Bicam approves renewable energy bill

By Michael Lim Ubac
Philippine Daily Inquirer
First Posted 21:03:00 10/07/2008

MANILA, Philippines — The bicameral conference committee adopted on Tuesday the renewable energy bill, which aims to reduce the country’s dependence on imported oil and thus help shield Filipinos from price fluctuations in the global market.

Principally authored by Senators Edgardo Angara and Juan Miguel Zubiri in the Senate, and Representatives Juan Miguel Arroyo and Luis Villafuerte in the House, the bill supports the development of renewable energy (RE) sources such as hydro, wind, sun, biomass and ethanol over crude and other petroleum products.

The bill seeks to encourage local entrepreneurs to go into the development of the country’s vast alternative energy resources through a package of fiscal and non-fiscal incentives, and help decrease dependence on imported fuel.

Both panels of the Senate and House of Representatives crafted a compromise version of the bill, certified urgent by President Gloria Macapagal-Arroyo, after more than five hours of deliberation at the Sofitel Hotel in Pasay City.

Angara and Representative Arroyo said the final copy of the bill would be sent to both houses for ratification before the adjournment of Congress on Wednesday.

The House approved the bill in June, while the Senate passed it on third and final reading in late September.

To show government’s aggressiveness in tapping alternative energy resources, the bill, if signed into law by President Arroyo, will give renewable energy users and developers tax-free privileges on the importation of equipment and even a seven-year income tax holiday.
It would take about two years, and billions of pesos, to put up renewable energy plants and facilities, said Zubiri after the bicameral meeting.

So far, 12 companies have been “waiting in the wings” and willing to spend P50 billion, Zubiri said. He added that the country can produce an initial output of 100-200 megawatts of clean energy for the next two years.

“But in the long run, power will become cheaper because we don’t need to import [so much] oil,” he said.

Angara said the proposed measure would foster sustainable growth, energy independence and economic security for the country, saying “renewable energy use can save the country valuable foreign exchange of as much as $3.6 billion or almost P200 billion in fuel purchases.”

“Every 600-million-kilowatt-hour of RE generation saves one million barrels of oil. The Philippines could avoid having to buy more than 100 million barrels of oil by developing 2,500 megawatts of RE-based [energy] by 2014,” said Angara.

The bill calls for the massive utilization of renewable energy sources that are abundant in the country but remain untapped, so far, due to lack of funding and encouragement from the national government.

Zubiri said the measure would begin the process of phasing out harmful coal-fired power plants and bunker-fuel plants that “are polluting [the environment] and causing greenhouse gases and climate change…At the same time, it will lead to lower power prices because the sale of RE to the consumers is value-added tax-free.”

He said homeowners who would tap solar power for their electricity needs under the metering system would be paid for energy they would produce.

“They will have a discount. At the end of the month, Meralco [Manila Electric Company], for example, will check how much they produced energy-wise, how much they consumed and fed to the energy grid. Meralco will deduct that from the total cost. Consumers can even be repaid by Meralco, or they can now be given a discount, but definitely, they will be getting a discount for the electricity charges.”

He said the measure would benefit the poor directly because host-communities of renewable energy would be given 100 kWh in “direct discount” for their electricity bills, plus “very, very minimal transmission and tolling charge.”

“This is the best package of incentive to any developer,” he said, disclosing other fiscal and non-fiscal incentives, to wit — VAT-free for manufacture, importation and sale of renewable energy equipment, depreciation loss, net operating cost carry over, among others.


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