project fund directlyto LGUs account as

provided in the MOA

Criteria on Projects to be Funded under DLF & REFO

Availability of Funds

Has the capacity to increase income levels and generate employment opportunities Uplift the living condition of the beneficiaries No adverse environmental effects Promote a more equitable share of benefits

Demonstrate the capacity for effective and successful implementation

ER 1-94 UPDATES

ER 1-94 UPDATESGenerating Facilities Generating Facilities

NationwideNationwideIncorporated in E.R. 1-94 ProgramIncorporated in E.R. 1-94 Program

(As of 06 July 2009)(As of 06 July 2009)

T o t a l 136

NPC 36 IPPs 88 Joint NPC and PNOC-EDC (incl. CALENERGY BOT w/ PNOC-EDC)

12

Establishment of Trust Accounts (on-going)

14

Active 76 Inactive 57

Note:NPC – National Power CorporationIPPs – Independent Power ProducersPNOC-EDC – PNOC Energy Dev’t Corp.CALENERGY – California Energy Int’l ltd

ER 1-94 UPDATESHost CommunitiesHost Communities

Incorporated in E.R. 1-94 ProgramIncorporated in E.R. 1-94 Program ( As of 06 July 2009 )( As of 06 July 2009 )

T o t a l 680 NPC Owned Facilities 481* Joint NPC-PNOC-EDC Facilities 34 IPP Facilities 165

*AGUS 1, 2, 4, 5, 6, 7 HEPs (300) Facilities Resources

Barangays 30 242

Municipalities/Cities 5 19

Provinces 2

Regions 2

Trust Accounts EstablishedTrust Accounts Established (As of 06 July 2009)(As of 06 July 2009)

T o t a l 384 DOE Administered Trust Accounts 346

(Land Bank of the Phils.) 279

(Dev’t. Bank of the Phils.) 67

NPC Administered Trust Accounts* 38

Note:* The DLF and RWMHEEF are still with NPC but subject for transfer of administration to DOE pursuant to Section 7, Part A, Rule 29 of EPIRA-IRR

ER 1-94 UPDATES

ER 1-94 UPDATES

Total No. of

Projects

Type of Project (PhP)Billio

n

2,018 Electrification* 1.70

980 Development and Livelihood 0.83

845 Reforestation, Watershed Management, Health and/or Environment Enhancement

1.02

Note: * Excluding MIRANT, SARO, KEPHILCO & PNOC-EDC Projects and among other advanced financial assistance

Summary of Approved ProjectsSummary of Approved Projects( As of 06 July 2009 )

TYPES OF PROJECTS

What are the specific types of projects being funded under EF, DLF, and RWMHEEF?

Electrification Projects (funded under EF)

Missionary Electrification Projects- Extension/expansion of distribution lines-Upgrading of distribution

lines


Development Projects (funded under DLF)

StreetlightingFarm to Market RoadMulti-Purpose Pavement Farm produce collection & buying stationRice/Corn MillingCommunal Irrigation

SystemSmall water impounding

Projects

Fish portsSeawallsDay Care CenterSchool BuildingPublic marketSlaughter houseBridgeFlood control measuresPublic drainage/sewerage

system


Development Projects (funded under DLF)

StreetlightingFarm to Market RoadMulti-Purpose Pavement Farm produce collection & buying stationRice/Corn MillingCommunal Irrigation

SystemSmall water impounding

Projects

Fish portsSeawallsDay Care CenterSchool BuildingPublic marketSlaughter houseBridgeFlood control measuresPublic drainage/sewerage

system

What are the specific types of projects being funded under EF, DLF, and RWMHEEF?Reforestation, Watershed Management, Health and/or

Environment Enhancement Projects (funded under RWMHEEF or REFO)

ENVIRONMENT ENHANCEMENT PROJECTS

Fire TruckGarbage/Dump TruckSanitary Landfill Development of MRFConstruction of ConcreteSanitary Waste WaterCollection Facility

Waste Management Equipment:

Garbage TruckDumptruckBulldozerBuckhoe / Loader


Reforestation, Watershed Management, Health and/or Environment Enhancement Projects

(funded under RWMHEEF or REFO)

HEALTH RELATED PROJECTS

Water supply system

Municipal Hospital

Health Center

Medical equipment/facilities

Medicinal plant gardens

Ambulance

REFORESTATION, WATERSHED MANAGEMENT RELATED PROJECTSImprovement of forest cover

Vengineering measures

Community-based forestry

management

Agro-forestry

Conservation of Mangroves

Seedling nursery

DOEDOE

NPC/PNOC/ IPP

OTHER GOVERNMENT AGENCIESOTHER GOVERNMENT AGENCIES

DENR/DOH/DA/DPWH/DSWD/DECS

FINANCIAL BENEFITS (EF, DLF, RWMHEEF)

TECHNICAL ASSISTANCE / CONSULTANCY &COORDINATION/PARTNERSHIP

1. PLANNING: PROJECT ID, PRIORITIZATION, CONSULTATION, PROPOSAL PREP.; 2. IMPLEMENTATION; MONITORING & EVALUATION.

INTEGRATED/WHOLISTIC & INTEGRATED/WHOLISTIC & SUSTAINABLE APPROACHSUSTAINABLE APPROACH

ELECTRICITY

LIVELIHOOD

INFRASTRUCTURE

OTHER SUPPORT SERVICES

INTEGRATED & SUSTAINABLE PROGRAM APPROACH UNDER E.R. 1-94

INTEGRATED & SUSTAINABLE PROGRAM APPROACH INTEGRATED & SUSTAINABLE PROGRAM APPROACH UNDER E.R. 1UNDER E.R. 1--9494

LGU & CROLGU & CRO

PROGRAM MONITORING AND

EVALUATIONCAPABLE GROUP

Maraming Salamat Po!