PE2 submits comments to DOE for draft ESCO certification guidelines

Date Published: 
April 30, 2020
  • PE2 member representatives join DOE and other ESCO market stakeholders in a PE2-LCEP ESCO certification workshop in this 4 February 2020 file photo. (PE2 photo by Luigi Eusebio)
    PE2 member representatives join DOE and other ESCO market stakeholders in a PE2-LCEP ESCO certification workshop in this 4 February 2020 file photo. (PE2 photo by Luigi Eusebio)

TAGUIG CITY, 30 April 2020 – The Philippine Energy Efficiency Alliance (PE2) submitted earlier today its official comments to the draft Department of Energy (DOE) Department Circular (DC): Guidelines, Rules and Procedures in the Administration, Classification and Certification for Energy Service Company (ESCO). This in response to the letter of DOE Energy Utilization Management Bureau (EUMB) Director Patrick T. Aquino to PE2 president Alexander Ablaza on 24 April 2020, which attaches the proposed ESCO certification guidelines.

The DOE-EUMB circulation of the draft DC comes after the successful ESCO certification workshop co-organized for DOE-EUMB by the UK Prosperity Fund ASEAN Low Carbon Emission Programme (LCEP) and PE2 on 4 February 2020. During this consultative workshop, experts from both LCEP and PE2 contributed their views and recommendations, which would be used as stakeholder inputs by DOE-EUMB in crafting the ESCO certification guidelines under the Implementing Rules and Regulations (IRR) of Republic Act No. 11285, otherwise known as the Energy Efficiency and Conservation (EE&C) Act.

In the DOE-EUMB letter to PE2, the former announced that the draft DC will “establish the guidelines, rules and procedures in the administration, classification, and certification for ESCOs with the goal of elevating the standards, professionalism and quality of services.” The EUMB Director also highlighted the new ESCO classifications: [1] “Registered ESCO refers to an ESCO that meets the minimum of requirements on legal and technical capacity. The validity of the Certificate for Registered ESCO shall be valid for two (2) years;” and, [2] “Certified ESCO refers to an ESCO which in addition to meeting the requirements of a Registered ESCO also has performance or results-based projects savings experience and with proven customer experiences. The validity of the Certificate of Certified ESCO shall be valid for three (3) years.”

Leading the PE2 review of the guidelines was the Sub-committee for ESCO Certification, headed by trustee Raymond A. Marquez, and composed of fellow trustees Jose O. de Jesus and Ronaldo R. Torres. The ESCO Sub-committee is under the broader PE2 Policy Committee chaired by Ablaza.

Among the salient comments of PE2 were:

  • The guidelines need to define the juridical entity and legal requirements that would prevent the recurrence of small, fly-by-night foreign ESCOs which lacked the long-term commitment to sustain an ESCO business in the Philippines and, worse, abandoned their ESCO contracts, thereby negatively impacting market confidence on the ESCO business model.
  • The application fee structure should be adjusted also to prevent less serious players from entering the market and potentially damaging the reputation of the entire ESCO sector.
  • Peer endorsement was found effective in other mature ESCO markets in complementing the accreditation system.
  • DOE-EUMB can support the ESCO sector by taking on a mediation role to settle possible disputes between ESCOs and their clients.

Once approved by DOE Secretary Alfonso G. Cusi, the ESCO certification guidelines will supersede the ESCO accreditation framework instituted on 24 September 2008 under DOE Department Circular No. DC2008-09-0004.

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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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