The Department of Energy (DOE) has ordered power generation companies (gencos) to triple their mandatory contributions to host communities starting next year.
In a circular signed last week but only made available yesterday, the DOE increased the required allocation under the Energy Regulation (ER) 1-94 program to P0.03 per kilowatt-hour (kWh) of power sales.
This represents a 200-percent increase from the current P0.01 per kWh contribution made by gencos and energy resource developers to their host communities and local government units (LGUs).
‘We are shifting our approach to focus on empowering people and giving them a greater stake in our country’s energy growth,’ Energy Secretary Sharon Garin said.
Effective January 2026, P0.025 per kWh will be directed to host communities to support initiatives in livelihood development, environmental protection, health care and education.
The remaining P0.005 per kWh allocation, meanwhile, will fund electrification projects through distribution utilities to connect households requiring electric service.
The policy also permits the funds to be used to lower the host communities’ power rates, either voluntarily through a resolution passed by the LGUs or mandatorily if they remain unused for two years.
‘By reinvesting the benefits of power generation back into local areas, we are building shared prosperity and a stronger foundation for a sustainable future,’ Garin said.
According to the DOE, hosting a 100-megawatt conventional power plant could generate financial benefits of around P21 million annually, while a 100-MW solar plant could bring in P5.5 million. This is assuming that both plants operate at their maximum capacity.
Given higher contributions from gencos, the DOE expects a threefold increase in community investments, which could translate to stronger local economies and more livelihood opportunities.
Amid corruption concerns, the DOE has assured the public that the funds will be managed transparently and regularly audited in coordination with the Commission on Audit.
DOE data showed that 683 LGUs benefited from the ER 1-94 program as of December 2024.
‘This is a partnership built on trust and shared progress, ensuring that every community truly benefits from the energy that powers our nation,’ Garin said.