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PIA Press Release
2009/10/08

NGOs buck reduction on LGU royalties in geothermal production

By Rachelle M. Nessia

Dumaguete City (8 October) -- Members of the Alliance of Geothermal Energy Producing LGUs (AGEPL) have passed a resolution strongly objecting the enactment of the Electricity Reduction Act of 2009 proposed early this year by Sen. Juan Ponce Enrile.

The alliance composed of six local government units that are hosting renewable energy generation in the country approved said resolution during its 3rd Alliance Summit held Oct. 2 in Dumaguete City.

The said resolution vehemently objects to the bill proposed by Sen. Enrile which seeks to reduce the royalty share received by the LGUs in development and utilization of the natural wealth.

Sen. Enrile's proposed act which is now pending at the Senate seeks to reduce the LGUs' royalty shares from 60 percent to three percent over the remaining duration of their respective service contracts.

The said proposal further states that the three percent government share shall be maintained at the current 60/40 sharing scheme between the national government and the local governments concerned.

"While the purpose of the bill is laudable, it is unfair, unreasonable and inequitable to host LGUs' of natural wealth or indigenous energy resources…as it practically nullified the benefit afforded them by the law and the constitution," the resolution stated.

Article X of the Constitution states that local governments are entitled to an equitable share in the proceeds of the utilization and development of the national wealth within their respective areas.

The law mandates that the royalty shares received by the LGUs are shared with their constituents by way of direct benefits such as reduction in the rates of certain local taxes of fees.

The alliance led by Valencia Mayor Rodolfo Gonzalez, Jr. is set to seek audience with Sen. Enrile as well as Energy Sec. Angelo Reyes to discuss their resolution. (PIA/RMN) [top]

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