DoE seeks to term projects ‘nationally important’

Business World Online
Posted on December 06, 2011 11:41:56 PM


IN A bid to get more energy facilities moving forward, the Department of Energy (DoE) is looking at various ways to encourage faster permitting and to classify projects as nationally important.
An Energy official said it is pushing a bill that will classify some projects as nationally important therefore disallowing local government units from unnecessarily hampering programs and charging high municipal taxes.
The department said several energy projects like transmission lines and power plants have not been moving forward due to local government issues like high real estate taxes and permitting problems.
“It has to be a law, making energy projects of national relevance. You need to correct the situation where a local government unit can hold the whole country hostage to a situation. I mean, how many power plants do we have that cannot move because they’re stuck with local government issues?” said Energy Secretary Jose Rene D. Almendras during the Energy Investment Forum held yesterday in Quezon City.
“We’re still exploring various options and we are still studying the matter because there is a lot of resistance. It is of national interest which is why we are working with other government agencies,” Mr. Almendras said.
The Energy department said projects like transmission lines are being blocked by some local government units due to “grossly exorbitant taxes charged” while power plants cannot begin construction due to “local issues.”
Mr. Almendras said if energy projects that are meant to augment the country’s power supply are blocked by local government issues, the country will continue to have limited energy supply.
Three years ago, the Pandacan oil depot was classified as a project of national importance thereby preventing it from being subjected to local government legislation and taxes. The recommendation was forwarded to the National Economic and Development Authority but was denied.
The Energy department said 900 megawatts (MW) of baseload power are needed by Luzon alone by 2016 to meet increasing power demand. The Visayas is projected to need 300 MW of additional power while Mindanao is still lacking 700 MW of energy.
The Energy department has also formed two technical working groups which will hash out issues of investors in the coal, and oil and gas exploration sector.
“We have formed a working group with the Department of Environment and Natural Resources for coal where we will be discussing issues like the granting of permits to mines and other issues. Another group has also been formed for the oil and gas exploration sector. Investors have been coming to us asking for help about docking rights for their rigs so the group will include various government agencies so we can resolve these issues,” Mr. Almendras said.
The government identified areas of investment in the energy sector including petroleum resource development, downstream oil and gas, rural electrification and renewable energy.
The private sector, however, said there also needs to be a review of some of the current processes to be allowed to sell energy.
“There should be a review of the EPIRA (Electric Power Industry Reform Act of 2001) because right now, regulators are dictating the price of generation which they should not do. There is also the issue of the performance bond which we consider to be redundant and exorbitant,” said Peregrino P. Fernandez, Jr., president of Montalban Methane Power Corp. -- Emilia Narni J. David