Host communities across the country are set to receive five times more financial benefits from energy projects starting January under the Department of Energy’s (DOE) revised Energy Regulation 1-94 (ER 1-94) program.

Citing Department Circular (DC) No. 2025-10-0023 signed on 14 October, Energy Secretary Sharon S. Garin said on Wednesday that the financial share of host communities will increase to P0.03 per kilowatt-hour (kWh) from P0.01 of electricity generated and sold. 

The benefit, previously sourced from a half-centavo per kWh, will now rise to 2.5 centavos per kWh to fund community development programs.

“We are shifting our approach to focus on empowering people and giving them a greater stake in our country’s energy growth. 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.

The expanded benefit will support livelihood projects, environmental protection initiatives, healthcare programs, and educational assistance as determined by local government units (LGUs) and indigenous cultural communities or indigenous peoples.

The half-centavo share for electrification projects through distribution utilities will be retained to connect unserved households. The DOE said the policy also allows the ER 1-94 funds to be used to lower electricity rates in host communities, either voluntarily through LGU resolutions or mandatorily if the funds remain unused for two years.

Based on DOE estimates, hosting a 100-megawatt (MW) conventional power plant may yield around P21 million per year, while a 100-MW solar plant may generate around P5.5 million annually, assuming maximum capacity operation.

Funds will be managed under three dedicated trust accounts: the Development and Livelihood Fund, Reforestation, Watershed Management, Health, and/or Environment Enhancement Fund, and the Electrification Fund. 

Disbursements will undergo regular audits by the DOE and the Commission on Audit to ensure accountability.

The circular also introduces non-monetary benefits for host communities, including local employment preferences, skills training, and procurement of local materials.

As of December 2024, the ER 1-94 program has supported 683 LGUs, including 321 barangays, 286 municipalities and cities, and 76 provinces.