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OUTLINE OF PRESENTATION Legal Basis
Policy Objectives
Obligation of Energy Resource Developers
Beneficiaries, Host Communities
Allocation of 0.01 P/KwH
Application of Electrification Fund (EF), DLF & RWMHEEF
Fund Administration and Monitoring
E. R. 1-94 Trust Account/Advance Financial Assistance
Process Flow
Designation of Community Relations Officer
Criteria in Processing Project Proposals
Documentation Requirements
Examples of DL and RWMHEE Projects
Updates on Energy Regulations No. 1-94 program
LEGAL BASIS
DOE was mandated by RA 7638 (DOE Act of 1992) Section 5(i) to “devise ways and means of giving direct benefits… and equitable and preferential benefit to the region that hosts the energy resource and/or the energy-generating facility”
RA 9136 (EPIRA of 2001) mandated that “the obligations of generation companies and energy resource developers to communities hosting energy generating facilities and/or energy resource developers shall continue”
To recognize the contributions made by the communities and people affected;
To lessen conflict of rights; and
To promote harmony and cooperation among the LGUs/Region and the Energy Resource Developers and/or power producers.
POLICY OBJECTIVES
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 of such generation facility
OBLIGATION OF ENERGY
RESOURCE DEVELOPERS
Host Communities - a local government unit (barangay, municipality, city or province)/region where the energy resource and/or energy generating facility is physically located.
Community/People Affected - these are the bona fide/legitimate residents of a host LGU and who were relocated, as a result of the construction, and/or operation of an energy generating facility or the development of an energy resource projects, to official resettlement site/s.
BENEFICIARIES
HOST COMMUNITIES PER ENERGY RESOURCE/FACILITY
A. Host LGUs/Region of Hydro Facilities : LGUs/Region hosting the energy-generating facilities LGUs/Region hosting the hydro reservoir
B. Host LGUs/Region of Geothermal Facilities : LGUs/Region – where the producing geothermal
reservoir is located, inclusive of the production and re-injection/recharge zone
C. Host LGUs/Region of Diesel, Thermal, Gas Turbine, Coal, Natural Gas, and other related Facilities: Where facility/ies is/are physically located
ALLOCATION OF 0.01 P/KWH
ELECTRIFICATION FUND (EF)
DEVELOPMENT & LIVELIHOOD FUND (DLF)
REFORESTATION, WATERSHED MANAGEMENT, HEALTH AND/OR ENVIRONMENT ENHANCEMENT FUND (RWMHEEF)
APPLICATION OF EF
Radiating order
Examples:
Extension of primary
and/or secondary
distribution lines
Upgrading of
existing lines
Solar home systems
Host Region
Host Province
Host Municipality/City
Host Barangay
Resettlement Areas
APPLICATION OF DLF AND RWMHEEF Allocated depending on area classification
Resettlement 10%
Host Barangay 30%
Host City 60%
Resettlement 5%
Host Barangay 20%
Host Municipality/City 35%
Host Province 30%
Host Region 10%
The administration of EF, DLF, and RWMHEEF shall be undertaken by the DOE.
Item 2.2.4 of the Joint DOF-DBM-COA Circular No. 1-97
Exempts from the coverage cash accounts owned by government-owned and/or controlled corporations and local government units.
COA Decision No. 2002-240
The DOE is only allowed directly to apply the Trust and its income for the purpose for which it was created.
FUND ADMINISTRATION
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 that:
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 that:
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.
FUND MONITORING
ER 1-94 TRUST ACCOUNT
All interest earnings from EF, DLF, RWMHEEF are set aside into one trust account utilized for electrification projects
Areas with no ER 1-94 benefits may avail “as maybe prioritized/ determined by DOE”
DOE CONDUCTS FINANCIAL &TECHNICAL AUDIT
DU IMPLEMENTS PROJECT
DOE EVALUATES, APPROVES, ISSUES NTP, MOA, & FACILITATES
FUND RELEASE
DU ASSESS THE AREA/S , SUBMIT REQ DOCS & ENDORSES TO DOE
LGU SUBMITS LIST OF AREA/S FOR EF PROPOSAL TO DU’s/EC’s
DOE CONDUCTS FINANCIAL &TECHNICAL AUDIT
LGU IMPLEMENTS PROJECT
DOE EVALUATES, APPROVES, ISSUES NTP, MOA, & FACILITATES
FUND RELEASE UPON LGUs SUB. OF COMPLETE BID DOCS
PP CONDUCTS INITIAL EVALUATION & ENDORSES TO DOE
LGU SUBMITS DLF & RWMHEEF PROPOSAL thru a RESOLUTION
PROCESS FLOW ELECTRIFICATION FUND DLF & RWMHEEF
The energy resource developer and/or power producer is required to designate one Community Relation (COMREL) Officer for each power plant tasked to:
Coordinate with the LGU on annual work program;
Assist in the preparation of all project proposals prior to DOE’s release of fund;
Monitor the implementation of all DOE approved work programs/projects proposal;
Shall provide the LGUs/Region updated status of accrued financial benefits;
Act as liaison officer to all concerned government agencies relative to the implementation of ER 1-94.
DESIGNATION OF COMMUNITY RELATIONS OFFICER
SEC. 6a, RULE 29 (A) EPIRA-IRR
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 Promotes equitable share of benefits Demonstrate the capacity for effective and successful implementation No outstanding unliquidated project fund/s
CRITERIA ON PROJECTS TO BE FUNDED UNDER DLF & RWMHEEF
Project Proposals Bid Documents prior to release of project fund Liquidation Documents
DOCUMENTATION REQUIREMENTS:
Staking Sheets Bill of Materials Cost Estimates Potential Household Connection For NRE’s - project proposals, plans, designs & specifications
REQUIRED DOCUMENTS FOR ELECTRIFICATION PROJECT PROPOSALS
REQUIRED DOCUMENTS FOR DL & RWMHEE PROJECT PROPOSALS 1. LGU/RDC Resolution 2. Endorsement of project proposal by the concerned power plant 3. Project proposal 4. Sketch/Location Map of the Project Site 5. Duly approved detailed cost estimate/bill of materials 6. Duly approved project plan/specifications 7. Duly approved Program of Works/Schedule of Activities 8. Abstract of canvass/quotation from three (3) suppliers – to establish the prevailing cost of
equipment/materials/supplies within the area 9. Certification from appropriate agency on the implementation of project/s – to eliminate the possibility of double funding on the same nature of request 10. List of beneficiaries 11. On project site – copy of notarized “Deed of Donation”/Proof of Transfer of Private Property/Cert. of Title justifying public ownership w/ date of transfer/classification of the lot 12. Three to five years projected income statement – when applicable (for income generated
funding like: farm inputs) 13. For projects to be implemented by COOP: CDA Certification of the Cooperative’s good standing
(dated), Business Permit (dated), SEC/CDA/DOLE accreditation/registration 14. On Road Improvements/Construction (Relevant permit from concerned agencies &
Certification of Road Classification from the Municipal/Provincial Engineering Office 15. On Acquisition of Service Vehicle/Dump Truck/Mini-DT/Multi-purpose Vehicle (Inventory of Vehicles ) 16. Other requirements which maybe required to effect approval of the project
INFRASTRUCTURE PROJECTS: 1. LGU/RDC Resolution 2. Endorsement of project proposal by the concerned power plant 3. Project proposal (Objectives, Project Profile, Rationale/Justification, Target Beneficiaries,) 4. Sketch/Location Map of the Project Site 5. Duly approved detailed cost estimate/bill of materials, plans, drawings, specifications, 6. Duly approved Program of Works/Schedule of Activities 8. On Road Improvement/ConstructionRelevant permit from concerned agencies & Certification of Road Classification from the Municipal/Provincial Engineering Office)
LIVELIHOOD PROJECTS: 1. LGU/RDC Resolution 2. Endorsement of project proposal by the concerned power plant 3. Project proposal (w/ list of beneficiaries, project profile, rationale/justification) 4. Sketch/Location Map of the Project Site 5. Three to five years projected income statement – when applicable (for income generated
funding like: farm inputs) 6. For projects to be implemented by COOP: CDA Certification of the Cooperative’s good
standing (dated), Business Permit (dated), SEC/CDA/DOLE accreditation/ registration
1. Invitation to Apply for Eligibility and To Bid, Notice of Bidding
2. Copy of News Clipping with project cost of 500 thousand and above
3. Evaluation Result /Evaluation Report of Bidders/Suppliers (Pre-Qualification & Post Qualification)
4. Instruction to Bidders
5. Bidder’s Bond
6. Performance Bond
7. Minutes of BAC Meeting/Minutes of Bidding
8. Attendance Sheet
9. BAC Resolutions duly signed by BAC: a) Recommending Mode of Procurement;
b) Resolution of Award ; c) Declaring LCRB and Recommending Approval
10. Bid Form including the following: a) Detailed Estimate; b) Bid Price in the Bill of Quantities;
c) Bid Evaluation Report; d) Bid Schedule; e) Cash Flow/Payment Schedule
11. Abstract of Bids to be signed by Bids and Awards Committee (As Read & As Calculated)
12. Contract/Memorandum of Agreement among LGU and winning Public Bidder
13. Notice of Award
14. Notice to Proceed duly acknowledge by Contractor indicating actual date of receipt
15. Recent Land Bank Certificate
16. Sangguniang Resolution re: Project Proposal
17. Sangguniang Resolution authorizing the concerned Government Officials to enter into and
sign all contracts/agreements concerning ER 1-94 projects
18. DOE Notice to Proceed, MOA among DOE, LGU and Power Plant
BID DOCUMENTS FOR ER NO. 1-94 PROJECTS
ADDITIONAL REQUIREMENTS FOR SUCCEEDING PROJECTS:
Technical Inspection, and
Financial Audit : 1. Report of Disbursements duly signed by the following: a. For Electrification * certified by EC Accountant, * noted by EC General Manager, and * verified by EC Internal Auditor b. For DL / RWMHEE * certified by the Provincial/Municipal Accountant, * noted by Municipal/Provincial Governor, and * verified by the Resident COA Auditor 2. Certificate of Completion and Acceptance 3. Certificate of Joint and Final Inspection signed by DOE, NPC / IPP / EC / LGU 4. Project photos showing the installed permanent marker
EXAMPLES OF PROJECTS: DEVELOPMENT & LIVELIHOOD (DL) PROJECTS REFORESTATION, WATERSHED MANAGEMENT,
HEALTH AND/OR ENVIRONMENT ENHANCEMENT (RWMHEE) PROJECTS
DEVELOPMENT PROJECTS • Street lighting • Farm to Market Road • Multi-Purpose Pavement • Farm produce collection & buying station • Rice/Corn Milling • Communal Irrigation System • Small water impounding projects • Zip Line
• Fish ports • Seawalls • Day Care Center • School Building • Public market • Slaughter house • Bridge • Flood control measures • Public drainage/ sewerage system • Showcase Center
Funding for the projects shall include costing of materials, equipment and labor, exclusive of payment for salaries, wages, honoraria, allowances, administrative expenses, transportation, and travel expenses, and other similar expenses that may be incurred in the processing and release of funds, and implementation
LIVELIHOOD PROJECTS • Food production/processing • Ice Plant • Livestock and poultry
production • Handicraft production • Aquaculture • Skills training for LGU administered livelihood
projects • Vegetable seed farm
Small scale services livelihood projects such as:
• Corn/Rice Milling • Carpentry / Furniture Shop • Radio, Refrigerator and
TV servicing • Garment Weaving • Engine mechanic services • Electrical wiring and design • Dressmaking • Gold and silver trading and
jewelry making • Blacksmith shop • Welding shop
27
Health Related Projects: Water supply system Municipal Hospital Health Center Medical equipment/ facilities Medicinal plant gardens Ambulance
Environment Enhancement Projects: Fire Truck Garbage/Dump Truck Materials Recovery
Facility
RWMHEE PROJECTS
Reforestation & Watershed Management Projects: Improvement of forest cover Community-based forestry management Agro-forestry Conservation/Rehabilitation of Mangroves Seedling nursery Fire truck Waste Management Equipment Construction of Concrete Sanitary Waste Water Collection Facility Sanitary Landfill Development with Materials
Recovery Facility (MRF) Development of Waste Recovery Warehouse
RWMHEE PROJECTS
TRUST ACCOUNTS ESTABLISHED (As of March 14, 2014)
TOTAL 694
DOE Administered Trust Accounts
(Land Bank of the Phils.) 627
(Dev’t. Bank of the Phils.) 67
UPDATE ON
ENERGY REGULATIONS 1-94
GENERATING FACILITIES NATIONWIDE
INCORPORATED IN E.R. 1-94 PROGRAM (As of March 14, 2014)
TOTAL 238
National Power Corp. (NPC) 7
Independent Power Producers (IPPs) 231
Luzon 119
Visayas 44
Mindanao 75
Total 238
HOST COMMUNITIES
INCORPORATED IN E.R. 1-94 PROGRAM (As of March 14, 2014)
TOTAL 1,260
NPC Owned Facilities
AGUS 1, 2, 4, 5, 6, 7 HEPs 300 *
PULANGI HEP 15
IPP Facilities 945
AGUS 1, 2, 4, 5, 6, 7 HEPs Facilities Resources
Barangays 30 242
Municipalities/Cities 5 19
Provinces 2
Regions 2
Total * 300
32
SUMMARY OF FINANCIAL BENEFITS
(IN BILLION PESOS)
26 June 1994 – 25 December 2013 (Validated Electricity Sales)
Total EF DLF RWMHEEF
Accrued Financial
Benefit 9.03 3.72 2.49 2.82
Approved 6.05 3.26 1.25 1.54
Available/Collectible
Balance 2.98 0.46 1.24 1.28
SUMMARY OF APPROVED PROJECTS (March 14, 2014)
# Type of Project (PhP)
Billion
3,604 Electrification* 3.26
1,221 Development and Livelihood 1.25
1,071 Reforestation, Watershed
Management, Health and/or
Environment Enhancement
1.54
Note: * Excluding MIRANT, SARO, KEPHILCO & PNOC-EDC Projects and
among other advanced financial assistance
COMPARISON OF BENEFITS TO LGUS/RDCS
ER 1-94 ROYALTY TAX (or NWT) GOVERNMENT SHARE
Legal Basis Sec. 5i of RA 7638; Rule 29 (a) EPIRA-IRR, Sec. 66 of R. A. No. 9136 (EPIRA Law of 2001)
Secs. 289-294 of RA7160 (Local Govt Code of 991); Rule 29 (b) EPIRA-IRR, Sec. 66 of R. A. No. 9136 (EPIRA Law of 2001)
Sec. 20, Rule 7 of RE-IRR; Rule 29 (b) EPIRA-IRR, Sec. 13, Chapter V of R. A. No. 9513 (RE Act of 2008)
Nature of Benefits
P0.01/kWh of the total electricity sales
(total generation – own use, system loss)
1% of Gross Receipts or
40% of the Nat’l Wealth Taxes, royalty fees, or charges derived by the government agency of the preceding calendar year whichever is beneficial to the LGUs
1% of Gross Income (GS-CGS) of RE Developers and 1.5% of Gross Income for Indigenous GEDs of the preceding fiscal year
If hosting a Private Company:
Nat’l Govt gets 60%, and
Local Govt gets 40%
Beneficiaries Resettlement Area, Barangay, Municipality/City, Province and Region
Barangay, Municipality/City and Province
Barangay, Component City/Municipality and Province
Nature of Fund Utilization
Electrification, Development & Livelihood, and RWHEE Projects
80% be applied to lower the cost of electricity
20% for development and livelihood projects
80% be applied to RE projects & activities to subsidize end-users of RE whose consumption does not exceed 100kWh
20% for development and livelihood projects
Fund Availment
Directly remitted to LGU/RDC/DU/EC based on approved projects
Directly remitted to the host LGU for GOCC and for LGUs hosting IPP with Service Contract to DOE thru DBM
IPP with Service Contract to DOE thru DBM