Energy Projects Require LGU Endorsement

DOE Set To Issue Circular

By Myrna M. Velasco

January 16, 2013, 6:50pm

For developers opting to pour in capital for energy projects, an endorsement of a prospective host local government unit (LGU) will soon be a mandatory requirement to be institutionalized by the Department of Energy through a Circular.

Energy Secretary Carlos Jericho L. Petilla made this announcement parallel to his search for an Undersecretary who will specifically handle matters relating to local government affairs.

The energy chief noted this would be part of the solutions in the ever-recurring hurdles of securing local government approvals on energy investments, primarily critical power projects.

Petilla explained that there are instances when a project achieves financial and technical readiness, but implementation will still not move forward because host-LGUs’ resistance could be impeding the process.

When it comes to the award of the allowable installation for renewable energy (RE) projects, the energy secretary noted that a firm endorsement from the host LGU could be the ultimate pass of the developer to jump the gun over the other proponents.

“We don’t normally allow overtaking, but we will allow overtaking,” he stressed, noting that a condition to this “will be an endorsement from the LGU.”

He explained that the normal process is for the DOE to award the contract, “but it is up to you to go to the LGU and make sure that social acceptability is okay.”

Petilla said once a project developer applies for a contract, the simultaneous move will be for DOE to inform the LGU in writing that a certain energy project will be set up at its domain.

“We want to inform them (LGU) ahead of time to thresh out the problems, that’s the rules that we’re trying to come up with in the next round of releases for both REMB (Renewable Energy Management Board) and all other contracts,” he said.

Petilla said such will cut the tricky process of resolving permitting processes as well as the contentious issues of real property tax (RPT) payments which are generally the major concerns of hosting local jurisdictions.   source