Government Share (RE Projects)
The Government Share is the fee paid by RE Developers to the Philippine Government in consideration of the right to develop renewable energy resources under an RE Service/Operating Contract. It is established under Section 30 of RA 9513 and operationalized by DC2009-05-0008, SEC. 20–21 [DC2009-05-0008, SEC. 20, 2009-05-25].
Rates
| Resource Type | Rate |
|---|---|
| All RE resources (general) | 1% of gross income of the preceding fiscal year |
| Indigenous geothermal energy | 1.5% of gross income of the preceding fiscal year |
[RA 9513, Section 30, 2008; DC2009-05-0008, SEC. 20(A), 2009-05-25]
“Gross Income” for this purpose equals gross sales less sales returns, discounts, allowances, and cost of goods sold — consistent with NIRC Section 27(A)(7) as amended by RA 9337 [DC2009-05-0008, SEC. 20(A), 2009-05-25]. Gross income includes all proceeds from the sale of RE produced and incidental income from RE generation, transmission, and sale of electric power.
National/Local Split
Except for GOCCs, the Government Share is distributed as follows [DC2009-05-0008, SEC. 20(A), 2009-05-25]:
| Level | Share |
|---|---|
| National Government | 60% |
| Local Government (Host LGU) | 40% |
Geothermal — Basis by Operation Type
| Operation Type | Gross Income Basis | Cost of Goods Sold |
|---|---|---|
| Integrated geothermal operation | Sale of electricity from geothermal energy | Direct cost of electricity generation |
| Steamfield development/production only | Sale of geothermal steam | Direct cost of geothermal steam production |
| Geothermal power plant operation only | Sale of electricity from geothermal energy | Direct cost of electricity generation + direct cost of geothermal steam |
[DC2009-05-0008, SEC. 20(B), 2009-05-25]
Local Government Sub-Distribution
The Local Government Share (40% of the total Government Share) is sub-allocated pursuant to Section 292 of the Local Government Code (RA 7160) [DC2009-05-0008, SEC. 20(C), 2009-05-25]:
Where the natural resource is located in a province:
| Level | Share of Local Government Share |
|---|---|
| Province | 20% |
| Component city/municipality | 45% |
| Barangay | 35% |
Where the natural resource spans two or more provinces, cities, municipalities, or barangays, shares are prorated by:
- Population: 70%
- Land area: 30%
Where the natural resource is located in a highly urbanized or independent component city:
| Level | Share |
|---|---|
| City | 65% |
| Barangay | 35% |
LGU Remittance
Per Sections 286 and 293 of RA 7160, the Host LGU share is released directly to the provincial, city, municipal, or barangay treasurer within five (5) days after each quarter-end, on a quarterly basis, without need for further action and without any lien or holdback by the National Government [DC2009-05-0008, SEC. 20(D), 2009-05-25].
Exceptions — No Government Share Collected
No Government Share is collected from [DC2009-05-0008, SEC. 20(E), 2009-05-25]:
- Biomass Resources — proceeds from biomass development are exempt
- Micro-scale communal/non-commercial projects — projects not greater than 100 kW for communal purposes and non-commercial operations (e.g., community-based RE)
RE Host Communities and LGU Benefits
SEC. 21 of the 2009 IRR defines Host LGUs and the mandatory allocation of local government share proceeds [DC2009-05-0008, SEC. 21, 2009-05-25]:
Host LGU Definition
| Facility Type | Host LGU |
|---|---|
| Integrated energy generating facility | Where both the energy-generating facility and the energy resource are located |
| Non-integrated generating facility | Where the energy-generating facility is located |
| Energy resource only (no generating facility) | Where the renewable energy resource is located (as delineated by geophysical/exploration surveys) |
Mandatory Allocation of Local Share
| Allocation | Use |
|---|---|
| 80% of local government share | Must be used to subsidize electricity consumption of end-users whose monthly consumption does not exceed 100 kWh; excess subsidizes same class of consumers in the host city, municipality, or province |
| 20% of local government share | Utilized to finance local government and livelihood projects, appropriated by the respective Sanggunian pursuant to Section 294 of RA 7160 |
The subsidy may take the form of rebates, refunds, or other mechanisms as determined by DOE, DOF, and ERC in coordination with NREB and distribution utilities. The DOE, DOF, and ERC were directed to promulgate implementing mechanisms within six (6) months of the Act’s effectivity [DC2009-05-0008, SEC. 21(B), 2009-05-25].
Distinction from RETF Government Share
The Government Share discussed here is the RE project government share flowing to the National Government (60%) and Host LGUs (40%). A separate and distinct government share from non-renewable energy service contractors (1.5% of proceeds) flows into the Renewable Energy Trust Fund (RETF) — not the RE project Government Share [RA 9513, Section 28, 2008].