Oriental Mindoro Rep. Reynaldo V. Umali: Facilitating energy investments. FILE PHOTO
MANILA, Philippines–In its push for a law that will facilitate energy investments, the Department of Energy (DOE) has gained an advocate in Oriental Mindoro Rep. Reynaldo V. Umali, chair of the House committee on energy.
Because of the time it takes for the government to issue permits for the construction of new power plants, the country’s energy situation may worsen in the next two years, Umali on Thursday said, pointing out that no new power plants are set to be built.
Umali has filed House Bill (HB) No. 4479, which seeks to facilitate energy investments and lower power costs.
“Securing permits requires 150 to 169 signatures, and the process takes about four to five years or more. In other countries like Peru, government takes care of securing licenses and permits on behalf of the private investor, while in certain states in the US, it takes only 45 days,” Umali told reporters.
Umali has authored a bill seeking to amend certain provisions of the Electric Power Industry Reform Act (Epira) of 2001, promote competition in the energy industry, and bring down power rates.
To cut power costs, the bill proposes to exempt electricity sales of generators and distribution utilities from the value added tax (VAT).
According to Umali, VAT on power is tantamount to “double taxation” and will further burden consumers because the Philippines does not subsidize power unlike other countries in Southeast Asia. The bill also aims to require distribution utilities to fully or “adequately” contract their current and future energy demands via bidding.
Small firms generating not more than 20 megawatts will also be excluded from the mandated 15 percent public listing requirement to further promote investment.
Another way to help consumers manage power costs is by broadening the implementation of retail competition and open access down to 500-kilowatt power users. Presently, only those consuming at least 1 megawatt can choose the distribution utility that can best supply them with affordable electricity.
DOE Secretary Carlos Jericho Petilla earlier said he would push for a bill that would create a separate law, rather than amend the Epira, to encourage energy investments.