Expanded Rural Electrification Program Implementation Strategies

The Expanded Rural Electrification (ER) Program integrates the rural and missionary electrification efforts of the government in collaboration with the private sector, non-government organizations, and several donor-funded projects with the view to attaining total barangay electrification by 2008 and 90% household electrification by 2017.
 

The Reconstituted ER Program Team

To cope up with the recent developments in the electric power sector, the ER Program Team was reconstituted through the Doe Circular No. 2006-04-003 dated April 2006. The new ER Program Team will continue manage the implementation of rural and missionary electrification program for the purpose of achieving the country’s total electrification, refocus and strengthen rural and missionary electrification through the integrated and synchronized approach.
 

Responsibilities of the Reconstituted ER Program Team

The following are the responsibilities of the reconstituted ER Program Team:

  • Oversee the implementation of ER Program
  • Recommend policy and program directions of the ER Program
  • Formulate and refocus the Program’s goals to address “present” concerns including sitio and household electrification
  • Conduct regular monitoring and evaluation of the Program and feedback system to concerned agencies and participants
  • Develop timeline, reform action plans, targets and detailed implementation schedule for barangay and household electrification
  • Identify the coverage areas of the various stakeholders/key players and set/coordinate with the timetable for project implementation
  • Institute collaborations among players
  • pearhead the promotion of the program

     

    Other Mandates

  • Review and endorse projects and activities in relation to off-grid electrification
  • Serves as clearing house of all rural and missionary electrification initiatives in the country
  • Coordinate with other entities such as QTP’s, financing institutions, NGOs, and private entities, whenever necessary to provide insights and valuable inputs to the ER Program Team in the exercise of its mandate

     

    The New ER Program Team Structure

    A. The Oversight Committee

    This committee is chaired by Undersecretary Melinda L. Ocampo, DOE and co-chaired by Administrator Editha S. Bueno, NEA. Its members are representatives from DOE-Energy Policy and Planning Bureau (DOE-EPPB), DOE-Electric Power Industry Management Bureau (DOE-EPIMB), DOE-Energy Utilization Management Bureau (DOE-EUMB), NPC-Small Power Utility Group (NPC-SPUG). The committee also composed of honorary members from National Economic and Development Authority (NEDA), Department of Finance (DOF), Department of Budget and Management (DBM) and other players if deemed necessary.

    B. Secretariat Support

    The DOE-Rural Electrification Administration and Management Division will serve as the ER Program Team-Secretariat, who will be assisted at the minimum of two (2) representatives from DOE-EPPB, DOE-EUMB, NEA and NPC-SPUG.

    C. Inter-Agency Technical Working Group (TWG)

    The functions of the Inter-Agency TWG is to provide assistance to Oversight Committee and assist in the development of sub-programs, review ans assessment of existing programs, and formulate strategies for the efficient implementation of ER Program. The TWG is composed of three (3) sub-committees namely: Committee on Policy, Committee on Program Implementation and Operations and Committee on Investment and Financing.

    1. Sub-committee on Policy The functions of the Sub-committee on Policy are:

  • Review the objectives of the ER Program and develop guidelines and specific strategies for its implementation;
  • Conduct regular assessment of the implementation of all program components and activities, identify gaps and issues, and recommend the continuation or cessation of certain programs as maybe consistent with law and Government policies;
  • Review existing ER policies and guidelines and evaluate/assess their effectiveness in ensuring the ER targets are achieved as planned in a timely manner;
  • Develop policies to address the isues/gaps affecting program implementation;
  • Provide institutional support to the program implementation.

     

    2. Sub-Committee on Program Implementation and Operations The Sub-Committee on Program Implementation and Operations has the following functions:

     

  • Ensure Coordination among ER Program Team;
  • Actively monitor the implementation of programs and projects vis-à-vis the milestones/targets set and, in this regard, prepare and submit a monthly monitoring report to the Oversight Committee highlighting the critical problems/issues that prevent or hinder the timely implementation of programs and projects;
  • Plan and set milestones for the implementation of ER Program components and activities based on the objectives and strategies developed by the policy committee;
  • Implement specific objectives and activities of the ER Program;
  • Assist in the promotion of ER Program;
  • Prepare reports, presentation/briefing materials, IEC documents, and other documentation relevant to the implementation of the ER Program; and
  • Collect information relevant to the ER Program and maintain relevant database.

     

    3. Sub-Committee on Investment and Financing The Sub-Committee on Investment and Financing has the following functions:

     

  • Identify budgetary requirements in implementing the ER Program and coordinate with DBM and other donor agencies;
  • Identify and harmonize existing financing schemes set by various players implementing ER Program;
  • Identify financing and investment issues and propose policies/strategies to address such issues.

     

    D. Support Groups to ER program Team

    In support to the ER Program Team, the following groups were created: 1. Qualified Third Party – Technical Working Group (QTP-TWG) The Qualified Third Party – Technical Working Group has the following functions:

  • Develop and implement specific guidelines/procedures for the conduct of the QTP Selection Process;
  • Recommend names, service areas and qualification of QTPs for endorsement to ERC;
  • Oversee the reportorial requirements to facilitate the ERC authorization of QTPs endorsed by DOE;
  • Recommend names strategies to enhance the overall process of determining unviable areas for QTP participation;
  • Recommend policies and strategies towards successful implementation of the QTP program including investment promotion;
  • Provide recommendations/inputs in the preparation of MEDP;
  • Undertake other activities to carry out its intended functions. 2. Unified Electrification Subsidy Committee (UESC) The Unified Electrification Subsidy has the following functions:
  • Formulate, recommend and regularly update appropriate guidelines for the provision of subsidy to rural electrification projects;
  • Review proposed donor and private entities-assisted projects;
  • Review and assess impact of existing electrification projects implemented with subsidy funds;
  • Prepare recommendations on the provision of missionary electrification subsidies.
     

    Bigger Challenges

    Electrification Program today faces various and bigger challenges than years before. Remaining barangays are mostly remote and disperse and more difficult to electrify, requiring intensive resources, time and efforts.

    Amidst the various challenges being experienced, the ER Program Team continues to develop and initiate various innovative solutions involving policy-making, program integration, coordination and monitoring of all electrification projects and partnerships schemes.

    1. Public Sector Contribution

    As part of its mandate, the Government continues to be the major contributor in delivering access to electricity services.

    Currently the DOE has two programs to extend access to electricity services. These are through Benefits to Host Communities, which is also known as the Energy Regulations 1-94 (ER 1-94), as amended. Under ER 1-94, power generators and/or energy resource developers are mandated to set aside one centavo per kilowatt-hour (P0.01/kWh) of the total electricity sales as financial benefits to host communities for electrification, development and livelihood, reforestation, watershed management, health and/or environment enhancement. ER 1-94 electrification fund provides funding for grid-extension and off-grid electrification of host communities, following the radiating order i.e., based on proximity of the un-electrified areas to the contributing power plant/s.

    For remote barangays that are feasible for off-grid or decentralized electrification like Battery Charging Stations (BCS) or individual Solar Home System, micro-hydro systems and wind turbine energy systems, the DOE is implementing the Barangay Electrification Program that provides cost-of-capital subsidies.

    The NEA provides technical, financial and institutional assistance to electric cooperatives (ECs) to ensure the provision of the reliable and adequate electric services in their respective franchise areas. There are 119 ECs operating in the country today. Please note that almost 96 percent of the remaining un-electrified barangays in the country are located within the franchise areas of the ECs.

    The NPC-SPUG, on the other hand is responsible for providing power generation and its associated power delivery systems in areas that are not connected to the transmission grid. However, its assistance depends on availability of internal cash generation or the share of Missionary Electrification from the Universal Charge (UC-ME).

    The PNOC-EDC, on the other hand, provides assistance in areas where its geothermal fields are located namely in Albay and Sorsogon, Leyte Provinces and Samar Provinces, Negros Oriental and Occidental, and North Cotabato.

    2. Private Sector Contribution

    In 2005 also marked the implementation of a pilot project in Rio-Tuba, Bataraza, Palawan through the initiatives initiated of a private sector. The Project is a showcase of a public-private partnership consisting of DOE, KEPCO, PALECO and PowerSource. The project uses innovative design of stand alone electrification system by integrating basic elements of a sustainable electrification solution: (i) provision of a viable, cost effective generation platform; (ii) provision of a local distribution system; (iii) provision of a customer service facilities; and (iv) provision of a community development platform ensuring, at a minimum, integrated skills training, technology transfer and livelihood training leading to community-based enterprise creation. The design named “Community Energizer Platform” or “CEP,”

    a. Independent Power Producers

    While DOE provides policy direction and over-all program management, the private sector particularly the IPPs extend participation in the ER Program through provision of advanced financial assistance where the cost incurred can be recovered through the available electrification fund under ER 1-94, as amended or “benefits to host communities.” The other option available for the IPPs is the “Adopt-a-Barangay” scheme where IPPs provide entire funding for rural electrification of chosen barangays. Under this scheme, the IPP can either implement the project by itself or through the relevant franchise holder.

    b. Qualified Third Parties

    With the enactment of the “Electric Power Industry Reform Act of 2001” or “EPIRA” opened opportunities for private sector participation and investment in the rural electrification activities of government. Specifically, Section 59 of the EPIRA and Rule 14 of the EPIRA-IRR stated that “the provision of electric service in remote and unviable villages that the franchised utility is unable to service for any reason shall be opened to other qualified third parties.” This means that once the concerned franchised holder deems the barangay/s unviable for it to serve (having negative impact on its financial and economic viability, then an electric service provider other than the adjacent distribution utility may be authorized to provide the electricity services, subject to approval or authorization by the ERC.

    In compliance with its mandate, the DOE issued on 18 June 2004 Department Circular DC 2004-06-006 “Prescribing the Qualification Criteria for the QTPs,” which will be the basis for determining whether or not a certain interested non-governmental organization, a local government unit or a private firm, is qualified to participate in the missionary electrification program of the Government. To complement this issuance, on 12 December 2005, the Department Circular 2005-012-011 “Prescribing the Guidelines for the Participation of QTPs in the Provision of Electric Services in Remote and Unviable Areas” (QTP Participation Guidelines) was promulgated which sets the guidelines to encourage investment by QTPs in remote and unviable areas consistent with the Missionary Electrification Program of the Government as prescribed in the Missionary Electrification Development Plan (MEDP).

    Currently, the DOE and ERC along with other concerned Government agencies are collaborating on the full development of the QTP Program. We expect the full implementation within Third Quarter of 2007.

    3. Foreign-Assisted Projects

    Various donor-funded projects through grants/loans also contributed in the achievement of the total electrification target of the country. These grants are aimed at increasing access to electricity, better delivery of electricity services, capacity building for the energy sector, and, increase participation of private sector in the rural electrification efforts.

    The DOE implements the Rural Power Project funded by the World Bank-Global Environment Facility (WB-GEF). It aimed to carryout key reforms and priority investments in the rural power sector. The project expects to contribute a minimum of 10,000 households connections by the end of the 5-year project life in 2009.

    The PNOC implements the Solar Home System (SHS) Distribution Project with fund support from the Dutch Government. The Project seeks to install 15,000 SHS in selected regions in the country to induce countryside development. The Dutch Government provides 60% grant to the total system cost and the remaining 40% is being shouldered by the end-users.

    The Department of Agrarian Reform (DAR) undertakes the Solar Power Technology Supports Project (SPOTS) aimed to address poverty in the unenergized and off-grid agrarian reform communities (ARCs) through the introduction of appropriate solar PV applications for agricultural and rural enterprise. One of the project components was the solar electrification which involves provision of variety of solar packages (ie., home lighting, alternating current power supply systems for various agribusiness uses, level II potable water pumping and lighting of public facilities such as barangay halls, school buildings, health centers, and, streets).

    The Alliance for Mindanao Off-grid Rural Electrification (AMORE) Project is a joint undertaking of USAID, Mirant Philippines, Autonomous Region of Muslim Mindanao (ARMM), Winrock International and DOE. It envisions to establish sustainable renewable energy systems in remote and conflict-affected offgrid communities in Mindanao Regions.

    The Philippine Rural Electrification Service Project (PRES) is being proposed through the French Filipino Loan Protocol financing amounting to some Euro17.5 Million. The project aims to improve the living conditions of the Masbate residents by providing them adequate and reliable energy services. About 18,000 households located in 128 barangays shall benefit from the project. Aside from this, basic services such as lighting for barangay halls and school building, provision of vaccine refrigerators and lighting for rural health units as well as provision of streetlights to major thoroughfares will also be the project’s main concern. The Project will eventually be operated by a private operator.