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”
 POLICY OBJECTIVES
 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.
 OBLIGATION OF ENERGY
RESOURCE DEVELOPERS
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
 BENEFICIARIES
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.
 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 Host Region
 Examples: Host Province
 Extension of primary
and/or secondary Host Municipality/City
distribution lines Host Barangay
 Upgrading of
existing lines Resettlement
 Solar home systems Areas
 APPLICATION OF DLF AND RWMHEEF
Allocated depending on area classification

Resettlement 10% Resettlement 5%

Host Barangay 20%
Host Barangay 30%
Host Municipality/City 35%
Host City 60%
Host Province 30%
Host Region 10%
 FUND ADMINISTRATION
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 MONITORING
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.
 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”
 PROCESS FLOW
ELECTRIFICATION FUND DLF & RWMHEEF
LGU SUBMITS LIST OF AREA/S FOR LGU SUBMITS DLF & RWMHEEF
EF PROPOSAL TO DU’s/EC’s PROPOSAL thru a RESOLUTION

DU ASSESS THE AREA/S , SUBMIT PP CONDUCTS INITIAL

REQ DOCS & ENDORSES TO DOE EVALUATION & ENDORSES TO DOE

DOE EVALUATES, APPROVES, DOE EVALUATES, APPROVES,

ISSUES NTP, MOA, & FACILITATES ISSUES NTP, MOA, & FACILITATES
FUND RELEASE FUND RELEASE UPON LGUs SUB. OF
COMPLETE BID DOCS

DU IMPLEMENTS PROJECT LGU IMPLEMENTS PROJECT

DOE CONDUCTS FINANCIAL DOE CONDUCTS FINANCIAL

&TECHNICAL AUDIT &TECHNICAL AUDIT
 DESIGNATION OF
COMMUNITY RELATIONS OFFICER
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.
SEC. 6a, RULE 29 (A) EPIRA-IRR
 CRITERIA ON PROJECTS TO BE FUNDED
UNDER DLF & RWMHEEF
 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
DOCUMENTATION REQUIREMENTS:
 Project Proposals
 Bid Documents prior to
release of project fund
 Liquidation Documents
 REQUIRED DOCUMENTS FOR
ELECTRIFICATION PROJECT PROPOSALS
 Staking Sheets
 Bill of Materials
 Cost Estimates
 Potential Household Connection
 For NRE’s - project proposals,
plans, designs & specifications
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
 BID DOCUMENTS FOR ER NO. 1-94 PROJECTS
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
 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 • Fish ports
• Farm to Market Road • Seawalls
• Multi-Purpose Pavement • Day Care Center
• Farm produce collection & • School Building
buying station • Public market
• Rice/Corn Milling • Slaughter house
• Communal Irrigation System • Bridge
• Small water impounding • Flood control measures
projects • Public drainage/
• Zip Line 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 Small scale services livelihood
• Ice Plant projects such as:
• Livestock and poultry • Corn/Rice Milling
production • Carpentry / Furniture Shop
• Handicraft production • Radio, Refrigerator and
• Aquaculture TV servicing
• Skills training for LGU • Garment Weaving
administered livelihood • Engine mechanic services
projects • Electrical wiring and design
• Vegetable seed farm • Dressmaking
• Gold and silver trading and
jewelry making
• Blacksmith shop
• Welding shop
 RWMHEE PROJECTS
Health Related Projects: Environment
 Water supply system Enhancement Projects:
 Municipal Hospital  Fire Truck
 Health Center  Garbage/Dump Truck
 Medical equipment/  Materials Recovery
facilities Facility
 Medicinal plant gardens
 Ambulance

27
 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
 UPDATE ON
ENERGY REGULATIONS 1-94

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
 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
 SUMMARY OF FINANCIAL BENEFITS
(IN BILLION PESOS)

26 June 1994 – 25 December 2013

(Validated Electricity Sales)
Total EF DLF RWMHEEF

Accrued Financial 9.03 3.72 2.49 2.82

Benefit
Approved 6.05 3.26 1.25 1.54
Available/Collectible 2.98 0.46 1.24 1.28
Balance

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 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 1.54
Management, Health and/or
Environment Enhancement

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 Secs. 289-294 of RA7160 (Local Sec. 20, Rule 7 of RE-IRR; Rule 29 (b)
29 (a) EPIRA-IRR, Sec. Govt Code of 991); Rule 29 (b) EPIRA-IRR, Sec. 13, Chapter V of R. A.
66 of R. A. No. 9136 EPIRA-IRR, Sec. 66 of R. A. No. 9513 (RE Act of 2008)
(EPIRA Law of 2001) No. 9136 (EPIRA Law of 2001)

Nature of P0.01/kWh of the total 1% of Gross Receipts or 1% of Gross Income (GS-CGS) of RE

Benefits electricity sales 40% of the Nat’l Wealth Taxes, Developers and 1.5% of Gross
(total generation – own use, royalty fees, or charges derived Income for Indigenous GEDs of the
system loss) by the government agency of the preceding fiscal year
preceding calendar year If hosting a Private Company:
whichever is beneficial to the Nat’l Govt gets 60%, and
LGUs Local Govt gets 40%
Beneficiaries Resettlement Area, Barangay, Municipality/City and Barangay, Component
Barangay, Province City/Municipality and Province
Municipality/City,
Province and Region
Nature of Fund Electrification, 80% be applied to lower the cost 80% be applied to RE projects &
Utilization Development & of electricity activities to subsidize end-users of RE
Livelihood, and RWHEE 20% for development and whose consumption does not exceed
Projects livelihood projects 100kWh

20% for development and livelihood

projects
Fund Directly remitted to Directly remitted to the host LGU IPP with Service Contract to DOE thru
Availment LGU/RDC/DU/EC based for GOCC and for LGUs hosting DBM
on approved projects IPP with Service Contract to DOE
thru DBM