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  • By : Delmar O. CariƱo
  • Jul 02, 2020

Right of first refusal

We are not throwing the towel as yet on our long embedded plea that the Department of Energy (DOE) would review its policy on the issuance of renewable energy service contracts (RESCs) to provide homegrown countryside electric cooperatives (ECs) the opportunity to engage in power generation.

It took the ZAK Green Energy, Inc. to remind us anew of this undying struggle when it appeared before the Board of Directors (BOD) recently to offer the sale of an RESC covering the rivers of Naguey, Atok for a whooping P23 million. ZAC, through lawyer Alexander Bangsoy, said the RESC promises potentials for a seven megawatt hydro facility. Well, that's not bad.

The BOD said it will study the offer but what tickled our imagination is what Bangsoy said - that the energy developer decided to first broach such idea of a sale to BENECO following the principle or right of first refusal. He said that in case the electric cooperative will be lukewarm, then the company will start shopping for other potential investors.

Well said. That's what BENECO had been fighting for, thanks to former GM Gerardo Verzosa whose bare knuckles style had taken the DOE and other regulatory agencies to task for unfair polices, the issue on RESC included. The Cordillera region, North Luzon's watershed cradle, is host to vast tributaries that promises potentials for hydropower development. Its just frustrating to find out that such landscape has already been dotted with RESCs issued to big time private capitalists.

Not that we hate private investors. But these moneyed players do not have the luxury of the appetite to engage in renewable energy production. There are other stakeholders who are local, foremost are the electric cooperatives whose distribution network encompasses flowing rivers, geothermal steams, wind floats and solar rays. Why not the ECs fist? After all, there are the party that directly interfaces with the communities that host the natural resources.

Before the DOE issues an RESC to an interested power development applicant, it must first knock on the doors of the distribution utility in the area concerned and just convey a simple matter - "We have here a developer who has applied for an RESC over an area that falls within your franchise. Please study the details of the proposal and inform us if you are interested and able to develop the energy source before we give due course to the application."

This is why it is called the right of first refusal. If the EC could not match the deal, then the DOE can procced to evaluate the outsider's application. At least, it gave the EC the chance to say its piece.

Obviously though, this cry is not part of the DOE's policy on the issuance of RESCs. In fact, a perusal of its various department circulars would nowhere find any statement saying that before any RESC application will be considered, the affected EC must first be notified, consulted and asked if it would be interested for the project. That's not the case though and the ECs find this as a gross example of unfair competition in an industry the Electric Power Industry Reform Act or EPIRA has long declared as deregulated.

The indigenous peoples (IPs) and indigenous cultural communities (ICCs) of Kabayan took note of this rather one sided policy of the DOE. Knowing fully well their rights under the Indigenous Peoples Rights Act (IPRA), they removed pretences of respect for any RESC issued to any big layer over their waters and chorused that as IPS and IPPs, they have the right from God to decide what should be best for their environment.

The DOE must come to the ground. RESCs have an impact on the lives of people who would scorn them should their surroundings be disturbed by companies whom they consider as aliens to their shores. The same sentiment envelopes the ECs. And the right of first refusal must come to their aid.

Perhaps the DOE highly suspects the bankability of the ECs as power generators. But there are ECs in the country that have proven their mettle in the business of energy production. They may not have the war chest the private investor has but they are trying to exhaust all available means to deck their cards well.

There's nothing detestable if the ECs would be given the right of first refusal.