Philippines boosts benefits for communities hosting energy projects

As of December 2024, the program covered 683 local government units.

Starting January 2026, communities hosting energy projects in the Philippines will receive increased financial benefits under the Energy Regulation Program No. 1-94 (ER 1-94), following Department Circular (DC) No. DC2025-10-0023 releasedg by the Department of Energy (DOE).

The total benefit rises to ¢0.05 (Php 0.03) per kilowatt-hour (kWh) of electricity generated and sold, up from ¢0.018 (Php 0.01).

Of this, ¢0.045 (Php 0.025) per kWh is allocated for community programs—including healthcare, education, livelihood, environmental protection, and optional electricity-rate reductions—while ¢0.009 (Php 0.005) per kWh is for electrification projects.

Local government units (LGUs) and indigenous cultural communities/indigenous peoples (ICCs/IPs) identify and approve priority projects through council resolutions. Unused funds for two consecutive years will automatically reduce local electricity rates.

Funds are managed through trust accounts for the Development and Livelihood Fund (DLF), the Reforestation, Watershed Management, Health and/or Environment Enhancement Fund (RWMHEEF), and the Electrification Fund (EF).

Generation companies and developers remit payments within 60 days of complete documentation.

Based on indicative assumptions, a 100-megawatt (MW) conventional power plant could generate around $375,000 (Php 21m) annually, whilst a 100-MW solar facility could produce about $98,000 (Php 5.5m) per year.

As of December 2024, ER 1-94 covered 683 LGUs, including 321 barangays, 286 municipalities and cities, and 76 provinces. The DOE expects enhanced allocations to increase local investments in community services and electrification.