13 May 2025
The Power Sector Assets and Liabilities Management (PSALM) Corporation has successfully remitted a total of PHP377,505,060.55 in ER 1-94 and Share in the National Wealth (SNW) funds for Calendar Year 2024. This total is composed of PHP135,796,591.90 in ER 1-94 remittances and PHP241,708,468.65 in SNW benefits.
Pursuant to Section 66 of Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA), generation companies are mandated to remit ER 1-94 funds. This provision requires generation companies to donate one centavo per kilowatt-hour (PHP0.01/kWh) of total electricity sales to their respective host communities—defined as the localities where these companies operate. The ER 1-94 program supports electrification, livelihood, development, reforestation, watershed management, health, and environmental enhancement projects. These initiatives undergo a rigorous evaluation process led by the Department of Energy (DOE).
Meanwhile, under Republic Act No. 7160, or the Local Government Code of 1991, LGUs are entitled to an equitable share in the proceeds from the utilization and development of national wealth within their jurisdictions. For PSALM, these proceeds come from the one percent (1%) of the gross sales or receipts from the preceding calendar year. These funds, known as SNW, are intended to directly benefit the inhabitants of host communities.
As such, Local Government Units (LGUs) play a crucial role in managing ER 1-94 and SNW funds.
On one hand, the ER 1-94 financial benefits were sourced from the Agus and Pulangui Hydroelectric Power Plants (HEPPs), as well as the Sual, Pagbilao, and Bakun power plants under Independent Power Producer Administrator (IPPA) arrangements. The SNW proceeds, on the other hand, come from the Caliraya-Botocan-Kalayaan Hydroelectric Power Plants (HEPPs), Agus and Pulangui HEPPs, and the Bakun and San Roque power plants, the latter two also under IPPA contracts.
Initially, the National Power Corporation was responsible for remitting both ER 1-94 and SNW funds to the DOE. However, in 2010, these functions were transferred to PSALM. Since then, SNW proceeds have been directly remitted to the municipal treasurers of host communities, while ER 1-94 funds—originally still funneled through the DOE—have been remitted directly to generation companies beginning 2021, in accordance with DOE Department Circular No. DC2018-08-0021.
Strategic Communication and Partnerships Division |