Layug quitting post as NREB chairman

By Myrna Velasco – April 9, 2018, 2:40 PM
from Manila Bulletin

The chairman of the National Renewable Energy Board (NREB), lawyer Jose M. Layug, has reportedly submitted his resignation to Energy Secretary Alfonso G. Cusi effective April 30 this year, citing “health reasons” as his main justification for quitting the job.

NREB chair Jose M. Layug Jr. (Photo courtesy of punolaw.com)

NREB chair Jose M. Layug Jr. (Photo courtesy of punolaw.com)

According to highly placed sources, “it would be of highest probability that his resignation will be accepted.” Following such development, there had been no hints yet as to who will be his replacement.

Layug first served as Department of Energy (DOE) undersecretary during the tenure of former Energy Secretary Jose Rene D. Almendras of the Aquino administration.

He has been resurrected into the sector as NREB chairman under the current administration while also working as a senior partner to Puno & Puno law firm; and is concurrently a member of the transition committee of the market operator of the Wholesale Electricity Spot Market.

His appointment at NREB became effective in December 2016, hence, that could sum up more than a year of service in this job that he assumed in the sector. On this stint, the NREB Board worked on the Renewable Portfolio Standards (RPS) as the new incentive scheme for renewable energy investments; and has been finalizing the Green Energy Option Program (GEOP) as well as the Renewable Energy Market (REM) to provide broader policy frameworks for the industry.

NREB is a body that frames policies for the RE sector and recommends such to the Energy Secretary for his approval, so these edicts can eventually be enforced in the industry.

At his return, the first controversy Layug was embroiled in was seeking the approval of the Energy Regulatory Commission (ERC) on the feed-in-tariff (FIT) incentives of some solar projects of which completion were of questionable proportions.

In fact, prior to the kick-off of the RPS rules’ enforcement, solar developers have been prodding Cusi to make public and give closure to the “alleged irregularities” that supposedly marred the FIT race in the country’s second wave of solar power installations capped on March 15, 2016 – at least by publishing the outcome of the result of investigation that the DOE had undertaken on this case.

Philippine Solar Power Alliance (PSPA) President Tetchi Cruz-Capellan noted that the “publication of the probe results” would be the only logical step that the government can do to finally give investors closure on reports of rigged award of FIT perks to some projects.

“There are things that we have been asking from the DOE. Number one, put a closure on the petition of the two companies relative to the FIT incentives award – on the allegations of cheating.,” she stressed.

The five-man DOE team of undersecretaries and assistant secretaries who scrutinized the FIT endorsements and awards in the second wave solar development race, had not given any conclusion on whether or not “cheating” or rigging had been done in the grant of the solar subsidy.

The recommendation was just to refer the matter to the DOE’s legal department – a step perceived to be “very weak” and lacking traction if the intent is to really rectify policy infirmities in the RE sector.

Nevertheless, the DOE investigation team set sharp focus on the observation of the Energy Regulatory Commission (ERC) that two FIT-endorsed projects may have not reached the required level of completion at the prescribed cut-off date for the FIT race.

“The Committee takes into consideration the findings of the ERC communicated to the Honorable Secretary in a letter dated November 8, 2016; showing at least two projects that may have been overlooked in awarding of COE-FIT (certificate of endorsement for FIT) eligibility,” the DOE report stated.

The ERC, in particular, has conveyed to the energy department that “two of the solar power plants have only reached 65-percent and 48-percent of their dependable capacities – namely Enfinity Phils Renewable Resources Inc. and Solar Powered Agri Rural Communities Corp.”

Capellan added the industry’s plea would be for that investigation result “to be published…we just want DOE to put a closure to the issue, whether the decision is favorable or not favorable to the industry.”

She said the solar sector is now ready for a head-to-head market competition with all other technologies in the energy sector – even on the competitive selection process (CSP) of supply procurement of the distribution utilities.

In reaching this phase of market competition, Capellan proposed that a technology agnostic auction on bilateral contracting of the DUs be enforced; and all capacity bidders must also make sure that the price offers shall be anchored on an “all-in cost paradigm.” (MMV)

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