The recent congressional bicameral conference committee approval of the Energy Virtual One-Stop Shop bill, or Evoss, has raised the expectations of power industry stakeholders. Evoss, in a nutshell, seeks to establish an online platform where power players would be able to apply, monitor, and receive all needed permits and applications, submit all documentary requirements, and even pay for charges and fees.

The measure, likewise, streamlines the permitting process of power generation, transmission and distribution projects in the country, thereby eliminating the overlapping mandates in documentary submissions, which mainly contribute to the lengthy application process of power projects.

Within the Department of Energy, permits for all energy projects are processed within 25 days. Securing a similar permit from the DOE, however, is only 10 percent of the entire permitting process.

According to Sen. Sherwin T. Gatchalian, chairman of the Senate Committee on Energy, it takes 1,340 days to secure a permit, 359 signatures needed for the permits to be signed, and involves 74 different agencies, including the DOE.

“The permitting process to get a power plant off the ground takes at least three-and-a-half years. This legislation will eradicate the red tape in the process, which impedes the increase of the country’s energy supply,” said Gatchalian, principal author of the bill.

Investor confidence

Ultimately, Evoss is projected to drive down electricity costs and provide significant savings to electricity consumers.

But exactly how will Evoss bring down power rates?

If investors, both local and foreign, see an improved permitting process, then they would be encouraged to apply for new power projects, thereby stimulating competition in the Philippine energy generation industry.

“The elimination of red tape in the permitting process will go a long way toward rejuvenating our energy sector. It will remove a formidable barrier to entry that has often discouraged foreign firms from entering the generation market,” Gatchalian said.

Consequently, competition will heighten as more energy projects are built. In the power-generation business, more power plants would mean more electricity supply. More supply would then drive down generation costs and offer savings to households.

AC Energy Inc. President Eric Francia said the completion of power projects would definitely be much faster with Evoss, resulting in additional capacity for the country. He stressed, however, that the strict enforcement of Evoss is a must if improvement in the permitting process are expected.

“This is welcome development. We hope that the scope will be expansive and execution will be effective. Successful implementation should redound to more and affordable power,” he added in a text message.

AC Energy has set a goal to achieve 5 gigawatts (GW) from a balanced mix of renewables and thermal assets by 2025. Right now, Francia said, the company is close to a 50-50 mix.

Aboitiz, Alsons, DMCI upbeat, too

Aboitiz Power Corp. also looks forward to a speedy permitting process.

“We welcome any effort to facilitate ease of doing business through faster permitting processes with various government agencies. We are hoping that some of our projects can already be applied under this scheme,” said AboitizPower Chief Operating Officer Emmanuel Rubio.

AboitizPower engages in the power generation, distribution and retail business. It has set a 4,000-megawatt (MW) target capacity by 2020.

Alsons Power Group, the energy business of the Alcantara family, also welcomed the approval of the anti-red tape measure.

“We welcome any initiative that will fast-track the approval of government permits and licenses that are critical in the development, construction and operation of a power plant. Obtaining these permits in a timely manner allows generation companies, such as Alsons, to build power plants faster, at a lesser cost, and contribute toward the government’s goal of ensuring adequate, reliable and affordable electricity to the consumers,” said Alsons Power Vice President for Project Development Joseph Nocos in an interview.

Alsons Power currently operates four power facilities in Mindanao, generating a combined capacity of 363 MW serving over 8 million people in 13 cities and eight provinces, including key urban centers such as Davao, Cagayan de Oro, General Santos, Iligan and Zamboanga cities.

Other projects that Alsons Power has lined up for the next few years are the 15.1-MW Siguil River hydropower plant in Sarangani Province that is targeting to commence operations by 2021; and the 105-MW San Ramon Power Inc. (SRPI) base-load coal-fired power plant in Zamboanga City slated to begin operating in 2022.

Lower power rates

Gatchalian said Evoss will benefit working-class Filipino families in the long run by reducing their monthly electricity bills, which will give them more money to pay for day-to-day living expenses such as food, shelter, medicine and education.

He estimated that the reduced generation costs could result in the reduction of consumer electricity prices by as much as P0.35 per kilowatt-hour. Pegged at the average household consumption rate of 200 kWh per month, this would result in savings of P840 per household every year.

“Passing this measure is quite timely, especially when inflation continues to hover around 6 percent as of November. We are optimistic that this bill is poised to drive down electricity costs and provide significant savings to power consumers. We will be putting a lot of money back where it belongs–in the pockets of Filipino families struggling to pay their basic day-to-day expenses,” Gatchalian said.

DMCI Power Corp. Chairman Isidro Consunji, in an interview, said that consumers are sure to benefit from Evoss.

“If the way business is carried out–from application to execution–would be improved, then not only the private sector carrying out the project will benefit but also the consumers. I welcome this. It’s very good. I hope it happens,” he said in a text message.

How Evoss works

The Evoss system will be managed and maintained by the DOE, while its operational aspect will be handed over to an Evoss steering committee.

A strict time frame will be observed by government agencies involved to act on pending applications. Failure of an agency to act within the prescribed time frame will result in the automatic approval of the application.

Administrative sanctions against government employees who are responsible for the delay will also be imposed.

For private entities’ failure to act within the prescribed time frame, the law provides it would mean a hefty P100,000 fine per day of delay.

The National Electrification Administration (NEA) also welcomed the passage of Evoss, saying this measure comes at a time when energy supply is at its highest demand historically due to increased economic activity in the rural areas and the government’s hastened capital outlay expenditure primarily for public infrastructure construction.

“Aside from further satisfying the accelerated power demands being distributed by electric cooperatives in the provinces, this measure, when enacted into law, will insulate the country from unexpected shocks from the dynamics of the global market and ensure energy security, especially in developing regions of the country,” NEA Administrator Edgardo Masongsong said.

Duplication

A consumer group headed by former Trade Undersecretary Victor Dimagiba said there are two laws–the Ease of Doing Business (EODB) Act and Competition Act–that are already implementing what the Evoss is meant to achieve.

“The EODBA can achieve the same objectives of facilitating investments in the energy industry, cutting red tape and promoting competition,” said the Laban Konsyumer Inc. (LKI) president.

Dimagiba, however, is not convinced that power rates will go down when Evoss is implemented. “It remains doubtful that power rates will be reduced under the Evoss due to taxes and the country’s dependence on imported fuels. We also have the Competition Act as safeguard to promote competitive practices. The Evoss duplicates the EODB and the competition law,” he pointed out.

Cusi’s view

Energy Secretary Alfonso G. Cusi, however, sees it differently.

Evoss, said the energy chief, will support the EODB Act, which would make the entire permitting process much faster.

“We really welcome Evoss. It will really help guide investors. Once Evoss is fully enacted into law, it will be a tool that will facilitate permitting process. The DOE is just a small part of the entire process. There are other agencies involved. But it is also incumbent for us to follow it up,” said Cusi, who added that his office has since been working with the legislators for the passage of Evoss.

Lawmakers and energy officials appeal to the public to give Evoss a chance. But as the saying goes, the proof of the pudding is in the eating.

Image Credits: Alexey Kornylyev | Dreamstime.com