The Benguet Electric Cooperative (Beneco) initial foray into renewable energy generation in Man-asok Buguias, Benguet is the first of many planned for the province to make Benguet self-reliant when it comes to energy.
Its abundance of water systems resources and high altitude make the province ideal for hydropower generation. This is what the national government acknowledged when it built three large hydroelectric dams in the path of the Agno River: the Ambuklao, Binga, and San Roque Dams.
BENECO’s quest in generating its own power supply was first conceptualized in 2007 as a means to lessen the price of electricity it buys from Team Energy. It may soon become a template for future mini-hydro projects in Beneco’s pipeline.
THE MAN-ASOK PROJECT
The Man-asok run-of-the-river Hydro Electric Power Plant (HEPP) entails diverting a small portion of the headwaters of Agno River located at Sebang, Buguias in the northern part of Benguet. The mini dam located at Sitio Alapang will divert a portion of the water from the river through a pipeline into a surge tank, the surge tank would allow the water to flow faster before hitting turbines which will convert the falling water’s energy into mechanical energy to spin a generator’s magnets to produce electricity.
The project has three generators, each capable of producing one megawatt of electricity. “But when pushed [to their limits] the entire plant can generate 3.2 megawatts,” Beneco Power Generation Department Manager Engr. Art Bacoco said.
The water is then released downstream of the river it originated from ready to irrigate the farmlands of the town once again.
NO PICNIC
The entire project was supposed to be finished in 2019. However, unexpected circumstances delayed the opening of the facility.
The Indigenous People’s Rights Act (IPRA) also guarantees that indigenous peoples’ rights are protected in all development projects on their lands. The law, passed in 1997, specifies how to obtain the indigenous people’s consent for any project. However, the law does not specify how much each indigenous people’s organization is to receive allowing for negotiations to determine the amounts.
Even though the Beneco Board of Directors approved the mini-hydro plant in 2007, it took the better part of 14 years of negotiations with indigenous peoples groups and lot owners before the plant could be fully constructed. Now Beneco is only awaiting the approval of the Department of Energy for Man-asok’s full commercial operation.
| Man-asok Project Timeline |
|---|
| From the first Board Meeting that happened sometime in 2007, BENECO sought approval from the Department of Energy to go ahead with the Renewable Energy project and to bid for a company to conduct the feasibility study. After two years, BENECO got the go signal and on October 23, 2009, they signed the Hydropower Service Contract (HSC) with AVGarcia Power System Corp. On August 2010, AVGarcia Power System Corp. submitted the Detailed Feasibility Study (DFS) and on January 2013, the consultative firm submitted the Detailed Engineering Design (DED) prepared by AVGarcia Power System Corp. On March 25, 2013, BENECO started consultative assemblies in the affected barangays. It jumpstarted in Sitio Bad-ayan, Baculongan Sur, Buguias, Benguet headed by the NCIP FPIC Team. Many more consultations followed among the affected barangays and lot owners. On May 2, 2014, the FPIC MOA was signed. But before a MOA was signed with the Buguias LGU, BENECO was asked to consult with the lot owners if they agree to the usage of their lands for the project. After six months of consultations, a MOA by and between BENECO and the SBALP Man-asok Lot Owners’ Association was signed on December 20, 2014 prior to the issuance of an individual lease agreement for each of the affected lots. This was followed by the approval of the resolutions from each of the Sangguniang Barangays of Sebang, Baculongan Sur, Amgaleyguey. Lengaoan and Poblacion, Buguias which favorably endorses the development and operation of the project by BENECO. And finally on July 28, 2015, MOA between BENECO and the Municipal LGU of Buguias relative to the development of the project was signed. It was followed by the Approval of Resolution No. 2015-76 by the Sangguniang Bayan of Buguias which favorably endorses the development and operation of the project on August 17 of the same year. On January 12, 2016, the project was issued the Environmental Compliance Certificate by EMB-CAR. The project was then published for bidding on April 15 of the same year. Ruben Tindaan who took over as the municipal Mayor of Buguias in June 2016 said that he scrutinized the MOA and found it satisfying so he also endorsed the continuation of the project. On September 6, 2016, 320 million loan from the Development Bank was approved to finance the project |
The power plant will undergo several challenges, such as approval of the FPIC, community acceptance, and strong typhoons that will eventually increase the projected expenses, among others.
2013 and 2014 were filled with Negotiation Meetings to iron out the FPIC MOA headed by the NCIP FPIC Team with the IP representatives from the 5 affected barangays, municipal and provincial LGUs, IPO (BADANG) and BENECO.
Among the issues that rose were the unforeseen situations regarding the cultural practices of the IPs.
The original plan, according to lot owners President Senario Toda, who was also the barangay captain of Barangay Sebang, did not take into account the IPs’ cultural beliefs, particularly the places considered hallowed grounds such as burial caves. The pipeline in the master plan was to pass through a burial cave in sitio Sib-itan. The IP family, which owns the lot, refused to allow the burial caves to be disturbed and protested the destruction the project will cause to the caves.
The barangay only allowed the continuation of the project when BENECO presented a new plan that will go around the burial cave and some affected farms. Toda said the lot owners agreed to renegotiate the original plan.
Even minor details had to be resolved before the project could proceed. Engineer Bacoco recalls that contracts to protect the slopes where the project’s pipelines were to pass had to be specified. This led to a popular tagline at the time: “Lote Mo, Kabite Mo.”
The project was finally done and inaugurated in December 2021. It was then commissioned in April 2022 and awaiting DOE’s certificate of compliance to begin operating commercially.
With the project already done Kapitan Toda hopes that the Energy Regulatory Commission (ERC) would soon grant BENECO’s certificate to operate commercially so that they could also begin enjoying the benefits promised to them, especially those whose farmlands were unusable during construction.
Once operational, Buguias and the affected barangays will receive a total of 26 centavos per kilowatt-hour incentive in terms of royalty and Corporate Social Responsibility (CSR) projects such as educational scholarships and vocation training, livelihood projects, health, and dental assistance, CCTV and computer equipment, among others. The livelihood assistance will be determined by the IP elders. (See the complete list of benefits in the box.)
On the 26th year of operation, the sharing with the municipality will be 50-50. With the projected income, it would mean about 30 million annual shares for Buguias.
Buguias Mayor Ruben Tindaan said the municipal officials asked in advance for the shares of the municipality in terms of heavy equipment to be used in fixing damaged roads during calamities.
| Under Energy Regulation 1-94, power producers are mandated to provide the following: 1. P0.010/kWh 2. Real Property Tax Business Tax Local Fees and Permits 3. Watershed Management Fund P0.005/kWh 4. National Wealth Tax P1% of annual gross income |
| ADDITIONAL VOLUNTARY BENEFITS PROVIDED BY BENECO 1. For the LGU of Buguias a. 50% Co-ownership on the 26th year in addition to the average P0.2697/kWh which will continue beyond the 25th year b. Restricted Fund (P0.01/kWh) For the LGU’s community projects c. Additional ER 1-94 P.010/kWh (years 1-5) P.015/kWh (years 6-10) P.040/kWh (years 11-15) P.045/kWh (years 16-20) P.050/kWh (years 21-25) d. CSR Projects i. Educational Assistance Free enrolment and training for residents of the 5 barangays at the BENECO Technical Vocational School in Abatan, Buguias ii. Free educational scholarship for selected students who will eventually operate the minihydro power plant iii. Journalism trainings for school paper advisers and campus writers in the five barangays iv. Computers with internet access to all public elementary schools in the five barangays v. Medical/Dental Assistance Medical Dental missions in the 5 barangays vi. Pailaw sa Paaralan for unenergized schools; 73 schools accomplished as of October 2017 (5 in Buguias), 88 schools for implementation vii. Support for peace and order by providing CCTVs cameras; installed 127 units as of October 2017 (10 in Buguias) & 34 units for installation (10 in Buguias) viii. Provide on or before December 31, 2017 one unit of brand new wheel loader to Buguias LGU which they will use to clear landslides. The cost of equipment will be charged to LGU’s future benefits e. Five Barangays where the facilities are located P0.0667/kWh (first 10 years) P0.2667 (for the succeeding years) *30% for livelihood *projects determined by consensus among the elders/leaders f. For the Buguias Ancestral Domain Alternative for Native Governance (BADANG) 1. P0.0175/kWh (years 1-5) 2. P0.0250/kWh (years 6 -10) 3. P0.0325 /kWh (years 11-15) 4. P0.0400 (years 16-25) g. (4)For the Landowners P4.00/sq, m.(years 1-5) P4.20/sq m (years 6-10) P4.40/sq/m (years 11-15) P4.60/sq m (years 16-20) |
The lots occupied by the power plant will also be rented for the next 25 years. During the negotiation, the lot owners did their own research on the prevailing rental with other power plants. The parties agreed to a higher rent of 4.00 per square meter increasing by 20 centavos every five years. Other power plants in the province are paying 3.00 and below per square meter.
| Year of Operation | Monthly Rental Rate |
| Year O (Construction Period) | P4.00/sqm |
| Year 1-5 | P4.00/sqm |
| Year 6-10 | P4.20/sqm |
| Year 11-15 | P4.40/sqm |
| Year 16-20 | P4.60/sqm |
On November 25, 2022, the Department of Energy finally granted the Certificate of Endorsement Under the Feed-in-Tariff System for the 3.240 MW Man-asok Hydroelectric Power Plant (HPP) COE-FIT No. H2022-10-019 signed by no other than Energy Secretary Raphael Lotilla.
DOE certified that Man-asok HPP has complied with the requirements under Republic Act 9513 known as the Renewable Energy Act of 2008. BENECO’s compliance made it eligible to operate under the FIT System, as well as its capability to produce an average of 14.688 GWh annual generation. This is one of the final requirements before BENECO will be issued a Certificate of Compliance by ERC to finally operate commercially.
As FIT-eligible, Man-asok HPP’s generated power gets a guaranteed price for 20 years for the electricity it will generate.
PARTNERSHIP REQUESTS
Beneco General Manager Melcor Licoben believes the Man-asok model willl attract more of the province’s towns to want to host Beneco’s minihydro plants.
“The Beneco model would be a game changer for rural folks in Benguet who will be able to raise their own income without any cost to government due to negotiated rental of their properties for the power plants and therefore graduate [the LGU] from IRA (Internal Revenue Allotment) dependency,” Licoben emphasized.
According to Licoben, two towns have written Beneco signifying their interest in hosting one or several Beneco hydro plants.
In an interview with the LGU of Bakun, municipal Mayor Bill Raymundo said what attracted them to appeal to BENECO to start an exploratory project was the MOA signed between the Coop and the Buguias LGU with regards to the Man-asok Hydro-Electric Plant Project. He said the best of part of the MOA was the LGU will become partner of the plant after 25 years of operation with 50-50 sharing.
Bakun is one of the municipalities that have three mini-hydro power plants operated by HEDCOR-Aboitiz. The plant was established in 1991 and the 25 years contract expired in 2018. Councilor June Suni-en said the negotiation for the renewal of MOA took a while as HEDCOR-Aboitiz gave them alibis to reduce their share. This resulted in the community picketing and stopping the operation of the dams twice. Their MOA was signed only this year but retroactive to 2018. Suni-en said they ended at 12 centavos per kilowatt hour in their MOA. According to him, Aboitiz claimed that this is the highest royalty they ever gave to their host.
Suni-en said the MOA entered by BENECO with Buguias was the most ideal as the people become co-owner of the plant after 25 years. And this was the very reason why the municipal council endorsed the resolution of Barangay Bagu to enter a partnership with BENECO to explore possible collaboration in creating a Hydro-Electric Plant in the said Barangay.
OTHER POSSIBILITIES
Beneco Power Generation Department Manager Engr. Art Bacoco said aside from the letters of the mayors of Kibungan and Bakun towns, the other hydro project in the pipeline is one in Kabayan municipality.
Basing on the Man-asok project expenses, Bacoco estimates it will take Beneco some P100 to P150 million investments per megawatt to pursue the 30 megawatt undertaking. That’s a total of at least 3 to 4.5 billion.
Also on the drafting table is a solar-generating plant to be located in the lower elevations of Tuba town. The major issue with this plan is the negotiation with land use.
STOLEN WATERS
Not everything is coming up as daisies. In the course of finding a suitable location for the first hydro plant of Beneco, its leaders discovered that most of the water rights in the province have allegedly been reserved by a private corporation.
Although BENECO is being endorsed by the community for its proposed project in Kabayan, a service contract was already awarded to Hedcor and BENECO will not be able to proceed with its proposal until the contract expires.
Similar issues we met on other potential sites. “The question many of the indigenous people are now asking is how this came about without free and prior informed consent as guaranteed by the National Commission of Indigenous Peoples (NCIP) as enshrined in the Indigenous Peoples’ Rights Act (IPRA).
According to a NEDA (National Economic and Development Authority) report, 67 service contracts have been issued by the Department of Energy (DOE) covering various river systems around the region for the production of more than 4,200 kilowatts of renewable energy.
Whether or not these water rights have any effectivity without the FPIC of the concerned indigenous peoples’ community or organization is up to the courts to decide but Beneco is moving to halt further “theft” of Benguet water.
In 2017, the Beneco Board of Directors has come out with a resolution calling on the DOE and the National Water Resources Board (NWRB) to be more transparent with the issuance of water rights in the Cordillera region.
Specifically, the Beneco directors then asked the DOE and NWRB “to issue a moratorium on the issuance of permits for hydroelectric power plant generation projects and water permits in the Cordillera without the prior knowledge and consent of the RDC (Regional Development Council) and would be host communities.”
The directors also asked the DOE not to accept oil exploration offers in the region, and to allow Beneco “to pursue, within its franchise area, [the] development of mini hydros since it has its own market.”
AIMING TO BE A LEADER POWER IN POWER GENERATION
Licoben said Beneco is positioning itself “to be one of the major power generation companies [in the country] and one that grants substantial benefits to the communities hosting their renewable energy plants.”
According to him, the benefits derived by the host communities, indigenous peoples, and local governments from the operation of the Man-asok mini hydro power plant will surely make a big difference in the lives of the people in the communities.
“It is a game changer [in hydroelectric profit sharing,” Licoben said.
(Reporting for this story was supported by the Institute for Climate and Sustainable Cities (ICSC) under the Jaime Espina Klima Correspondents Fellowship)
2 thoughts on “Raising the bar: Part 2 – Benguet towns to partner with Beneco for sustainable power supply”