Energy - 21feb17 EVOSS PDF

Republic of the Philippines
Congress of the Philippines

SENATE
Pasay City
COMMITTEE ON ENERGY
JOINT WITH THE
COMMITTEE ON FINANCE
Date : Tuesday, February 21, 2017
Time : 9:00 a.m.
Venue : Committee Room No. 2

2nd Floor, Senate of the Philippines
Financial Center, Roxas Boulevard
Pasay City
Agenda : SENATE BILL NO. 1286 - AN ACT ESTABLISHING

THE VIRTUAL ONE STOP SHOP FOR THE
PURPOSE OF STREAMLINING THE PERMITTING
PROCESS OF POWER GENERATION PROJECTS
(by Senator Gatchalian)
ATTENDANCE
SENATOR:
HON. WIN GATCHALIAN - Chairman, Committee on Energy
GUESTS/RESOURCE PERSONS:
Ms. Lisa Go - Chief Investment Specialist, Investment

Promotion Office, Department of Energy
Mr. Enar Trinidad - Administrative I, Department of the
Interior and Local Government
Ms. Sandra Paredes - Interim Executive Director, Union of
Local Authorities of the Philippines
Ms. Rosario Venturina - President, Wind Energy Developers
Association (WEDAP)
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Committee on Energy joint with the Committee on Finance
February 21, 2017 (Tuesday)
Page 2
Atty. Poch Ambrosio - Corporate Secretary, WEDAP

Mr. Reynaldo Casas - President, Confederation of Solar
Developers of the Philippines (CSDP)
Mr. Arthur Aguilar - San Carlos Clean Energy, CSDP
Ms. Teresa C. Capellan - President, Philippine Solar Power Alliance
(PSPA)
Mr. Mike de Guzman - PSPA
SENATE SECRETARIAT:
Atty. Grace Ann C. Salesa - Committee Secretary, Committee on

Energy
Mr. Guillermo E. Sapinoso Jr. - Committee Stenographer
Ms. Nida A. Mancol - -do-
Ms. Rosemarie J. Ortiz - -do-
Ms. Carolina F. Driz - -do-
Ms. Christine M. Nery - -do-
Ms. Jennifer L. Flores - -do-
Ms. Susana Grace L. Robles - -do-
Ms. Merlene J. Palaganas - -do-
(For complete list, please see attached Attendance Sheet.) /cfd
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COMMITTEE ON ENERGY JOINT WITH THE COMMITTEE ON
FINANCE
GESapinoso I-1 February 21, 2017 9:24 a.m. 1
AT 9:34 A.M., HON. WIN GATCHALIAN,

CHAIRMAN OF THE COMMITTEE ON ENERGY, CALLED
THE HEARING TO ORDER.
THE CHAIRMAN (SEN. GATCHALIAN). Good morning
everyone.
Once again, thank you very much for joining us. Wala pa ho
iyong NCIP but since its already 9:30, we will start with the
presentation of the other proponents. And then hopefully pagdating ho
nila, we will ask them to make their own presentation. This is actually
an offshoot of the first hearing, we intentionally had a second hearing
because one of the most critical component which is NCIP was not
present last time. And alam ko, talking to everyone, all the various
proponents, malaki po ang role ng NCIP kaya we decided to have
another hearing, hopefully pumunta ho sila. Nag-confirm ho sila but
hopefully pumunta, dumating ho sila mamaya.
But we will go ahead and they will just catch up. Well ask Atty.
Joei to again recognize our resource persons for this morning.
MS. GANA. From the Department of Energy, Ms. Lisa Go; from
the Department of Interior and Local Government (DILG), representing
Secretary Ismael Sueno is Mr. Enar Trinidad; from the Union of Local
Authorities of the Philippines (ULAP), Ms. Sandra Paredes; from First
NatGas Power Corporation, Mr. Gerard Cajucom; from PhilHydro
Association, Mr. Theo Sunico; from Wind Energy Developers
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Association, Ms. Rosario Venturina; from the Confederation of Solar
Developers of the Philippines, Mr. Reynaldo Casas; from PSPA, Mr.
Mike de Guzman.
THE CHAIRMAN (SEN. GATCHALIAN). All right.
Thank you, Atty. Joei.
I think DOE has a presentation to share with us, tama po ba, Ms.
Go?
MS. GO. Thank you, Senator.
THE CHAIRMAN (SEN. GATCHALIAN). You have the floor,
maam.
MS. GO. Yes, actually, we just prepared iyong brief overview of
the Energy Virtual One Shared System to give everybody an overview
of what EVOSS is all about. This is a collaboration between USAID and
DOE. USAID supported the concept that we have proposed for coming
up with a systemized system to be able to track energy applications.
As mentioned, previously EVOSS emanated from the concept of
the one-stop facilitation and monitoring center of the Mindanao
Development Authority. And we have expanded this to include energy
projects nationwide because MinDA only focus on renewable projects in
Mindanao. So it will involve more agencies at the national level and
this is supported by USAIDs project.
So the concept of Energy Virtual One Shared System, its a web-
based monitoring system to be able to track energy applications and
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all the information will be shared among agencies involved in the
approval process and also among the developers. And this would just
show that we are one in the entire bureaucracy facilitating business in
the energy sector.
Basically, the objective is to streamline business processes,
create transparency and accountability especially on the agencies
involved and most importantly to cut down transaction costs, and
eventually to come up with a harmonized form and process across the
bureaucracy.
When we conceptualized EVOSS, we identify several things to do.
Eventually, we just wanted to be able to consolidate and understand
the process of each agency and how it relates to the final
implementation of an energy project.
Eventually, we came up and this were used as input in coming
up with a system. So we were able to understand the process of each
agency and currently were pilot-testing the EVOSS in DOE and
hopefully we would like to have other agencies on board to see how we
could collaborate and see how it works with other agencies.
So initially, activities were involved wherein gathering of data to
be able to have them on board. So right now, I guess what the,
Honorable Chair, has contributed significantly is in the
institutionalization of EVOSS across the agencies and this was part of
what we intended to do. Initially we were working on coming up with
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a memorandum of agreement or executive order so I guess this is a
most significant.
This slide just shows what weve done. Weve done a series of
focus group discussions among RE developers and agencies involved,
we have validated the processes and first slowly uploading them,
preparing the flowcharts and currently some of them are uploaded in
the website already, the portal.
Currently, activities that are going are the buildup of the
database. This is a critical part of the process; we have to gather data
within DOE, from RE developers and from other government agencies.
And this is where we need the support and collaboration of the
agencies.
Bottom line of the activities that we need to do is coming up with
a harmonized form.
So this is how the EVOSS portal looks like. So this is the list of
awarded projects being posted also on the DOE website, consistent
with the DOE website. We have the requirements of each agency
here, we have the forms; forms are now converted into fillable forms.
These are the forms available from each agency; these were just
converted into fillable format. We have a process of the renewable
energy getting its service contract and how its related to other
agencies. And we have the fees; fees are what weve gathered from
the available data.
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And we have a log-in of the agency and we have a separate log-
in for the developer. So the developers could only have access to their
own data, they cannot have an access to the other developers. This is
just to protect the confidentiality among developers.
But agencies will have access on the information that could be
shared among agencies. So, for example, an agency will be requiring
an ECC, they dont have to contact the developer, they can just
download the ECC, and to check or if a proponent has a service
contract already. So they could just download. Thats the intent
basically of the system.
So this is how an agency could log in. It would have available
information of the application that is lodged within the agency and
what are expected from them. For example, certificate of
endorsement or certificate of a particular permit.
So for example, for DOE, we have a list of projects and what is
expected and we have a project here.
The next slide will just show how a developer could log in.
And this is for the developer. So the developer will also have a
list of applications lodged within each agency.
So basically, Mr. Chair, this is how EVOSS and this is the current
activity we have done on EVOSS.
THE CHAIRMAN (SEN. GATCHALIAN). Lisa, itong EVOSS is
just limited to DOE for now?
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MS. GO. Actually, Mr. Chair, its designed to be able to be used
by other agencies as well.
THE CHAIRMAN (SEN. GATCHALIAN). So it can be used with
agencies outside of DOEs jurisdiction?
MS. GO. Yes, sir.
THE CHAIRMAN (SEN. GATCHALIAN). Nagagamit na ba
outside of DOEs jurisdiction?
MS. GO. So far we are encouraging the agencies ... /jun
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Mancol II-1 February 21, 2017 9:34 a.m. 1
MS. GO. encouraging the agencies, we have written them
with letters para mag-register sila. What they need to do is register.
And weve done a hands-on training with selected government
agencies and we taught them paano po gamitin, paano mag-register,
paano po mag-upload. Kasi basically po, the critical part is
information. Kung hindi po sila maglalagay ng information, hindi po
siya magiging useful to all the
THE CHAIRMAN (SEN. GATCHALIAN). So, ngayon, ito
tumatakbo na perfectly within DOE.
MS. GO. Within DOE po, and it can be used actually by other
agencies.
THE CHAIRMAN (SEN. GATCHALIAN). But for now, its
perfectly running within the DOE family.
MS. GO. Yes, sir. Were trying to monitor howparang may
mga bugs pa, well just configurate others.
THE CHAIRMAN (SEN. GATCHALIAN). But we all know that
to get your plant up and running, you need also the permits from other
departments?
MS. GO. Yes, sir.
THE CHAIRMAN (SEN. GATCHALIAN). Iyon, ine-encourage
niyo lang.
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MS. GO. Through the EOActually, through the bill, were
hoping that sila magla-log in po sila.
THE CHAIRMAN (SEN. GATCHALIAN). So, sa ngayon, kung
ayaw nila mag-cooperate, halimbawa, ayaw ni DENR mag-cooperate.
MS. GO. Opo. Ang default will be DOE. So, theyd have to
ensure na mayroon kaming data so we will have to upload the data.
Pero what we want the system para maging sustainable is for each
agency na sila po ang mag-a-upload ng information.
THE CHAIRMAN (SEN. GATCHALIAN). But the system is
capable toIts capable in approving permits, tama?
MS. GO. Hindi po. Currently, its just a business as usual so
ina-upload lang po niya what are the permits approved.
THE CHAIRMAN (SEN. GATCHALIAN). Ah, so monitoring lang
siya.
MS. GO. Monitoring lang at the moment.
THE CHAIRMAN (SEN. GATCHALIAN). So, hindi siya,
halimbawa, from one table to the other, tapos this table will approve
electronically, and then, walang ganoon? So, physically, the proponent
needs to go to DOE.
MS. GO. Yes. At the moment, its just for monitoring and
tracking po. Its a business as usual. So, if we have to cater po whats
in the bill, we have to configure again the system to be able to adapt.
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THE CHAIRMAN (SEN. GATCHALIAN). But even with other
agencies, you cannot monitor because theyre not using the system?
MS. GO. Yes, sir, opo.
THE CHAIRMAN (SEN. GATCHALIAN). So, kulang iyong
monitoring din.
MS. GO. Yes, sir.
THE CHAIRMAN (SEN. GATCHALIAN). So, pagdating, lets
say, sa ECC, hindi niyo alam rin kung
MS. GO. Yes, sir, if hindi na-upload or hindi sila magbibigay sa
amin or hindi namin hinihingi.
THE CHAIRMAN (SEN. GATCHALIAN). Right now, ito updated
ba with ECC?
MS. GO. Currently po, wala pa siyang data from DENR.
THE CHAIRMAN (SEN. GATCHALIAN). Wala siyang data from
DENR.
MS. GO. Wala pa, although we touched base na po with them,
in-identify focal persons po na mag-upload, hanggang ngayon wala pa
po.
THE CHAIRMAN (SEN. GATCHALIAN). In the last hearing,
mayroon pa ngang CAAP, 'di ba?
MS. GO. Yes po.
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THE CHAIRMAN (SEN. GATCHALIAN). Kasali rin dito ang
CAAP?
MS. GO. Yes, sir. Basta mag-register po sila.
THE CHAIRMAN (SEN. GATCHALIAN). Pero ginagamit ba ng
CAAP?
MS. GO. As of today, hindi po.
THE CHAIRMAN (SEN. GATCHALIAN). So, walang
gumagamit?
MS. GO. Wala po.
THE CHAIRMAN (SEN. GATCHALIAN). So, DOE lang talaga.
MS. GO. Yes.
THE CHAIRMAN (SEN. GATCHALIAN). And was there any
MOA or any executive order mandating the other agencies to use the
system?
MS. GO. Under the EVOSS, wala pa po. That was our next
move sana, to have a MOA. But theres an existing MOA with the
Mindanao Development Authority for selected agencies.
THE CHAIRMAN (SEN. GATCHALIAN). Within Mindanao?
MS. GO. National po.
THE CHAIRMAN (SEN. GATCHALIAN). National.
MS. GO. Yes. And this was also supported by USAID.
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THE CHAIRMAN (SEN. GATCHALIAN). Yeah, but if you want
a total nationwide cutting the red tape, you need the national agencies
to cooperate in the system?
MS. GO. Yes po.
THE CHAIRMAN (SEN. GATCHALIAN). Sa ngayon, wala pa
tayong ganoon?
MS. GO. Wala pa. Were knocking on their doors na dapat mag-
ano po sila, register. The important thing, mag-register and mag-
identify ng focal persons who will be responsible in uploading the data.
THE CHAIRMAN (SEN. GATCHALIAN). Im just curious.
Iyong system kaya na ba talagang detailed like, for example, CAAP?
During the last hearing natin, mayroon pa tayong BFAR, 'di ba?
MS. GO. BFAR.
THE CHAIRMAN (SEN. GATCHALIAN). Kaya rin mag-track
down ng BFAR.
MS. GO. Yes. As long as they willang critical po dito is the
focal person for each agency.
THE CHAIRMAN (SEN. GATCHALIAN). But the system is
equipped
MS. GO. Yes.
THE CHAIRMAN (SEN. GATCHALIAN). in identifying all of
those agencies.
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MS. GO. Yes, will identify po each agency involved in the
process ng approval ng energy projects and the prerequisites ng each
agency and output ng each agency po.
THE CHAIRMAN (SEN. GATCHALIAN). Okay. In your
experience, bumilis ba ang application ng mga proponents? This is
solely for RE, tama?
MS. GO. Initially po.
THE CHAIRMAN (SEN. GATCHALIAN). Iyong mga nag-a-
apply ba ng RE bumilis ba iyong kanilang pag-a-apply at pagkuha ng
permits, in your experience?
MS. GO. Sa ngayon po, hindi pa namin nakita iyong impact of
the process although when we did EVOSS po, we also implemented an
internal DOE system to interface with EVOSS. So, that would be able
to fast-track po internally within DOE, hopefully. So, nag-institute din
kami ng ibang system po.
From the proponentsmarami tayong proponentsI really
invited the different proponents here. Nagamit niyo ba itong system
na ito? Have you used the system? Did the system make your life
easier or nobody really cares about the system? Can you share sa
mga RE developers? Alam ko may mga RE tayo dito. Nagamit niyo ba
ho ito?
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Si Maam Venturina, umiiling. So, I guess hindi niyo nagamit ito
sa wind.
MS. VENTURINA. Not in the project that I personally handled
kasi matagal na namin iyon dinevelop (develop). This system of the
DOE only came about during the term of last year lang. And even for
the other projects that we have developed, hindi namin natapos.
THE CHAIRMAN (SEN. GATCHALIAN). So, nangyari ito
pagkatapos ng FIT-2?
MS. VENTURINA. Opo, opo, opo. After FIT-2 already.
THE CHAIRMAN (SEN. GATCHALIAN). After FIT-2. So, after
FIT-2, wala na namang nagpatayo.
MS. VENTURINA. Wala.
THE CHAIRMAN (SEN. GATCHALIAN). So, wala nang
gagamit noon.
MS. VENTURINA. Talagang we go from each and every office.
We usually have a couple of people doing only that.
THE CHAIRMAN (SEN. GATCHALIAN). I have a friend na
nag-apply po ng solar. And with all due respect, Maam Liza, nag-
apply siya ng solar at nagtataka siya bakit iyong papeles niya two
months na hindi gumagalaw. Nung pumunta iyong friend ko doon,
apparently iyong messenger nag-AWOL. So, kaya hindi gumalaw
iyong papel, nag-AWOL iyong messenger, hindi ho madala iyong papel
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niya from Table A to Table B. So, na-stuck sa Table A. Within DOE
iyon, ano. Hindi ko ho alam kung saan but thats his story. And thats
why tama si Maam Venturina, basically they got one person, walang
ginawa kungdi to make sure that their physical paper, not only in DOE,
huh, with all agencies gumagalaw from Table A to Table B to Table C.
Kasi nga the physical paper, pag hindi ho gumalaw, natabunan,
nawala, nabuhusan ng kape, tepok na iyong application mo. So, I
think that experience is similar to my friends experience doon sa
proponent, one of the proponents of solar.
Any comments? Any experience ho? Did you ever try using the
system?
Mr. Casas, na-try niyo na ba ito sa solar group?
MR. CASAS. Not yet, Mr. Senator. Actually,based on their
calendar, it was launched in December 2016 so its relatively new. So,
each industry will have a, you know, scheduled briefing and orientation
So, when they launched it in December 2016, thats relatively the
recent development. So, we really need to sit down, conduct an
orientation program for the solar industry.
THE CHAIRMAN (SEN. GATCHALIAN). All right. Kung wala
namang comments, Mr. Casas, I understand you also have a
presentation. You want to share something with the body?
MR. CASAS. Ah, yes.
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THE CHAIRMAN (SEN. GATCHALIAN). You can have the
floor. Later on, I have other questions but lets finish with the
presentation first so everyone can ask questions simultaneously.
MR. CASAS. Okay. While it is being prepared, Mr. Senator, and
to all my colleagues, our confederation is composed of solar developers
purely on the scale. And were very fortunate that our members are
very active when we asked them to secure a profile, share their
experiences when it comes to permitting.
Leading the path is one of our members, Bronzeoak, led by Art
Aguilar who is here with us. And they did a very thorough study on
the permitting. And let me show you two sets of presentation. One is
just a very brief run-through of the details that was gathered by
Bronzeoak representing the solar industry. Its not very clear but just
to show you that they went through very detailed analysis. And I have
here a copy. I have here a copy. I can share this with you. Its the
only one Ive seen really in any industry to present a solar industry.
And let me now show . . . (nam)
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RJOrtiz III-1 February 21, 2017 9:44 a.m. 1
MR. CASAS. And let me now show you the summary. Okay.
Those details are briefly summarized here. And this is just to
introduce our group. We are purely on utility scale.
Next slide, please. Okay. Those details are summarized in this
slide. And it shows that for a solar proponent, you will need a total of
455 signatures. But this doesnt include the Department of Agrarian
Reform which we estimate to be another hundred. So for the solar
industry, it will require about 555 signatures. But minus the
Department of Agrarian Reform, you will notice here that the biggest
number of permitting is not from a government entity but the private
which is called the NGCP. So there are hundred forty-six signatures
from NGCP alone which constitute 32 percent of the total.
THE CHAIRMAN (SEN. GATCHALIAN). So you excluded
the Department of Agrarian Reform?
MR. CASAS. We were just looking at that moment.
So may I ask my colleague, Art Aguilar, to please answer that
question.
THE CHAIRMAN (SEN. GATCHALIAN). Just to give us a
perspective.
MR. CASAS. Yes.
Mr. Art, can you answer that question, please?
MR. AGUILAR. Good morning, Mr. Chairman.
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THE CHAIRMAN (SEN. GATCHALIAN). Good morning.
MR. AGUILAR. The reason we didnt put it here is not all sites
are subject to conversion. Some of our sites are already ecozones.
So it was not generic to all. It was specific to I think at least half but it
was not at all generic. In fact, here, if I may, Mr. Chairman, just to be
fair on NGCP, I come from TransCo, we transferred TransCo to NGCP.
This is specific to the Negros grid because the Negros grid had a small
capacity in relation to the large to be installed solar capacity. So they
had to be very, very specific in their requirements which apparently
were not present in Luzon and Mindanao. In Negros, the system
operator in Cebu had to see each and every inverter of every solar site
in Negros. And thats in fairness to them. So if one were to apply this
on a national scale, the number of signatures probably in Luzon will be
much less for the first line of NGCP, Mr. Chairman.
THE CHAIRMAN (SEN. GATCHALIAN). Thank you, Mr. Art.
Go ahead, Mr. Casas.
MR. CASAS. So for the LGU there are about 19 percent, the
DOE contributed to about 18 percent, ERC is 9 percent, BOI is 6. So if I
am going to look at the first top six, thats already equivalent to 89
percent of the total. Now when you look at the EVOSS, if you will
input this into the EVOSS, you can imagine that for every agency there
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seems to be a different template against another agency, in that
regard alone.
So with that let me move on to another slide.
THE CHAIRMAN (SEN. GATCHALIAN). Mr. Casas?
MR. CASAS. Yes, sir.
THE CHAIRMAN (SEN. GATCHALIAN). The signature doesnt
correspond to time? So this is only signature?
MR. CASAS. Yes, signature.
THE CHAIRMAN (SEN. GATCHALIAN). But, for example,
iyong mga below seven it might have fewer signatures but it will take
them longer to sign?
MR. CASAS. It could be, yes.
THE CHAIRMAN (SEN. GATCHALIAN). Mayroon ba ho
kayong breakdown as to the timing? Like DOE, theyre the most, I
think the third but if they can finish it naman in 30 days mas maliit
iyong time. But is there a timing analysis?
MR. CASAS. Yes, there is. And thats a very good question.
Because what weve experienced is that an agency at times becomes
dependent on the approval of another agency before they can proceed
to the next step. That adds on and compounds the permitting process.
And while you look at the requirements of one agency against another,
a lot of the data required are mirror image of the other and yet we
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need to submit the same data to another agency and we are very
pleased to know that the concept of EVOSS or computerization is
there. Because all you need to do is just to craft it once and you
submit it electronically. Thats the advantage of computerization. That
may reduce the time. But let me show you other input in answer to
your question because that was addressed by another proponent of
CSDP.
Regarding the LGU in our previous meeting, Mr. Senator, you did
say that computerizing the LGU in the provinces might be quite a
challenge. So the computerization concept might really be limited at
the national level. To computerize the LGU which is 19 percent of the
total might be--you are right, might be quite a challenge.
So the other concept that we have is that after going through
this process, there must be a distinction when it comes to templates
per agency because each agency has a different set of requirements.
And its also dependent on the technology and its called technology
agnostics.
So in the case of solar, the permitting process as a whole might
differ from wind in many respect. Hydrofor example, in hydro, you
are concentrated on one small area but in our case, you know, we can
be anywheresolar can be implanted anywhere and we occupy a
bigger space. So the template is different for each RE. So when you
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computerize this, you can imagine an EVOSS being tailored fit, one for
wind, one for solar and depending on the agency, it might be likewise
be different from another. So the evolution of EVOSS is to be
expected, anticipated. It cannot be taken as one and expected to
resolve all the permitting challenges. So there has to be a
technological evolution of EVOSS. And were willing to sit down with
DOE to tailor fit the solar and the others, likewise. So thats the
concept of the template. So in other words, we have to stretch our
patience. This will be quiteand then the challenge of one agency
clicking a button to approve and then forwarding it to another agency
to do the same, you know, is another technological dimension that
must be clearly understood. There is a lead time for that.
Okay. And here are the other inputs we got from Solar
Philippines. After asking them their input, Solar Philippines says
allowing solar farms to be built on agricultural land is the issue of land
conversion. So one of the challenges in land conversion for solar is the
lead time. It takes about a year to convert an agricultural land to
industrial. Its really quite a challenge which, you know, when you
look at it after weve seen theour experience, the transformation of
an agricultural to industrial being a solar is the qualitative impact upon
the province is so significant in terms of, you know, being a source of
energy. Not only being a source of energy but the provincial
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government could see that the government has become an investment
haven from a 10 hectare with two farmers with two carabaos, it gets
converted into a, you know, 40,000 solar panels generating electricity,
providing jobs, taxes are there. So the transformation is really
significant. And for the landowners, the challenge of harvesting and,
you know, dependent on climate change really transforms. And many
of the solar farms have become tourist destinations. Like, believe or
not, in Mindanao our solar plant has an average of two visitors a day.
Because the DTI and all the other government agencies kept on
promoting the site.
Next one /rjo
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CFDriz IV-1 February 21, 2017 9:54 a.m. 1
MR. CASAS. Next one. And then, of course, when it comes
to BOI theres also a lot of challenges. What we are saying hereWhat
Solar Philippines is saying here is that the importation of the
components of a solar plant is one and the same, you know, all
throughout. So theres a lot of challenges. I mean its one and the
same model. So there should be a shorter lead time. Everybody
knows that solar technology, use of inverters, transformers need not
go through, you know, the same rigmarole. In other words, importing
components of a solar technology theres a learning curve that each
agency can adopt and no need for replicating the same, you know,
rigmarole when its reallyits technology agnostics. Everybody knows
the solar panel, use of inverters and transformers.
Next. And then the service contracts. Well again, the service
contract, when it comes to hydro, its very specific location but for
solar it can be anywhere. So Solar Philippines is also saying--on the
service contract. Theres another dimension in service contract. Once
you have a service contractI mean, the solar industry experienced
thousands of solar developers who are outdoor just to start things off
and flip out, with no ability really to build. Now, the solar technology
requires funds upfront because we can build a 10-megawatt in about
two months. So the funds upfronts are needed. But many developers,
they would get the service contract, block the area, prevent others
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from entering, and yet, they dont have the funds really to build. And
so its a deterrent. Its actually deterrent. They dont have the funds
to build, they need what we call bridge funds. And the bridge funds
are liquidated by local equity through local banks over the next seven
or--depending on the ROI. But right now, there are so many service
contracts that prevents true-blue developers from really building the
solar plants.
Next. Yes.
THE CHAIRMAN (SEN. GATCHALIAN). Maputol ko lang kayo
ng sandali because this has been one of the point of contention for
solar.
Gusto ko lang maintindihan iyong philosophy. Ewan ko kung
masasagot ni Lisa ito. The philosophy of service contract for solar. I
understand for oil and gas kasi extractive iyan. Youre extracting oil
gas minerals. But for solar which is coming from the sky, what is the
philosophy in service contract and anong process po to get the service
contract? For example, I want to put solar plants utility scale, ano ba
iyong process to get a service contract from DOE? At, maam, ewan ko
kung alam mo. For solar developers, why do we need to get a service
contract?
MS. GO. Mr. Chair, when the RE Law was crafted I think they
require the service contract to have an exclusivity in the area because
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there was instance na maraming applicants in an area just to give
them--And the process for getting a service contract may pre-
development and development fees. For the pre-development, that
gives the developer a chance to do its own feasibility study. May
timeline po siya. For a solar, its a three years. As long as may
results on the study, thats when it will proceed to the next phase,
conversion into a development contract. Pero once may na-award
pong service contract to developer it gives them exclusivity sa area
and would be entitled na po to get all the permits related sa ibang
agencies as well.
THE CHAIRMAN (SEN. GATCHALIAN). Pag may service
contract ka its by block iyan, in a specific area? Paano kung hindi sa
iyo ang lupa, anong pwedengPaano iyon? Halimbawa--And how do
you identify? Because the sun is infinite. I mean the whole Philippines
can be a service contract for that matter. So how do you identify now
na itong dito may service contract, dito may service contract. Paano
ba iyong process na
MS. GO. Part po the requirements for a developer is to submit
iyong coordinates po nung area.
THE CHAIRMAN (SEN. GATCHALIAN). So sila ang magsa-
submit?
MS. GO. Sila ang magsa-submit.
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THE CHAIRMAN (SEN. GATCHALIAN). Unlike sa oil and gas
kasi kayo ang nagbibigay?
MS. GO. Ang oil and gas its bidded out. The blocks are bidded
out.
THE CHAIRMAN (SEN. GATCHALIAN). But identified by DOE?
MS. GO. Identified based on previous studies.
THE CHAIRMAN (SEN. GATCHALIAN). So in this case the
developer identifies?
MS. GO. Opo, unless its a competitive selection process
wherein ang DOE po ang mag-identify ng areas and it will be offered to
the private sector. But the other case is ang developer ang mag-
submit the areas they are willing to develop.
THE CHAIRMAN (SEN. GATCHALIAN). Paano kung iyong lupa
hindi sa kanila? Who mediates? Sila na ang bahala doon.
MS. GO. Sila na po. They have to rent it or
THE CHAIRMAN (SEN. GATCHALIAN). They have to rent it or
bahala na sila.
MS. GO. Yes.
THE CHAIRMAN (SEN. GATCHALIAN). But the coordinates
will come from them.
MS. GO. Yes po.
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THE CHAIRMAN (SEN. GATCHALIAN). And then what is the
approval process? So may dala akong coordinates, Ill give it to you.
So what I needapproval process for that.
MS. GO. Opo. I think I have a slide on the
THE CHAIRMAN (SEN. GATCHALIAN). Ano ang tinitingnan
ninyo para ma-approve na
MS. GO. Yes.
THE CHAIRMAN (SEN. GATCHALIAN). Ito, malakas ang araw
dito, ganoon ba iyon?
MS. GO. First po when DOE receives the application i-tse-check
po ng Renewable Energy Management Bureau and they call it to the IT
group namin to look at the coordinates, kung wala siyang overlap with
existing service contracts na nag-submit din ng coordinates. As ma-
clear po siya with the IT group, it goes back to the Renewable Energy
Management Bureau and then it goes to the legal para i-check po
iyong ownership. The ownership sa mga developers, the compliance
is 60/40.
THE CHAIRMAN (SEN. GATCHALIAN). Ownership of the
land?
MS. GO. No, of the corporation.
THE CHAIRMAN (SEN. GATCHALIAN). The corporation, okay.
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MS. GO. If it complies with the 60-40 requirement under the RE
Law. And then it goes back to the technical group, they look at the
technical aspect of the project and simultaneous na po with the
financial. And then after that, it goes to the review committee of the
RE projects and then once nag-comply na sila they have to come up
with the drafting of the service contract and they have to get in touch
with the developers.
THE CHAIRMAN (SEN. GATCHALIAN). But what is the legal
basis of a service contract for solar power projects? Alam mo ba kung
anong legal basis noon?
MS. GO. Naka-incorporate na po siya sa RE Law. It was a
requirement.
THE CHAIRMAN (SEN. GATCHALIAN). Is it in the RE Law?
MS. GO. For the service contract.
THE CHAIRMAN (SEN. GATCHALIAN). So requirement talaga
iyangSa RE Law requirement talaga iyan?
MS. GO. Yes, its a requirement under the RE Law, Mr. Chair.
THE CHAIRMAN (SEN. GATCHALIAN). So what is your
decision making points to approve or disapprove a service contract?
MS. GO. We have, first, the overlapping ng area. And then we
have the legal personality if compliant siya sa 60-40 from the legal and
financial, if they are financially capable.
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THE CHAIRMAN (SEN. GATCHALIAN). Okay.
MS. GO. And the technical aspect. So iyon po iyong mga
criteria na tinitingnan when evaluating a service contract.
THE CHAIRMAN (SEN. GATCHALIAN). Okay. All right. Im just
thinking out loud na dahil ngaI mean solar is different from
extractive. Ito hindi naman specific ito its all over the nation. Ang
naiisip ko lang kung may lupa ka, you wanna put up a utility scale, I
think thats already enough. I think that should be enough to get a
permit to put up a solar power plant. You own the land, you have the
sun, I think that should be enough. For me ha kasi service contract is
another layer again. And I think that takes time also to approve, hindi
ba?
MS. GO. Currently, Mr. Chair, under the DOE guidelines its 45
days.
THE CHAIRMAN (SEN. GATCHALIAN). But I asked some of
the developers, it takes years rin. In actuality its not 45 days.
MS. GO. There are cases po.
THE CHAIRMAN (SEN. GATCHALIAN). I think iyong 45 is the
exception.
MS. GO. Yes, thats why we just institutedthis year actually,
sir, for the implementation of the tracking within DOE. So once the
application is received by DOE, put in a tag, RFID the tag and well be
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able to track from one office. So nakikita po namin ngayon.
Tinitingnan namin kung sino iyong medyo matagal and then we have
to sit down again with the different units within DOE.
THE CHAIRMAN (SEN. GATCHALIAN). Maam.
MS. CAPELLAN. Thank you, Mr. Chair.
I think one of theyou have mentioned a very significant point
as to how and why the delays are happening in the solar service
contract. One is the land. As I think, you very well know, Mr. Chair,
land is very crucial /cfd
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CMNERY V-1 February 21, 2017 10:04 a.m. 1
MS. CAPELLAN. ... land is very crucial to solar. And what
happen is that there are some developers that lay claim to a particular
coordinates but have no rights to the property. The CREBA, the
Chamber for Real Estate and Builders wrote the PSPA and we have
forwarded the letter of CREBA to DOE to decide on the matter because
it violates their property rights. And it is not for us to make a
determination because the RE law specifically says that we have to
apply for a service contract. The problem there is that there are land-
owners who want to develop their piece of property and one day find
themselves upon application in the DOE that their lands have been
pre-reserved by someone who has no claim to the land.
So I think there has to be some resolution on this matter
because there are some developers who has property rights to the
piece of serve(?) coordinates and they take about easily a year to
resolve that because the holder of the service contract has three years
before it can release that service contract even if he doesnt intend to
use it. Because for one reason or another he doesnt have money or
just want to sell the service contract to that person who really wants to
develop it. So that is one cause of the delay. The provisions, the rules
in the DOE says that after three years you can relinquish it but there
are some even after three years the issue is not resolved. So you
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have listings in the monitoring board of the DOE whose service
contracts are still listed there but actually they have not been revoked.
So I think that is one issue that really has to be acted on by the
oversight committee of the Renewable Energy Law because it really
holds up the permitting process. As Ms. Lisa Go said, the ITMS, the
division that handles the overlap, they decide on whether you can get
that service contract and go ahead. That takes months before that can
be resolved. Thats one issue.
The legal is easy because once you submit the corporate papers
they just look at the shares and if they establish that its 60-40, then
two days the legal can release it. In the financial, they determine the
financial capability of the developer. That is really kind of smooth. Its
not a rocket science. Its really in the ITMS. The overlap that causes
that and also in the technicalIn the technical team of the REMB, its
actually the number of people. There are only three people processing
hundreds of service contract. And I think they have to have a
template in terms of yes/no decision making to simplify it so that they
dont have to go through those thick submissions of the developers
before they can make a determination that it has technically passed.
THE CHAIRMAN (SEN. GATCHALIAN). Lisa, itong service
contract ba, do you look at the lease of the property? Or for example,
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ako iyong proponent, is part of my submissions the lease contract of
the property? Kasali ba iyon?
MS. GO. I dont think DOE po. I think its a requirement of the
LGUs in coming up with the decision.
THE CHAIRMAN (SEN. GATCHALIAN). So mayroon ngang
mangyayari na approved?
MS. GO. Yes. Its required by DA and DAR for the conversion.
THE CHAIRMAN (SEN. GATCHALIAN). Hindi, but for DOE.
MS. GO. But for DOE, no.
THE CHAIRMAN (SEN. GATCHALIAN). So nangyayari talaga
na
MS. GO. Yes. For the conversion of the predevelopment
contract to a development contract its
MS. CAPELLAN. No, its not a requirement.
THE CHAIRMAN (SEN. GATCHALIAN). So puwedeng
mangyari nga na approved iyong service contract pero wala ka pang
lupa?
MS. CAPELLAN. [Off-mike] Wala kang right sa land.
THE CHAIRMAN (SEN. GATCHALIAN). Wala kang right sa
land. Magulo iyon.
MS. GO. Yes.
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THE CHAIRMAN (SEN. GATCHALIAN). Actually, nangyayari
iyan sa mining.
MR. CASAS. Mr. Chair, if I may augment the
THE CHAIRMAN (SEN. GATCHALIAN). Sige po, Mr. Casas.
MR. CASAS. After going through our own experience, we
questioned their rationale or logic of the concept of blocking versus the
size of the solar land that you need to put up a plant. The ratio is
about one to 10 sometimes one to 100. Meaning, the solar plant
occupies x number of hectares but the block area is 10 times. So it
could be the whole town. So the logic or rationale behind that is truly
questionable. Because at the end of the day what really counts is, No.
1, would the region require more power? Can the transmission line still
carry? Can it still accommodate x number of megawatts? Those are the
more accurate. But the rationale of blocking practically the whole town
and youre occupying only 10 or 20 hectares in your service contract is
for me
THE CHAIRMAN (SEN. GATCHALIAN). Lisa, itong service
contract ba, is it being used to regulate where solar farm should be put
up in accordance, lets say, of the PEP or the TDP? Alam mo ba kung
ganoon?
So walang regulatory function iyang service contract basta
pumasa ka bigay na kaagad.
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MR. CASAS. The other, Mr. Chair, is that our contract is about
20, 25 years. So we prefer to acquire the land rather than just to
lease. Less headache when it comes to inheritors, you know, the next
descendants. So we normally acquire the land.
THE CHAIRMAN (SEN. GATCHALIAN). I dont know baka
kabisado ng mga solar developers. Maybe you can ask your legal team
to research this. I dont know if there is merit to exempt solar and
wind to service contracts. Again, I believe the basis of that will be
more scientific than legal and maybe you can help the Committee in
terms of researching and other jurisdictions if they have service
contracts for solar and wind. For extractive, yes, oil and gas, maybe
minerals, geothermal. But for wind and solar, hindi bawind
nanggagaling nga sa Pacific Ocean iyon. Hindi naman sa Pilipinas iyon,
sa totoo lang. Again, its a scientifichow you define
MR. CASAS. Thats a very valid point.
May I ask Mr. Mike De Guzman to say something about the
rooftop?
THE CHAIRMAN (SEN. GATCHALIAN). And that goes also to
my next question.
Sa rooftop kailangan niyo rin ng service contract?
MR. CASAS. Mike, can you answer that question?
He has got some concerns about the rooftop.
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MR. DE GUZMAN. Thank God when were putting solar panels
in the house we dont have to get a solar service contract.
THE CHAIRMAN (SEN. GATCHALIAN). Sa household.
MR. DE GUZMAN. You dont need it. However, when you go
for the bigger projects, once you start going to the megawatts scale...
THE CHAIRMAN (SEN. GATCHALIAN). Whats the definition?
MR. DE GUZMAN. ... youll need the service contract because
you have to sell it via FIT or through WESM.
THE CHAIRMAN (SEN. GATCHALIAN). Mike, anong big
rooftop? Whats a capacity?
MR. DE GUZMAN. The Philippines had won the Worlds largest
rooftops for about five months...
THE CHAIRMAN (SEN. GATCHALIAN). So how do you define
a big capacity rooftop?
MR. DE GUZMAN. Above 100 kilowatt.
THE CHAIRMAN (SEN. GATCHALIAN). Above 100 kilowatts.
So anything above 100 kilowatts you need the service contract
already?
MR. DE GUZMAN. If you are to sell.
THE CHAIRMAN (SEN. GATCHALIAN). If you are to sell.
MR. DE GUZMAN. Yeah. But if its self-consumption you dont
need it.
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THE CHAIRMAN (SEN. GATCHALIAN). Pag sarili hindi na
kailangan.
MR. DE GUZMAN. Hindi na kailangan.
THE CHAIRMAN (SEN. GATCHALIAN). Go ahead, Mike, if
you have something to say.
MR. DE GUZMAN. About solar service contracts. Actually, I
encountered a couple of projects we had to decline because of the
solar service contract issue. The owner of the property, he had
enough roof to put 11 megawatts of solar panels but somebody took it,
the solar service contract. I dont know that person who took it. They
said, like, Its my roof. I said, Well, Sir, we cant put panels on your
roof and sell it to the national government, the energy, because
somebody took your rights. And that also happened in one town in
the south and also one in an ecozone. He also has 35 factories and I
think Clark ecozone and he couldnt sell the power back to the national
government because somebody blocked out the entire town.
So the solar service contracts, I believe, works in about 88
hectare footprints. Its large chunks of
THE CHAIRMAN (SEN. GATCHALIAN). [Off-mike] Eighty-
eight?
MR. DE GUZMAN. Eighty hectares. Yes. Theyre gigantic
squares.
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THE CHAIRMAN (SEN. GATCHALIAN). So on one block.
MR. DE GUZMAN. Eighty hectares.
THE CHAIRMAN (SEN. GATCHALIAN). No, kasi ang 80
hectares for oil and gas is small.
MR. DE GUZMAN. Yeah, but for solar ...
THE CHAIRMAN (SEN. GATCHALIAN). Eighty hectares for
solar is huge.
MR. DE GUZMAN. Is huge. Its 60 megawatts. We could power
the whole MOA with that.
THE CHAIRMAN (SEN. GATCHALIAN). I need the support of
the solar developers, the RE developers, in terms of researching this
whether we need service contracts, in my view, if we can do away with
the service contracts for non-extractive power generations, then it will
ease the burden in applying for these types of permits.
In principle, I dont see the need for it. But we have to research
more in termsmy team is already researching /cmn
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JLFLORES VI-1 February 21, 2017 10:14 a.m. 1
THE CHAIRMAN (SEN. GATCHALIAN). ... is already
researching. But I think, sabi ko, may scientific definition iyan.
MS. CAPELLAN. Mr. Chair
THE CHAIRMAN (SEN. GATCHALIAN). Sino ba ang may-ari
ng araw?
MS. CAPELLAN. I think
THE CHAIRMAN (SEN. GATCHALIAN). Sino ba ang may-ari
ng wind? So, theres a scientific reason for that.
MS. CAPELLAN. Mr. Chair, one of theI think somebody has
to police claims to the land. What form that will take, I think, has to
be something that has to be researched on because there may be
situations where several will lay claim to the land. Now, if the onlyif
the land right is the sole determination for laying claim to the land,
then I dont think we need a service contract. Because if I have a
claim to the land, then I have a right to develop it whichever way I
want.
THE CHAIRMAN (SEN. GATCHALIAN). Right, right.
MS. CAPELLAN. So, if that is
THE CHAIRMAN (SEN. GATCHALIAN). Of course. You have
the superior right over the land.
MS. CAPELLAN. Yes. So, I think if that is going to be the
determination, then the service contract is something that may not be
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necessary. But there are three permits, Mr. Chair, that are attendant
to a service contract. You cannot be granted an impact study of the
grid by NGCP unless you have an approved service contract by the
DOE. Your papers cannot also be processed by the National
Commission on Indigenous People if you dont have a service contract.
And the BOI will not process your application without a service
contract. So, this service contract triggers the review and approval of
three other permits that are necessary for you to operate a solar
power plant.
THE CHAIRMAN (SEN. GATCHALIAN). Okay. I think there
isnakikita ko may mga problems. Theres a problem on how service
contracts are being awarded and
Can you submit to us, Lisa, thefor RE lang naman ito, for RE
all the service contracts issued? So, we will also be guided as to what
are the outstanding service contracts for RE: solar, wind andI think,
solar and wind lang for this matter. And can you also submit to us a
generic service contract? I want to study that. I want to see the
provisions in the service contract.
Again, were currently studying whether we can exempt wind and
solar and alike to service contracts. If we can cut one document, then
thats well and good.
Another
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MS. VENTURINA. Mr. Chair.
THE CHAIRMAN (SEN. GATCHALIAN). Sige po.
MS. VENTURINA. May I just request that we be allowed to put
forward a position paper regarding service contracts?
THE CHAIRMAN (SEN. GATCHALIAN). Yes. Yes. Definitely.
MS. VENTURINA. Thank you.
THE CHAIRMAN (SEN. GATCHALIAN). Iyon na nga ano,
kung matutulungan niyo ako to find a legal basis to take it out, then so
much the better. Not for the entire energy sector but only for wind
and solar.
MS. VENTURINA. Yes. Sir, can I just ask our corporate sec or
legal counsel to put a few words, Atty. Poch Ambrosio?
THE CHAIRMAN (SEN. GATCHALIAN). Sige po.
MR. AMBROSIO. Good morning, Your Honor.
We just like to echo the statements of Ms. Tetchie Capellan
regarding the importance of the service contract and how embedded it
is in the system of getting the permits and licenses for RE. Its
actually the very basis of everything, all the permits, BOI and all of
that.
Have there been problems? Yes. And I think thats the main
issue therehaving problems of abuse with how the service contract is
used. But particularly in respect to solar, I do know of one case where
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one developer actually lost a portion of his service contract to the
owner of the land. So, the owner of the land or the property can
assert his rights as against the service contract owner. Thats not an
issue. It will just take time. But at the end of the day, the owner of
the property, his rights cannot be overridden by any blocking that the
DOE may give for the area. Because while its correct, theres an 81-
hectare block that is covered, at the end of the day, your rights will
only extend to those properties over which you can get tenure. If I
can make reference to the solar work plan, within the first six months,
the DOE will ask for your rights to the land. If you do not get those,
the service contract will get cancelled. So
THE CHAIRMAN (SEN. GATCHALIAN). When you say land,
Attorney, ano iyan, lease, ownership?
MR. AMBROSIO. Lease or ownership.
THE CHAIRMAN (SEN. GATCHALIAN). Or usufruct?
MR. AMBROSIO. Or usufruct. Thats possible, Your Honor.
THE CHAIRMAN (SEN. GATCHALIAN). Within six months?
MR. AMBROSIO. Within six months.
THE CHAIRMAN (SEN. GATCHALIAN). Pero may mga stories
nga na three years na, hindi pa
MR. AMBROSIO. Understood, Your Honor. But its being
abused and its not being enforced properly. But the DOE set those
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rules themselves, that in the first six months, if you do not produce
and thats a milestoneif you do not produce that milestone
THE CHAIRMAN (SEN. GATCHALIAN). In your knowledge,
and I want to consult with you being a lawyer, can we legally remove
the service contract?
MR. AMBROSIO. If its to be removed, it would have to be by
amending the RE law, Your Honor, because its really based on the
service contract system.
THE CHAIRMAN (SEN. GATCHALIAN). Okay. All right.
Maybe you can help us study that. Your group can help us study
that.
MR. AMBROSIO. We can do that, Your Honor.
Thank you.
THE CHAIRMAN (SEN. GATCHALIAN). Lisa.
MS. GO. Yes, Mr. Chair.
Regarding the issue iyong mga service contracts na existing and
those that are cancelled, maybe just to backtrack a bit.
When the RE law was implemented, they were strictly following
what was in the law po. And then during the time of Secretary Petilla,
he introduced the milestone approach, which you have on screen. It
limits the holding of a service contract depending on the resource.
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So, iyon po iyong mga previously na awarded na contracts.
Youre following the preprior to the implementation of the milestone
approach. So, those awarded under the milestone approach, they will
be terminated according po dito sa milestone periods. So, for solar,
its six months. Thats for a pre-development stage. And for
development stage...
Next slide, please. You havenext, please.
... its five to six years. So, kung wala pong movement iyong
contracts within five to six years, its a ground for termination of the
service contract.
So, thats the background po of the service contracts.
THE CHAIRMAN (SEN. GATCHALIAN). The point, I think, of
the proponents is its not being enforced properly. Kaya may mga
cases na tumatagal at tumatagal, I think this is not being enforcedor
abused, iyong ginamit ni Attorney for this matter. But then again nga,
this is a hearing in cutting red tape and streamlining, so if we can do
away with certain documentary requirements, then that will be the
best.
In that light, just submit to us, Lisa, iyong outstanding service
contracts, just a summary of the outstanding service contracts and a
typical service contract. We want to review the provisions inside those
service contracts.
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In other jurisdiction, alam niyo ba kailangan ng service contract?
Like, for example, I dont know, Thailand or Indonesia. If you put up a
solar plant there, you need a service contract?
MR. CASAS. Yes. Mr. Chairman
THE CHAIRMAN (SEN. GATCHALIAN). Mr. Casas.
MR. CASAS. In response, I dont mean to be funny, but Ive
been asked many times the root of this issue. And this service
contract, the RE law is also founded onif you look at the Philippine
Constitution, Article XII, Section 2, clearly says that the government
owns the rays of the sun and the wind. [Laughter] So, that is the root
why. So, look at Article 12, Section 2 of the Philippine Constitution.
So, the government owns the rays of the sun and the wind. All forms
of natural energy.
THE CHAIRMAN (SEN. GATCHALIAN). Ill ask them to
review. Dahil alam ko extractive, yes. Extractive.
MR. CASAS. Extractive. But it includes the wind and the sun.
THE CHAIRMAN (SEN. GATCHALIAN). Well, thats why we
need your
MR. CASAS. All forms of natural energy.
THE CHAIRMAN (SEN. GATCHALIAN). In any case, for the
proponents, especially the wind and the solar proponents, give us your
position paper. Im here to help you, guys, get off the ground as quick
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as possible. So, kung matutulungan niyo kami with research, especially
in other jurisdictionsI dont think the Thais are more nationalistic
than the Filipinos, soBut if they can do away with that service
contract policy, then I think maybe we have a legal basis to do it.
MS. CAPELLAN. Mr. Chair, in Thailand, its the reverse. They
give authority to the developer on the basis of grid availability. Its not
on the land.
THE CHAIRMAN (SEN. GATCHALIAN). Iyon. Maam, bigyan
niyo kami ... /jlf
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Sglrobles VII-1 February 21, 2017 10:24 a.m. 1
THE CHAIRMAN (SEN. GATCHALIAN). bigyan niyo kami
ng knowledge and information about that.
My other question actuallyMr. Casas, Ill interrupt you for a bit
because you mentioned NCIP. For Solar, kailangan ng NCIP
documentation and that is the certificate of non-coverage. I have
talked to someone, I think even for solar rooftop kailangan ito?
Kung like for example, solar rooftop ako, assuming one
megawatt and I will apply for an FIT, I still need a NCIP document,
certificate of non-coverage?
MR. DE GUZMAN. Apparently, it is part of the COC process for
FIT project.
THE CHAIRMAN (SEN. GATCHALIAN). So, for example, if I
put a one megawatt plant in Metro Manila--wala namang IT dito, alam
natin--kailangan ko pa rin iyon?
MR. DE GUZMAN. Yes. Kung sakaling makikita sa bubong.
Its part of the
THE CHAIRMAN (SEN. GATCHALIAN). Hindi ba katawa-tawa
iyon naI mean, this is really height of ridicule?
MR. DE GUZMAN. Mr. Chairman, can we include that in our
position paper?
THE CHAIRMAN (SEN. GATCHALIAN). Yes, please. Yes, yes.
So totoo iyon? I mean, Im trying to get information from the
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practitioners. So totoo iyon. So even in Metro Manila, if you want to
put a one megawatt rooftop solar power plant, you need CIT
documentation?
MR. DE GUZMAN. Yes.
MS. CAPELLAN. In fact, Mr. Chair, we recommended before.
The PSPA submitted a position paper, in the early days of the NREB, to
separate the treatment of rooftops with utility. Because it is really a
different regime and the operations of the rooftop have different
features that is not applicable to the utility land-based solar projects.
THE CHAIRMAN (SEN. GATCHALIAN). Yes, but this is really
more common sense. Nasa Metro Manila ka tapos kailangan mo pa rin
ng IT certification.
In any case, Mr. Casas, naputol ho kayo, so you can go ahead.
MR. CASAS. Its okay. I think Ill justthis is just my comment.
Im glad that we can include NCIP in our position paper. Okay.
THE CHAIRMAN (SEN. GATCHALIAN). Please. But you can
go ahead. Are you done with your presentation?
MR. CASAS. Yes, I am done, I guess.
Oh, the last item is just also from Brozeork, that there should be
no dependency on the permitting, being dependent from one agency to
another. That adds the lead time process as well. Yes, thats it.
THE CHAIRMAN (SEN. GATCHALIAN). All right. Thank you
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very much.
And unfortunately, the representative from NCIP cannot join us
today for the second time. Let that be put on record, that we have
invited NCIP and this is the second time that they didnt joint us so it is
very difficult now to address some of the NCIP concerns.
Nevertheless, we will proceed with the technical working group
and proceed with the formulation of the energy one-stop shop bill,
With us also is DILG and representative from the local
government units. I know marami tayong tanong sa local
governments. But let me direct this question to Maam Paredes.
Can we go back to that, yung maraming signatures. I think this
is a good basis for the local government units. Iyan.
Itong 88 signatures, Mr. Casas, from barangay ito, all the way to
the provincial level.
MR. CASAS. Thats right. Just in the local, in the province
area. But ironically, based on our experience, we had quicker shorter
lead time in the provinces because the local government, the governor,
the mayors are all very, very supportive when they see that huge
investments in billions are flowing into the province. They will
expedite and facilitate all forms of remedy. Its in the national level
that is the challenge.
THE CHAIRMAN (SEN. GATCHALIAN). The problem.
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But nevertheless, we would like to see a uniform system for the
local governments.
MR. CASAS. Yes.
THE CHAIRMAN (SEN. GATCHALIAN). I am very happy to
hear that your experience with the local government units are
MR. CASAS. Very quick, very fast.
THE CHAIRMAN (SEN. GATCHALIAN). very quick and less
red tape.
MR. CASAS. Very supportive.
THE CHAIRMAN (SEN. GATCHALIAN). But not everyone
experience the same. So I want to hear kay Maam Paredes. I just
want to be enlightened.
What type of permit ang ini-issue ng Sangunian at the barangay
level? Because thats a starting point. So, for example, mag-a-apply
ako, let say lang, ng solar, I have to go to the barangay captain. Pero
ano ba yung kanilang hinihingi at ano ba yung kanilang dapat i-issue?
At ano ba yung kanilang dapat hanapin? Because some of the
barangay captains, they just go through the motion without knowing
what to ask. So ano ba ang dapat nilang tingnan at the barangay
level? Three levels tayo ano.
MS. PAREDES. Thank you, Chairman.
Sa barangay naman po mga location clearance, mga permit na
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ganoon lang naman. And we were discussing earlier with maam.
Truthfully, their experience in dealing with barangays, medyo mas
tumatagal nga po sa barangay kaysa sa city or province level kasi nga
po alam naman po ng mga higher level local officials natin yung impact
noong energy projects in terms of investment, job generation,
economic development. Pero sa barangay maybe ho due to their
minsan po sabi ni maam, yung may political quarrels, squabble,
sinuportahan ng isang political group. Minsan po, Senator, talaga pong
binabarahan ng ibang--yung kalaban ng local official na iyon. Iyon po
yung nangyayari realistically sa ground.
Pero po yung sa mga business licensing permits, mayroon
naman pong electronic system na rin ang business licensing ng mga
LGU. Like what was said earlier, sabi po parang imposible na i-
computerize daw yung sa LGU level in terms of the energy projects.
Since there are already business licensing permits that are
computerized at the local level, siguro po i-enhance na lang ito para
may access din sila.
For example, mayroon tayong EVOSS, I tried it here so I opened
the EVOSS system, nakalagay lang, nakita naman natin ang access
lang is limited to NGAs. Wala pong access diyan ang local government
units so kung sa barangay level gustong malaman ni kapitan kung ano
iyongsome background tungkol sa project, iyon po. Masakit pong
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sabihin, minsan ignorance din. Hindi nila din alam kung ano yung
what they can expect from that project so may konting apprehensions
din sila on their part. But if DOE will serve as a clearing house for
LGUs, lets say, takot din sila sa mga COA audit, mga ganyan, pag
binigyan ng permit baka nandiyan na yung kalaban niya, kakasuhan na
siya, yung mga ganoon pong concerns. Kung may clearing house
naman tayo through the EVOSS, sana nga po isa na lang ang kausap
ng mga energy generation proponents, DOE na lang at sila na ang
bahalang mag-ensure na all the other agencies do diligence doon sa
entire process. If the DOE will serve as a clearing house for LGUs,
sasabihin ng DOE sa mga gobernador, mayor, Eto, okay na ito. We
have exerted our effort in determining the financial capability, the legal
personality, their technical capacity and theirIyon na lang sigurong
issues on the property rights, business permits, kaya naman pong
madaliin. And the 88 signatures were also supporting DILGs ease of
doing business so baka naman din po pwedeng ma-shorten,
mabawasan yung signatures required and on the time if sa barangay
level, maglagay na lang po tayo ng prescribed period. Kung hindi ma-
approve ni barangay within a prescribed period, its deemed approved
by the higher LGU.
Ganoon na lang po siguro, Senator .
THE CHAIRMAN (SEN. GATCHALIAN). Yung sa barangay ba
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requirement pa rin iyan ng DOE, the barangay clearance? Kailangan
pa iyan ng DOE talaga.
MS. PAREDES. Opo.
THE CHAIRMAN (SEN. GATCHALIAN). And under the Local
Government Code may prescription ang barangay clearance /sglr
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MJPalaganas VIII-1 February 21, 2017 10:34 a.m. 1
THE CHAIRMAN (SEN. GATCHALIAN). may prescription
ang barangay clearance, hindi ba, seven days? Pag hindi inisyuhan ng
seven days, deemed approved na iyon, hindi ba? So napa-practice ba
ho iyan ng developers? Alam ninyo ho
MR. CASAS. In response, the answer is yes. But the challenge
in the province is that while we are situated in one barangay, we have
to get permits from all the districts. It is not only limited in that
district. So if our solar plant is situated in one district and there are
eight others, we have to go through
THE CHAIRMAN (SEN. GATCHALIAN). Eight barangays, you
mean.
MR. CASAS. We have to go throughyou know.
THE CHAIRMAN (SEN. GATCHALIAN). Oo.
MR. CASAS. We have to go through all the
THE CHAIRMAN (SEN. GATCHALIAN). My next question is,
at the municipal level, I understand that the solar developers pay real
estate taxes as well as you get business permits. So walang
problemang ganoon. But on top of that, DOE requires a sangguniang
pangbayan resolution.
MR. CASAS. Yes.
THE CHAIRMAN (SEN. GATCHALIAN). Ano iyong
ihinahanap ng sangguniang pangbayan resolution doon?
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MS. PAREDES. Siguro po dini-discuss po diyan iyong impact
ng project, iyong share ng LGUs sa
THE CHAIRMAN (SEN. GATCHALIAN). Pero may business
permit na. So bakit pa kailangang pumasok ang sanggunian kung may
business permit na?
MS. PAREDES. Siguro iyon din po iyong authority of the chief
executive to enter, lets say, into an agreement with the proponents,
mga ganoon po. Minsan
THE CHAIRMAN (SEN. GATCHALIAN). Assuming its just a
straightforward business permit, a-apply lang ako, let us say, business
permit; kukuha ako ng tax declaration; apply ako ng construction
permit. Hindi ba enough na iyon dapat? Bakit pa nire-require ng DOE
ang sangguniang pangbayan? And that takes time, iyong sangguniang
pangbayan ang pinakamatagal talaga.
MS. PAREDES. Lalo na po kung walang template sa
resolution, ida-draft pa nila, tumatagal.
THE CHAIRMAN (SEN. GATCHALIAN). And then, at the
same time, pag in-approve ng sangguniang pangbayan, hindi naman
iyan magiging effective kung hindi ho sangguniang panlalawigan. So
aakyat ka na naman sa taas. Tama? And that is another ball game ulit,
talking to the board members.
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Ang tanong ko ngayon sa DILG, can we consolidate all of that?
For example, kung province, province na lang; isang application na
lang, all levels? So mag-apply na lang ho kay governor.
MS. PAREDES. [Off-mike] Si gov na lang ang bahala.
THE CHAIRMAN (SEN. GATCHALIAN). Oo. Si governor na
ang bahala. Isang sangguniang panlalawigan approval na lang and
carried na lahat ang municipal and barangay. Through that body,
which is sanggunian panlalawigan, doon na sila magdebate, mag-usap
whether its good for the province or not.
And may process naman, anything that the sanggunian
pangbayan approves is not effective until the sangguniang
panlalawigan approves it. Umaakyat talaga iyan, you know, umaakyat
talaga iyan.
MR. TRINIDAD. Mr. Chairman, siguro ang ano natin doon is
iyong local code na kung bakit kinakailangan pa na from municipal
level ay kailangan umakyat ka pa ng provincial, sa board.
THE CHAIRMAN (SEN. GATCHALIAN). Ang tanong ko,
legally ba, is there a basis for, let us say, siguro mas mabilis, we take
out the two levels. Hindi naman tinatanggal ang LGU, nilalagyan lang
natin ngkumbaga mas mabilis lang iyong proseso. So we are now
empowering the provincial government to take the lead in terms of
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approving the sanggunian approvals. So carried ninyo na pati
sangguniang pangbarangay approval. Is there a legal basis for that?
MR. TRINIDAD. We will check, Mr. Chairman, kung pupwedeng
ganoon na lang para ma-expedite na po iyong sa pagpe-permit.
THE CHAIRMAN (SEN. GATCHALIAN). Oo. Kasi kung ikaw
ang developer, lalo na if you want to invite foreign investors, biro mo,
kakausapin mo pa ang barangay. Kung sampung barangay iyan, di
sampu iyong kausap mo, hindi ba? Aakyat ka ng municipal, kung
dalawang municipality iyan, dalawang mayor ang kakausapin mo. Iba
pa iyong sangguniang pangbayan members. Kung magkaaway pa iyan,
di dalawang kampo dapat kausapin mo, hindi ba?
MS. PAREDES. At least, Senator, through the principle of
supervision naman, the governors can probably call for a meeting with
all the concernedsi governor na po ang magtatawagsa League of
Provinces din po ako, Senator.
THE CHAIRMAN (SEN. GATCHALIAN). Oo, yes.
MS. PAREDES. So si governor na po ang magtatawag ng mga
lahat ng stakeholders up to the barangay level, i-explain ni governor
iyan, Ganito ang sistema diyan And then mayroon na lang
sigurong omnibus resolution na authorizing the province to approve or
to provide the business permit for the project. Baka po pwedeng
ganoon.
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THE CHAIRMAN (SEN. GATCHALIAN). Baka pwede na lang.
MS. PAREDES. Hindi ba, nandito po si Useciyong nag-attend
po last meeting.
MS. PAREDES. Nag-usap naman din po kami nina Usec
Panadero na we are trying to do away also with the barangay but not
entirely. Maybe there is a political way. There is a
THE CHAIRMAN (SEN. GATCHALIAN). Actually, we are not
removing the barangay.
MS. PAREDES. Yes, oo. Kasi
THE CHAIRMAN (SEN. GATCHALIAN). We are just
consolidating the hearings into one.
MS. PAREDES. Because they are autonomous in character as
welloo.
THE CHAIRMAN (SEN. GATCHALIAN). So instead of three
different sanggunian hearings
MS. PAREDES. Yes.
THE CHAIRMAN (SEN. GATCHALIAN). we will now
consolidate it to one panlalawigan hearing.
MS. PAREDES. Pwede naman, to involve all the stakeholders
from prior consulatation.
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THE CHAIRMAN (SEN. GATCHALIAN). To involve everyone
na.
MS. PAREDES. Iyong ganoon lang po.
THE CHAIRMAN (SEN. GATCHALIAN). Kasi para hindi na ho
hiwalay-hiwalay. Medyo maano talaga iyan, mabusisi talaga.
Anyway, if we can cover theiron a separate ano, the
conversionalam ko, land conversion is also one of the most
controversial permits for developers, doon na rin pag-usapan iyong
conversion.
MS. PAREDES. Basta po may clearance ni DOE na okay iyon,
palagay ko iyong apprehensions nila on the on thekasi marami pong
tanong iyan sa baba: magkano ang share nila, magkanong taxes and
then how many jobs, iyong impact po noon sa local economy. Idi-
discuss naman ni governor iyon soactually, matutuwa po sina
governor and then
THE CHAIRMAN (SEN. GATCHALIAN). Oo. Mas mabilis iyong
proseso.
MS. PAREDES. Opo.
THE CHAIRMAN (SEN. GATCHALIAN). That is possible
naman?
MS. PAREDES. Opo. Basta may prior consultation naman po na
kinonduct (conduct) and malinaw po sa barangay na may prescriptive
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period, Pag hindi ninyo in-approve within this time , parang
nagiging ministerial na lang on their part. Ganoon po.
THE CHAIRMAN (SEN. GATCHALIAN). Right, right.
Kasi ang power projects, Maam Paredes, is hindi lang for that
province, but its a national interest. Those energy or power generated
into one province will be delivered to the different parts of our country.
So we have to look at the overall benefit of that power project to the
nation.
MS. PAREDES. May isa pa po kaming concern, Senator, kasi
gauging from the experience of the mining industry, iyong sa pag-issue
ng permits and the closure. The closure, mamaya may mangyari rin na
closure sa energy projects, dapat din po maisama rin sa bill iyong
proseso noongif ever, magkaroon din po ng ganoon.
THE CHAIRMAN (SEN. GATCHALIAN). Oo, all right.
Any concerns from the LGUs?
MR. TRINIDAD. In addition, Mr. Chair.
MR. TRINIDAD. Iyong sinasabi po ni Maam Paredes ng ULAP,
sinasang-ayunan ko rin po iyon kasi may positive effect talaga, kung
halimbawa, si city mayor or si gov ang magpapatawag doon sa
barangay, lalo na kung mga ilang barangay iyong involved. Kasi kung
minsan, iyon nga iyong nangyayari sa baba, pagka ano,
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magkakakontra sa kulay pulitika. So pagka nanggaling na kay mayor
at siya iyong nagpaliwag, ito na po ngayon at gayundin sa provincial
governor, mas mapapabilis nga po iyong proseso.
THE CHAIRMAN (SEN. GATCHALIAN). May mga cases kasi
na si mayor, minority, hindi ba? Gusto nga ni mayor, ayaw noong
sanggunian, mahirap iyon. Matagal, kawawa iyong developer, to be
honest about it. They are forced to play the political game, which is not
their business.
So any concerns with the local government units?
Mayroon pa tayong concerns from the developers?
MR. CASAS. Mr. Chairman, the lady there is correct because
that is what we experienced. We got the support of the governor and
she conductedsimilar here, and the lead time really was reduced.
Sa ibang developers po, do you have any comments regarding
the local government units?
MS. PAREDES. Senator, may tanong lang po kami sa DOE,
kung pupuwede po?
THE CHAIRMAN (SEN. GATCHALIAN). Opo.
MS. PAREDES. Iyong sa access po ng LGUs sa EVOSS, may
plan din po ba na magkaroon din po ng access ang mga LGUs?
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MS. GO. Eventually po, when ma-adopt na iyong EVOSS on a
larger scale and a larger scope, eventually, well have to configure po
iyong system to include LGUs lalo na pag active na involved ang LGUs
in the approval process na rin.
THE CHAIRMAN (SEN. GATCHALIAN). All right. Thank you.
I think for practical purposes, to be honest about it /mjp
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THE CHAIRMAN (SEN. GATCHALIAN). to be honest about
it, its quite difficult to give all the local governments a computer.
Maybe access to monitor, pwede.
MS. PAREDES. Mayroon naman po sila na, Senator, access lang
po.
THE CHAIRMAN (SEN. GATCHALIAN). Yeah, pwede access to
monitor. This is naman a cloud-based system so they can just log in
and for purposes of transparency also, we would like the local
governments to know the movements. Kasi, for example, magtatayo
doon ng hydro, malaman mo rin kung anong phase na noong
permitting para enlightened iyong mga constituents nila.
All right.
From the proponents, rooftops, behind the meter.
Mike, do you have any presentation? Anything to share?
Do you have a PowerPoint?
MR. DE GUZMAN. Yeah.
THE CHAIRMAN (SEN. GATCHALIAN). To be honest about it,
at face value mukhang madali lang itong bill but when you go into the
nitty-gritty, napakahirap ho, ang daming mag-aaway, ang daming
kumokontra. Its easy to say one-stop shop but when you start
putting each provision, hirap ho.
Go ahead, Mike, you can use that.
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MR. DE GUZMAN. Okay.
So this is about a rooftop solar one. This is for a smaller scale,
not exactly utility scale but although it can be.
Next slide. So there are two main classes of solar installations for
a rooftop. One is below the 100-kilowatt mark, typically this falls
under net metering. So this is residential, commercial, light
commercial, anything less than about 400 solar panels falls under this.
And there is the one which is more than 100-kilowatt peak. Currently,
for installation of this size, the clients go for self-use because there is
no ready mechanism where they could export their excess power once
they reached that mark. The 100-kilowatt limit, to me, I think was an
arbitrary number they came up with back in 2009 when they didnt
know what to do with solar and that was a convenient number to have
maybe in grid impact study standpoint.
But if we look at it, the 100-kilowatt barrier, I think that is
something which could be lifted because it doesnt make sense that a
home has a 100-kilowatt limit to put in solar and also a Puregold
supermarket which probably needs 400-kilowatt and they have enough
roof, but because of the current setup of the law or the implementation
rules, it only favors the 100.
Next slide, please. So this is a sample of 100-kilowatt and below,
to the left, number of houses, small businesses. Then to the right, you
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have ice plants, huge manufacturing firms doing it. The one on the top
right was actually a feed-in tariff scheme. It was a 40-plus megawatt
built back in 2013. Actually, one of the earlier feed-in tariffs which got
FIT-1.
THE CHAIRMAN (SEN. GATCHALIAN). Where is that, Mike?
MS. DE GUZMAN. That was in Cavite Export Processing Zone.
THE CHAIRMAN (SEN. GATCHALIAN). And you need NCIP
certification for that?
MS. DE GUZMAN. Yeah, probably they have to get their COC.
From what I understand, yes, you need a clearance that they didnt
displace any indigenous people in an ecozone. So its one of thoseI
guess, if you have 456 years or something, there is probably some
signatures to share a bit, superfluous.
The one on the left is an ice plant which frankly runs 70 percent
on solar but they are self-use.
Next slide. So the challenges we find is permitting, for utility
scale, the problem is more acute, 455 signatures and counting for
putting of a solar power plant. Thankfully, for residential, light
commercial rooftop, there is still a bunch of signatures needed but is
mostly the time delay imposed by the distribution utility themselves.
They do their distribution impact study which could take three months,
could take one year to do their study. I think thats something which
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should be looked at because there might be a conflict of interest issue
because the distribution utility themselves which issues the study and
they could take as long as they want. There should be a time
prescription in conducting the study.
Also other distribution utilities, they dont charge a study or put a
study fee.
So those are some of the barriers we are seeing.
The one is the 100-kilowatt cap. To me, it is encountered to the
principle of the Philippines, the drive to adopt renewable energy
resources is putting a limit on how much solar you need. Its common
knowledge between the hours of 10 a.m. to 2 p.m., the grid needs
power, we turn on peaker plants and the 100-kilowatt cap is like tying
your hands behind your back. When you need the power the most, we
are limiting it to 100 kilowatts per meter.
And also the delays in doing the distribution impact study fees.
So can we have the next slide?
So this is the current timeline if you are, say, to install solar
panels in your home. We inform the utility, the utility will do their
distribution impact study fee or now they call it the CRECA, the
compatibility assessment for renewable power. It could take four
weeks, it could take four months. My own personal home took about
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nine months and counting but they finally approved it last week. It
takes time.
Then they will issue a yellow card to the city hall that youll be
installing a solar system that size, you have to do certain things and
you get to the city hall. The LGU will give you the certificate of
electrical inspection or your wiring permit. So thats typically one or
two weeks. Then you complete the installation, you show pictures to
the OBO, the building official or they inspect the home if it was done
safely. Then you get the yellow card signed and you give it back to
Meralco. Meralco will then schedule the change to the net meter then
you have your net meter.
Now, the net meter has some flaws like if you put solar and you
dont have the net meter yet, if you export power, that export is
counted as consumption. And the thing is it will take you three
months to one year to get the net meter. So if you put a lot of solar in
your home and outside of your house is exporting power, the
homeowner is punished for exporting that power. So we had some
cases where people put solar in their homes, they are outside the
house, the dog is using the aircon. Its silly but thats one of the
things we had to do because its exporting power.
So hopefully as a process gets faster, we wont have this
problem of excess power being punished against the consumer.
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So going back, after Meralco changes the meter, then they file
the COC to ERC, the homeowner pays 1,500 in managers check. And
about two or three weeks, then Meralco will start recording the export.
There are some cases that the home has been exporting more than
one megawatt hour of power in the past eight, 10 months but not a
single peso has been credited to the homeowner because of the delays
on ERC given the COC and the whole process.
So those are the things we are seeing happening now. It might
be a growing pains sort of thing, the process is slowly improving but
there is a lot of room for improvement.
Next slide. So just some suggestions from PSPA on how to
improve efficiency and the speed. One, make the process shorter. It
generally speaks of shortestthe quickest way is the shortest distance.
So if you have less signatures, less red tape, I think to move quicker.
Standardization of processes. A lot of LGUs, especially if you are
not familiar with solar, we have to teach them how the thing works, all
the safety protocols and all that. But that is something which I guess
improves the practice. But there should be like a standardized thing
for putting in solar and alsoI am questioning the conduction of the
distribution impact study because in my opinion its like a constructive
delay onto the project by putting such a long process and also levying
fees and putting in solar systems.
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In other countries, its the utility which are giving rebate to the
consumer when they put in solar. We have it the other way around. If
we were in Japan and we are exporting power, they will reward the
consumer with triple than the retail rate. Here, they are only paying
40 percent of value.
So maybe ... /jun
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MR. DE GUZMAN. So maybe these are some of the
incentives the government could look at or review at what rate is
being paid to the consumer when they export power especially when
the grid needs it the most because currently, if we export power, its
being bought at P3.80 per kilowatt-hour. My peak rate if I buy
power during peak times from Meralco will be about P7.50 so its
about double. And solar produces power always exclusively during
peak rate hours. So, thats something which I think ERC should
review because I dont think its equituous to count exported power
at blended generation charge. It does not make any sense
whatsoever. But I guess thats a different discussion altogether.
I think thats pretty much what we could suggest on what were
facing in the process now. We did about maybe 115 net meter
installations. Meralco did a total of 600 so I guess Ive a good idea on
whats happening in the market.
MS. CAPELLAN. Mike.
THE CHAIRMAN (SEN. GATCHALIAN). Go ahead, maam.
MS. CAPELLAN. Maybe just to add on the presentation, there
are two subcategories of the rooftop: the residential and the
commercial. And I think insofar as the residential installations are
concerned, Mike was very explicit, the PSPA position is that
homeowners who have invested into the solar should really be given
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the value so that they can optimize the savings from what they have
put on the roof.
THE CHAIRMAN (SEN. GATCHALIAN). When you say value,
its
MS. CAPELLAN. Theyre being paid. Thats the position of the
residential group.
THE CHAIRMAN (SEN. GATCHALIAN). The exporting price.
MS. CAPELLAN. The export price of the residential sector.
There has to be a clear
THE CHAIRMAN (SEN. GATCHALIAN). Generation rate, no.
MS. CAPELLAN. Right now, its generation rate, yes.
THE CHAIRMAN (SEN. GATCHALIAN). Its generation rate.
MS. CAPELLAN. Yes. Generation rate is the payment when
actually most of the solar roof residential are dispatching at the
daytime which is at peak. Thats the difference between the
residentialthey are not there so the consumption is low and most of
theI would say, in the data that was given by our rooftop installer,
practically 80 percent are exported. So, therefore, its really on peak
rate. And there has to be some kind of a pricing methodology that
would recognize that retail dispatch.
On the commercial installation, Mr. Chair, you were mentioning
that the service contract is really a redundant permit. In the rooftop
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sector, if it is own use, there is no service contract. We do not need to
even apply to ERC because it is own use of the factories and the malls.
The problem is, there is a cap. There is a 100-kilowatt cap. Therefore,
if in Megamall or in Gaisano Mall or in other malls, when the solar
rooftop developers install a one-megawatt, they consume it and then
they have a small export, that is not counted because there is a cap of
100.
THE CHAIRMAN (SEN. GATCHALIAN). So, you mean kung
above 100the cutoff is 100 kilowatt, no?
MS. CAPELLAN. For the distribution utility company to pay you
for the export because its under a net metering.
THE CHAIRMAN (SEN. GATCHALIAN). For own use?
MS. CAPELLAN. For own use
THE CHAIRMAN (SEN. GATCHALIAN). For example, you
have a 100-megawatt own use.
MS. CAPELLAN. What do you mean?
THE CHAIRMAN (SEN. GATCHALIAN). Im sorry. One
megawatt own use.
MS. CAPELLAN. Yes.
THE CHAIRMAN (SEN. GATCHALIAN). You need a service
contract?
MS. CAPELLAN. No.
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THE CHAIRMAN (SEN. GATCHALIAN). Halimbawa, kung mga
shopping mall, ano. The shopping mall, they consume three
MS. CAPELLAN. Yes, yes, yes.
THE CHAIRMAN (SEN. GATCHALIAN). So, they need service
contract?
MS. CAPELLAN. Yes, as own use.
THE CHAIRMAN (SEN. GATCHALIAN). Own use, ha, own
use.
MS. CAPELLAN. Yes.
THE CHAIRMAN (SEN. GATCHALIAN). I dont export
anything. I just use it myself.
MS. CAPELLAN. Yes. Its an own use service contract.
THE CHAIRMAN (SEN. GATCHALIAN). Own use service
contract.
MS. CAPELLAN. Yes, yes. Its a different kind of service
contract.
MR. CASAS. Its under self-generation.
MS. CAPELLAN. Yes. Self-generation service. Its a different
permitting process.
THE CHAIRMAN (SEN. GATCHALIAN). Okay. But
nevertheless, thats still a service contract.
MS. CAPELLAN. Yes, yes, yes.
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The problem there, the challenge there is that most of these
factories and malls cannot sell to the grid excess of what they produce.
So, they do not get any value for thatfor that price. And that
happens because you cannot really control your generation 24/7.
MR. DE GUZMAN. Apparently, when we do a big project, we
put 200-kilowatt or 300-kilowatt, we actually have to put that
prevents export. So, instead of selling the power, they basically just
pour down the drain. They rate the output of the plan. For example,
in a big factory and its, lets say, Holy Week or Good Friday, the sun is
very strong, pinapatay lang iyong solar because no ones gonna buy it,
and the current framework of the law is if its over 100 kilowatt, you
cant sell it back. So, I think that is something which should be
changed because its putting one hand behind their backs.
THE CHAIRMAN (SEN. GATCHALIAN). One hundred kilowatt
and above for own use.
MR. DE GUZMAN. And if you have excess, you cant sell it.
THE CHAIRMAN (SEN. GATCHALIAN). Ah, you cannot sell it.
MR. DE GUZMAN. Yes. We actually shut it down with this, to
turn off the system.
THE CHAIRMAN (SEN. GATCHALIAN). If your permit is for
own use, anything in excess of 100, you cannot sell it?
MR. DE GUZMAN. You cannot sell it.
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THE CHAIRMAN (SEN. GATCHALIAN). So, you have to apply
a service contract for that matter?
MR. DE GUZMAN. Yeah. And as we can see, the service
contract and all that is pretty cranky. Its only when your plant is
really big
THE CHAIRMAN (SEN. GATCHALIAN). So, for example, I
have a house and I have a 200 kilowatt solar panel and I only consume
100 and I want to sell the other 100. I need a service contract,
ganoon ba iyon?
MS. CAPELLAN. Yes, sir. You need a service contract.
THE CHAIRMAN (SEN. GATCHALIAN). Kahit na 200 kilowatt
lang ako?
MS. CAPELLAN. Yes because the cap is at 100.
THE CHAIRMAN (SEN. GATCHALIAN). Oo nga. Pero 200 is a
smallbahay lang iyan.
MS. CAPELLAN. Two hundred watts, sir, iyon, huh?
THE CHAIRMAN (SEN. GATCHALIAN). Ah, sorry, 200
kilowatt pala, sorry.
MR. DE GUZMAN. Thats very big. Thats very big.
THE CHAIRMAN (SEN. GATCHALIAN). Two hundred kilowatt
pero ibebenta ko, kailangan ko pa ng service contract doon?
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MR. DE GUZMAN. Oo like the users who actually get penalized
by this scheme are schools. They have 230 active days in a year. The
best is Saturday, Sunday, summer break, wala. So, like, for example,
if you take De La Salle Zobel, for example, we could put 300 kilowatt
solar on the roof. However, Meralco will only buy back the export if
the total installed capacity is 100 kilowatts although iyong bubong nila
kaya ng 300.
THE CHAIRMAN (SEN. GATCHALIAN). What do you propose
to increase
MR. DE GUZMAN. Yeah, to have increase and take out the 100
kilowatt cap. So, we researched
THE CHAIRMAN (SEN. GATCHALIAN). Wala nang cap?
MR. DE GUZMAN. Wala na iyong cap. The cap doesnt make
sense because home, 100 kilowatt cap. Thats your maximum.
Puregold Supermarket, 100 kilowatt rin iyong maximum. No rhyme or
reason or no relation to what is actually that facility is using. Other
countries, they based it on whatever is the connected load, aircons,
lights, et cetera, multiply it by a value of four. Dont exceed that.
Thats already fair thats safe, it prevents people from abusing the
system. But putting arbitrary 100 kilowatt cap regardless of the user,
thats not really a well-thought-out implementing rule because its no
regard kung bahay or mall. Its the same cap. It doesnt make sense.
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THE CHAIRMAN (SEN. GATCHALIAN). Okay. Anything else
from the ano?
MR. CASAS. Mr. Chairman.
MR. DE GUZMAN. review the implementation nga of the
Renewable Energies Act of 2008 has been in the bookstore for quite
some time but the buyback is based onI think the most minimum
defensible rate to buy back at blended generation charge which is not
analogous of what is actually happening because if Meralco is going to
buy power in the middle of the day, 10:00 a.m. to 2:00 p.m., I am
sure its not P3.50. Its gonna be a lot higher. But they buy that
excess power from their consumer, theyll sell it to your next door
neighbor for P12.00. I guess theres no way to really defend it.
MR. CASAS. Mr. Chairman, may I ask a question?
THE CHAIRMAN (SEN. GATCHALIAN). Go ahead.
MR. CASAS. Which is also affectingwhat ifjust a what ifif
the DU enters into the trade of providing all the products and services
that the rooftop providers and if they do, it will affect the industries
and maybe, Mike, let me ask a question what if the DU provides all the
services that youre providing, how will it affect the industry players
like you?
MR. DE GUZMAN. One thing, were for competition, but were
asking for fair competition. Once the DU enters into the solar sphere
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and they themselves are going to do that distribution impact study, I
think theres a major conflict of interest issue there because for us to
get the net meter, we have to work with the DU, and its really up to
them when theyre gonna issue the distribution impact study. Now, if
the DU goes into solar generation or putting in solar power and they
themselves do the study . . . (nam)
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MR. DE GUZMAN. do the study, sa palagay ko there will be
like two different roads.
THE CHAIRMAN (SEN. GATCHALIAN). I know some of the
electric coops are also putting solar panels in missionary areas.
MS. CAPELLAN. Thats different, sir, thats the--
THE CHAIRMAN (SEN. GATCHALIAN). Thats part of their
missionary and social component.
MS. CAPELLAN. Yes, sir. Thats under the Rural Electrification
Program of the DOE.
THE CHAIRMAN (SEN. GATCHALIAN). Yes, thats Rural
Electrification Program.
MR. DE GUZMAN. But for a DU, for example, saykasi ano
Meralco isone of this division called M-Spectrum, basically Meralcos
solar group. So they could enter a mall, Okay, well put solar there
and well do the DIS. Its like, come on, they are the ones who do the
distribution impact study. Like if I were to connect to the mall, they
will charge me a DIS which might be hundred--P200,000. But if its
their own group putting it in, I dont think theres any transparency on
how they do their studies.
THE CHAIRMAN (SEN. GATCHALIAN). Well take a look at
the anti-competitive angle of that. Lets see whether they violated any
anti-competitive provisions of EPIRA.
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MS. CAPELLAN. Mr. Chair, the Philippine Solar Power Alliance
sent a position paper to ERC asking for clarity in this case of how
would ERC rule on this particular incident where a distribution utility
company enters into the market. Is there a China wall between the
two businesses that they have that they are operating? We havent
had any response from ERC.
THE CHAIRMAN (SEN. GATCHALIAN). Well, from what I
understand its just like Meralco owning MGen which is their coal-fired
generation company. I think theres only a limit as to how much
generation they can produce. Whether solar form is part of that
limitation in terms of capacity, I have to check that. But I would
assume it forms part. Meralco can own generating plants but up to 25
percent of the total capacity of the nation. And, in fact, they own
generation companies.
MS. CAPELLAN. I think, Mr. Chair, the difference is that in the
case of the solar rooftop, they are a determining factor of whether a
solar rooftop can connect or not. The decision rests solely on the DU
of whether a solar rooftop can connect.
THE CHAIRMAN (SEN. GATCHALIAN). Uh-huh.
MS. CAPELLAN. So that is what the DIS is for, they determine
that.
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THE CHAIRMAN (SEN. GATCHALIAN). Right, right, I get
your point. Please furnish us your--
MR. DE GUZMAN. [Off-mike] They become monopoly of power.
THE CHAIRMAN (SEN. GATCHALIAN). Yes, its an anti-
competitive factor.
Please furnish us with that position paper, well look at that.
Although its not part of this discussion, but well look at that also.
Anything else from the rooftop group kung mayroon tayong mga
comments? If not, I think we have exhausted all of our resource
persons for this morning unless anyone wants to share.
Sige po, Maam Paredes.
MS. PAREDES. Kasi mga LGUs din po natin, Senator, malaki
rin ang expense nila sa utilities nila. Baka may public-private
partnerships tayong maano with the LGUs for the solar rooftops, mga
ganoon po. Sa mga kapitolyo nila or ano para po to--for a more
efficient ano and to lower the cost. Iko-connect ko lang po iyong early
na sinabi ko ika-qualify ko lang po, provinces po pati po iyong city
mayors. Kasi iyong mga municipalities naman po under the highly
urbanized cities, sila din naman po iyon. Baka po may taga-LCP na
sitahin po ako.
THE CHAIRMAN (SEN. GATCHALIAN). Kung baga highly
urbanized separate talaga sila, separate. But the component and the
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independent component kasama sa local governmentkasama sa
province.
MS. PAREDES. Senator, may ibang mga local permits lang din
na ini-issue din ng LGUs pero ano na lang po ito iyong after the fact na
na-established na sila like the mga usual lang na health, sanitation,
electrical permits, building permits, construction permits. Iyong mga
ganoon lang naman po. But Im surewe will also look at the local
ordinances that they have passed with regard to renewable energy,
Senator.
THE CHAIRMAN (SEN. GATCHALIAN). I think doon sa mga
ganyan, mgathe other permits, it can be subdivided into the other
categories, iyong predevelopment and then the development stage and
the construction stage. I think one of the most difficult is the
predevelopment stage. Doon pa lang nagkakaroon na tayo ng
malaking problema. And thats where the online system will help solve
and improve the process flow of the predevelopment stage.
All right. Anything else from anyone?
Kung wala naman po, let me just recap before we end. This is
actually the final hearing for the Energy One Stop Shop bill. And just
to recap, we are asking the Department of Energy to submit to us all
the service contracts for solar and windjust a summary of those,
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generic service contract for solar and wind. We want to also look at the
provisions.
And a position paper from ULAP regarding our proposal to
consolidate all the hearings into one hearing in the province levelsa
cities in the city level naman. So give us a position paper on that.
Please ask your legal department also to comment because that will
definitely have some legal implications.
And the others ones for the developers, again, let me just
remind the developers to submit to us your position paper. Please read
the bill. The bill is very important because kayo po iyong end users
nitong bill na ito. We want the developers to be very, kung baga,
comfortable and to be very knowledgeable with this bill because at the
end you will be the one using the bill. So if you have any more
improvements, any more comments, please submit to us in a position
paper. Include in your position paper the process flow. Some of the
developers havent sent their process flow yet, their flow chart, their
prerequisites, their documentation parainiisa-isa ho kasi namin per
technology so we will see what are the nuisances per technology. So
please submit to us those hopefully by Thursday, 5 p.m. But at the
same time, we will have our TWG on Thursday, 9 a.m. Typically po,
ini-invite ho namin dito government stakeholders to comment on the
bill but everyone is welcome to join us. All the private proponents are
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welcome to join us. Since 9 oclock pala ito on Thursday, please
submit to us your position paper tomorrow pala 5 p.m. so we can
process that as soon as possible and before the TWG.
All right. Any last words? If not, thank you again for joining us
and, hopefully, ho like I said kanina on face value madali lang itong bill
but when we go into the nitty-gritty of it, napakahirap ho, ang daming
mga details. So we will need the cooperation of everyone.
Thank you very much.
Meeting is adjourned.
[THE HEARING WAS ADJOURNED AT 11:13 A.M.] /rjo
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Republic of the Philippines

Congress of the Philippines

Date : Tuesday, February 21, 2017

Time : 9:00 a.m.

Venue : Committee Room No. 2

Agenda : SENATE BILL NO. 1286 - AN ACT ESTABLISHING

HON. WIN GATCHALIAN - Chairman, Committee on Energy

Ms. Lisa Go - Chief Investment Specialist, Investment

Atty. Poch Ambrosio - Corporate Secretary, WEDAP

Atty. Grace Ann C. Salesa - Committee Secretary, Committee on

(For complete list, please see attached Attendance Sheet.) /cfd

AT 9:34 A.M., HON. WIN GATCHALIAN,

THE CHAIRMAN (SEN. GATCHALIAN). Good morning

presentation of the other proponents. And then hopefully pagdating ho

an offshoot of the first hearing, we intentionally had a second hearing

proponents, malaki po ang role ng NCIP kaya we decided to have

another hearing, hopefully pumunta ho sila. Nag-confirm ho sila but

hopefully pumunta, dumating ho sila mamaya.

Joei to again recognize our resource persons for this morning.

the Department of Interior and Local Government (DILG), representing

Authorities of the Philippines (ULAP), Ms. Sandra Paredes; from First

NatGas Power Corporation, Mr. Gerard Cajucom; from PhilHydro

Association, Mr. Theo Sunico; from Wind Energy Developers

Association, Ms. Rosario Venturina; from the Confederation of Solar

Developers of the Philippines, Mr. Reynaldo Casas; from PSPA, Mr.

THE CHAIRMAN (SEN. GATCHALIAN). All right.

Thank you, Atty. Joei.

MS. GO. Thank you, Senator.

THE CHAIRMAN (SEN. GATCHALIAN). You have the floor,

MS. GO. Yes, actually, we just prepared iyong brief overview of

the Energy Virtual One Shared System to give everybody an overview

of what EVOSS is all about. This is a collaboration between USAID and

up with a systemized system to be able to track energy applications.

As mentioned, previously EVOSS emanated from the concept of

the one-stop facilitation and monitoring center of the Mindanao

Development Authority. And we have expanded this to include energy

projects nationwide because MinDA only focus on renewable projects in

Mindanao. So it will involve more agencies at the national level and

this is supported by USAIDs project.

So the concept of Energy Virtual One Shared System, its a web-

based monitoring system to be able to track energy applications and

all the information will be shared among agencies involved in the

show that we are one in the entire bureaucracy facilitating business in

the energy sector.

Basically, the objective is to streamline business processes,

create transparency and accountability especially on the agencies

involved and most importantly to cut down transaction costs, and

eventually to come up with a harmonized form and process across the

When we conceptualized EVOSS, we identify several things to do.

Eventually, we just wanted to be able to consolidate and understand

the process of each agency and how it relates to the final

implementation of an energy project.

Eventually, we came up and this were used as input in coming

up with a system. So we were able to understand the process of each

agency and currently were pilot-testing the EVOSS in DOE and

hopefully we would like to have other agencies on board to see how we

could collaborate and see how it works with other agencies.

So initially, activities were involved wherein gathering of data to

be able to have them on board. So right now, I guess what the,

Honorable Chair, has contributed significantly is in the

institutionalization of EVOSS across the agencies and this was part of

what we intended to do. Initially we were working on coming up with

a memorandum of agreement or executive order so I guess this is a