Sec. De Lima Declares: Geothermal royalties for power subsidy only

ORMOC CITY, Philippines – Justice Secretary Leila de Lima recently declared that the city’s use of its P50-million royalty from geothermal generation for a waterworks project was “an erroneous interpretation and application” of the law and thus has no legal basis.

In the same opinion, de Lima said the use of the Kananga municipal government of its royalty share to cover the services and expenses of its Kananga Electrification Service Staff also has “no legal basis.”

Ormoc and Kananga are geothermal producing LGUs, and each of them gets annual royalties from the operation of geothermal plants within their areas. The law however mandates that 80 percent of this money shall be used “solely to lower the cost of electricity in the LGU,” said the secretary.

De Lima’s opinion was issued in response to a query from Rep. Lucy Torres Gomez (4th district, Leyte) who said that she received complaints from her constituents regarding the use of the royalties to fund programs outside of the intended use, which is as subsidy in the form of a refund to lower the power rates they are paying.

De Lima said the royalties, as envisioned in the Local Government Code, was a way of “compensating” the locals for the exploitation of their natural resource. The use of these funds for the “repair or rehabilitation of Ormoc’s waterworks system is outside the ambit of the law,” she said.

Even granting that “some rules and regulations were crafted to create new or legal provisions that have effect of law, such rule-making power cannot extend to amending or expanding the statutory requirement or to embrace matters not covered by the statute,” said de Lima in her issued opinion. — (FREEMAN)