5 MIN READ

By APIT MONTANYOSA

The Sagada-Besao windfarm is nothing but another business venture that is designed to rake in giant profits for the investors at the expense of the peoples of the Aplai tribe of Sagada and Besao. Like other Renewable Energy projects, Philcarbon enjoys comprehensive policy support from the national government as seen in the Energy Power Industry Reform Act (EPIRA) of 2001 and the Renewable Energy Act (REA) of 2008.

What profits are in store for Philcarbon?

1. Generation Charges. Under the EPIRA Law (Energy Power Industry Reform Act of 2001) or RA 9136 (may be read or downloaded through the internet); the energy industry became divided into three main sections: generation, transmission and distribution. This law also opened the energy industry which was formerly state controlled and owned – to the private sector/big business and free enterprise. This has resulted to the control of 52% of the energy industry to 3 main players: San Miguel Electric Corp; Lopez; and Aboitiz.

Philcarbon is a company whose business is renewable energy. It is a producer of electricity. In the top most item of the MOPRECO bill is a section that says GENERATION CHARGES. This is the amount that is paid to businesses like Philcarbon. It is not a government agency whose primary function is to deliver services to the people. In short, Philcarbons’ purpose as a business entity is primarily profits.

2. Incentives as stated in the Renewable Energy Act 2008 or RA 9513 (may be read or downloaded through the internet)

a. Duty-free or 10 year non-payment of tariffs for importation of materials intended for the business. Tariff is the amount collected by the national government on items that are imported. According to Philcarbon President Ruth Yiu Owen, each windmill is estimated to cost $US 24.2million or Php982.52 million. The national government stands to lose big money which they could have generated through tariff.

b. Tax free carbon-credits. Carbon credits at present is pegged at 3 Euros per credit. Again the national government loses revenue by giving tax holidays on carbon-credits.

c. Priority for the purchase of energy which will be transmitted to the grid, from the grid to the local distributor (in this case MOPRECO). In the Implementing Rules and Regulation (IRR of RA 9513) “intermittent sources” or energy whose source is uncontrollable, whose output is variable, unpredictable and irregular like wind or hydro shall be given a high priority in the grid in its “must dispatch” policy.

d. Mandatory purchase of a not less than 1 percentage of electricity by distributors/MOPRECO shall be from renewable energy.

e. Feed-in-tariffs (except for geothermal energy) or fixed amount collected from the distributors or consumers for the first 12 to 15 years of production. In the case of wind energy it is Php8.53 per kwh (ABS-CBNnews.com, 07/27/2012) lower than the Php10.37 per kwh expected by the investors. This is a huge incentive for investors as they are guaranteed a Php8.53 per kwh on top of their generation charges and carbon credits. Of course for the consumers this means nothing but an added Php8.53 per kwh on their electric bill when MOPRECO purchases power from Philcarbon.

f. Non-VAT rates on the sale-purchase of Renewable energy.

3. Additional Profits under International Mechanisms such as the Kyoto Protocol to the United Nations Framework Convention on Climate Change:

a. Sale of carbon credits (3 Euro per credit)

b. Projects considered under clean development.

Therefore, giant profits for Philcarbon while National Government loses revenues from taxes. Why the deal? To lure investors into the country. Of course these foreign investors also have local big business partners who more often are the big time politicians or bureaucrats.

What’s in it for LGU?

Royalty of 1% of gross income (meaning from sales or other income from generation, transmission and distribution and NOT from targeted optimum production) from which %age will go to the following: (rule 7, IRR REA of 2008)
¨ 60% national government
¨ 40% local government unit which will be divided into:
• Provincial LGU 20%
• Municipal LGU 45%
• Barangay LGU 35% host local government units

If the RE project is located in two municipalities or barangays, the division of the royalty shall be computed based on: 70% Population and 30% Land Area.

Of the LGU share, 80% shall be used to subsidize electricity consumption of communities utilizing not more than 100kwh. 20% shall be utilized for local government and livelihood projects. In short, livelihood projects for the Aplai of Besao and Sagada shall be sourced out from the LGU share. Is this sufficient exchange for giant profits and what the people will lose? NO!

What’s in it for the Aplais?

The windmill is not what the people need – they already have electricity purchased from the local electric distributor MOPRECO.

The windmill was not requested by the people – it is being railroaded by Philcarbon and its local Aplai cohorts who are willing to deceive their very own people – for the interest of their business partners.

The Aplai and the rest of the Filipino consumers suffer higher electricity prices as added burden to their already inadequate livelihoods and income.

What’s at stake?

Destruction/pollution of water sources at the Pilao-Langsayan ridge. E-agawa, residents of Sagada Central Zone and Northern Barangays of Sagada have expressed concern over the presence of water sources in the Pilao-Langsayan ridge. Water is already a very scarce resource in Sagada. Water is vital in the peoples existence as it is a necessity in agriculture, health and sanitation and, other livelihood sources related to tourism.

Dormant boundary conflicts will be wakened. This is because the sharing of host communities shall be based on the population and land area per barangay or municipality. As seen in the experience of the IRA, many barangays are in conflict over boundaries.

Removal of top soil during the excavation of foundations for the 10 giant windmills with base area of 400 square meters and excavation to connect power from each windmill to the next and to the power house. Top soil takes decades to be produced. It is most important in agriculture as this holds essential nutrients need by plants.

25 years control and effective ownership of Philcarbon over the windfarm area;

Socio-cultural concerns such as disunity within communities and against communities and families.

What does Philcarbon and their local cohorts promise?

Jobs for qualified individuals during installation of the windmills and its facilities;

Windmills as added tourist attraction;

Livelihood support.

What is the process of getting the project “IN”?

Indigenous peoples have the right to FREE PRIOR INFORMED CONSENT (FPIC) in anything that shall affect their lives, livelihoods and resources. This right is also stated in the Indigenous Peoples Rights Act and the United Nations Declarations of the Rights of Indigenous Peoples (UNDRIP).

This means that indigenous peoples prior to approving or opposing any project/activity in their territories should be given correct information on these projects/activities.

The affected IP communities should be consulted above and before the Local Government Units (LGU). But often the business/companies deal with the LGU first. Endorsement is most often granted by the LGU for either feasibility studies, exploration and in some cases endorsement for the actual project implementation.

FPIC as a process is conducted by the National Commission on Indigenous Peoples (NCIP).

We call on all Aplai of Sagada and Besao to be participative in all these processes at the same time exercise other means of which there voices shall be heard. Utilize all media, dagup ti ipugaw, ag-agong for the debate and education activities in relation to the windfarm.

Call on all local candidates for discussion as to their development programs and opinion in relation to the windfarm.

What is Philcarbon?

According to Ruth Yiu Owen, Philcarbon President – it is a company whose business is renewable energy.

What is their project?

The business wants to install a wind farm composed of 10 giant windmills at the Pilao to Langsayan ridge. The windfarm, at optimum conditions is targeted to produce 15 mega watts of electricity. The giant windmills are estimated to be from 80-100 meters in height (254feet-330feet) or approximately 5 times the height of the new Sagada munisipyo. The blade diameter is at 80meters. The foundations shall not be less than 5 meters (15 feet). The base shall be an area of 20×20 meters or 400 square meters.

What’s to be done?

Oppose the Philcarbon Sagada-Besao windfarm project as it only means greater economic problems for the people and the promise of giant profits for the company.

Participate in all fora to expose the profit driven interests guaranteed by national government policy for renewable energy investors. # nordis.net