EDC to directly remit royalties from geothermal op’s to local community on Leyte, Philippines

Local Mayors of Ormoc, Kananga, and other dignitaries upon signing MOA with EDC (source: EDC)
Alexander Richter 13 Feb 2020

An agreement has been signed between EDC and local municipalities on the remittance of royalties from EDC's geothermal operations on Leyte, Philippines directly to the communities, according to regulations by the Philippines' DOE.

In a release this month, geothermal leader Energy Development Corporation (EDC) announced that beneficiaries in Ormoc and Kananga, Leyte will soon reap the benefits of hosting its geothermal plants directly from the company after recently signing a Memorandum of Agreement (MOA) to establish trust accounts for their accrued financial benefits.

The MOA between EDC and its beneficiaries will be signed in compliance with the Department of Energy’s (DOE) Circular No. DC2018-08-0021 that requires energy generation companies and/or energy resource developers to directly provide their Energy Regulations (ER) No. 1-94  benefits equivalent to one centavo per kilowatt-hour (P0.01/kWh) of the total electricity sales to their host communities. The amendment intends to accelerate their socio-economic development and have more efficient utilization of funds, which used to be released by the DOE.

While the exact amount is still being computed, EDC will be able to directly remit this benefit to its beneficiaries on a quarterly basis beginning this year once they have opened their trust accounts.

Ormoc City Mayor Richard Gomez and Municipality of Kananga Mayor Manuel Vicente M. Torres were present for the ceremonial MOA signing that was held at the Ormoc City Government’s Multipurpose Hall.  Hon. Eric Gonzaga, barangay captain of Lim-ao, Kananga, Leyte; Hon. Angelito Napoles, barangay captain of Tongonan, Kananga; Hon Wilma Taneo, barangay captain of Tongonan, Ormoc City; Hon. Hilario Singson, barangay captain of Milagro, Ormoc City; Hon. Richard Impas, barangay captain of Lake Danao, Ormoc City; and Hon. Rodelito Cantay, barangay captain of Cabintan, Ormoc City also signed the MOA.

These barangays are hosts of EDC’s 711-Megawatt Leyte Geothermal Project, the company’s biggest geothermal facility that also has the world’s largest geothermal steamfield.

“Being able to directly disburse our partner communities’ benefits as hosts of our geothermal facilities will also help us strengthen our relationship with them as we provide them with the necessary guidance on the use of the funds for community projects” said Atty. Allan V. Barcena, head of EDC Corporate Social Responsibility-Public Relations group.

Under Rule 29(A) of the Electric Power Industry Reform Act of 2001’s Implementing Rules and Regulations (EPIRA-IRR), 25% the P0.01/kWh of the total electricity sales shall be set aside for the Development and Livelihood Fund (“DLF”) and another twenty five percent (25%) of the P0.01/kWh of the total electricity sales shall be set aside for the Reforestation, Watershed Management, Health and Environment Enhancement Fund (“RWMHEEF”) for use by the host region, province, city or municipality and barangay, which are required to establish the corresponding trust accounts.

The MOA specifies that the host barangays are supposed to submit their annual work program for the tangible projects where the funds will be used as well as report on the status of the said projects  at the end of each year.

“The bottomline is we have to make everything efficient. This new set-up will enable us to release the funds to our beneficiaries right away,” Gomez said in his welcome message at the signing ceremony.

Torres agreed and added: “I look forward to working with EDC, our partner in progress. This MOA will enable us to iron out issues on how funds are released to our beneficiaries.”

EDC’s Leyte geothermal facility that straddles between Ormoc City and the Municipality of Kananga currently supplies more than 30% of the country’s installed geothermal capacity.  It is also responsible for putting EDC and the Philippines on the map as the world’s 3rd largest geothermal producer.

Source: Company release