WHEREAS, Energy Regulations 1-94, as amended by Department Circular No. 95-11-009, dated November 8, 1995 and Energy Regulations 1-94-A, dated 31 July 1996, established Trust Accounts to be administered by the DOE for the electrification fund, the development and livelihood fund and the reforestation, watershed management, health and/or environmental enhancement fund for the benefit of local government units (LGUs) which are hosts to energy resources and/or energy generating facilities;

WHEREAS, the Trust Accounts consist of the following portions of the total electricity sales of the power producer:

a. 25% of one-centavo (P 0.0025) per kilowatt hour for electrification fund;

b. 25% of one-centavo (P 0.0025) per kilowatt hour for development and livelihood fund; and

c. 50% of one-centavo (P 0.005) per kilowatt hour for reforestation, watershed management, health and/or environment enhancement fund;

WHEREAS, to enable the DOE to discharge its functions as administrator of said Trust Accounts in a more responsive and effective manner, it is necessary to set aside portions of the above-mentioned funds in sufficient amounts, to be determined by the Energy Industry Administration Bureau (EIAB) and approved by the DOE Executive Committee annually, which are reasonable to meet and cover necessary expenditures to be incurred in connection with DOE ™s administration of said funds;

NOW, THEREFORE, the applicable provisions of Department Circular No. 95-11-009, dated November 8, 1995, amending Energy Regulations 1-94, are hereby amended as follows:

Section 1 f of Department Circular No. 95-11-009, dated, November 8, 1995 is hereby amended, to read as follows:

œf.      The funds can only be utilized to finance projects and work programs duly endorsed by the host LGU and can only be defrayed for actual costs authorized under projects and work programs duly approved by the DOE through the Energy Industry Administration Bureau (EIAB). However, the DOE shall set aside portions from the interest earnings of said funds in sufficient amounts which are reasonable and necessary in the discharge of its functions as administrator of said Trust Accounts. 

SECTION 2. A new section 1 g is hereby incorporated in Department Circular No. 95-11-009, dated November 8, 1995, to read as follows:

œg.     The cost of administration of the aforesaid Trust Accounts in connection with the processing, approval and implementation of the projects in electrification, livelihood and development and reforestation, watershed management, health and environment enhancement shall include all expenditures in an annual line item budget prepared by the EIAB and approved by the DOE Executive Committee. 

SECTION 3. All Department Circulars, Orders, Memoranda or other issuances or portions thereof which are inconsistent with this Circular are hereby superseded, modified or amended accordingly.

SECTION 4. This Department Circular shall take effect fifteen (15) days after its complete publication in a newspaper of general circulation.

Adopted: 19 Nov. 1998

(SGD.) MARIO V. TIAOQUI
Secretary