Energy projects to get perks in 2012 IPP

MANILA, Philippines -  Energy projects that were dropped in the initial list of the Board of Investments (BOI) of business projects that will be given tax perks this year have been re-included in the final draft submitted for approval by President Aquino.

This was relayed to Philippine Chamber of Commerce and Industry (PCCI) president Miguel B. Varela by BOI chief and trade undersecretary Adrian Cristobal Jr. in a reply to a letter sent by Varela asking for the inclusion of energy projects, particularly for baseload power plants.

Cristobal wrote: “Please be informed that after due consideration, the Board has decided to include energy in the final draft of the IPP that was submitted to the Office of the President on May 4, 2012.”

Cristobal said that the proposed IPP coverage include “exploration, development and utilization of energy resources adopting environment- friendly technologies.”

The proposed list, to be finally given incentives, woul have to get the green light from the President, Cristobal pointed out.

Asked by PCCI energy chairman and vice president Jose Alejandro on the impact of the exclusion of power projects from tax holiday and other perks, a representative of the Philippine Independent Power Producers (PIPP) association said builders of new power plants would have to pass on the lost perks to consumers.

With a total of 2,000 megawatts that the Luzon grid needs to put on stream in the next two years, the lost tax perks would translate to rate increases of 27 centavos per kilowatt/hour. This will mean P4.2 billion in additional charges each year.