500mw service contract faces cancellation

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KIBUNGAN, Benguet  – A local renewable energy corporation petitioned the energy department to cancel the renewable energy service contract that it issued to the controversial Coheco Badeo Corporation (CBC), the proponent of the ambitious 500-megawatt pump storage hydro power plant in barangay Badeo, because it allegedly overlapped the earlier service contract it issued based on recent findings by the environment department.

In his letter to DOE Luzon field office director Engr. Reynaldo V. Liganor, lawyer Jingboy M. Atonen, Director for Legal and Government Relations Officer of the Cordillera Hydroelectric Power Corporation (COHECO), the operator of the proposed 60-megawatt run-of-river minihydro power plant in Kapangan and Kibungan, recommended that an immediate investigation why a service contract was issued to CBC covering and overlapping the earlier service contract of COHECO, particularly its exclusive contract area and the imposition of the appropriate administrative penalties, if warranted, or outrightly cancel the contract granted to CBC because it overlapped the service contract it earlier granted to COHECO.

“COHECO humbly believes that the energy department has the legal duty and the moral obligation to enforce the provisions of the service contract against all subsequent overlapping applications like that of the CBC, otherwise, the integrity and validity of all prior permits and existing service contracts would be greatly compromised and in constant danger of being encroached upon by any enterprising entity like CBC,” Atonen stressed in his letter to the DOE.

On October 31, 2013, the energy department issued to COHECO a renewable energy service contract that provided that ‘the renewable energy developer is appointed and constituted by the department as the party having the exclusive right to explore, develop and utilize the hydro power resources within the contract area as defined.”

Further, the department shall have the right to require performance of any or all obligations of the developer under the contract.

However, COHECO learned that the service contract issued by the energy department to CBC overlaps the contract area exclusively granted to the earlier grantee under its service contract that was issued earlier than CBC’s.

Atonen also informed the energy department that CBC’s application for special land use permit with the environment department also overlaps COHECO’s approved forest land use agreement (FLAG).

Moreover, COHECO wrote a letter to the Benguet Provincial Environment and Natural Resources Office (PENRO) that it is not amenable to any proposal for co-existence with CBC considering that CBC’s proposed project is fundamentally inimical to the 60-megawatt hydro project of COHECO.

He claimed that most of the facilities of COHECO’s 60-megawatt project are located within the area overlapped by CBC and that the company already stated its clear position against the overlapping special land use permit application of CBC.

Based from the PENRO’s validation report, Atonen asserted that it is clear that CBC’s service contract illegally overlapped the earlier issued service contract of COHECO, specifically its assigned contract area.

According to him, it is worthy to emphasize that the area overlapped by CBC’s service contract is the most critical area for COHECO because it is where most of its essential generation facilities are located.

The contract area of COHECO was specifically defined under the service contract as the area located along the Amburayan river in the Province of Benguet and more particularly described in pertinent documents specifying the point of water diversion and the proposed location of the generation facilities, exclusively reserved by the energy department for the renewable energy developer, over which the company has exclusive right to explore, develop and utilize the hydro power resource in accordance with the contract subject to pertinent laws, rules and regulations.

COHECO is currently in the process of working on the preparatory works for the construction of its proposed 60-megawatt minihydro project in the border of Kapangan and Kibungan towns.