LGUs ‘preferred’ to develop renewable energy projects

Bukidnon News.Net official Logo for site2MALAYBALAY CITY (Bukidnon News/06 July) – Local government units are the better developers of renewable energy projects like hydroelectric power because of faster time to develop at lower cost, among other reasons, said David A. Tauli of the Mindanao Coalition of Power Consumers.

Tauli told Bukidnon News Thursday LGUs are preferred over private corporations for hydroelectric power because of shorter time to obtain permits from government agencies and lower rates for generated energy because of lower rate of return requirement.

“The best part of the renewable energy solution to the Mindanao power problem is that most of the power plants will be owned by the people through their local governments and not by private corporations or the national government,” he added.

Romeo Montenegro, investment promotions and public affairs director of the Mindanao Development Authority (MinDA), said if the LGU is capable, competent, and has put in place a proper mechanism to operate a plant like a private entity, then the scheme is preferred.

“With LGUs, more profit means more budgets is ploughed back to the project for the benefit of the owners – more services for the people,” he added.

But he stressed that if it lacks the qualifications, then the LGU shouldn’t go into power generation.

Tauli added that it is easier for LGUs to obtain low-cost loans.

“Earnings from hydro (electric) projects go to the LGU for use in the development of the river and its watershed area, as well as for other government services,” he added in a PowerPoint presentation, a copy of which was emailed to this reporter Friday.

He said a greater part of about 540 megawatt total new capacity from 2016 to 2018 will be owned by the local government in partnership with private corporations, the latter will take charge of construction, operation, and maintenance.

Tauli, also an engineering consultant of Bukidnon 2nd District Rep. Florencio T. Flores, was previously connected with the Cagayan Electric Power and Light Company (Cepalco).

He said the provincial, city, or municipal government can be the developer and owner of the project with the advantage that the project itself is the collateral for bank loans.

He added that LGUs need not infuse capital into the project but “can borrow all funds required for project implementation.”

But he clarified that construction should not be done by administration or by the LGU itself.

He said it should be done by private hydro corporations through public bidding and operations should be managed by private corporations, too, through public bidding.

Montenegro, however, clarified LGUs are to work with the local electric cooperatives for embedded capacity before offering their new power source to the grid.

He added that what bogs many power buyers from contracting with LGUs is the possibility of problems in sustainability, political dynamics, and lack of good governance in some. (Walter I. Balane/Bukidnon News)