BAGUIO CITY – The National Electrification (NEA) commended the Benguet electric cooperative (BENECO) relative to the policy of the energy department on the issue of hydro power service contracts.
Earlier, BENECO conveyed its comments or views o energy Secretary Alfonso G. Cusi on the policies and procedures of the agency on the issuance of hydro power service contracts wherein it underscored it stated that electric cooperatives must be given the option to match whatever proposals that re submitted by private developers to exploit, utilize and develop the resources of the indigenous peoples (IPs) over their ancestral domain to give a chance to the IPs to decide on which proposal will be advantageous to them.
Subsequently, NEA Administrator wrote Secretary Cusi stating his support to the views submitted by ENECO wherein he argued that to successfully achieve the agency’s 7-point electrification agenda, NEA intends to review or introduce measures necessarily carried out for availability of power supply of electric cooperatives and review or introduce measures required towards power rate reduction from generation to transmission, distribution and supply costing.
Masongsong added it is best to allow the electric cooperatives to challenge the holders of hydro service contracts by allowing the cooperatives to provide alternative projects for the IPs within its franchise area considering that the existing policy of the energy department in awarding service contracts is on a first come, first serve basis and no other interested party is allowed to challenge the holder of the contract once awarded, never the less, the cooperatives are no precluded from applying for a service on the same area due to the possibility of contract cancellation in the event that the holder or awardee fails to accomplish or provide the documentary evidence to prove the implementation of development in the said area within the specified period.
More importantly, he underscored that ECs should be given the opportunity to compete and match or provide more financial benefits and incentives vis-à-vis those given by the existing holders of renewable energy service contract to the host communities and for the ECs to provide cheaper rates to all member-consumer-owners within the coverage area once debt is full paid in their bid to develop hydro power plants.
The NEA administrator agreed and recommended that before a service contract be issued covering resources hosted by IPs, a free prior and informed consent process (FPIC) pursuant to the provisions of Republic Act (8371 or the Indigenous Peoples rights Act (IPRA) must first be conducted to give due respect and protect the interest of the affected IPs.
Masongsong further recommended that the minimum proposed benefits be included in the terms of reference wherein the bidder has the option to offer or indicate additional benefits, provided that the cost of benefits will not result to higher generation rates.
In the case of an EC which will develop its own hydro plant like BENECO, he pointed that it can apply with the Energy Regulatory Commission (ERC) as a self-generation facility under ERC Resolution No. 16, series of 2014 where requirements are less stringent than the normal procedures.
Despite the issuance of a service contract to a third party, the NEA official asserted that the EC in the area must be given the opportunity to conduct dialogues and consultations with the IPs on the bid of the EC to develop hydro power plants in the IP dominated areas for them to get the most beneficial benefits due them.
He proposed that the ECs, notwithstanding the issuance of a service contract to a third party, must be given the widest latitude to listen, entertain, choose and negotiate for better terms from other parties interested to develop the community’s energy resources.
In a resolution passed by the BENECO Board of directors, the EC expressed its sincerest gratitude to Administrator Masongsong for his comments and recommendations that supported its position in providing an opportunity for ECs to match the proposals of hydro developers in IP dominated areas for the IPs to have a chance to appreciate the best offer beneficial to the development of their ancestral domain.