PE2 members tackle EE incentives under CREATE in well-attended AGMM
MAKATI CITY, 20 May 2021 – Member companies of the Philippine Energy Efficiency Alliance (PE2) discussed how emerging policy issuances will affect the suite of tax-based fiscal incentives for energy efficiency (EE) projects during PE2’s Annual General Membership Meeting (AGMM) held virtually earlier today.
A record 87% of PE2’s 54 member companies attended the AGMM to receive and discuss the PE2 President’s Report on the EE Policy Reform Agenda and other accomplishments of the Alliance since the last general membership meeting on 22 October 2020.
PE2 president Alexander Ablaza reported that Sec. Alfonso G. Cusi of the Department of Energy (DOE) signed on 11 May 2021 a new department circular containing DOE’s guidelines for endorsing EE projects to the Board of Investments (BOI) for fiscal incentives, which incorporate PE2’s recommendations to recognize Third-Party Project Developers (TPPD) and Project Special Purpose Vehicles (SPV) as investing entities that could request for DOE endorsement and BOI registration of EE projects. Ablaza also said that the BOI implementing guidelines under the 2020-2023 Investment Priorities Plan (IPP) will need to be amended to correct EE guidelines which erroneously cap the terms of EE performance contracts according to the 4-year and 6-year income tax holiday (ITH) benefits granted under the Executive Order No. 226, or the Omnibus Investments Code of 1987. BOI’s EE guidelines will also need to be aligned with the endorsement framework adopted by DOE, particularly on the qualifications of TPPDs and Project SPVs, which need not be registered or certified ESCOs.
Villaraza & Angangco Law’s Atty Efren R. Resurreccion II, who is an active member of the Legal Sub-committee of the PE2 Policy Committee, presented to the general body his analysis of how EE fiscal incentives under Republic Act No. 11285, or the Energy Efficiency and Conservation Act, will be affected by the passage of Republic Act No. 11534, better known as the Corporate Recovery and Tax Incentives for Enterprises Act or CREATE Act. He described a conservative scenario, wherein 4-6 year ITH benefits will depend on project locations, and how secondary incentives can be availed through a limited number of years beyond the ITH period.
The PE2 President’s Report also reported on: the successful inaugural Energy Efficiency Day held on 12 April 2021; how PE2 supported DOE in the crafting of new policy issuances related to EE; PE2’s intent to propose grant funding from the Department of Science and Technology - Philippine Council for Industry, Energy and Emerging Technology Research and Development to support ESCO-led EE technology deployment in the micro, small and medium enterprise (MSME) sector; PE2’s support to the Management Association of the Philippines (MAP) for the latter’s EE webinar on 4 March 2021, and updates relating to PE2’s participation in the growing Asia-Pacific ESCO Industry Alliance (APEIA) and the Global ESCO Network.
Ablaza led the membership in welcoming new members, which included Phoenix Pilipinas Gas & Power Inc., NextGen Innovations Phils., Inc., Atlas Copco (Philippines), Inc., and Siemens, Inc. to the Alliance.
A majority of the members of the PE2 Board of Trustees convened just before the AGMM to ratify previously issued Board resolutions and receive reports from Vice President for Internal Affairs Ruth Yu-Owen, Vice President for External Affairs Theresa Acedillo-Lapuz, Corporate Secretary Atty. Maria Concepcion P. Simundac, and Treasurer Raymond A. Marquez.
