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Gatchalian sponsors landmark energy red tape reform bill

PASAY, Philippines – Senator Win Gatchalian delivers his speech at the Senate Session Hall, 10 May 2017, expounding the need for the government to legislate reforms in the power sector by adopting an efficient and standardized application process to attract more energy investors. Gatchalian said this modernization policy will help secure the country a stable, affordable and sustainable power supply its economy direly needs. Photo by Mark Cayabyab/OS WIN GATCHALIAN

Power supply will be more stable and costs will be much lower under a simplified permitting process for new energy generation developers, Senator Win Gatchalian said on Wednesday as he sponsored the Energy Virtual One Stop Shop Act of 2017 (EVOSS Act) on the Senate floor.

The proposed EVOSS Act “focuses on a problem that is painfully common in all fields of public governance – bureaucratic inefficiencies, redundancies, and overlaps, collectively known more commonly as ‘red tape’,” Gatchalian, who is the chairman of the Senate Committee on Energy, said in his sponsorship speech.

He stressed that “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.”

Competition in the industry would bring in a larger supply of power, and subsequently, make generation costs cheaper.

“Based on my conversations with industry analysts and our own internal research, 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 P2400 for that family. An extra P2400 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 pesos per year as a result of the EVOSS reform.

The proposed EVOSS Act seeks to make easier and faster the permitting process for new generation projects. As an example of the unwieldy permitting set-up at present, Gatchalian pointed to the example of the permitting process of run-of-river hydro plants, a 1340-day ordeal which requires 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.

The EVOSS will be under the control and supervision of the Department of Energy (DOE), while its operations will be determined and monitored by the EVOSS Inter-Agency Technical Working Group (EVOSS IATWG), which will be chaired by the Office of the President.

“Addressing bureaucratic inefficiencies by eliminating red tape is one of the advocacies that inspired me to enter public service almost two decades ago… As the Chairman of the Committee on Energy, I am proud to introduce a measure that allows me to extend my advocacy to the energy sector – a field  that is critical to the long-term growth prospects of our developing nation – but has long been ignored or neglected because of its complexity. It is time to set the energy sector free from the dense undergrowth of red tape surrounding it. It is way past time for hedge-clippers, Mr. President. It is high time we use the EVOSS Act to set all of that red tape ablaze,” Gatchalian said.