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Peza perks for power plants urged

By: - Reporter / @amyremoINQ
/ 10:00 AM June 02, 2014

Six foreign and local business groups have urged the government to declare power plants as critical infrastructure, or projects eligible for registration with the Philippine Economic Zone Authority. PHOTO FROM PILILLAONLINE.COM

MANILA, Philippines–Six foreign and local business groups have urged the government to declare power plants as critical infrastructure, or projects eligible for registration with the Philippine Economic Zone Authority.

The groups said that the move would help secure and boost investments in the local energy sector.

The proposal, which will facilitate the acquisition of permits and approvals from government agencies, is contained in a position paper put forward by six trade groups—Management Association of the Philippines, Korean Chamber of Commerce of the Philippines, Financial Executives Institute of the Philippines, European Chamber of Commerce of the Philippines, Employers Confederation of the Philippines and the American Chamber of Commerce of the Philippines.


The groups stressed that there was no longer a need to amend the Electric Power Industry Reform Act (Epira) as this would only result in uncertainty in the regulatory regime of the power industry and could lead to a “potentially chaotic system.”

International and local investors and financial institutions, the trade groups said, “won’t invest in an industry where the rules are not known and stable. The government should increase dialogue with industry participants to reduce key uncertainties or the changing of material rules midstream,” the joint paper stated.

The solution instead lies in the effective implementation of the Epira to assure stable supply and prices of electricity, the groups said.

The signatories also urged the Department of Energy to call for a joint stakeholders meeting to address key issues, such as limits on open access; fiscal independence of the Energy Regulatory Commission; review of the price cap of the wholesale electricity spot market; the contracting requirement of power distribution utilities; better monitoring and evaluation of grid operations, and a review and improvement of the electric cooperatives’ performance.

Also to be included in the agenda are possible revision of rules governing the spot market; the independence of the system operator and market operator; government plans for the 650-megawatt Malaya plant in Rizal; the ongoing privatization of state-run power plants and the need to improve bidding system to reduce disputes; review of the Transmission Development Plan; and the review and simplification of taxes levied on the energy sector.

Other business groups have earlier called on the Aquino administration to define and craft a clear-cut program that would ensure the security of power supply and stability of electricity rates in the country.

The Philippine business groups and the foreign chambers said they were more than ready to support measures that would resolve the country’s power situation, but stressed the need for the government to define the national policy concerning supply sustainability and reliability, and regional competitive power tariff. The country’s energy situation is deemed a critical factor in realizing the government’s overarching goal to accelerate the industrial sector and ensure a more sustainable, inclusive growth.

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TAGS: Business, business incentives, Philippine Economic Zone Authority, power plants
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