Energy group confident Palace will sign efficiency measure

  • Energy group confident Palace will sign efficiency measure

THE Philippine Energy Efficiency Alliance, Inc. (PE2) said the proposed energy efficiency and conservation law, as cleared by Congress, has narrowed the “positional gaps” between the government and the private sector, including their stand on fiscal incentives.

PE2 President Alexander Ablaza said his group believes the draft law, which reconciles Senate Bill 1531 and House Bill 8629, is well-placed for approval by the President.

“Both sides contributed largely to consensual draft law,” he said in a statement.

PE2, the private-sector group that has been pushing the passage of the proposed law, said the bicameral committee agreed to re-anchor the fiscal incentives provision on Executive Order No. 226, or the Omnibus Investments Code of 1987, as amended.

On Wednesday, the Bicameral Conference Committee convened to reconcile the disagreeing positions of the Senate and House bills. They approved the Energy Efficiency and Conservation (EE&C) Act on the same day.

The private sector alliance said the bicameral committee considered the “last-minute” recommendation of the Department of Finance (DoF) to cut the period of mandatory inclusion of energy efficiency projects in the investment priorities plan of the Board of Investments from the House-proposed 15 years to an adjusted 10 years.

In its description of what transpired on Wednesday, PE2 said the Senate panel viewed the adjustment as a reasonable balance between the incentive rationalization objectives of the DoF and the requirements of private investors.

The House panel agreed with the compromise reduction, but wanted to put on record that every peso of granted incentives to energy efficiency projects will result in a P2.31 reflow to the national treasury in the form of additional tax revenues, in addition to other socioeconomic benefits.

“The conferees from both chambers likewise agreed to exempt energy efficiency investments from Article 32(1) of EO 226, thereby enabling foreign-owned projects to avail of fiscal incentives,” PE2 said.

The alliance said the Senate and House panels agreed to insert “clearer language” that mandates local government units (LGUs) to establish energy efficiency and conservation offices and appoint officers, with the option to do so within their existing plantilla and resource framework.

Also, the bicameral body accepted the Senate panel’s recommendation to include a new section that would encourage innovative procurement, contracting and financing procedures for government-implemented energy efficiency projects in public facilities.

The Department of Interior and Local Government and the Department of Science and Technology were added to the proposed inter-agency energy efficiency and conservation committee.

Separately, Senator Sherwin T. Gatchalian said the Senate and House energy committees had agreed to adopt the senate version of the bill as the “base” of the reconciled bill.

“This bill is quite important in terms of growing our economy because we all know we need a lot of power supply in the next few years, but the power supply will not come in as a form of physical plants, that power supply can come in the form of savings,” he said.

He said both the Senate and House panels “have a general meeting of minds to approve this bill.” He said Congress had been trying to pass such a measure since the idea was brought up in the 8th Congress in 1988.

Mr. Gatchalian said estimates made by the EU Access to Sustainable Energy Programme put the savings generated by a 10% improvement in efficiency at P55.5 billion, translating to a P140 monthly or P1,680 yearly savings in the electricity bill of the average household.

He also said the World Bank estimates that government energy efficiency projects could result in savings of P3.4 billion a year.

Mr. Gatchalian said energy efficiency will also reduce the country’s dependency on imported coal, avoiding up to 290.2 million metric tons in imports over a 12-year period.

This would result in average annual savings of $392 million to $1.3 billion between 2018 to 2030 at the 50% and 100% efficiency standard, respectively, the legislator added. — Victor V. Saulon

Written/Posted by: 
Victor V. Saulon

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Philippine Energy Efficiency Alliance Inc. (PE2), is a non-stock, non-profit organization of energy efficiency market stakeholders.

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Republic Act 11285

R.A. 11285 - An Act Institutionalizing Energy Efficiency and Conservation, Enhancing the Efficient Use of Energy, and Granting Incentives to Energy Efficiency and Conservation Projects

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