Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon Gity

SIXTEENTH CONGRESS
First Regular Session

987

HOUSE BILL NO.

Introduced by REP. TEDDY BRAWNER BAGUILAT

EXPLANATORY NOTE

As mandated under Republic Act No. 7638, the Department of Energy (“DOE”) shall “devise ways

and means of giving direct benefits to the province, city, or municipality, especially the community

and people affected, and equitable preferential benefit to the region that hosts the energy resource

and/or the energy-generating facility: Provided, Powever, That the other provinces, cities,
or regions shall not be deprived of their energy requirements.”

Pursuant to this mandate, the DOE. promulgated Energy Regulation (“ER”) No. 1-94. The
regulation made clearer the policy of the State with regard to the equitable treatment of host
communities, that is, the local government units (“LGUs”) or the regions where a particular energy
resource or power plant is located.

Republic Act No. 7638 and ER No. 1-94 recognize that host communities contribute to the
electrification of the country by way of their granting power plants or energy resource developers to.
operate within their jurisdictions. In the case of energy resources, there is additional benefit to the
resource developer and the country when the host communities undertake activities that conserve,
preserve, maintain or otherwise protect the energy resource, ensuring the availability of that resource
ata steady or higher volume and/or for a longer time.

‘Thus, Republic Act No. 7638 grants benefits to host communities, which mandate is implemented
by ER No. 1-94, to compensate the host communities for their contribution to the country. When a
power plant is capable of producing more electricity, then the host community becomes entitled to
greater benefits. Thus, this system of benefits will encourage host communities to protect their
energy resources, so that the hosted power plant will be able to generate more electricity.

‘The benefits are likewise intended to enhance the relationship and promote harmony among host
communities, energy resource developers, power plant operators, and relevant government agencies.
Iris envisioned that such harmonious relationship will encourage further development in the energy
industry.


In the case of hydroelectric energy, the energy resource is a waterway or a body of water. At the
point where a hydroelectric power plant is located, the power of the water system is harnessed and
converted into electric energy. Before reaching that point, however, the water system builds up
power, starting from its source, as it gathers energy while traveling long distances. Communities
upstream therefore contribute to the amount of energy that can be generated by a particular water
system.

‘The activities of upstream communities either enhance or diminish the capability of the water
system to produce energy. For instance, if upstream communities properly manage watersheds and
ensure that there are no impediments to the flow of water, then the hydroelectric plant will benefit
from sufficient volume or adequate flow of water. But if upstream communities mismanage
watersheds, then the water system will likely be silted, water volume will be generally low, and there
will be insufficient water to turn turbines at the hydroelectric plant.

Obviously, hydroelectric power plants and energy developers stand to benefit from the favorable
activities of upstream communities. As such, it is only just that, in the case of hydroelectric plants
and energy resources, upstream communities also be compensated for their contribution to the
country’s energy resources.

At present, however, the term “host community” fails to consider the critical role of upstream
communities to hydroelectric energy. This glaring gap impairs the fulfillment of the principal
objectives of the State. ‘Thus, the term “host community” must be redefined to cover not only the
Barangays, Municipalities, Provinces or Regions where the dams or hydroelectric power generating,
facilities are located but also to include LGUs or Regions upstream which protect and maintain the
watersheds and ensure the free flow of water towards the hydroelectric plants.

In order to address this injustice, this bill is most respectfully submitted and requested for early
approval.

‘The technology for the generation of hydroelectric power available in the country is currently limited
to conventional (with the power generator being housed in a dam), run-of-river, and pumped
storage. But hydroelectric technology includes the generation of electricity from tide and wave
energy. Regardless of technology, however, the nature of hydroelectric energy is that its source, and
therefore the capability to efficiently generate electricity, is affected by its surroundings. It is the
intent of this bill to encourage communities affecting hydroelectric energy resources, regardless of
generation technology used, to contribute to the sustainability and development of the said
resources

‘Lone District, ingao


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

987
HOUSE BILL NO.

Introduced by REP. TEDDY BRAWNER BAGUILAT

AN ACT REDEFINING THE TERM “HOST COMMUNITY” AS FOUND IN THE
LOCAL GOVERNMENT CODE OF 1991 (RA 7160) AS AMENDED, DEPARTMENT OF
ENERGY ACT OF 1992 (RA 7638), AND THE ELECTRIC POWER INDUSTRY
REFORM ACT (EPIRA) OF 2001 (RA 9136)

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:

Section 1. The term “host community” as used or referred to in Republic Act No. 7160, otherwise
known as the Local Government Code; Republic Act No. 7638, otherwise known as the
Department of Energy Act of 1992; and Republic Act No. 9136, otherwise known as the
Power Industry Reform Act; each Republic Act as amended, shall be redefined as follows:

a) With respect to hydroelectric generation facilities, the host local government unit (LGU) or
the host region is that where the hydroelectric generating facility is located.

b) With respect to hydroelectric energy resources, the host LGU or the host region is that
where the waterway or water system used as energy resource is located, beginning. at the
point of origin of the waterway or water system and terminating at the point where the
hydroelectric generation facility concerned is located

Section 2, In the case of hydroclectric generation facilities and hydroelectric energy resources, the
amount to be collected as benefit to host communities shall not be less than twenty-five percent
(25%) of one centavo for every kilowatthour generated by the hydroelectric generation facility
concerned.

Section 3. All amounts collected as benefit to host communities from hydroclectric generation
facilities and hydroelectric energy resources shall be shared equally by the host communities
concerned.



Section 4, The Department of Energy shall issue the implementing rules and regulations necessary
for the administration of the host community benefits provided hercin.

Section 5. All laws, decrees, executive orders and rules and regulations contrary to or
inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

Section 6. ‘This Act shall take effect fifteen (15) days after its publication in at least two (2)
newspapers of general circulation.

Approved,