THE Department of Energy (DoE) will not issue certifications for energy projects of national significance (EPNS) if an applicant has no power supply agreement (PSA) in place, officials said.
“What we agreed on in December is that we will follow Undersecretary [Jesus Cristino P. Posadas]’s instruction not to issue an EPNS certification without a PSA,” DoE Undersecretary William Felix B. Fuentebella told reporters.
A PSA is typically a crticial milestone for power projects, signed before construction of a power plant starts in order to reassure banks that the plant will have ready buyers for its output.
A certification that a project is nationally is stipulated in Section 5 (a) of Executive Order No. 30 s. 2017, which intends to establish a simplified approval process and harmonize the rules and regulations of all government agencies involved in the permitting process.
EO 30 was signed by the President in June 2017, while the Energy department issued the implementing rules and regulations in April 2018. The law created the Energy Investment Coordinating Council, which came out with the guidelines on how energy-related projects can qualify.
“If the issue is for transmission or distribution, you will be given an EPNS,” he added.
“But if you use the EPNS to get your PSA, the answer will be ‘no’.”
He added that some project proponents have been using the EPNS certification to improve their chances of obtaining contracts and PSAs.
During the pre-development phase, the certificate entitles project proponents to all the rights and privileges provided for under EO 30, including action on applications within 30 working days.
A certified project will also enjoy presumption of prior approval, that is, it is presumed to have complied with the requirements and permits from other government permitting agencies.
It will be deemed approved if no action is taken five days after the lapse of the 30 working-day period for processing the application.
Mr. Fuentebella said there have been questions raised about the issuance of a certificate of EPNS to some power developers even if they did not have power supply contracts.
Asked about which project prompted the stricter certification process, he said: “Atimonan was the trigger.”
He was referring to Atimonan One Energy, Inc. (A1E), which is developing a 1,200-megawatt (MW) coal-fired power plant in Quezon.
The Energy Regulatory Commission (ERC) has yet to act on A1E’s PSAs.
Mario C. Marasigan, director of the DoE’s Electric Power Industry Management Bureau, said the certificate of EPNS is meant to facilitate licenses, clearances and permits.
“So it’s not supposed to develop the investment. The investment should be there already,” he said.
“But to avoid delay, EPNS will be issued. So if your intention is to attract more investment for the project, EPNS will not work. If you have a problem with the local government, then EPNS will be useful,” he said. — Victor V. Saulon

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