Working Towards Building a Green Economy and Sustainable Local Communities

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Municipality of Kananga, Leyte: Ensuring local communities benefit from hosting energy projects

MAYOR ELMER C. CODILLA OF MUNICIPALITY OF KANANGA LEYTE DISCUSSED THE MONETARY AND NON-MONETARY BENEFITS THAT KANANGA RECEIVES FROM HOSTING GEOTHERMAL ENERGY PROJECTS AND LIKEWISE THEIR UTILIZATION FOR LOCAL ECONOMIC DEVELOPMENT DURING THE NG-LG JOINT ENERGY FORUM, HELD LAST 6 SEPTEMBER 2013 AT HERITAGE HOTEL, PASAY CITY.

Kananga, located in the Northwestern part of Leyte, is the host municipality of the 700 MW Leyte Geothermal Production Field (LGPF) with 5 Geothermal Power Plants and 4 Optimization Power Plants.

Although Ormoc shares a part of the LGPF, Kananga hosted majority of the Geothermal Power Plants and Kananga is the 90% source of the geothermal steam that flows in the steam highway of the LGPF that feds the Geothermal Power Plant in the production of electricity.

According to Mayor Elmer C. Codilla, “Kananga receives monetary benefits like the: Royalty Fee, Real Property Fee, and the ER1-94 Fee or the one centavo benefits from the sale of electricity; and non-monetary benefits like the: priority in electricity load dispatch; preference in procurement; preference in hiring; and work direct award to community association, from hosting geothermal power plants”.

Utilization of proceeds from the National Wealth tax:

The utilization of the Royalty Fund was divided into 80% for reducing the cost of electricity and 20% for development programs/projects/activities.

Kananga has a 1995 Municipal Ordinance that created the Direct/Energy Cost Subsidy Program and the Energy First Cost Subsidy Program. The Direct/Energy Cost Subsidy Program is for those who already have electricity in their respective residence. Today the refund is 3.00 per kilowatt with a cap of not more than 150 KW on a monthly basis.

The Energy First Cost Subsidy Program is for those who don’t have electricity in their respective residence. Kananga residents are supplied with electrical materials and lightings enough to energize their residence, like service drop line wires, electric meter, 3-4 lightings, 2 outlets, switches and the services of electrician for the installations.

“During my term of office, we have utilized PHP105,513,202.02 that represent the 80% of the Royalty Fee. Today the locality is serving 5,003 beneficiaries municipal-wide for the Energy/Direct Cost Subsidy or the power consumption refund; and 4,833 beneficiaries municipal-wide for the Energy First Cost Subsidy program or the first cost of energy”, said Codilla.

The utilization of the remaining 20% of the Royalty Fee of the municipality forms part of the operational cost of the Kananga EDC Institute of Technology or KEITECH. KEITECH is a school partnership of the LGU of Kananga, the Energy Development Corporation (EDC) group and TESDA committed to produce world class TESDA license skilled workers. To date, KEITECH has produced 508 graduates with minimum of 3 to 5 TESDA license in three sectors of Construction, Metals & Engineering, and Tourism.

Utilization of Real Property Tax fund:

Another benefit that the host community receives and utilize is the Real Property Tax (RPT) from the land, buildings, power plants and equipment of the energy projects.

“Our RPT SHARE goes to our Special Education Fund (SEF) and used in improving our public education, like computerization, & Capability Building for our Teachers", said Codilla.

Three Secondary Annex School were opened in 3 barangays, and 1 national high school was established. There are 28 school buildings constructed and 70 school buildings repaired sourced from SEF. The LGU also hired 110 Locally-Hired Teachers in addressing lack of teachers in public schools.

Utilization of ER 1-94 funds:

Energy Regulations 1-94 Funds or commonly known as the ER 1-94 Fund, a one (1) centavo share of host community per electricity sale is another monetary benefit that Kananga receives and utilize. The ER 1-94 is divided into three programs: Development and Livelihood fund (DLF), Reforestation, Watershed, Health and Environment Enhancement fund (RWHEEF) and Electrification fund (EF).

To avail the DLF and RWMHEEF funds, the municipality prepares Project Proposals submitted to the Energy Resource Developer and Energy Producing Facility.

For the EF:

In 2010, out of the 41 sitios of the Municipality, only 9 remained un-energized. There are 25 new sitios emerged. The electrification of these new sitios have been already approved but was pending as of the present, due to unliquidated electrification projects of Ormoc City.

For DLF and RWHEEF:

“During my term of Office from 2007 until present we received and utilized Development and Livelihood Fund of about Php 9,060,991.61 and about Php 11, 241,943.06 for the Reforestation, Watershed Management, Health and Environment Enhancement Fund”, noted Codilla.

The amount was spent in various projects such as:

  • About 1.3 kms of Farm to  Market Road with Critical Slopes are concreted in 6 different Barangay Local Government Units;
  • One Tourism vehicle procured at the municipal LGU for the tourism livelihood programs;
  • Construction of Health Center & Day Care Center in Sitio Anagasi, Barangay Montealegre;
  • Construction of Concrete Flood Control for Environment Protection in Barangay Hiloctogan;
  • Construction of Municipal MRF, 3 Multi-Purpose Health Building and 20 mts Flood Control structure, and
  • Six units vehicles procured for waste management

Mayor Codilla stressed that “Kananga and its local communities truly benefit hosting geothermal projects”.