Lawmaker seeks to cut red tape in power projects

MANILA, Philippines - Eliminating red tape in the permitting process for new power projects will bring in more competition in the power industry, which could help lower electricity costs by P1 per kilowatt-hour (kwh), Sen.Sherwin Gatchalian said.

Through his proposed Energy Virtual One Stop Shop of 2017 (EVOSS Act), Gatchalian said he sees a more stable power supply and lower cost of electricity in the future.

The proposed law seeks to make easier and faster the permitting process for new generation projects.

“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,” said Gatchalian, who also chairs the Senate committee on energy.

Based on industry analysis and research, the lawmaker said cutting down red tape could reduce consumer electricity prices by as much as P1 per kwh.

“The ordinary household within the Greater Metro Manila Area consumes 200 kilowatt hours per month. Thus, shaving off P1 per kwh would translate into an annual savings of P2,400 for that family. An extra P2,400 can do a lot for a family. That’s enough to buy an entire 50kg sack of rice with some extra cash to spend on tuition and supplies for the children, healthcare, and other essentials,” Gatchalian said.

Overall, Gatchalian estimates that Philippine households, numbering approximately 23 million, will stand to save a total of P55.2 billion per year as a result of the EVOSS reform.

Citing an example of red tape, the development of run-of-river hydro plants would require developers to secure 359 signatures from 74 regulatory agencies and attached bureaus, and accomplish 43 different contracts, certifications, endorsements, and licenses as required by 20 different laws governing the entire permitting process.

Under the EVOSS Act, government agencies, instrumentalities, and other public bodies involved in the permitting process of power generation projects will be mandated to follow clear processes within a strict timeframe using published standards, thereby cutting the permitting process into half.

It likewise mandates the establishment of an online system that allows the single submission and synchronous processing of documentary requirements, assessment and payment of taxes and fees, status updates and progress monitoring, and a synchronized permitting approval process. It will likewise provide a single decision-making portal for the evaluation of new power generation projects.

The new system will also eliminate repetitive form submission, the physical transport of documents from one agency to another, and existing constraints that prevent multiple agencies from simultaneously processing applications.