CEPMP FINAL REPORT-colored (Edited)

Republic of the Philippines
Cordillera Administrative Region

REGIONAL DEVELOPMENT COUNCIL
CORDILLERA ENERGY PRODUCER

MASTER PLAN
2004 - 2013
FINAL REPORT
TERRAMONT FOUNDATION, Inc.

Baguio City
December 2004
ACKNOWLEDGEMENT
This project was made possible by the

DEPARTMENT OF ENERGY
in collaboration with
NATIONAL POWER CORPORATION

and
REGIONAL DEVELOPMENT COUNCIL-
CORDILLERA ADMINISTRATIVE REGION.
Department of National Power Regional

Energy Corporation Development
GENCO I & II Council-CAR
Name of Project : Cordillera Energy Producer Master Plan
Project Cost : P 1,800,000.00

Contract Cost : P 1,797,600.00
Fund Source : Energy Regulation No. 1-94
Fund Type : Development and Livelihood Fund
Date of Project Approval : 18 June 2002

Notice of Award : 22 August 2002
Signing of Contract : 23 August 2002
Notice to Commence Work : 20 September 2002
Inception Report : 05 November 2003
Interim Report : 23 December 2002
Consultation Report : 23 July 2003
Project Extension : 08 September 2003
Draft Master Plan : 23 December 2003
Final Master Plan : 15 July 2004
Revised Final Master Plan : 31 August 2006
Approval and Adoption of Master Plan : 08 November 2006
Implementing Agency : The RDC-CAR through an

Inter-Agency Project Team
Consultant : Terramont Foundation, Inc.
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CONTENTS
Title Page
Preface
RDC ExCom Resolution Approving and Adopting the Master Plan 8-9
Executive Summary 10-20
I. Introduction 21-23
Project Study Background and Objectives 21
Study Approach and Methodology 22
Scope and Focus of the Study 22
II. National, Regional and Sectoral Context 24-26
A. National Situationer on Energy Supply and Demand 24
Overall Development Framework 24
Power Demand and Supply Outlook 25
B. Regional Profile 27-34
Brief Description of the Region 27
Demography 27
Socio Cultural Development 29
Social Aspects 30
Regional Economy 31
Major Infrastructure Facilities 32
Telecommunications 33
Rural Electrification 34
III. CAR Energy Sector Development 35-52
A. Background 35
B. Development Framework 35
Goal 35
Objectives 35
C. Strategic Interventions 36
D. Major Programs/Projects 39
E. Rural Electrification Status 39
F. New and Renewable Sources 40
Solar Power 41
Wind Power 42
G. System Loss 47
H. Environmental Impact 47
I. Factors Affecting Development of Facilities 48
J. Energy Production and Consumption 48
K. Most Viable Renewable Energy Resource in CAR 49
IV. Legal and Policy Framework 52-57
A. Legal Basis 52
B. Major Laws Related to Power Sector 53
Energy Laws 53
Other Related Laws 6
Laws on Economic Enterprise 56
V. Consultation Framework 58-72
A. Background 58
B. Importance of the Consultation Dialogue 58
C. Primary Consultation Expected Output 58
D. Framework 59
E. Consultation Outline 60
F. Detailed Activity 60
G. Integrated Consultation Output 62
H. Issues, Concerns and Comments 62
I. Prioritized Hydropower Project Proposals 67
J. Other Hydropower Project Potentials 68
Abra 68
Apayao 68
Benguet 69
Ifugao 70
Kalinga 70
Mt. Province 71
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CONTENTS continued
Title Page
K. Resolutions 72
L. The Consultation Team 72
VI. Hydro Power Development 72-88
A. The Situation 72
B. The Mission, Goals and Objectives 76
C. The Concept 77
D. Basic Assumptions 78
E. Operationalizing the Concept 79
Policy Recommendations 79
F. Proposed Investment Program 80-88
1. Top six Preferred Hydro Electric Power Projects 80
2. Project Cost Estimates 82
3. Factors in the Determination of Financial Viability 85
4. Risk Analysis 87
5. SWOT Analysis 88
VII. The Information, Education and Communications (IEC) Plan 89-91
A. Goals 89
B. Objectives 89
C. Strategies 89
D. Audience and Message 89
E. Implementation Scheme 90
VIII. The Implementation Plan 91-97
1. Establishing the Local Power Corporation 91
2. Obtaining the HEP Franchise or Permit to Operate HEP 92
3. Partnering with an HEP Developer/Operator with proven track 92
record
4. Negotiating for Funding and Financing 92
5. Project Implementation 92
6. Monitoring and Evaluation 92
7. Other Implementing Concerns 93
8. Mini-hydropower Project Cycle 94
9. Nonexclusive Reconnaissance Permit 94
10. Operating Contract 94
11. Accreditation as Private Sector Generating Facility 94
12. Endorsement from LGU and Business Permit Application 95
13. Registration of the Business with SEC 95
14. Application for Water Rights Permit with NWRB 96
15. Application for ECC. IEE and EIS 96
TABLES
Table No. Title Page
1 Primary Energy Mix 1999-2000 25
2 Power Generation Installed Capacity and Annual Generation by Type 26
3 2000 Population, CAR 27
4 Mean Family Income by Province 30
5 Development Status by Human Development Index 31
6 Gross Domestic product by Sub-sectoral Origin 31
7 Rural Accessibility Situation CAR 2002 32
8 Telephone Service Coverage (Private) CAR 2002 33
9 Telephone Service Coverage (Public) CAR 2002 33
10 Information Technology Situationer CAR 2002 34
11 Barangays Served with Electricity 34
12 Status of Rural Electrification , 2002 40
13 Cost of Solar Modules 42
14 Practical Wind Resources in CAR 45
15 Existing Power Generating Facilities in CAR 49
16 Multiple Criteria Evaluation 51
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TABLES Continued
Table No. Title Page
17 Standardization 51
18 Weighted Scores 52
19 Top Hydropower Project Proposals by Province 67
20 Potential Hydropower in Abra 68
21 Potential Hydropower in Apayao 68
22 Existing Hydro Power in Benguet 69
23 Potential Hydropower in Benguet 69
24 Existing Hydro Power in Ifugao 70
25 Potential Hydropower in Ifugao 70
26 Existing Hydropower in Kalinga 70
27 Potential Hydropower in Kalinga 71
28 Potential Hydropower in Mountain Province 71
29 Existing Hydropower in Mountain Province 72
30 List of Provincial Development Council Resolutions 72
31 List of Sangguniang Panlalawigan Resolutions 72
32 Supply Distribution by Source of Power, Philippines 73
33 Power Supply and Demand by Province, CAR 74
34 Potential Hydroelectric Power Projects by Province, CAR 2004-2013 80
35 Priority Hydroelectric Power Projects, CAR 2004-2013 81
36 Investment Requirements: LGU & Private Sector Collaboration 82
By Province, 2004-2013
37 Low-end Unit Production Cost of Proposed Hydroelectric Power 86
Projects
38 High-end Unit Production Cost of Proposed Hydroelectric Power 86
Projects
39 Step by Step Guide to Implementing Hydro Projects 93
FIGURES
Fig. No. Title Page
1 Master Planning Approach 23
2 Administrative Map 28
3 Major River Basins 37
4 Existing Transmission Lines in Northern Luzon 38
5 Solar Radiation Values Map of the Philippines 43
6 Philippines-Northern Luzon Most Favorable Wind Resource Areas 46
7 Existing Power Generating Facilities in CAR 50
8 Consultation Diagram 63
9 Proposed Mini and Small Hydroelectric Power Projects, 2004-2013 84
APPENDICES
Appendix Contents Page
“A” Terms of Reference (TOR) 98-105
“B” Notice of Award 106-107
“C” Notice to Commence Work 108-109
“D” Energy Seminar Report 110-114
“E” Consultation Summary 115-145
“F” Provincial Dev’t Council & Sangguniang Panlalawigan Resolutions 146-158
“G” Visual Aids Used in the Consultations 159-206
ACRONYMS
ABC Association of Barangay Councils
ABRECO Abra Electric Cooperative
ADB Asian Development Bank
ANEC Affiliate Non-Conventional Energy Center
ATMP Alternative Transport Master Plan
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ACRONYMS continued...
BDC Bontoc Development Corporation
BENECO Benguet Electric Cooperative
BOD Board of Directors
BOI Board of Investments
BOT Build Operate Transfer
BT Build Transfer
CAR Cordillera Administrative Region
CASCADE Caraballo and Southern Cordillera Agricultural Development
CATV Cable Television
CDM Clean Dust Mechanism
CECAP Central Cordillera Agricultural Programme
CEPMP Cordillera Energy Producer Master Plan
CHARMP Cordillera Highland Agriculture Research Management Project
COA Commission on Audit
CRDP Cordillera Regional Development Plan
CTMP Cordillera Tourism Master Plan
DAR Department of Agrarian Reform
DBM Department of Budget and Management
DENR Department of Environment and Natural Resources
DepEd Department of Education
DILG Department of the Interior and Local Government
DOE Department of Energy
DOJ Department of Justice
DOLE Department of Labor and Employment
DOST Department of Science and Technology
DOTC Department of Transportation and Communication
DPWH Department of Public Works and Highways
DSWD Department of Social Welfare and Development
DTI Department of Trade and Industry
ECC Environment Compliance Certificate
EIAB Energy Industry and Administration Bureau
EIS Environment Impact Statement
EO Executive Order
EPIRA/EIRA Electric Power Industry Reform Act
FPIC Free, Prior Information, and Consent
FS Feasibility Study
IIE Initial Environmental Examination
GDP Gross Domestic Product
GENCO Generation Companies
GWH Giga Watt Hour
HDI Human Development Index
HEDCOR Hydro Electric Development Corporation
HEP Hydro Electric Plant
ICC Indigenous Cultural Communities
IEC Information, Education and Communication
IFELCO Ifugao Electric Cooperative
INFRACOM Infrastructure Committee
IP Indigenous Peoples
IPP Independent Power Producer
IPRA Indigenous Peoples Rights Act
JCPC Joint Congressional Power Committee
KAELCO Kalinga Electric Cooperative
KW/Kw/kW Kilowatt
KWH/Kwh/kWh Kilowatt hour
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ACRONYMS continued…
LPC Local Power Corporation
MERALCO Manila Electric Company
MBFOE Million Barrel of Fuel Oil Equivalent
MOA Memorandum of Agreement
MOPRECO Mt. Province Electric Cooperative
MPDC Municipal Planning and Development Coordinator
MTPDP Medium Term Philippine Development Plan
MW/Mw Mega Watt
MWH/MWh Mega Watt Hour
NAPOCOR/NPC National Power Corporation
NAPOLCOM National Police Commission
NCIP National Commission on Indigenous Peoples
NEA National Electrification Administration
NEDA National Economic and Development Authority
NGO Non-Governmental Organization
NIA National Irrigation Administration
NIPAS National Integrated Protected Areas
NRE New and Renewable Energy
NWRB National Water Resources Board
ODA Official Development Assistance
PCC Project Coordination Committee
PCO Public Calling Offices
PDC Provincial Development Council
PEAC Pre-qualification, Evaluation and Awards Committee
PENRO Provincial Environment and Natural Resources Officer
PEO Provincial Engineer's Office
PEP Philippine Energy Plan
PEZA Philippine Economic Zone Authority
PFS Pre-Feasibility Study
PGO Provincial Governor's Office
PHO Provincial Health Office
PIA Philippine Information Agency
PNOC Philippine National Oil Corporation
PNOEC Philippine National Oil Exploration Corporation
PNP Philippine National Police
PPA Power Purchase Agreement
PPDC Provincial Planning and Development Coordinator
PSALM Power Sector Assets and Liabilities Management Corporation
PSGF Private Sector Generating Facility
RA Republic Act
RDC Regional Development Council
RDIT Regional Inter-agency Development Interventionist Team
RDR Regional Development Report
REC Rural Electric Cooperative
RPMES Regional Project Monitoring System
SCU State Colleges and Universities
SEC Security Exchange Commission
SEFCO San Fernando Electric Cooperative
SHS Solar Home System
SP Sangguniang Panlalawigan
SPUG Small Power Utilities Group
TOR Terms of Reference
TRANSCO National Transmission Corporation
VAT Value Added Tax
WESM Wholesale Electricity Spot Market
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PREFACE
The Cordillera Energy Producer Master Plan is a product of a series of multi-sectoral

consultations under the auspices of the various Provincial Development Councils in CAR
chaired by the respective Provincial Governors. These consultations were actively
participated-in by the Provincial Board Members, Municipal Mayors, NGOs, private sectors
and the concerned communities.
The master plan was conceptualized by the RDC-CAR through its Infrastructure Committee
to operationalize the Cordillera’s vision to propel the region as a “major hydro power
producer” in North Luzon. It was made possible with the DOE concurring to charge the
project funding to CAR’s regional share from the ER No. 1-94.
The series of provincial consultations held from December 2002 to February 2003 were
presided over by the respective Provincial Governors, namely: Governor Raul M. Molintas of
Benguet, Governor Macario A. Duguiang of Kalinga, Governor Teodoro B. Baguilat, Jr. of
Ifugao, Governor Sario Malinias of Mountain Province, Governor Vicente P. Valera of Abra,
and Governor Elias K. Bulut, Sr. of Apayao. Valuable inputs were provided by Engineer.
Rufino B. Bomasang, then President and CEO of PNOC Exploration Corporation, CEO Rene
Ronquillo and Mr. Romy Montoya of Hedcor and the DOE staff headed by Assistant
Director Mario Marasigan. Also worth to mention is the effective coordination of the project
team headed by the NEDA-CAR Regional Director with representatives from NPC-Genco II,
NEA-I, DILG-CAR and PIA-CAR as members.
The master plan advocates a joint national and local government intervention in hydro power
development through the establishment of local power corporations wherein various LGU
levels would hold significant shareholdings together with the affected communities and the
local private sector as major investor in hydroelectric projects.
The basic requisites for a successful undertaking of hydro-power development project are
economic viability, environmental friendliness and social acceptability. Economic viability
is to ensure that enterprise profitability is sustained together with the standard requirements
of project feasibility studies. Environmental friendliness is to ensure minimal disturbance on
the landscape of our natural resources or ecological balance and sustain longevity of quality
water supply to feed the hydro plant which in operational terms pertain to the DENR-
enforced environmental compliance certificate. Social acceptability is to guarantee that the
project is agreeable to the local populace especially to villagers who may be adversely
affected. In no way should their livelihood patterns be affected and any disturbance should
be duly mitigated and compensated. In operational terms, the project implementors should
adhere to the principles of the NCIP-imposed free and prior informed consent (FPIC).
The Project Team

November 2006
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9
10
EXECUTIVE SUMMARY
BRIEF DESCRIPTION OF THE CORDILLERA ADMINISTRATIVE REGION (CAR)
The Cordillera Administrative Region popularly known as CAR is a landlocked and

mountainous region. It is located at the heart of northern Luzon and saddled on the largest
mountain range in the Philippines, the Gran Cordillera, bounded on the North by Ilocos Norte
and Cagayan; on the West by Ilocos and Pangasinan; on the East by Isabela and Nueva
Vizcaya; and on the South by Pangasinan and Nueva Vizcaya.
Executive Order No. 220 dated July 15, 1987 delineated the boundaries of CAR
carving it from Regions I and II. It comprises Abra, Benguet, Mt. Province and Baguio City
from Region I (Ilocos); and Ifugao, Kalinga and Apayao from Region II (Cagayan). The
region has a land area of 18,293.70 square kilometers. There are a total of 1,172 barangays of
which 128 barangays are in the lone chartered city of Baguio and 1,044 barangays in the 76
municipalities of the six provinces.
CAR is a popular tourist destination. It prides itself with the following attractions: the
so-called Ninth Wonder of the World, the Banaue Rice Terraces in the province of Ifugao;
the natural limestone caves and underground rivers of Sagada, Mt. Province; the white waters
and virgin forests of Kalinga and Apayao; the second highest mountain in the archipelago,
Mt. Pulag, sitting in the boundaries of Benguet and Ifugao; the melting pot of lowlanders and
highlanders in the province of Abra; and historic Baguio City, the venue of the First
Philippine Commission Session from April 22 to June 11, 1904. Today this premier city is
the center of the Cordilleras as well as the educational center of the North.
THE CONTEXTUAL FRAMEWORK
The Cordillera Regional Development Plan (CRDP) 1999-2004 followed by its

successor CRDP 2005-2010, serves as the reference point of the Cordillera Energy Producers
Master Plan (CEPMP). The region’s energy resources both existing and potential are
enormous. When developed, the potential could contribute a significant amount of energy to
the community and to a great extent to the Luzon Grid. The Plan aims to cultivate such
resources in accordance with the culture of the region such that CAR may in due time
become leading energy producer, especially on hydropower, in Luzon.
SOLAR POWER POTENTIALS
The potential capacity of solar power in the Cordillera region cannot be quantified
exactly but potential is already evident from the existence of solar power systems in the
region. With the region’s solar radiation range of 145–194 watts per square meter, as
supported by the solar radiation map of the Philippines, the realization of solar home
communities in the rural areas and the introduction of modern solar homes in the urban areas
could soon be considerable. Solar home systems could accordingly be designed to efficiently
work at night time provided they could have prior sun exposure of at least six (6) hours.
Also, they can accordingly last for a period of three days of poor insolation, which is equal to
the time a “normal” typhoon needs to pass over a certain location. These are the downside of
solar power technology in CAR since fog incidence as well as rainfall intensity is high during
the wet season. They are probably also the reasons why solar energy systems in the region
are limited to small-scale applications only as remote, single houses and small villages
requiring only a limited amount of electrical power.
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WIND POWER POTENTIALS
There is yet no operating wind energy system in the region. Under the National Wind
Energy Atlas of the Philippines, thirteen mapping stations were considered in measuring the
wind potential capacity of the country. The maps in the atlas were created using a program
developed at National Renewable Energy Laboratory of the United States Department of
Energy based on the geographic information system. The mapping program, which combines
high-resolution terrain data with formatted meteorological data, highlights areas with
favorable wind resource where wind energy projects are likely to be feasible for both utility
grid and rural power applications. Based on these mapping, good-to-excellent wind resources
are found in the Cordillera Central Mountains in the interior of Luzon.
The Department of Energy’s wind investment kit also included a listing of potential
wind sites in northern Luzon and identified 87 sites in CAR with a total capacity of 609
megawatts.
The most promising wind power potential identified by the NWE Atlas is in Sagada,
Mountain Province. The site is at a high-elevation located at northwest of the town at an
elevation of 1,871 meters, and is on a north–south-oriented mountain range. The average
wind speed at 30 meters above ground level is 6.7 meters per second a velocity considered
adequate to generate the desired output.
In 1996, the Department of Energy conducted a pre-feasibility study in 12 selected

locations in the Philippines. Tetep-an Norte in Sagada, Mt. Province and the Poblacion of
Tadian, Mt. Province were among them. However, there seemed to be a negative
environmental impact in these areas and thus further study was suggested.
The limited data available to validate the potential wind resources in the Cordilleras is
not reason to abandon the same considering that baseline characteristics of mountains in the
Cordillera region provides a good source of wind power. It is highly recommended that wind
measurement programs be conducted in sites under consideration to validate resource
estimates and refine wind maps and assessment methods.
HYDRO POWER POTENTIALS
There are twelve major river basins in the Cordilleras and from it the existing and
potential hydropower is generated. Owing to its mountainous terrain and dispersed river
systems, the Cordillera Administrative Region is blessed with vast hydro energy potentials
resources the latest update of the number of identified potential projects of which is estimated
to generate an aggregate of some 3,587 megawatts. When fully developed, these could
significantly contribute to the Luzon’s Grid’s requirements and could potentially result to an
estimated foreign exchange savings of about US$1.2 Billion annually. The Cordillera rivers
provide the needed water to run the 360 megawatts Magat Dam in Isabela and the 345 MW
San Roque Dam in Pangasinan. Likewise the Cordillera headwaters feed the various
irrigation systems of Cagayan, Isabela and Nueva Vizcaya on the northeastern part of Luzon
and Pangasinan, La Union, Ilocos Sur and Ilocos Norte on the northwestern part of Luzon.
Currently, the existing hydroelectric power plants of Binga, Bakun and other Hedcor
mini-hydro plant generate around 207 MW or 630 megawatt-hour annually, or about two
percent of the Luzon Grid’s power generation. The planned rehabilitation of the Ambuklao
and Binga hydroelectric plants has been long delayed due to technical and managerial
difficulties while the planned development of 14 mini-hydro projects; two geothermal sites
and a wind power have been shelved. The country’s power requirement as of the present is
sufficient and this was brought about by the fast-track construction of oil-based and coal
power plants.
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In the long term, Cordillera energy resources are seen to occupy a strategic position in
national electric power development and security as imported fuels become increasingly
expensive and subject to external trade control.
All CAR municipalities have been energized with about 82 percent of the barangays
covered and 78 percent of potential households connected to the power lines. The region’s
average systems loss is 15.68% attributed by the National Power Corporation and
Department of Energy to the generally dilapidated distribution lines.
MOST VIABLE RENEWABLE ENERGY POTENTIAL IN CAR
A multiple criteria technique was used to determine which among solar, water and
wind energy potentials resources in the CAR could be the most promising. The technique
provided the capacity to differentiate each energy source from the other and how the
objective of finding which among the three energy potential sources could be the most viable
energy resource that should be developed in the region to justify the preparation of a Master
Plan to operationalize the Cordillera Regional Development Plan’s niche vision as a “leading
hydro-based power supplier in North Luzon”, specifically from run-off-river-type of mini-
and small-hydro power plants. There were six factors that comprised the multiple criteria
considered in the evaluation of potential energy resources: 1) potential capacity, 2) local
skills and technology availability required to develop the resource, 3) distance to service
areas, 4) financial viability, 5) social acceptability and 6) environmental impact. The final
results ranked hydropower resources as the best and most viable renewable energy
development in the Cordillera Administrative Region.
ENERGY DEMAND-SUPPLY OUTLOOK
At the National Level
Energy consumption is expected to increase with the Medium Term Philippine

Development Plan Gross Domestic Product growth targets of 6.5% annually. This
necessitates that energy development needs to keep in pace with the expected increase in
industrial activities and the domestic needs of the growing population. In particular, the
Philippine Energy Plan will target the aggressive development of natural gas, and higher
utilization of indigenous coal, geothermal, hydro and new and renewable energy sources.
In 2002, the country consumed around 251 million barrels of fuel oil equivalent,
which slightly decreased by about 1.2 percent from its 2001 level. Dependence on
indigenous energy sources is increasing with the significant development of the country’s
coal, geothermal, natural gas, and new and renewable energy sources. Dependence on
imported energy is decreasing as indigenous energy is increasing. Indigenous energy
increased from 45 percent in 2001 to 51 percent in 2002 while imported energy dropped from
55 percent to 49 percent, a clear savings in foreign exchange.
Around 48,467 giga-watt-hour of electric power has been generated by the country’s
power generation facilities in 2002, which has a combined installed capacity of 10,738
megawatts. Historically, the country’s total installed capacity has decreased by 19 percent
for the past three years with the decommissioning of aging power plants, particularly oil-
based facilities. The resulting decrease in their power generation has been compensated by
the commissioning of 2,763 megawatts natural gas-fired power plants, which contributed
some 8,724 gigawatt-hour (or about 18% of the total power generated for 2002). In 2003,
CAR hydropower generation accounted for 14.9 percent of the country’s power generation
mix.
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The Philippine Energy Plan 2004-2013 indicates that system peak power needs to
increase by 9.6 percent to match the projected gross domestic product growth rate of 6.5
percent by 2009, as well as to replace aging power plants. Also the Philippine Energy Plan
2004-2013 targets the increase in indigenous power generation through the development and
utilization of new and renewable energy sources such as mini-hydro, wind, solar, ocean and
biomass, as well as the installation of additional natural gas, coal, hydro and geothermal
resources.
In hydropower alone, the Department of Energy Renewable Energy Policy

Framework envisions developing a total of 2,950 MW of hydro projects within the plan
period, bringing the total installed capacity to about 5,468 MW. It is in this context of the
national energy development target wherein the CAR proposes to contribute some 401.29
megawatts or 13.6 percent of the national total target, as the collective output of the 23
proposed mini (0.1–10 megawatts) and 13 small (10.1–50 megawatts) hydroelectric projects.
These proposed sustainable hydroelectric projects would ensure the region’s fair share in
equity for development.
It is the micro-, mini- and small-hydropower projects that are locally regarded as
sustainable and hence, socially acceptable in the various provinces of the CAR. Large hydro
projects are regarded as environmentally destructive and unsustainable; the proposed large
hydro projects are therefore being strongly opposed by local communities and efforts to
secure support from local governments is extremely difficult if not impossible. It is highly
recommended that these planned large hydro projects be re-designed into series of small- or
mini-hydropower projects.
At the Regional Level
Based on the 2001 National Power Corporation report on power generated and
consumed, the CAR’s net power generation was 633.24 megawatt-hours annually, which is
fairly above the region’s total consumption of 618.25 megawatt-hours. The difference of
about five megawatt-hours was channeled through the Luzon grid or users outside of the
region.
In 2002, CAR power generation demand was 107.5 megawatts distributed as follows:
Abra, 7.1 megawatts; Benguet, 92.3 megawatts inclusive of Baguio City; Ifugao, 1.9
megawatts; Kalinga and Apayao, 3.1 megawatts; and Mt. Province, 2.9 megawatts.
The total installed capacity of CAR power facilities is 208.3491 megawatts. Total
share of Benguet is 208.36 megawatts while the rest of the region generates 0.9891 megawatt
primarily by some 26 micro-hydroelectric units. The total capacity of CAR should have been
higher by 75 megawatts had Ambuklao Hydro Electric Plant been running in full capacity. It
is still under rehabilitation since the 1990 killer earthquake damaged it.
The 207.36 megawatts produced by the province of Benguet alone more than satisfy
the needs of the entire CAR and thus export excess generated power to other provinces
outside of the region. NPC owned generating plant located in Binga accounts for 100
megawatts while non-NPC owned plants account for 107.36 megawatts.
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The following table shows the existing hydroelectric power generating facilities.
Existing Power-Generating Facilities in CAR

Installed Capacity Type of Development
PROJECT TITLE (commissioned) LOCATION (Megawatts)
NPC-Owned 100.00
1. Ambuklao HEP (1956) Bokod, Benguet (75.00) Reservoir
2. Binga HEP (1960) Itogon, Benguet 100.00 Reservoir
Non-NPC Benguet 107.36
3. Bakun A (June 2001) Bakun 35.00 Run-of-River
4. Bakun C (June 2001) Bakun 35.00 Run-of-River
5. Amphohaw (Aug 1991) Sablan 8.00 Run-of-River
6. Bineng 1 (Nov 1991) La Trinidad 2.80 Run-of-River
7. Bineng 2 (Dec 1991) La Trinidad 1.80 Run-of-River
8. Bineng 2b (Aug 1992) La Trinidad 0.75 Run-of-River
9. Bineng 3 (Sep. 1992) La Trinidad 4.50 Run-of-River
10. Irisan - Baguio City gov’t. (Jun 91) Tuba 1.20 Run-of-River
11. Lon-oy (Jul 1993) Bakun 3.60 Run-of-River
12. Lower Labay (Aug 1992) Bakun 2.40 Run-of-River
13. Sal-angan (Oct 1991) Tuba 2.40 Run-of-River
14. Asin Plant 1 (May 1991) Tuba 1.36 Run-of-River
15. Asin Plant 2 (April 1991) Tuba 1.35 Run-of-River
16. Asin Plant 3 (June 1991) Tuba 1.50 Run-of-River
17. FLS/Upper Takbo (Jun 92/Oct 93) Bakun 5.20 Run-of-River
18. Philex Itogon 0.50 Run-of River
Benguet (Total MW) 207.36
19. Ifugao (11 micro-hydro) 0.7828 Run-of River
20. Kalinga (10 micro-hydro) 0.2050 Run-of River
21. Mt. Province (2 micro-hydro) 0.0013 Run-of River
CAR (Total MW) 208.3491
* Under rehabilitation since July 1990 earthquake Source of Data: NPC, HEDCOR, DOE, LGU
ENVIRONMENTAL IMPACT
In hydropower development, interference with the ecosystems where they are

implemented is a major concern. During construction, some problems that may arise include
air pollution from equipment emissions and dust from excavations, water contamination from
petro-chemical spills, loss of fish species, spawning paths and existing aquatic habitats.
During the operation phase, drying up of the riverbed may occur and could lead to the loss of
aquatic life and obstruction of natural fish migration patterns. These are short-term effects
and can be regarded as moderate negative impact. The river's temperature and its oxygen
content may also be affected. Just like any other energy development project, the negative
impact from hydropower development is mostly incurred during the construction phase.
Majority of the environmental impact seen in the production of solar energy is not in
their use, but during the process that is required to manufacture photovoltaic cells. It is
estimated that 97% of the pollution is involved in their production; the other 3% is due to
small amounts of toxic gases which are used in non-silicon based cells. Still, the amount is
still less than pollution caused by conventional methods of energy production. There is also
some environmental impact through the use of natural resources as production materials.
Other than these, solar energy production produces no fumes, liquids, or solid waste
products, nor does it require water to function. It does not produce greenhouse gases,
contribute to acid rain, or air pollution.
Wind energy is at the extreme end of a means of energy production, which does not
affect the environment. Throughout the years wind turbines have produced little to no harm
to the environment. Although, there have been some complaints made against them such as
noise pollution, electromagnetic interference, and excessive land use, these problems are
currently being phased out through advancements in the materials used to build and
efficiency of modern turbines. In terms of water and air pollution, the impact of wind
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turbines is negligible. Noise pollution is becoming a non-factor through the production of
modern turbines, which can operate at lower noise levels than their predecessors once did.
Currently, a modern wind turbine operates at a lower decibel level than normal street traffic.
Electromagnetic interference is also something that occurred in the wind turbines of the past
because their blades were made out of steel, rather than the composite or wood laminate
which is commonly used today.
MAJOR PROGRAMS
Power Generation
The Cordillera Energy Producer Master Plan contains for the planning period of
2004-2013 some 36 proposed hydroelectric power projects distributed in six provinces
initially designed to generate a combined installed capacity of 401.29 MW.
While this projected generated power is just a small eleven percent of the region’s
total potential of 3,587.03 megawatts, the same would be a giant step at jumpstarting a larger
mass-based, popularly supported energy development program in the Cordilleras, befitting its
avowed development niche to become the leading hydro-based power producer. The
foregoing tables show the distribution of the proposed priority projects and the hydroelectric
power potential for each province.
Priority Hydroelectric Power Projects, CAR, 2004-2013

Priority/ Province Type of Hydro Installed Capacity
Project Title Dev’t. Municipality (Megawatts)
First Priority (Start-up) 28.55
Abra Tineg A Mini Tineg 6.80
Apayao Agbulo Mini Calanasan 5.00
Benguet Bakun E Mini Bakun 7.00
Ifugao Malulon Mini Lamut 3.50
Kalinga Maling Mini Balbalan 3.75
Mt. Province Talubin Mini Bontoc 2.50
Second Priority 51.37
Abra Lower/Upper Bucloc Mini Daguioman 2.15
Apayao Aoan Mini Calanasan 5.00
Benguet Galiano Mini Tuba 10.00
Ifugao Lamut A Small Lamut 12.00
Kalinga Pasil B Small Lubuagan 16.00
Mt. Province Layugan Mini Besao 6.22
Third Priority 54.26
Abra Dumanil A Small Luba 17.70
Apayao Gened Mini Pudtol 5.00
Benguet Malaya A Small Bakun 11.31
Ifugao Panghinawan Mini Kiangan 1.20
Kalinga Pasil C Small Pasil 16.00
Mt. Province BDC-Chico Mini Bontoc 3.05
Fourth Priority 99.78
Abra Palsiguan Small Tineg 31.00
Apayao Dagara Mini Kabugao 6.70
Benguet Benneng A Small Bokod 14.48
Ifugao Bangbang Mini Kiangan 8.60
Kalinga Pasil D Small Pasil 12.00
Mt. Province Tanudan B Small Barlig 27.00
Fifth Priority 106.83
Abra Utip A Small Tubo 23.57
Apayao Abulog Mini Pudtol 3.00
Benguet Amburayan C Small Kibungan 30.20
Ifugao Siffu B Small Aguinaldo 17.96
Kalinga Saltan B Small Balbalan 24.00
Mt. Province Tanudan A Mini Barlig 8.10
16
Table Continued…
Priority/ Province Type of Hydro Installed Capacity
Project Title Dev’t. Municipality (Megawatts)
Sixth Priority 60.50
Abra Tineg D Mini Tineg 5.30
Apayao Agbulu B Mini Calanasan 5.00
Benguet Amburayan A Small Kibungan 32.80
Ifugao Bokiawan Mini Kiangan 6.90
Kalinga Chico Mini Tabuk 9.80
Mt. Province Siffu I Mini Paracelis 0.70
Total 401.29
Potential Hydroelectric Power Projects, By Province, CAR, 2004-2013

Province Potential (Megawatts) Percent to Total
Abra 671.03 18.71
Apayao 1,327.92 37.02
Benguet 534.66 14.91
Ifugao 154.29 4.30
Kalinga 601.64 16.77
Mt. Province 297.49 8.29
C.A.R. TOTAL 3,587.03 100.00
Rural Electrification
In terms of rural electrification, all CAR municipalities have been energized with
about 82 percent of the barangays covered and 78 percent of potential households connected
to the power lines. The region’s average system loss according to NAPOCOR for all of the
provincial electric cooperatives is 15.68 percent which is attributed to the generally
dilapidated distribution lines.
The New and Renewable Energy sources are found to be more viable and suitable to
CAR’s rugged topography and dispersed settlement patterns compared to missionary lines,
which would require kilometers of expensive transmission, and distribution lines.
Under the National Electrification Administration Energization Program (2002–
2006), 129 barangays in 34 municipalities considered as off-grid areas would accordingly be
energized through NRE. Some 44 barangays and sitios would still be connected to the grid.
Off-grid areas like the remaining 10 % un-energized barangays in CAR are categorized as:
(a) at least 5 km. from the nearest distribution/ transmission line; (b) low capacity of potential
consumers to pay and mostly are flat-rate users; (c) clustered houses of at least 30; and (d) no
concrete plans by the rural electric cooperatives concerned for grid connection within the
next 2-5 years.
Information, Education and Communication (IEC) Plan
This study found out that mini- and small-hydroelectric projects of the run-of-the-
river type of development are largely supported in principle by the local people. Nonetheless,
there is need to institute full awareness among the stakeholders on the details on hydropower
projects in order to explain the three conditionalities of local national resources exploration
and development, namely, economic viability, environmental friendliness and social
acceptability. Hence the necessity to mount an information, education and communication
plan to support a hydropower development program. This would entail social mobilization,
advocacy, showcasing of community benefits, and strategic messages. The carrying-out of
the IEC Plan will largely depend on:
• The availability of logistical support from the concerned national line agencies,
concerned LGUs and private investors
• Cooperation and support of the Local Government executives
• Active participation of the local stakeholders
One overriding imperative is prior social marketing before actual project development
starts. Also, there is the need to be transparent in all the details of the project and to involve
all affected local stakeholders.
17
INVESTMENT REQUIREMENTS
The investment requirement for the 36 priority proposed hydroelectric projects that
would generate 401.29 megawatts over a ten-year period is projected at P 33.106 Billion (at
constant 2004 prices). Financing these projects is envisioned to be sourced from government-
backed long-term loans through Department of Energy assistance utilizing the provisions of
the Mini-Hydro Law, which provides a loan package equivalent to 56% of the total project
cost, the balance of which should accordingly be provided by the private sector. Local
investors’ equity from the proponent local government units, the local electric cooperatives,
and the local private sector are seen to be limited and may not even be able to contribute ten
percent of the total project cost. Other sources of funds being considered are Kyoto Protocol
participating countries fund for exchange-for-environment mechanism.
Over the planning period 2004-2013 the estimated capital outlay of priority projects
are as follows: First priority or start-up projects would need P2.355 Billion and would
generate 28.55 megawatts; Second priority projects P4.238 Billion with 51.37 megawatts;
Third Priority Projects P4.476 Billion with 54.26 megawatts; Forth Priority Projects
P8.231.85 Billion with 99.78 MW; Fifth Priority Projects P8.813 Billion with 106.83 MW;
and Sixth Priority Projects P4.991.25 Billion with 60.50 MW of expected hydropower energy
output. The table below shows the details of priority projects
INVESTMENT REQUIREMENTS, 1st to 4th PRIORITY PROJECTS
Long-term Loans, LGU & Private Sector Investments, By Province, 2004-2013
Priority/ Type Installed Cost
Province Project Title of Municipality Capacity (PhPMillion) Potential Market
Hydro (MW)
Dev’t.
First Priority 28.55 2,355.38
(Start-up)
Abra Tineg A Mini Tineg 6.80 561.00 The province’s
requirement of 5.8 MW
Apayao Agbulo Mini Calanasan 5.00 412.50 The province’s
Benguet Bakun E Mini Bakun 7.00 577.50 Adjoining provinces and
the Luzon Grid
Ifugao Malulon Mini Lamut 3.50 288.75 The province’s
Kalinga Maling Mini Balbalan 3.75 309.38 The province’s
Mt. Talubin Mini Bontoc 2.50 206.25 The province’s
Province requirement of 2.4 MW
Second Priority 51.37 4,238.03
Abra Lower/ Mini Daguioman 2.15 177.38 Ilocos Sur and the Luzon
Upper Bucloc Grid
Apayao Aoan Mini Calanasan 5.00 412.50 Northwestern Cagayan
and the Luzon Grid
Benguet Galiano Mini Tuba 10.00 825.00 Adjoining provinces and
the Luzon Grid
Ifugao Lamut A Small Lamut 12.00 990.00 Nueva Vizcaya and the
Luzon Grid
Kalinga Pasil B Small Lubuagan 16.00 1,320.00 Cagayan and the Luzon
Grid
Mt. Layugan Mini Besao 6.22 513.15 Ilocos Sur and La Union
Province and the Luzon Grid
Third Priority 54.26 4,476.45
Abra Dumanil A Small Luba 17.70 1,460.25 Ilocos Sur and the Luzon
Grid
Apayao Gened Mini Pudtol 5.00 412.50 Northwestern Cagayan
and the Luzon Grid
Benguet Malaya A Small Bakun 11.31 933.08 Adjoining provinces and
the Luzon Grid
Ifugao Panghinawan Mini Kiangan 1.2 99.00 Nueva Vizcaya and the
Luzon Grid
Kalinga Pasil C Small Pasil 16.0 1,320.00 Cagayan and the Luzon
Grid
Mt. BDC-Chico Mini Bontoc 3.05 251.62 Ilocos Sur, La Union and
Province the Luzon Grid
18
Hydro (MW)
Dev’t.
Fourth 99.78 8,231.85
Priority
Abra Palsiguan Small Tineg 31.00 2,557.50 Luzon Grid
Apayao Dagara Mini Kabugao 6.70 552.75 Luzon Grid
Benguet Benneng A Small Bokod 14.48 1,194.60 Luzon Grid
Ifugao Bangbang Mini Kiangan 8.60 709.50 Luzon Grid
Kalinga Pasil D Small Pasil 12.00 990.00 Luzon Grid
Mt. Tanudan B Small Barlig 27.00 2,227.50 Luzon Grid
Province
INVESTMENT REQUIREMENTS, 5th and 6th PRIORITY PROJECTS

Long-term loans, LGU & Private Sector Investments, By Province, 2004-2013

Hydro (MW)
Dev’t.
Fifth Priority 106.83 8,813.47
Abra Utip A Small Tubo 23.57 1,944.52 Luzon Grid
Apayao Abulog Mini Pudtol 3.00 247.50 Luzon Grid
Benguet Amburayan C Small Kibungan 30.20 2,491.50 Luzon Grid
Ifugao Siffu B Small Aguinaldo 17.96 1,481.70 Luzon Grid
Kalinga Saltan B Small Balbalan 24.00 1,980.00 Luzon Grid
Mt. Province Tanudan A Mini Barlig 8.10 668.25 Luzon Grid
Sixth Priority 60.50 4,991.25
Abra Tineg D Mini Tineg 5.30 437.25 Luzon Grid
Apayao Agbulu B Mini Calanasan 5.00 412.50 Luzon Grid
Benguet Amburayan A Small Kibungan 32.80 2,706.00 Luzon Grid
Ifugao Bokiawan Mini Kiangan 6.90 569.25 Luzon Grid
Kalinga Chico Mini Tabuk 9.80 808.50 Luzon Grid
Mt. Province Siffu I Mini Paracelis 0.70 57.75 Luzon Grid
1st to 6th Priority Projects Total 401.29 33,106.43
THE CEPMP IMPLEMENTATION PLAN
The Policy Context
Three basic laws of recent passage comprise the policy environment in which the
following Cordillera Energy Producer Master Plan implementation program is formulated:
The Electric Power Industry Reform Act of 2001 (R.A. 9136 otherwise known as EPIRA)
which established a revised market-driven playing field for the energy sector (no longer a
monopoly of government) and which transfers power generation responsibility to the private
sector; the Mini-Hydroelectric Power Incentives Act of 1991 or Republic Act No. 7156
which grants opportunity for mini-hydro development to the private sector; and the Local
Government Code of 1991 or Republic Act No. 7160 which grants local government units to
engage in local enterprise as one means of raising revenue.
Initiating Hydropower Development at Local Levels
The province based public consultations conducted in the preparation of this CEPMP
surfaced two main options of inducing local initiatives to advance hydropower development
of the mini- and small-hydroelectric projects variety in the Cordillera provinces: a) simply
allowing unhampered the private sector to develop local hydropower potentials, as is being
undertaken in Benguet; and b) local government initiated projects unassisted or assisted by
higher level government authorities.
In the case of Benguet, there appears no compelling pressure for government

intervention in developing more mini- and small-hydroelectric projects; the private sector is
19
quite advanced. The same trend cannot be said in the rest of the provinces though where
private sector enterprises of considerable magnitude have yet to be established and mini- and
small-hydropower potentials are among the often-touted possibilities of opening up medium
to large-scale job generating enterprises in these areas.
There are some compelling reasons why government intervention is needed to spur
mini- and small-hydropower project development in the hinterland Cordillera provinces: a) It
is noted that the market-driven hydropower development in Benguet is not proceeding
acceleratedly into the other provinces; the sole private hydropower company in Benguet has
indicated desire to be assisted for it to venture into the other provinces; b) The greater private
sector developers in the energy sector have concentrated in the more technology-familiar
energy field like oil-based and coal-based power plants; and c) There appears to be some
cultural barriers in the other Cordillera provinces significant enough to discourage private
sector developers unassisted. Hence, decisive government intervention is needed and the
intervention needs to be local but greatly needs national government assistance if particular
local natural resource potentials are targeted or offered for development.
LGU Initiatives with national Government Assistance
The key implementation approach contemplated in the master plan attempts to

innovatively customize the proposed Cordillera hydropower development program to the
unique local peculiarities of the region. The feedback from the multi-sectoral consultations
conveys a set of basic conditionalities that must be sufficiently addressed for any and all
proposed hydroelectric projects to succeed. The considerations of environmental friendliness
and sustainability, cultural compatibility, social and political acceptability, economic
viability, mitigation of potential adverse impact, and assured mutual benefit should guide any
and all hydroelectric projects in the Cordilleras and all of them satisfactorily addressed at the
community or barangay, municipal LGU and provincial LGU levels. The proposed approach
does not have a full precedent in Philippine setting, hence could be considered as ground
breaking innovation in national government-assisted local development of natural resource
that is worthy to be experimented on and supported by all concerned stakeholders. The
following are the core features of the proposed operational implementation plan:
1. To establish a local power corporation with the provincial, municipal government,

the rural electric cooperatives, the local private sector, and the adversely affected
community people as initial incorporating stockholders;
2. Then obtain the necessary franchise or permit to operate a hydroelectric plant
from the Department of Energy over the identified/preferred prospective
hydroelectric project;
3. Next, partner with a hydroelectric plant developer/operator with proven track
record;
4. The new partnership then negotiates for funding and financing with government
assistance;
5. The partnership then undertakes project implementation when funding is
obtained.
6. Monitoring and evaluation should be undertaken by the assisting government
agencies to ensure project success.
7. Other Implementing Concerns:
a. Policy support from the Regional Development Council (RDC);

b. Information, Education and Communication (IEC) Program by RDC and
monitoring agencies;
c. Establishment of a nurturing hydropower development assistance
extension program by oversight government agencies made up by local
and national agencies specially in coordination with the Department of
Energy to attend to the following special tasks, among others:
20
(1) Mini-hydropower project cycle in pursuance to RA 7156
(2) Acquisition of a nonexclusive reconnaissance permit
(3) Execution of an operating contract
(4) Accreditation as a private sector generating facility
(5) Endorsement from local government unit and application of
business permit
(6) Registration of the business with the Securities and Exchange
Commission
(7) Application for water rights permit from the National Water
Resources Board
(8) Application for environment compliance certificate (ECC) from
the Department of Environment and Natural Resources
(9) Continuing information, education and communication plan
(10) Continuing investment promotion focused on Cordillera
hydropower potentials
The Rationale for Establishing a Local Power Corporation
“For whom is development?” is the basic question that is usually asked in local
debates when local communities and stakeholders are asked whether to allow or oppose a
proposed project to exploit and develop a particular local natural resource, such as, minerals
to be mined or water resource to be tapped for hydropower or irrigation/domestic use.
Past histories of natural resource exploitation/development in the Cordillera have

usually been by outsiders whose usual track record has been largely disappointing. Mined out
areas have been abandoned and the environment destroyed and not restored; the big
hydroelectric dams have still unresolved historical issues of displaced families. Local
communities and local government units are compensated with token royalties as provided
by law and sometimes with additional but still nominal benefits by the exploiting company
when doing so serves the latter’s objectives of maintaining community support to the
operations of the development project.
The proposal, therefore, to establish a local power corporation responds to the above-
mentioned basic question of local development stakeholders. The idea is to have the
concerned local government units, the affected community people, the principally concerned
sectors in the locality and the local private sector to co-own the local power enterprise. The
local power corporation then invites a reliable hydropower operator as a partner, either as an
industrial partner or investor-industrial partner, and develop and subsequently operate the
hydroelectric project.
This approach is seen to automatically address the conditionalities to exploiting and

or developing local natural resource mentioned earlier. For it would be in the long-term
interest of local stakeholders who would be co-owners of the hydroelectric enterprise that
shall develop and operate the local natural resource to ensure that their enterprise shall be
sustainable and be a long-term profitable undertaking.
21
THE
MASTER PLAN
2004-2013
I. INTRODUCTION
The Cordillera Regional Development Plan 2001-2004 envisions capitalizing

on and developing a significant number of the region’s vast hydro energy potentials
towards its goal of making the region a “major energy producer.” Within the planning
period, the Cordillera is being prepared to bolster its status as the leading hydro-based
power supplier in North Luzon through the development of environment-friendly and
culturally compatible micro, mini, small and large hydro projects. It has also limited
geothermal and wind power potentials. In the long term, the region would occupy a
strategic position in national energy development and security as imported fuels are
expected to become increasingly expensive and highly vulnerable to external price
fluctuations.
The Regional Development Council of the Cordillera Administrative Region

(RDC-CAR) conceptualized the master-planning project through its Infrastructure
Committee (INFRACOM) as a strategic implementing step to operationalize the
foregoing vision. The Department of Energy (DOE) with funding to be charged to the
share of CAR from the accrued financial benefits provided under the DOE Energy
regulation No. 1-94 adopted the project for assistance.
Project Study Background and Objectives
The master plan intends to serve as a strategic implementing step to

operationalize the 2001-2004 CAR Regional Development Plan’s vision as a “leading
hydro-based power supplier in North Luzon”, specifically run-off river type of mini
and small hydro plants.
This endeavor promotes the development and use of new and renewable
energy (NRE) sources in order to help shift the country’s dependence on imported
fuel.
The Regional Development Council (RDC-CAR) through its Infrastructure

Committee (Infracom) conceptualized the project study. The conduct of the study,
funded from the CAR’s regional share from DOE ER No. 1-94, intends to produce a
master plan and implementation program for the development of a number of mini
and small hydro-electric projects in the CAR following environmental friendly and
socio-culturally compatible approaches consistent with the economic development
needs of the region and the national energy plan. Specifically, the project will
undertake to achieve the following objectives:
a) To prepare a systematic inventory of the region’s recorded mini to small

hydropower potentials, conduct cursory evaluation of the same and produce some
information materials for public consultation purposes;
b) To conduct a series of local consultation dialogues with the officials of

potential host provinces, municipalities, barangays and other stakeholders with end
vision of encouraging host LGUs and communities to take ownership of certain local
proposed projects and champion them as investment possibilities;
22
c) To process, analyze, interpret and evaluate the gathered data and information
towards the formulation of the master plan including an implementation strategy and
action program; and
d) To design an information, education and communication (IEC) program for a

continuing program to increase acceptability of hydropower generation projects
among potential host communities.
Study Approach and Methodology
The approach required in the conduct of this project is goal-oriented: the

project output shall serve as resource guide to invited investors exploring to apply any
of the different Build Operate Transfer (BOT) variants. The project shall entail
regional development planning methodology, which incorporates resource
assessment, risk and viability analysis, and investment program formulation and
promotion module design. The stakeholders’ participation shall be given emphasis
through the conduct of local consultation dialogues to assure socio-political
acceptance of the development of energy resource projects. Within the dimension of
sustainable development, the master plan should determine the risks and potential
negative impact(s) of the energy source projects and correspondingly, provide
steps/mitigating measures to prevent these from happening. Figure 1 shows in
schematic form the Master Planning Approach.
The master plan is also envisioned to be used to attract investments on mini-

to small-hydro projects and would lead to increased economic activities in the
locality. It is preferred that the host LGUs own the projects and become the project
proponents and champions with assistance and support from national government
agencies. The plan should therefore, also serve as a guide to project shepherding.
The master plan is to be formulated within the contextual framework of the

Local Government Code of 1991 and the Electric Power Industry Reform Act (EIRA)
or Republic Act No. 9136.
Scope and Focus of the Study
As outlined in the technical proposal and the methodology stipulated under

the Terms of Reference (see Annex 1), it primarily entails regional development
planning approach to focus on the energy sector. This includes but not limited to
development framework, resource assessment, risk and viability analysis, and
investment program formulation and promotion module design. To generate local
stakeholder’s inputs through LGUs and concerned communities’ participation, the
conduct of consultation dialogues shall be in various levels. Likewise, a
comprehensive analysis shall be conducted.
23
24
II. NATIONAL, REGIONAL AND SECTORAL CONTEXT
A. National Situationer on Energy Supply and Demand
Overall Development Framework
The continuous and sustained development of the energy sector is necessary

in order to support the targeted economic growth, poverty alleviation and market
based industry objectives of the Medium Term Philippine Development Plan. Thus
the Philippine Energy Plan (PEP) 2002-2011 aims to attain the following energy
sector goals:
a) Stable, secure, and efficient energy supply;
b) Fair and reasonably prices energy prices in a market-based industry;
c) Full barangay electrification;
d) Consumer welfare enhancement in an increasingly deregulated energy
sector;
e) Clean and efficient energy fuels, technologies and infrastructure
facilities; and
f) Technology transfers and job creation opportunities in both domestic
and international markets.
In attaining stable, secure and efficient energy supply, the PEP targets an
increase in energy self-sufficiency level to at least 50 percent by the end of the
planning year. This could be attained thru the development and utilization of
indigenous energy sources like geothermal, natural gas, hydro, and other new and
renewable energy sources.
To attain fair and reasonable energy prices, the PEP targets to provide a
mechanism to lower the cost of power though appropriate fiscal and monetary
incentives and policies that will encourage increased participation of the private
sector in energy development.
On the other hand, the PEP targets a full electrification of all barangays by
2006, through a closer coordination between the public and private entities engaged
in energy development and distribution.
In ensuring consumer welfare in an increasing deregulated sector, the PEP
targets more intensive public information and advocacy.
To attain its goals on clean and energy efficiency, the PEP targets the adoption
of new and alternative energy technologies like the use of compressed natural gas,
coco diesel, and other NRE sources for transport.
Finally, the PEP targets technology transfer in the international market by
offering its expertise in the development of geothermal energy. Likewise, the PEP
targets job creation in the domestic market by supporting community based small
scale energy development like micro-hydro, biogas and other sources that could be
undertaken at the community level.
25
Power Demand and Supply Outlook
Energy consumption is expected to increase with the MTPDP’s GDP growth

targets of 6.5% annually. This necessitates that energy development needs to keep in
pace with the expected increase in industrial activities and the domestic needs of the
growing population. In particular, the PEP will target the aggressive development of
natural gas, and higher utilization of indigenous coal, geothermal, hydro and new and
renewable energy sources.
In 2002, the country consumed around 251 Million barrels of fuel oil
equivalent (MMBFOE), which slightly decreased by about 1.2 percent from its 2001
level. Dependence on indigenous energy sources is increasing with the significant
development of the country’s coal, geothermal, natural gas and new and renewable
energy sources. Dependence on imported energy is decreasing as indigenous energy
is increasing. Table 1 show that indigenous energy increased from 45 percent in 2001
to 51 percent in 2002 while imported energy dropped from 55 percent to 49 percent, a
clear savings in foreign exchange.
Table 1. Primary Energy Mix, 1999-2002
2001 2002
Volume % Share Volume % Share
INDIGENOUS ENERGY 114 45% 128 51%
Oil 0 0% 4 1%
Gas 0 0% 11 4%
Coal 5 2% 4 2%
Hydro 13 5% 12 5%
Geothermal 20 8% 18 8%
NRE 76 30% 79 31%
IMPORTED ENERGY 140 55% 123 49%
Oil 117 46% 104 41%

Coal 23 9% 19 8%
TOTAL 254 100% 251 100%
Oil 117.0 46% 107.5 43%

Non-oil 137.4 54% 142.9 57%
Sources of data: DOE’s 2001 Annual Report, Philippine Energy Plan 2002-2011,
Updated Executive Summary of PEP 2002-2011, and Handout, PEP 2004 -2013
Public Consultation.
26
Table 2. Power generation, installed capacity and annual generation by type
Ave 2000-
FUEL TYPE 2000 2001 2002
2002
Coal-fired
Installed capacity (MW) 3,825 3,825 3,769 -1.46%
Gross generation (GWH) 16,663 19,750 15,994 -4.01%
Oil Based
Natural Gas
Installed capacity (MW) 3 3 2,763 92000%
Gross generation (GWH) 17 0 8,724 51218%
Hydroelectric
Installed capacity (MW) 2,304 2,524 2,524 9.55%
Geothermal
Installed capacity (MW) 1,931 1,931 1,931 0.00%
Total Installed
Gross generation (GWH) 45,290 48,170 48,467 7.01%
Around 48,467 GWH of electric power has been generated by the country’s
power generation facilities in 2002, which has a combined installed capacity of
10,738 MW. Historically, the country’s total installed capacity has decreased by 19
percent for the past 3 years with the decommissioning of aging power plants,
particularly oil-based facilities. The resulting decrease in their power generation has
been compensated by the commissioning of the 2,763 MW natural gas-fired power
plants, which contributed some 8,724 GWH (or about 18% of the total power
generated for 2002).
The PEP 2004-2013 indicates that system peak power needs to increase by 9.6
percent to match the projected GDP growth rate of 6 percent by 2009, as well as to
replace aging power plants. Also the PEP 2004-2013 targets the increase in
indigenous power generation through the development and utilization of new and
renewable energy sources such as mini-hydro, wind, solar, ocean and biomass, as
well as the installation of additional natural gas, coal, hydro and geothermal
resources.
27
B. Regional Profile
Brief Description of the Region
The Cordillera Administrative Region popularly known as CAR is a

landlocked and mountainous region. It is located at the heart of northern Luzon and
saddled on the largest range in the Philippines, the Gran Cordillera. Bounded on the
North by the provinces of Ilocos Norte and Cagayan; on the West by the Ilocos
provinces and Pangasinan; on the East by Isabela and Nueva Vizcaya; and on the
South Pangasinan and Nueva Vizcaya. Figure 2 shows the political boundaries of the
region.
Executive Order No. 220 dated July 15, 1989 delineated the boundaries of
CAR carving it from Region’s I and II. It comprises Abra, Benguet, Mt. Province and
Baguio City from Region I (Ilocos); Ifugao, Kalinga and Apayao from Region II
(Cagayan). It has a land area of 18,293.70 square kilometers. There are a total of
1,172 barangays distributed as follows: 128 barangays in the lone chartered city of
Baguio and 1,044 barangays in the 76 municipalities of the 6 provinces.
CAR is a tourist haven. It prides itself with the following attractions: 9 th

Wonder of the World, the Banaue Rice Terraces in the province of Ifugao; the natural
limestone caves and underground rivers of Mt. Province; the white waters and virgin
forests of Kalinga and Apayao; the second highest mountain in the archipelago, Mt.
Pulag, sitting in the boundaries of Benguet and Ifugao; the melting pot of lowlanders
and highlanders in the province of Abra; and historic Baguio City, the venue of the 1st
Philippine Commission Session from April 22 to June 11, 1904. Today this premier
city is the center of the regional government of the Cordilleras as well as the
educational center of the North.
Demography
Approximately two percent of the entire Philippine population in 2000, that is,
1,365,220 persons resides in the Cordilleras. This grew at an average of 1.82 percent
annually from 1995. Alongside national figures, the Cordilleras paints a picture of a
sparsely populated region with density of 82 persons per square kilometer of land
area, more or less one-fourth of the country’s population density at 255 persons per
square kilometer. Among all its component city and provinces, Baguio City recorded
the highest population density at 4,389 persons per square kilometer, followed by
Benguet at 170; Apayao is the least populated province with only 25 persons per
square kilometer. Table 3 gives the population distribution of the CAR on a per
province / city basis:
Table 3. 2000 Population, Cordillera Administrative Region

Density Average Annual Growth Rate
Province / City 2000 Population (persons/sq km) (1995-2000)
Abra 209,491 67 1.44
Apayao 97,129 25 3.25
Baguio City 252,386 4,389 2.31
Benguet 330,129 170 1.09
Ifugao 161,623 64 1.67
Kalinga 174,023 55 2.63
Mt. Province 140,439 70 1.54
CAR 1,365,220 82 1.82
Source: 2002 Philippine Statistical Yearbook
28
Figure 2. ADMINISTRATIVE MAP OF CAR
29
With respect to the rate at which the population is growing on a per province
basis, Apayao, a newly created province, registered the fastest annual average
population growth rate at 3.25 percent while Benguet registered the least at 1.09
percent.
Socio-Cultural Development
Cultural Aspect. Indigenous peoples whose culture and ethno linguistics are
characterized by diversity and heterogeneity predominantly inhabit the Cordilleras.
According to the Cordillera Tourism Master Plan, the major ethno linguistic groups
of the indigenous peoples are:
• Ibaloy of northeastern and southern Benguet

• Kankana-ey of Northern Benguet and western Mountain Province
• Ifugao of the Ifugao province
• Kalinga of Kalinga province
• Isneg of Apayao
• Tingguian of Abra
• Bontok of central, northern and eastern Mountain Province
• Ilokano of Abra, Baguio and southern Benguet
• Karao of eastern Benguet
• Kalanguya of northeastern Benguet, Nueva Vizcaya and southwestern Ifugao
While the region’s culture is extremely diverse, like any other culture, its
uniqueness is presently undergoing social change brought about by the confluence of
several factors. The 1995 Cordillera Tourism Master Plan cites the following as
agents for the gradual cultural transformation: a) influence of religion (Christianity)
and education; b) assimilation of lowland ways – the lure of modern and urban life; c)
incursion of modern government systems into tribal leaderships; and d) economic
pressure forcing many to migrate to other areas and adapt to their new environment.
Hence to date, there have been noted observations on the loss of some sustainable
traditional practices especially in more urbanized areas of the region.
Another crucial concern presently governing indigenous cultural communities
(ICC) or indigenous people (IP) in the region is the passage of RA 8371 or the
Indigenous Peoples’ Rights Act (IPRA) of 1997. This Act aims to recognize, protect
and promote the rights of indigenous cultural communities / indigenous peoples
within the framework of the Constitution. The following policies of the State
governing indigenous peoples are worth noting to understand especially in the way
they might impact on proposed programs / projects in the region:
a) The State shall recognize and promote the rights of ICCs/IPs within
the framework of national unity and development;
b) The State shall protect the rights of the ICCs/IPs to their ancestral
domains to ensure their economic, social and cultural well-being and
shall recognize the applicability of customary laws governing property
rights or relations in determining the ownership and extent of ancestral
domain;
c) The State shall recognize, respect and protect the rights of ICCs/IPs to
preserve and develop their cultures, tradition and institutions. It shall
consider these rights in the formulation of national laws and policies;
30
d) The State shall guarantee that members of the ICCs/IPs regardless of
sex, shall equally enjoy the full measure of human rights and freedoms
without distinction or discrimination;
e) The State shall take measures, with the participation of the ICCs/IPs
concerned to protect their rights and guarantee respect for their cultural
integrity, and to ensure that members of the ICC/IPs benefit on an
equal footing from the rights and opportunities which national laws
and regulations grant to other members of the population; and
f) The State recognizes its obligations to respond to the strong expression

of the ICCs/IPs for cultural integrity by assuring maximum ICCs/IPs
participation in the direction of education, health, as well as other
services of ICCs/IPs, in order to render such services more responsive
to the needs and desires of these communities.
Towards these ends, the State shall institute and establish the necessary
mechanisms to enforce and guarantee the realization of these rights, taking into
consideration their customs, traditions, values, beliefs, interests and institutions, and
to adopt and implement measures to protect their rights to their ancestral domains.
The National Commission on Indigenous Peoples (NCIP) is now currently

laying the ground works for the full implementation of the IPRA. One essential
feature of the Act is the needed issuance of the Free and Prior Informed Consent
(FPIC) and the Certification Precondition as requisites in connection with
applications for license, permit, agreement to operate
programs/projects/plans/businesses, etc. within the indigenous peoples’ ancestral
domains.
Social Aspects
In year 2000, the Cordilleras registered a mean family income of P 139,613,

ranking 4th nationwide in terms of the regional average income in the country. As
expected, Baguio City had the highest followed by Benguet, Abra and Kalinga,
respectively. The poorest families live in Ifugao whose annual family income
averaged at P 85,245. Table 4 shows comparative figures on mean family income.
Table 4. Mean Family Income by Provinces, CAR (at 1994 constant prices)
Province 1988 1991 1994 1997 2000
Philippines 65,186 83,161 123,168 144,039

CAR 33,838 58,985 74,669 112,361 139,613
Urban 49,867 98,172 112,226 193,432 218,340
Rural 28,894 41,533 57,760 76,213 95,635
Abra 23,899 30,576 42,387 86,891 111,185
Apayao - - - 89,976 92,907
Baguio City - 127,429 131,950 211,236 233,701
Benguet 44,828 62,471 85,496 108,277 139,918
Ifugao 22,558 33,497 46,882 87,687 85,245

Kalinga 34,041 51,743 67,306 100,746 111,790
Mountain Province 21,534 40,650 59,426 68,080 98,369
31
In terms of the Human Development Index, the Cordilleras is rank 8 th out of
the 16 regions in the country. However, across 77 provinces, only Benguet and Abra
are in the top 15 having been ranked 12th and 15th respectively. While the other four
provinces are way below the rankings. Table 5 shows the CAR provinces ranking in
HDI.
Table 5. Development Status by Human Development Index (HDI)
Region 1994 Rank 1997 Rank 2000 Rank

Philippines 0.627 0.629 0.656
CAR 0.506 11 0.544 8 0.568 8
Abra 0.527 47 0.583 23 0.636 15

Apayao - - 0.532 50 0.545 61
Benguet 0.624 10 0.626 10 0.645 12
Ifugao 0.406 74 0.452 72 0.461 73
Kalinga 0.509 56 0.526 54 0.553 56
Mt. Province 0.513 54 0.545 40 0.570 43
Regional Economy
CAR’s economy output-wise is industry-based with over 65 percent of the

total goods and services domestically produced emanating from the industry sector.
Baguio City, the seat of the regional offices, hosts the Philippine Economic Zone
Authority (PEZA) where multi-national firms manufacture a variety of merchandise
from electronic items, mechanical parts of aircrafts and precision tools, to export
quality garments, etc. Owing to its unique, cool and rich culture, the region is also a
favorite tourist destination among local and foreign tourists, resulting to the rise of
trade in the services sector. Services in transportation, communications, trade,
finance, etc., accounted for more than 20 percent of gross regional domestic product
in 2002. Moreover the region, being the major producer of temperate vegetables in
the country has also carved a niche in the agriculture sector. Agriculture accounted
for more than 13 percent in the regional economy mix. Table 6 presents in detail the
region’s gross domestic product.
Table 6. Gross Domestic Product by Sub-sectoral Origin

(At Constant Prices in million pesos) Base Year: 1985
SECTOR/SUB-SECTOR 1997 VALUE % 2002 VALUE %
Agriculture 3,378 17.20 3,419 13.31
Agriculture 3,372 17.17 3,413 13.28
Forestry 6 0.03 6 0.02
Industry 11,638 59.25 16,822 65.48
Mining and Quarrying 2,122 10.80 2,553 9.94
Manufacturing 7,191 36.61 10,050 39.12
Construction 1,003 5.11 2,696 10.49
Energy, Gas & Water 1,322 6.73 1,523 5.93
Services 4,626 23.55 5,450 21.21
Transportation & Communications 353 1.80 457 1.78
Trade 989 5.04 1,313 5.11
Finance 96 0.49 105 0.41
O. Dwellings and Real Estate 879 4.48 886 3.45
Private Services 836 4.26 1,757 6.84
Government Services 1,473 7.50 932 3.63
CAR 19,642 100.00 25,691 100.00
Source: 2002 Philippine Statistical Yearbook
32
C. Major Infrastructure Facilities
National and Local Roads
Travel in the region in terms of comfort and safety has recently improved with
two major sections of the Cordillera Regional Trunk line -- the JBIC-assisted Baguio-
Rosario Road (Marcos Highway) now completed; and the rehabilitation of the World
Bank-assisted project, the La Trinidad-Mount Data Road Package I (Halsema
Highway) currently in progress. With these developments, paved national roads in the
region stood at 29 percent in 2002.
Recently, rural accessibility also improved with the new construction,

rehabilitation / upgrading of local roads, made possible through the initiatives of
Local Government Units, as well as support from various foreign-assisted projects
like the Cordillera Highland Agriculture Resource Management Project, Central
Cordillera Agricultural Programme, Caraballo and Southern Cordillera Agricultural
Development, Asian Development Bank, and from other programs of the national
government coursed through Department of Public Works and Highways and
Department of Interior and Local Government. Present rural accessibility is
generally described in Table 7.
Table 7. Rural Accessibility Situation, CAR: 2002

Development Indicator Unit of Measure 2002
Provincial roads paved % To total provincial roads 20.29
Municipal roads paved* % To total municipal roads 10.52
Barangay roads paved* % To total barangay roads 7.51
Municipal accessibility index % To total municipalities 95.13
Barangay accessibility index % To total barangays 82.59
Motor vehicle to population Motor vehicle per 1,000 population 36.00
Source of Basic Data: DPWH, DOTC, PPDOs, *Excludes the province of Abra
Of the 1,172 barangays in the region, 204 are yet to be connected with the
nearest road. The province having the most accessible barangays is Benguet (93.57
percent) while the province with the least is Kalinga (60 percent). In terms of
municipal accessibility, the poblacion of Hingyon in Ifugao and Tanudan and Pasil in
Kalinga are yet to be interlinked with the regional road system.
With the formulation of the Alternative Transport Master Plan for the
Cordilleras, rural accessibility is expected to improve in the coming years. The
Alternative Transport Master Plan envisions to:
a) Provide access to rural communities through alternative transport systems
such as footpaths, cable car systems, water transport improvements;
b) Complement transportation system in rapidly urbanizing areas in the
region;
c) Construct, rehabilitate and improve existing alternative transportation
facilities in support to the agricultural and industrial activities in the
region;
d) Support the delivery of basic and social services, governance and disaster
management; and
e) Provide access to eco-tourist sites and other areas of special interest.
33
There are identified alternative transport systems that are suitable to CAR’s
topography and socio-cultural make-up and which support the thrusts of physical
integration, sustainable development, environmental preservation and cultural
sensitivity.
In terms of air transport, the modernization of the navigation and traffic
control facilities of the Loakan Airport were recently completed. With an improved
air transport backbone, a boost in the economy is expected.
Telecommunications
Regional telecommunications development in the region is chiefly led by
partners in the private sector, in collaboration with the government. As of 2002, 19.48
percent, representing some 15 municipalities were served with private telephone
exchanges. Across provinces, Apayao remained isolated with none of its
municipalities connected to the private telephone backbone (Table 8). Among CAR
components, Baguio City registered the highest teledensity at 42.
Table 8. Telephone Service Coverage (Private), CAR: 2002

Mun. Served Number of Lines
Province % Capacity Subscribed % Subs. Teledensity
Abra 18.52% 5,126 2,239 43.68% 2
Apayao 0.00% 0 0 0.00% 0
Baguio City 100.00% 126,739 47,471 37.46% 42
Benguet 30.77% 12,262 2,980 24.30% 3
Ifugao 18.18% 165 158 95.76% 0
Kalinga 14.29% 300 280 93.33% 0
Mt. Province 20.00% 1,222 354 28.97% 1
CAR 19.48% 145,814 53,482 36.68% 10
Source of Data: NTC-CAR
On the other hand, the telephone service being provided by the Government
through the public calling offices (PCOs) continued to weaken over the years due to
damaged facilities and/or absence of telephone operators to man the facilities. Of the
60 PCOs initially installed region wide, 36 or roughly 47 percent are operational. The
current status of PCOs in the region is shown in Table 9. As shown, PCOs in Mt.
Province and Kalinga are yet to be revived.
To help provide for a cheaper service, the DOTC-CO is currently undertaking

the Telepono Para sa Barangay, Phase II whose purpose is to provide telephone
services to some 745 unserved and underserved barangays in the region. This project
however is delayed because of problems in providing national government
guarantees.
Table 9. Telephone Service Coverage (Public), CAR: 2002

Province No. of No. of Mun. No. of Mun. w/ %
Mun. With PCO Operational PCO PCO Operational
Abra 27 20 16 59.26%
Apayao 7 6 4 57.14%
Benguet 13 12 10 76.92%
Ifugao 11 7 6 54.55%
Kalinga 8 7 0 0.00%
Mt. Province 10 8 0 0.00%
CAR 76 60 36 47.37%
Source of Data: DOTC-CAR
34
Internet service expanded proportionately with the growth in telephone
service coverage. From 1999, internet service connection slightly grew with the
interlinking of the provinces of Mt. Province, Kalinga and Ifugao into the World
Wide Web. Meantime, Cable Television (CATV), radio broadcast and postal services
continues to be provided up to the present. Table 10 gives the current situationer in
information technology in CAR. As shown, the province of Apayao is yet to be
connected with a telephone service and subsequently, an Internet service.
Table 10: Information Technology Situationer, CAR: 2002

Internet Coverage CATV Coverage Radio Broadcast Postal Stations
Province No. of Mun. % Mun. % Mun. % Mun. %
Mun. Served Covered Served Covered Served Covered Served Covered
Abra 27 1 3.7% 2 7.4% 27 100% 27 100.0%
Apayao 7 0 0.0% 1 14.3% 7 100% 7 100.0%
Baguio City 1 1 100.0% 1 100.0% 1 100% 1 100.0%
Benguet 13 1 7.7% 5 38.5% 13 100% 13 100.0%
Ifugao 11 2 18.18% 3 18.2% 11 100% 10 90.9%
Kalinga 8 1 12.5% 2 12.5% 8 100% 7 87.5%
Mt Province 10 1 10.0% 3 20.0% 10 100% 10 100.0%
CAR 77 7 9.10% 17 22.07% 77 100% 75 97.4%
Source of Data: NTC, PPDOs
Rural Electrification
Rural electrification in the region is generally fair with more or less 91 percent
of all 1,172 barangays being served with electricity, although the province of Apayao
is still lagging behind as compared to the rest, highest in Baguio City (100 %),
Kalinga (99.33 %), Ifugao (97.14%), and Benguet (96.14%) (see Table 11).
Table 11. Barangays Served with Electricity
No. of
Province Municipalities Barangay
Total No. % Served
Abra 27 303 93.73
Apayao 7 131 57.25
Baguio City 1 129 100.00
Benguet 13 140 96.43
Ifugao 11 175 97.14
Kalinga 8 150 99.33
Mountain Province 10 144 88.89
CAR 77 1,172 91.29
Source of Data: NEA I, II and RECs, PPDOs
In terms of household connection, of the potential households of 257,787 in

2002, around 184,927 households or 71.73 percent were provided with power. The
provinces having less than 50 percent of their households served with electricity were
Apayao (40.23%), Ifugao (47.09%), and Kalinga (48.86%).
35
III. CAR ENERGY SECTOR DEVELOPMENT
The Cordillera Regional Development Plan (CRDP) 1999-2004 serves as the

reference point of the Cordillera Energy Producers Master Plan. The following are
the provisions on energy of the CRDP, which form as an integral part of the CEPMP.
The region’s energy resources are enormous from its vast river systems of its
mountainous terrain. There are twelve (12) major river systems in the Cordilleras
(Figure 3, page 35). When fully developed, it could contribute a significant amount of
energy to the Luzon Grid. The Plan aims to cultivate such resources in accordance
with its culture such that CAR can be the leading producer of hydro-based power in
Luzon.
A. Background
Owing to its mountainous terrain and vast river systems, the Cordillera
Administrative Region is blessed with vast energy resources of 3,587 MW. If fully
developed, could significantly contribute to the Luzon’s Grid’s requirements and
could potentially result to a foreign exchange savings of about US$1.2 Billion
annually.
Currently, the hydroelectric power plants (Binga & Bakun HEPs and other
Hedcor mini-hydro plants) generate around 630 megawatt-hour (mWh) annually, or
about 2 percent of the Luzon Grid’s power generation. The rehabilitation of the
Ambuklao and Binga hydroelectric plants (HEPs) have been long delayed due to
technical and managerial difficulties while the development of 14 mini-hydro
projects; two geothermal sites and a wind power have been shelved. To date,
Ambuklao HEP is yet inoperational. Nation-wide, there has been excess in power
supply, which was brought about by the fast-track construction of oil-based and coal
power plants.
In the long term, CAR’s energy resources will occupy a strategic position in
national development and security as imported fuels become increasingly expensive
and subject to external trade control.
In terms of rural electrification, all municipalities have now been energized

with about 82 percent of the barangays covered and 78 percent of potential
households connected to the power lines. The region’s average systems loss of
15.68% is attributed to the generally dilapidated distribution lines.
B. Development Framework
Goal: The Cordillera as the leading producer of hydro-based power in North Luzon.
The region will aim to be the leading hydro-based power supplier in North
Luzon according to the Regional Development Plan. This will be achieved through
the development of mini (101 KW-10 MW) and small hydro projects (10.1-50 MW),
ensuring sustainable development while assuring equity in development.
Objectives:
1. To promote clear energy sources particularly small-scale hydro power plants.
Clean energy is an energy technology, which have insignificant or no adverse

effect on the environment. This type of energy source emits little or no harmful by-
products like carbon dioxide. Run-of-river mini and small hydro plants are the most
36
appropriate types of clean energy due to minimal carbon dioxide emission and do not
require displacement of affected villagers.
During the medium term, the development of mini and small-scale hydro
power plants shall be pursued by way of advocacy, project studies, investment
promotions, facilitating implementation of ongoing and pipelined projects.
The LGUs, in partnership with the private sector, will be encouraged to

develop mini-hydros. The LGUs will be directly involved in energy generation;
thereby marking- off from serving as plain host of purely private sector owned power
plants. Additional revenue for LGUs from energy generation would translate into
sustained local funding for poverty alleviation programs.
2. To expand rural electrification while also advocating the use of non-

conventional energy sources.
The region shall also endeavor to expand rural electrification to unserved

barangays and unconnected households. It shall promote the use of non-conventional
energy sources such as solar, wind, and other micro schemes especially in remote
barangays where the construction of traditional distribution lines would be technically
difficult and expensive.
C. Strategic Interventions
1. Accelerate the development of mini and small hydropower potentials.
The development of mini and small hydro power plants will be pursued thru
advocacy, project studies and investment promotions. The LGUs will be encouraged
to be in consortium with the private sector to develop mini hydro power plants for
local consumption. Their excess production will be wheeled to the grid. The NPC,
PNOC and the independent power producers (IPPs) are expected to continue to
conduct explorations and project studies on energy projects. However, in developing
these energy potentials, past failures and difficulties compel the power developers to
heed the lessons from Cordillera history, particularly the value of respecting the
indigenous people’s rights over their ancestral lands.
Three imperatives are derived from such experiences:
(a) Environment-friendly designs particularly run-of-river types;

(b) Culturally compatible project development approaches; and
(c) Competent project communication and conduct of consultation dialogues with
all affected communities and stakeholders.
2. Expand and rehabilitate/upgrade/modernize major power plants,

transmissions lines and substations.
The region shall continue to monitor and facilitate the rehabilitation of the
Ambuklao and Binga hydroelectric power plants given their potential in increasing
the region’s contribution to the Luzon Grid and eventually increase in revenue shares
of host LGUs. The expansion and rehabilitation and/or modernization of power
transmission lines and substations shall be pursued in order to reduce systems loss to
increase reliability of power supply. Likewise, the lack of major transmission line in
the region is a setback in power generation. Figure 4 show the existing transmission
lines.
Figure 3. MAJOR RIVER BASINS IN CAR
37
LEGEND ZIWANAN - ZUMIGUI
WATERSHED BOUNDARY
N RIVER BASIN
Drainage Area:
Origin: Apayao
4,588.00 sq.km.
Provinces Traversed: Apayao,

Cagayan (Reg. 2)
RIVERS
AGBULOG - APAYAO
Drainage Area: 2,928.00 sq.km.
Origin: Apayao
PROVINCE OF CHICO RIVER BASIN
Provinces Traversed: Apayao, Cagayan ILOCOS NORTE
(Reg. 2) Drainage Area: 4,588.00 sq.km.
Origin: Benguet
Provinces Traversed: Benguet,
CABICUNGAN - ZUMIGUI Mt. Province, Kalinga, Apayao,
RIVER BASIN Cagayan (Reg. 2)
Drainage Area: 76.00 sq.km.

Origin: Apayao
Provinces Traversed: Apayao, Cagayan PROVINCE OF CAGAYAN
(Reg. 2)
ABRA RIVER SIFU-MALIG RIVER BASIN

BASIN
Drainage Area: 4,197.00 sq.km.
Drainage Area: 823.00 sq. km.
Origin: Ifugao
Origin: Benguet
Provinces Traversed: Ifugao, Isabela,
Provinces Traversed: Benguet, Mt. Province,
Nueva Vizcaya (Reg. 2)
Abra, Ilocos Sur (Reg. 1)
PROVINCE OF
ISABELA
AMBURAYAN RIVER BASIN

Origin: Benguet
Provinces Traversed: Benguet, La Union
(Reg. 1)
NAGUILIAN RIVER BASIN

Origin: Benguet
Provinces Traversed: Benguet, La Union
(Reg. 1)
PROVINCE OF
ILOCOS SUR
MAGAT RIVER BASIN

Origin: Ifugao
Provinces Traversed: Ifugao, Isabela,
Nueva Vizcaya (Reg. 2)
PROVINCE OF
LA UNION
AGNO RIVER BASIN
PROVINCE OF NUEVA VIZCAYA Drainage Area: 1148 sq. km.
Origin: Benguet
Provinces Traversed: Benguet, La Union,
Pangasinan (Reg. 1)
BUED RIVER BASIN
Origin: Benguet
Provinces Traversed: Benguet, La Union,
10 5 0 10 20 30kms
Pangasinan (Reg. 1)
GRAPHICAL SCALE
ARINGAY RIVER BASIN

Drainage Area: 199.00 sq. km. Cordillera Administrative Region
Origin: Benguet
Provinces Traversed: Benguet,
La Union(Reg. 1) MAJOR RIVER BASINS
COMPOSED BY:NEDA-CAR/jvcjr REF: BSWM; WTF DENR-CAR
NOTE:
BOUNDARIES ARE ONLY APPROXIMATE & NOT AUTHORITATIVE DATE: 9 AUGUST 2000 FN:RIVER
Figure 4. EXISTING TRANSMISSION LINES IN NORTHERN LUZON
38
TRANSMISSION LINE
(CAR, Regions I and II)
LEGEND:
SOURCE: TRANSCO & NPC
3. Facilitate the implementation of on-going and committed power plants.
39
While recognizing the strategic importance of the almost complete San Roque
Multi-Purpose Dam Project to national development, the region shall endeavor to
protect and promote the interests of its affected communities by way of facilitating
the airing of their concerns to appropriate bodies and facilitating the release of equity
projects as provided by the DOE Law.
4. Expand rural electrification.
Expansion electricity to the rural areas is not merely to sell electricity but to
deliver electric service, spur economic activities and provide opportunities for
livelihood and improve the standards of living towards poverty alleviation.
The rural electric cooperatives (RECs), in coordination with the National

Electric Administration and the NPC SPUG (Small Power Utilities Group), are
mandated to vigorously expand rural electrification thru construction/rehabilitation of
distribution lines and substations to underserved and unserved barangays.
Where missionary line is not feasible, very remote barangays shall

accordingly be energized thru the provision of generator sets, solar energy systems or
micro-hydro power plants. The DOE/ ANEC, NEA, DOST, and related NGOs are
expected to expand their programs to help attain a 100 percent barangay and
household connection by year 2006.
Major centers like Kabugao in Apayao and Lubuagan in Kalinga which are
currently served by costly-maintained generator sets should be provided with
missionary lines.
D. Major Programs/Projects
• San Roque Multi-Purpose Dam Project

• “O Ilaw” Rural Electrification Project
• Non-Conventional Energy Development Project
• Cordillera Energy Producer Master Plan (CEPMP)
E. Rural Electrification Status
Since December 1997, all the municipal poblacion have been energized. At
the barangay level, 91.29 % or 1,070 out of 1,172 have been energized at the end of
year 2002. Kalinga garnered the highest rate with 99.33 % followed by Ifugao, 97.14
%, Benguet, 96.43 and Abra with 93.73%. Apayao had the least barangays energized
with 57.25 %. At the household level, the region had 71.73 % service coverage.
Abra posted the highest with 78.96 % followed by Mt. Province with 67.18 % and
Benguet 61.67 %. Apayao had the least with 40.23 %.
Table 12 on next page shows the status of electrification across provinces,

municipalities and barangays.
Table 12. Status of Rural Electrification, As of December 2002
40
Province Municipalities Barangays House Connections System
Loss
Total Served % Total Served % Potential Served % %
Abra 27 27 100.0 303 284 93.73 40,709 32,144 78.96 14.16
Apayao 7 7 100.0 131 75 57.25 16,168 6,505 40.23 14.20
Baguio 1 1 100.0 129 129 100.0 52,302 61,369 100.0 7.00

City
Benguet 13 13 100.0 140 135 96.43 63,123 38,926 61.67 7.00
Ifugao 11 11 100.0 175 170 97.14 29,201 13,752 47.09 14.00
Kalinga 8 8 100.0 150 149 99.33 30,473 14,890 48.86 14.20
Mt. 10 10 100.0 144 128 88.89 25,811 17,341 67.18 18.66

Province
CAR 77 77 100.0 1,172 1,070 91.29 257,787 184,927 71.73
Source of Data: NEA-I & II, RECs & PPDOs
The high level of barangay coverage is primarily attributed to the use of new
and renewable energy (NRE) particularly micro hydros and solar energy for the off-
grid areas or remote barangays. The poblacion and adjacent barangays of Tineg and
Tubo in Abra; Tinoc in Ifugao; Balbalan, Pasil, Tanudan, Lubuagan, Rizal, Pinukpuk,
Tabuk and Tinglayan in Kalinga; and Calanasan, Kabugao and Conner in Apayao
were provided with Solar Home System (SHS). The DOE or private sector likewise
equipped a number of barangays in Abra, Kalinga and Ifugao with micro hydro
plants.
However, the poblaciones of Kabugao in Apayao and Lubuagan in Kalinga

are currently served by high-cost maintenance diesel generator sets.
With the implementation of the Philippine National Oil Company (PNOC)

Home Systems Distribution Project covering Regions I, II and CAR, many
households were able to avail of the project. This has a timetable of five (5) years
starting mid-2002. At the end of year 2002, some 692 units were installed in 42
barangays within 10 municipalities in Abra and Ifugao. Though the PNOC solar unit
is not free, a lot of households are availing. For the first three years, PNOC is
targeting 1,900 households in 141 barangays within 32 municipalities in CAR alone.
If this trend barangay coverage will be sustained, the target to energize all
barangays by year 2006 is attainable.
F. New and Renewable Energy Sources
Under the National Electrification Administration (NEA) Energization

Program (2002 – 2006), 129 barangays in 34 municipalities considered as off-grid
areas will be energized through New and Renewable Energy (NRE). Some 44
barangays and sitios will still be connected to the grid. Off-grid areas like the
remaining 10 % un-energized barangays in CAR are categorized as: (a) at least 5 km.
from the nearest distribution/ transmission line; (b) low capacity of potential
consumers to pay and mostly are flat-rate users; (c) clustered houses of at least 30;
and (d) no concrete plans by the REC concerned for grid connection within the next
2-5 years.
41
The NRE sources are found to be more viable and suitable to CAR’s rugged
topography and dispersed settlement patterns compared to missionary lines, which
require kilometers of expensive transmission, and distribution lines.
SOLAR ENERGY
The sun’s energy can be directly converted and produced into electrical
energy through solar photovoltaic cells, or PV cells. It is made of a semi-conducting
material, the most commonly used being silicon because of its abundance in the
natural environment. When the sunlight hits the surface of the PV cell, electrons are
knocked loose from the atoms, which generates a flow of direct electrical current.
Metal contacts at the top and bottom of the PV cell allow electrons to flow through an
external circuit producing electricity.
Solar Energy utilization is particularly suitable in regions with dry climates or

within 35° of the equator, since there is more diffuse radiation than at higher
latitudes, and less cloud cover. In the mountain areas, relief, altitude, slope, and fog
aspect, significantly influence the availability of solar energy. Energy potential in the
mountains is also extremely scale-sensitive.
The annual average incoming solar radiation (insolation) for the Philippines is
in the range of 4 to 5 kWh/m2 per day, with significant geographic (microclimatic)
and seasonal variations. On average the country has abundant sunlight and there is
relatively little variation from month to month compared with countries in more
extreme latitudes. Roughly one-half the sunlight at the ground in much of the
Philippines is diffuse radiation.
The potential capacity of solar power in the Cordillera region cannot be
quantified exactly but great potential is already evident from the increasing number of
solar power systems in the region. With the region’s average solar radiation based on
sunshine duration at 169.57 W/m2 with a range of 145 – 194 W/m2 as supported by
the solar radiation map of the Philippines (Figure 5), the realization of solar home
communities in the rural areas and the introduction of modern solar homes in the
urban areas are soon considerable. Solar home systems could be designed to
efficiently work at nighttime provided there is prior sun exposure of at least six (6)
hours. Also, it can last for a period of three days of poor insolation, which is equal to
the time a “normal” typhoon needs to pass over a certain location. This is the down
side of the technology in CAR since fog incidence as well as rainfall intensity is high
during the wet season. This is the reason why solar energy systems in the region are
limited to small-scale applications only as remote, single houses and small villages
requiring only a limited amount of electrical power.
In terms of cost, solar home systems equipped with one module (50-75 Wp), a
100 Ah battery, a 10 A control unit and 3 PL lamps (11 W, including inverter),
complete with cables, switches, panel support, transport and installation, may cost
PHP18,000–PHP 26,000 (US$ 700–US$ 1,000). Price guidelines as provided by
DOE for individual components is shown in Table 13.
Table 13. Cost of Solar Modules

Modules (imported) UNIT COST
53 Wp PHP 9, 500-PHP 11, 500
42
75 Wp PHP 13,000–PHP 14,000
Battery Control units(local)
> 10 A PHP 1,700–PHP 2,200
Battery (local)
Solar, 100Ah PHP 2,000–PHP 2,600
PL lamps (Compact fluorescent trim gap lamps complete with lamp-holder & miniverter local, local)
7, 11, 13 W PHP 1,100–PHP 1,350
Installation costs PHP 500–PHP 600
Source: DOE
Additional Information:
DC fluorescent lamp fluorescent (tubes plus tube holder and miniverter, local)
10 W PHP 700–PHP 750
Power conditioners (quasi – sine (wave, local)
150 W PHP 6,000–PHP 7,000
300 W PHP 8,700– PHP 9,500
1000 W PHP 35,000–PHP 40,000
Batteries (local)
Solar,100 Ah PHP 2,000–PHP 2,500
Solar, 80 Ah PHP 1,800–PHP 2,000
For larger-scale PV projects of a few kWp, the following price guidelines

might be helpful.
Modules PHP160 – PHP180/Wp
Battery Bank Controllers PHP120 – PHP150/A
Installation (mounting/cables) PHP 40 – PHP 60/Wp
There are 80 Solar Home Systems currently installed and in use in the CAR.
Each has a 1kW – 3kW capacity. Benguet holds no solar energy system.
WIND POWER
Creating energy by harnessing the wind is just a matter of getting a turbine to

spin. First off, the wind turns the blades, which are attached to the hub. The rotation
of this mass causes the power shaft to rotate, which transmits the rotational energy to
a gearbox. The gearbox houses the gears which turn the generator, which turns the
mechanical energy into electrical energy. All of this is suspended at the top of a
tower. There are two types of rotors that are attached to the turbine.
The first and most common, is the horizontal axis turbine. The second is the
vertical axis turbine. These two different types of turbine are classified according to
their motor orientation with respect to the ground. The horizontal axis turbines are the
typical windmill style, and they must be rotated so that they are kept perpendicular to
the direction of the wind. One way of accomplishing this is to have a tail on upwind
units, or to have a cone on a downwind unit. The third is a little more involved, with
control of the yaw axis being accomplished through a motor, which adjusts itself
automatically.
43
Figure 5. SOLAR RADIATION VALUES MAP OF THE PHILIPPINES
NOTE: All values are in kwh/square meter
Data Source: PAGASA
44
The second type of turbine, the vertical axis turbine, is much less common
than the first. In this type of turbine the rotor is approximately perpendicular to the
ground. This turbine has a few benefits over the horizontal axis type. In the first type
of turbine, the wind can turn the turbine from whichever direction it blows and
secondly, the turbine is easily accessed for any repairs that might be necessary
because it is near the ground instead of at the top of a tower.
Although they are different in terms of design, both types are equally effective
in terms of productivity, which is another determining factor in the classification of
wind turbines. There are three typical productivity ranges for wind turbines. The
first is a small turbine, which produces up to one hundred kilowatts. The next,
intermediate sized machines, produce between one hundred kilowatts and one
megawatt. The largest are turbines which produce one megawatt or more. The most
commonly used turbines are the intermediate sized ones because they can be used in
many applications.
Some complaints on these wind turbines are noise pollution, electromagnetic
interference, and excessive land use. However, current advancement in technology in
the materials used to build efficient turbines has reduced these negative effects
drastically. In terms of water and air pollution, the impact of wind turbines is
negligible.
Wind power in mountain regions has many specific climatic conditions.

Valley winds starting from south slopes (north slopes in the Southern Hemisphere)
are characteristic. When the valley bottom slopes, the wind may blow as a canyon
wind either up or down the valley. Winds blowing down the lee side of mountains can
be very strong. Wind velocities over mountain ridges or crests are higher than in
surrounding areas. However, the steeper the slope and the rougher the surface, the
stronger is the turbulence which may remove the advantage of higher wind velocities.
The Cordillera region sustains resources to generate these types of energy.
The Department of Energy promotes sixteen (16) wind power project areas to
prospective investors. The sixteen (16) sites account for 11 in Luzon, four in the
Visayas and one in Mindanao. Incentives for willing investors include waiver of
production bonus on the first project and payment of production bonus to the
government only after the project has fully recovered pre-operating expenses as stated
under Executive Order 462. Other incentives include income tax holiday, reduced
duty rates for imported capital equipment and other Board of Investments mandated
incentives. The DOE hopes that with this package of assistance international and
local renewable energy investors will seriously look at the Philippines wind potential.
Additionally, DOE in its wind energy program intends to research and development
for wind power; initiate pilot and demo projects; provide technical advice; assist in
past and present installations, including maintenance and repair; encourage private
sector participation; strengthen local consulting and project preparatory services;
assist in providing appropriate fiscal incentives (including tax exemptions, duty
exemptions); increase public awareness; conduct training projects and support the
development of quality standards and testing procedures and facilities.
DOE’s wind investment kit also includes a listing of potential wind sites in
northern Luzon and identified 87 sites in CAR with a total capacity of 609
Megawatts. Table 14 shows the distribution of these potentials however, no specific
sites as well as the method upon which they were arrived at were mentioned in the
kit.
45
Table 14. Practical Wind Resources in CAR
Province Number Estimated Aggregate Estimated Annual Power

of Sites Capacity in Mega Watts Generated in Gigawatt-hours
(MW) (GWH)
Abra 26 183 567
Benguet 20 137 421
Ifugao 15 98 299
Kalinga-Apayao 21 158 484
Mountain Province 5 33 100
CAR TOTAL 87 609 1,871
Source: Philippine Investment Kit, DOE
There is yet no operating wind energy systems accounted for in the region.
Under the National Wind Energy Atlas of the Philippines, thirteen (13) mapping
stations were considered in measuring the wind potential capacity of the country. The
maps in Figure 6 were created using a program developed at NREL based on
geographic information system (GIS).
The mapping program, which combines high-resolution terrain data with

formatted meteorological data, highlights areas with favorable wind resource where
wind energy projects are likely to be feasible for both utility grid and rural power
applications. Based on these mapping, good-to-excellent wind resources are found in
the Cordillera Central Mountains in the interior of Luzon.
The only wind power potential identified by the National Wind Resource
Atlas is Sagada, Mountain Province. The site is at a high-elevation located at
northwest of the town at an elevation of 1,871 m, and is on a north–south-oriented
mountain range. The average wind speed at 30 meters above ground level is 6.7
meters per second a velocity considered adequate to generate the desired output.
In 1996, a pre-feasibility study was conducted in by DOE in 12 selected

locations in the Philippines. Tetep-an Norte, Sagada, Mt. Province and Poblacion,
Tadian, Mt. Province were among them, however, there seems to be a negative
environmental impact in these areas and thus further study was suggested.
The limited data available to validate the potential wind resources in the
Cordilleras is not reason to abandon the same considering that baseline characteristics
of mountains in the Cordillera region provides a good source of wind power. It is
highly recommended that wind measurement programs be conducted in sites under
consideration to validate resource estimates and refine wind maps and assessment
methods.
Since Wind Power is one of the most environmentally friendly technologies,

not many problems are expected in future project development. Objections might be
raised to the “visual pollution and noise” generated by large turbines. For this reason
installations should preferably be located some 350 m away from the nearest
dwelling. This should limit noise to acceptable levels of 45 dB. In the Philippines
with admittedly only few WECs but substantial numbers of wind pumps, no records
exist of damage to flora and fauna (birds), or damage to human lives or other property
(in case of typhoons).
46
Figure 6
47
G. System Loss
The R. A. No. 7832 or Anti-Electricity and Electric Transmission Lines/

Materials Pilferage Act of 1994 set the system loss cap at 14 % starting year 2000.
This would mean that only 14 % of the system losses could be charge against the
consumers. With this, only Benguet Electric Cooperative (BENECO) passed with 7
%, while the other RECs failed with rates ranging from 14.16 % to 18.66 %.
It is expected that with the effectivity of the condonation of rural electric

cooperative (REC) loans used for electrification as mandated under the R.A. No.
9136 or EPIRA, REC’s budget for loan services could instead be channeled for
rehabilitating their dilapidated distribution lines to address technical system losses.
RECs are also exhorted to institute measures and programs to cut pilferages
and other non-technical losses.
H. Environmental Impact
In hydroelectric development, interference with the ecosystems where they are

implemented is a major concern. During construction, some problems that may arise
are air pollution from equipment emissions and dust from excavations, water
contamination from petro-chemical spills, loss of fish species, spawning paths and
existing aquatic habitats. During the operation phase, drying up of the riverbed may
occur and could lead to the loss of aquatic life and obstruction of natural fish
migration patterns. These are short-term effects and can be regarded as a moderate
negative impact. The river's temperature and its oxygen content may also be
affected. Just as in any energy development project, the negative impact is most
considerable during the construction phase.
Majority of the environmental impact seen in the production of energy

through solar methods is not in their use, but during the process that is required to
manufacture photovoltaic cells. It is estimated that 97% of the pollution is involved in
their production; the other 3% is due to small amounts of toxic gases which are used
in non-silicon based cells. Still, the amount is still less than pollution caused by
conventional methods of energy production. There is also some environmental impact
through the use of natural resources as production materials. Other than these, solar
energy production produces no fumes, liquids, or solid waste products, nor does it
require water to function. It does not produce greenhouse gases nor contribute to acid
rain or air pollution.
Wind energy is at the extreme end of the means of energy production, which
does not affect the environment. Throughout the years wind turbines have produced
little to no harm to the environment. Although, there have been some complaints
made against them such as noise pollution, electromagnetic interference, and
excessive land use, these problems are currently being phased out through
advancements in the materials used to build and efficiency of modern turbines. In
terms of water and air pollution, the impact of wind turbines is negligible. Noise
pollution is becoming a non-factor through the production of modern turbines, which
can operate at lower noise levels than their predecessors once did. Currently, a
modern wind turbine operates at a lower decibel level than normal street traffic.
Electromagnetic interference is also something that occurred in the wind turbines of
the past because their blades were made out of steel, rather than the composite or
wood laminate which is commonly used today. Wind Power is one of the most
environmentally friendly technologies, not many problems are expected in future
48
project development. Objections might be raised to the “visual pollution and noise”
generated by large turbines. For this reason installations should preferably be located
some 350 m away from the nearest dwelling. This should limit noise to acceptable
levels of 45 decibels. The Philippines with substantial numbers of wind pumps, no
records exist of damage to flora and fauna, or damage to human lives or other
property.
I. Factors Affecting Development of Facilities
a) Highly dispersed settlement patterns due to the mountainous topography and

cultural practices.
b) Condonation of the REC’s loans related to electrification program (as

stipulated under the EPIRA), the RECS could now channel their resources to
energize sitios and barangays where connecting to the grid is feasible.
c) Though a nationwide issue, the relatively high power rate is a drawback to the
electrification program. The high rate is beyond the capacity of the small
consumers particularly those in the remote areas. In the region, it has been
observed that the REC’s operational funds are largely programmed for
maintenance of existing distribution lines and previously to service
outstanding loans from NEA. These had been addressed with the loan
condonation.
d) High system loss due to dilapidated lines. Funds for servicing loans can now
be utilized to repair / rehabilitate the old lines in order to reduce technical
system losses.
J. Energy Production and Consumption
Based on the 2001 National Power Corporation (NPC) report, the CAR’s net
power generation was 633.24 mega watts hours (MWh), which is fairly above the
region’s total consumption of 618.25 MWh.
The year 2002 CAR peak demand was 107.5 MW with the following
breakdown: Abra, 7.1 MW; Benguet, 92.3 MW inclusive of Baguio City; Ifugao, 1.9
MW; Kalinga and Apayao, 3.1 MW; and Mt. Province, 2.9 MW. This represents
about half of the power generated in Benguet alone.
The total installed capacity of CAR power facilities, which are all located in
Benguet, is 207.36 MW. The capacity should have been higher by 75 MW had the
Ambuklao Hydro Electric Plant been running in full capacity. It is still under
rehabilitation since the 1990 killer earthquake damaged it.
The 207.36 MW produced by the Province of Benguet more than satisfies the
needs of the entire CAR and thus excess generated power is exported to other
provinces outside of the region.
Table 15 and Figure 7 on the next pages present in detail the region’s power
generating capacity.
49
Table 15. Existing Power-Generating Facilities in CAR
Installed Capacity Type of Development

PROJECT TITLE (commissioned) LOCATION (Megawatts)
NPC-Owned 100.00
1. Ambuklao HEP (1956) Bokod, Benguet (75.00) Reservoir
2. Binga HEP (1960) Itogon, Benguet 100.00 Reservoir
Non-NPC Benguet 107.36
3. Bakun A (June 2001) Bakun 35.00 Run-of-River
4. Bakun C (June 2001) Bakun 35.00 Run-of-River
5. Amphohaw (Aug 1991) Sablan 8.00 Run-of-River
6. Bineng 1 (Nov 1991) La Trinidad 2.80 Run-of-River
7. Bineng 2 (Dec 1991) La Trinidad 1.80 Run-of-River
8. Bineng 2b (Aug 1992) La Trinidad 0.75 Run-of-River
9. Bineng 3 (Sep. 1992) La Trinidad 4.50 Run-of-River
10. Irisan - Baguio City gov’t. (Jun 91) Tuba 1.20 Run-of-River
11. Lon-oy (Jul 1993) Bakun 3.60 Run-of-River
12. Lower Labay (Aug 1992) Bakun 2.40 Run-of-River
13. Sal-angan (Oct 1991) Tuba 2.40 Run-of-River
14. Asin Plant 1 (May 1991) Tuba 1.36 Run-of-River
15. Asin Plant 2 (April 1991) Tuba 1.35 Run-of-River
16. Asin Plant 3 (June 1991) Tuba 1.50 Run-of-River
17. FLS/Upper Takbo (Jun 92/Oct 93) Bakun 5.20 Run-of-River
18. Philex Itogon 0.50 Run-of River
Benguet (Total MW) 207.36
19. Ifugao (11 micro-hydro) 0.7828 Run-of River
20.. Kalinga (10 micro-hydro) 0.2050 Run-of River
21. Mt. Province (2 micro-hydro) 0.0013 Run-of River
CAR (Total MW) 208.3491
* Under rehabilitation since July 1990 earthquake Source of Data: NPC, HEDCOR
K. Most Viable Renewable Energy Resource in CAR
The region’s energy resources, both existing and potential, are enormous.
When developed, the potential could contribute a significant amount of energy to the
community and to a great extent to the Luzon Grid. The Plan aims to cultivate such
resources in accordance with its culture such that CAR can be the leading energy
producer in Luzon.
There is a need to determine which among solar, water and wind resources is
the most viable resource to develop in CAR. To be able to do this, the multiple
criteria evaluation (MCE) technique was employed. Six factors or criteria were
considered in the evaluation of potential energy resources: 1) potential capacity, 2)
local skill and technology required to develop the resource, 3) distance to service
areas, 4) financial viability, 5) social acceptability and 6) environmental impact.
The criteria provided the capacity to differentiate each energy source

from the other. The selection of the criteria was based directly on the objective of the
study to find the most viable energy resource that should be developed in the region.
Weights were allocated to the assessment criteria in order to rank the alternatives.
50
Figure 7. EXISTING POWER GENERATING FACILITIES IN
CAR
51
In the initial evaluation, no one energy resource bested the other in all the six criteria.
Given this situation, scores were standardized which means transforming the initial
evaluation into scores that range from 0 to 1. Cost criteria likewise were standardized using
the division by row maximum method and the benefit criteria by goal standardization.
In the standardization method, all the criteria were equally important. This yielded
solar power systems as the best alternative followed by water and then wind power.
However, after incorporating a weight system assigned to capture priorities such impact on
the public, extent of the effect on the area, and duration of the effects, the result was entirely
different.
There are also a number of methods of assigning weights. The complete ranking
method was used. Potential capacity and financial viability were the two most important
points to consider in project development; therefore both were given a 30% weight. This was
followed by social acceptability, 15%; local skill and technology and distance to service
areas, 10% each and 5% for environmental impact. Less weight was given to environmental
impact since the energy project proposal is the development of small-scale applications as
stand-alone solar home systems, micro (<100kW) and mini (101kW - 10MW) hydropower
and small (≤ 10kW) and intermediate (10 – 250kW) wind power plants.
The multiple criteria evaluation final results ranked hydropower systems as the best
and most viable renewable energy in the Cordillera Administrative Region. The ranking
process is shown in Table 16, 17 and 18. Appendix “G” shows how a typical mini-
hydroelectric plant works.
Table 16. MULTIPLE CRITERIA EVALUATION
CRITERIA: Solar Power Systems Hydro Power Systems Wind Power Systems
Moderately
1. Potential Capacity Very Satisfactory Satisfactory
Satisfactory
2. Local Skill and Technology
Required to Develop the available available Not available
Resource
3. Distance to Service Areas close far Very far
US$.1.6M to
PHP18,000 to 26,000 US$1.2M to US$1.5M
4. Financial Viability US$1.9M per MW
per unit per MW installed
installed
5. Social Acceptability acceptable acceptable Cannot say
Moderate Negative Moderate Negative
6. Environmental Impact Low Negative Impact
Impact Impact
Table 17. STANDARDIZATION
Solar Power
CRITERIA: Hydro Power Systems Wind Power Systems
Systems
1. Potential Capacity 0 1 0.5
2. Local Skill and Technology
1 1 0
Required to Develop the Resource
3. Distance to Service Areas 1 0.5 0
4. Financial Viability 0.80 0.25 0
5. Social Acceptability 1 1 0
6. Environmental Impact 1 0.5 0.5
Total 5.30 4.25 1.0
RANK 1 2 3
52
Table 18. WEIGHTED SCORES
Weight Solar Power Hydro Power Wind Power

CRITERIA:
(%) Systems Systems Systems
1. Potential Capacity 30% 0.00 0.30 0.15
2. Local Skill and
Technology Required
10% 0.10 0.10 0.00
to Develop the
Resource
3. Distance to Service
10% 0.10 0.05 0.00
Areas
3. Financial Viability
30% 0.24 0.08 0.00
4. Social Acceptability
15% 0.15 0.15 0.00
5. Environmental Impact
5% 0.05 0.03 0.03
Total
0.64 0.71 0.18
RANK 3 1 2
53
IV. LEGAL AND POLICY FRAMEWORK
A. Legal Basis
The overall framework of the study is derived from Republic Act No. 7638 or
the Department of Energy Act of 1992:
Article I, Section 2. Declaration of Policy. It is hereby declared the policy of

the state:
(a) To ensure a continuous, adequate, and economic supply of energy with

the end in view of ultimately achieving self-reliance in the country’s
energy requirements through the integrated and intensive exploration,
production, management and development of the country’s indigenous
energy resources, and through the judicious conservation, renewal, and
efficient utilization of energy to keep pace with the country’s growth
and economic development and taking into consideration the active
participation of the private sector in the various areas of energy
resource development; and
(b) To rationalize, integrate, and coordinate the various program of the

government towards self-sufficiency and enhanced productivity in the
power and energy without sacrificing ecological concerns.
The Constitution of the Republic of the Philippines guarantees such policy, to

wit:
Section 16. The state shall protect and advance the right of the people to a
balanced and healthful ecology in accord with the rhythm and
harmony of nature
Section 19. The state shall develop a self-reliant and independent national
economy effectively controlled by Filipinos.
B. Major Laws Related to the Power Sector
1. Energy Laws:
a. Republic Act No. 7638, the Department of Energy Act of 1992. This
act created the government agency DOE or Department of Energy.
b. Department of Environment and Natural Resources (DENR) Adm.

Order No. 2000-81 Series of 2000. This is the Implementing Rules and
Regulations for Republic Act No. 8749 or the Philippine Clean Air Act
of 1999.
c. Republic Act No. 9136 or Electric Power Industry Reform Act

(EPIRA) of 2001
The Republic Acts mentioned above embody two (2) major reforms,
namely, the restructuring of the power industry and the privatization of the
National Power Corporation (NPC). The restructuring involves the separation
of the different sector components specifically, generation, transmission,
54
distribution and supply. While the PNC privatization entails the sale of the
state-owned power firm’s power plants and transmission facilities to private
investors.
d. Republic Act No. 7156 or Mini-Hydroelectric Power Incentives Act of

1991
The Act grants incentives to private mini-hydro power developers in

accordance with the policy of the state to enhance the development of
indigenous sources of energy thereby minimizing the country’s dependence
on imported energy. A mini-hydro is one as those having capacity between
101 kW to 10,000 kW.
Objectives:
1. To encourage entrepreneurs to develop mini-hydropower

potentials existing in their localities.
2. To facilitate mini-hydropower development by eliminating

overlapping jurisdiction of many government agencies and by
vesting the Department of Energy the exclusive authority and
responsibility for mini-hydropower development in the
country.
3. To apportion a part of the realty and special privilege taxes and

other benefits of the mini-hydropower developer to the local
government units (LGUs) where they are located.
4. To provide a contractual framework wherein some stability of

conditions can be relied upon long term financing purposes.
Incentives:
1. Special Privilege Tax Rates. Tax payable by a developer shall

be 2% of the gross receipts from the sale of electricity and from
transactions incident to the generation, transmission and sale of
electric power.
2. Tax- and Duty-free Importation of Machinery and Equipment

and Materials. Within seven (7) years from the date of award,
importation of machinery and equipment, materials and parts
including control and communication equipment shall not be
subject to tariff duties and value added tax provided that such
are: (a) not manufactured domestically in reasonable quantity
and quality at reasonable prices; (b) directly and actually
needed and will exclusively be used for the development; and
(c) covered by shipping documents in the name of the duly
registered developer to whom the shipment will be delivered
by Customs authorities.
3. Tax Credit on Domestic Capital Equipment. A tax equivalent

to 100% of the value of the value-added tax and customs duties
that would have been paid on the machinery, equipment,
materials and the like had these items been imported shall be
given to the developer who purchases such equipment from a
domestic manufacturer.
55
4. Special Realty Tax Rates on Equipment and Machinery. Any
provision of the Real Property Tax Code or any other law to
the contrary notwithstanding, realty and other taxes on civil
works, equipment and improvements shall not exceed 2.5% of
the original cost.
5. Value Added Tax Exemption. The developer shall be

exempted from the 10 % VAT on the gross receipts derived
from the sales of electric power whether wheeled through NPC
grid or through existing electric utility lines.
6. Income Tax Holiday. For seven (7) years from the start of
commercial operation, the developer shall be fully exempt
from income taxes levied by the national government.
e) Executive Order No. 215 s. 1987
Allows the private sector to generate electricity. This amended

Presidential Decree No. 40 that gave the NPC the sole responsibility
for the development of power generation facilities ad transmission line
systems in the country. Under E.O. No. 215, a developer issued a
certificate of registration by the Bureau of Investment (BOI) is one
engaged in a pioneer enterprise under the Omnibus Investment Code
of 1987.
Incentives:
1. The approval of up to 100% foreign ownership of the firm.
2. Exemption from all national internal revenue taxes by the

National Government for a minimum period of six years, from
the start of the cooperation period with the right to apply for
extensions allowable under law.
3. Full exemption from custom duties and national internal

revenue taxes on importation of capital equipment and spare
parts until the date specified by BOI with the right to apply for
extensions allowable under the law.
4. Tax credit equivalent to 100% of custom duties and national

internal revenue taxes for locally supplied equipment.
5. Full exemption from value added tax and local contractor’s tax
for the developer and contractors associated with the project.
6. Exemption from customs duties and national internal revenue

taxes for importation and unrestricted use of the consigned
equipment for the project.
f. Republic Act No. 7586, National Integrated Protected Areas (NIPAS)

System Act of 1992.
Section 2. Declaration of Policy
56
Cognizant of the profound impact of man’s activities on all
components of the natural environment particularly the effect of
increasing population, resource exploitation and industrial
advancement, and recognizing the critical importance of protecting
and maintaining the natural biological and physical diversities of the
environment notably on areas with biologically unique features to
sustain human life and development, as well as plant and animal life, it
is hereby declared the policy of the State to secure for the Filipino
people of present and future generations the perpetual existence of all
native plants and animals through the establishment of a
comprehensive system of integrated protected areas within the
classification of national park as provided for in the Constitution.
Section 12. Environmental Impact Assessment.
Proposals for activities, which are outside the scope of the

management plan for protected areas, shall be subject to an
environmental impact assessment as required by law before they are
adopted, and the result thereof shall be taken into consideration in the
decision-making process. No actual implementation of such activities
shall be allowed without the required Environmental Compliance
Certificate (ECC) under the Philippine Environmental Impact
Assessment (EIA) system. In instances where such activities are
allowed to be undertaken, the proponent shall plan and carry them out
in such a manner as will minimize any adverse effects and take
preventive and remedial action when appropriate. The proponent shall
be liable for any damage due to lack of caution or indiscretion.
Section 14. Survey for Energy Sources.
Consistent with the policies declared in Section 2 above,

protected areas, except strict nature reserves and natural parks, may be
subjected to exploration only for the purpose of gathering information
on energy resources and only if such activity is carried out with the
least damage to surrounding areas. Surveys shall be conducted only in
accordance with a program approved by the DENR, and the result of
such surveys shall be made available to the public and submitted to the
President for recommendation to Congress. Any exploitation and
utilization of energy resources found within NIPAS areas shall be
allowed only through a law passed by Congress.
2. Other Related Laws:
a. Republic Act No. 6957 or Build-Operate-and Transfer (BOT) and

Republic Act No. 7718 or Build-Transfer (BT)
These laws authorize the private sector to finance, construct,

operate and maintain infrastructure project.
BOT Scheme.
This is a contractual arrangement whereby the Proponent

undertakes the detailed design and construction, including the
57
financing of the small hydropower facility. The proponent will operate
and maintain such facility for an initial period of 25 years. After the
term, ownership will be transferred to the government.
3. Laws on Economic Enterprise
a. Republic Act No. 7160 or the Local Government Code of 1991
Section 2 (c).
It is the policy of the State to require all national agencies and

offices to conduct periodic consultations with appropriate local
government units, non-governmental and people’s organizations, and
other concerned sectors of the community before any project or
program is implemented in their respective jurisdictions.
Section 15.
Political and Corporate Nature of the Local Government Unit.

Every LGU created or recognized under this code is a body politic and
corporate endowed with powers to be exercised by it in conformity
with law. As such, it shall exercise powers as a political subdivision of
the national government and as a corporate entity representing the
inhabitants of its territory.
Section 17 (3) For a Province (iii).
Pursuant to national policies and subject to supervision, control

and review of the DENR, enforcement of forestry laws limited to
community-based forestry projects, pollution law, small-scale mining
law, and other laws on the protection of the environment; mini-
hydroelectric projects for local purposes.
Section 22.
The Corporate Powers of the LGU are defined under this

section. As the LGU is already considered a corporation, it can
participate in a consortium with private investors. This strategy is a
means to generate additional revenue to be utilized for community
development projects. Both parties through a Memorandum of
Agreement (MOA) or other legal means or instruments would
determine capital shares.
Sections 26 and 27.
Mandates the national government agencies and government-

owned or -controlled corporations to consult with the LGUs and NGOs
and other sectors concerned on the implementation of any project or
program that may have any adverse effect on environment and
ecological balance and likewise may disturb the settlements and
livelihood of the people.
58
b. Presidential Decree No. 269 as amended
Chapter II Section 16 (l).
To become a member of other cooperatives or corporation or to

own stock therein, provided such cooperatives or corporation are
engaged in a business or activities of the cooperative, it’s members, its
directors, or its employees.
c. The Constitution of the Philippines
The related laws on the promotion of LGU participation and

community consultation on developmental projects specifically the
indigenous people is enshrined in the Philippine Constitution:
Section 22.
The state recognizes and promotes the rights of indigenous

communities within the framework of national unity and development.
d. Republic Act No. 8371 or Indigenous Peoples Right Act of 1997
The Act guarantees the recognition and protection of the

indigenous cultural communities (ICCs) / indigenous peoples (IPs)
rights and promotes the preservation and development of their
cultures, traditions and institutions.
Section 59. Certification Precondition.
All departments and other government agencies shall

henceforth be strictly enjoined from issuing, renewing, or granting any
concession, license or lease, or entering into any production-sharing
agreement, without prior certification from NCIP that the area affected
does not overlap with any ancestral domain. Such certification shall
only be issued after a field-based investigation is conducted by the
Ancestral Domain Office of the area concerned; Provided, that no
certification shall be issued by the NCIP without the free and prior
informed and written consent of the indigenous cultural communities
(ICC) or indigenous people (IP) concerned: Provided, that the
ICCs/IPs shall have the right to stop or suspend, in accordance with
this Act, any project that has not satisfied the requirement of this
consultation process.
59
V. CONSULTATION FRAMEWORK
A. Background
It is envisioned in the CAR Regional Development Plan for the Cordillera to

become the “leading hydro-based power supplier in North Luzon” specifically
through the development of run-of- river types of mini and small hydro plants. The
national government thrust is to reduce the country’s dependence on imported fuel by
tapping indigenous energy resources particularly new and renewable energy (NRE)
sources. This is where Cordillera becomes nationally significant because of its
considerable but untapped hydro-based energy potentials. Based on DOE’s report,
CAR’s hydropower potential is estimated at 2,800 MW, the highest nationwide.
To operationalize such regional vision, the RDC-CAR conceptualized the
“Cordillera Energy Producer Master Plan” project as a strategic implementing step.
B. Importance of the Consultation Dialogue

This master-planning project gives emphasis on the importance of
consultation to assure for the existence of a favorable socio-political environment and
promote acceptability of the hydropower projects. Through the consultation process,
the LGUs and prospective host communities would be enlightened and appreciate the
project and at the same time input in the conceptualization of the project. The Terms
of Reference (TOR) further proposes that in the development of hydropower projects,
a mechanism for collaboration between and among the LGUs, national government
and private sector investors (local and/or international) may be made possible.
Past experiences show that a socially sound and culturally compatible project
will have a greater likelihood of acceptance by the affected communities. A project is
culturally acceptable if it is well enough suited to local conditions that the
stakeholders could appreciate the advantages of adapting their lives to the proposed
development project. The affected communities may also consider modifying some
of their practices to attain significant benefits. Therefore, the consultation guarantees
that the past failures and difficulties will not be repeated. It is expected that the value
of respecting the indigenous people’s rights over their ancestral lands and natural
resources are integrated in the project development.
C. Primary Consultation Output

The tangible outputs would be LGU’s “no objection” endorsement at
minimum and manifestation of project co-ownership via equity participation at best.
Relative to this, the consultation participants are expected to bring-out their issues/
concerns and be requested to prioritize energy potentials and identify potentials for
advancement to project preparation.
Objectives:
1. To orient the participants on matters important to energy development and

how LGUs can contribute in harnessing their resources.
2. To make the LGU officials become familiar with the environment of energy
development projects.
3. To present the idea and convince the LGUs establish a local power
corporation to develop their own hydropower potentials.
60
4. To present the hydropower potentials of the localities and subject the same to
participants’ validation.
At the end of the Consultation, the following shall have been attained:
1. The participants should have understood the issues related to energy sector
development.
2. The participants become aware of the hydropower potentials of their locality

and how they may tap these resources for their own consumption with the
rural electric cooperative (REC) as the primary market and wheel any excess
power production to the grid.
3. The participants should have appreciated the comparative advantage of mini-

and small- run-of-river type hydropower projects against large hydros and
other power sources.
4. The participants have validation and prioritized their power potentials for
development.
5. The LGU officials shall have appreciated the role of LGUs in energy
development particularly the prospect for LGUs to become independent
power producers (IPPs) by establishing a local power corporation or in
consortium with hydropower developers.
6. To get endorsement / concurrence of the LGUs.
D. Framework
Step 1
Presentation on the situational analysis, providing a clear picture of the state

of the energy sector from the national to the regional level (development gaps, issues,
concerns) relationships of the proposed project with the national and regional
development plans.
Step 2
Possible solutions to issues and concerns leading to a brief presentation on the

Niche on Energy Producer and then introduce the “Cordillera Energy Producer
Master Plan” to operationalize the niche.
Step 3
The CEPMP will be presented as a mechanism to resolve most of the issues

and concerns and how to harness the hydropower potentials of the region through
hydropower projects giving emphasis on mini and small hydro projects, their
advantage in terms of cost and environmental aspect.
Step 4
In the development of hydropower potentials, the role of the LGU officials, as

the decision makers, and the community people will be highlighted. Then the idea
61
that the LGUs can establish a local power corporation and the possibility for the
LGUs to become independent power producers (IPPs) in consortium with
hydropower developers will be presented.
The importance of socio-political acceptance for a successful development of

energy projects will be discussed.
Step 5
Presentation and validation of the hydropower potentials.
Step 6
Prioritization of the Energy potentials through a plenary workshop. The

criteria of prioritization shall serve as guide. (Prior to the consultation proper, other
suggested criteria from the LGU officials and sub-team members will be entertained
and evaluated.)
Step 7
Would obtain a provincial board or Provincial Development Council (PDC)

endorsement to possible hydroelectric projects in the province.
E. Consultation Outline
1. Energy Sector Situational Analysis (demand & supply, current issues/

concerns)
2. The CAR RDP and Niche on Energy Producer and an overview of the
CEPMP
3. Role of the Cordillera and the LGUs in addressing the issues
4. Briefing on Hydropower projects
5. Possible mechanism to tap the hydropower potentials
6. Open Forum
7. Presentation and validation of potentials
8. Plenary workshop/ Formalization of Agreements
F. Detailed Activities
1. Opening
Usual formalities (opening prayer, welcome address & introduction)
2. Consultation Proper
A. Prospects of CAR Energy Potentials
a. Present national & CAR energy demand & supply focusing on

gaps and emphasis of the country’s high-level dependence on
62
imported fuel as energy potentials for CAR to develop. Show
these through charts/ visual aids, also in terms of $ or peso (30
minutes to one hour).
b. Present briefly Regional Development Plan (RDP) Niche on

Energy (15 min.)
B. The CEPMP Project
a. Objectives
b. Outputs/ findings
c. Methodology
d. Hydropower Projects
Present the comparative advantages of run-off river

types of mini- and small hydro projects over large hydros and
other energy sources.
C. Identification/ Presentation of Issues and Possible Development

Interventions (Workshop – one hour)
a. Initial list of issues as viewed from government side and

possible development interventions. This presentation is meant
to trigger discussions.
b. Workshop and open forum to discuss and validate the issues on

energy development. Validation could take the form of
additional issues as viewed from the non-government, private
sector and LGU perspective
c. Suggest acceptable interventions/ solutions
d. Presentation of workshop output
D. Validation of Local Energy Potentials (Workshop – one hour)
a. The consultant presents the initial listing of potentials (in map

and table)
b. Present the criteria for ranking/ prioritization
c. Validate the initial listings in terms of correctness,
completeness and prioritize according to its implementation
period
d. Presentation of outputs
3. Local Endorsement
The issues, development intervention and prioritized listing, is
presented to the Provincial Board and or PDC for adoption in the form of a
resolution indorsing the same to be considered in the formulation of the
CEPMP.
4. Integration
The Project Team Leader summarizes the day’s proceedings.
5. Closing
63
G. Integrated Consultation Output
One of the major components of the project is to generate stakeholders’ input
through the conduct of comprehensive consultation dialogue with the local officials
and communities concerned. The Project Team headed by the NEDA-CAR Regional
Director with members of the Project Coordination Committee (PCC) through the
INFRACOM Sub-Committee on the Niche on Energy Producer and the Consultant
conducted a series of consultation-dialogues with all the Provincial development
Councils in the Cordillera Administrative. Figure 7 show the Consultation Process.
The master-planning project gives emphasis on the importance of consultation
to assure for the existence of a favorable socio-political environment and promote
acceptability of the hydropower projects. Through the consultation process, the
LGUs and prospective host communities were able to appreciate the project. Past
experiences show that a socially sound and culturally compatible project would have
a greater likelihood of acceptance by the affected communities if they are consulted
right from the beginning or conception of projects to be implemented in their
respective communities. The consultation guarantees that past failures and
difficulties would not be repeated. It is expected that the value of respecting the
indigenous people’s rights over their ancestral lands and natural resources are
integrated in the project development.
The response of all the six (6) Provincial Development Council (PDC) to the
proposed energy projects in their respective localities was very encouraging and
enthusiastic. The projected output of LGU’s “no objection” endorsement at minimum
and manifestation of project co-ownership via equity participation at best had been
attained. This was manifested by the approval of a PDC resolution endorsing the
development of hydropower and other renewable energy projects in their respective
provinces, which will include among others:
1. To adopt the CEPMP Project as a strategy of socio-economic development of

the province;
2. To create a Local Power Corporation that will spearhead the development of

hydropower resources; and
3. To create a committee that will undertake the prioritization of hydropower

potential projects in the province.
The schematic flow chart of the consultation is herein under presented in

Figure 8, while the detailed summary report of the consultation can be seen in
Appendix “D”.
H. Issues, Concerns and Comments
1. Making the Cordillera the Leading Energy Producer in Northern Luzon by

Mr. Rufino B. Bomasang, President and Chief Executive Officer, Philippine
National Oil Exploration Corporation (PNOEC)
a. The Cordillera possesses enormous energy potential, which, when

developed on a sustainable basis, can be the springboard for poverty
alleviation in the region.
64
Figure 8
CONSULTATION DIAGRAM
GROWING DEMAND
FOR ENERGY
IMPORTED FUEL vs.

INDIGENOUS ENERGY
CAR-RDP
PROSPECTS OF CAR
ENERGY DEVELOPMENT
“Niche on MAJOR ENERGY
PRODUCER”
CAR INDIGENOUS ENERGY

POTENTIALS
CORDILLERA ENERGY PRODUCER MASTER PLAN
VALIDATION &
PRIORITIZATION OF
ISSUES/ POTENTIALS
CONCERNS
STRATEGY: LGU as an IPP
(Alone/Private Investors)
DEVELOPMENT OF HYDROPOWER PROJECTS

(Run-of-River Types of Mini & Small Hydros)
65
b. Hydropower remains the biggest potential of the Cordillera, including
wind and solar power. These can be developed to supply not only the
region’s power requirements, but the rest of Northern Luzon as well.
c. Renewable energy development is capital intensive and need the

participation of private investors, including foreign investors – 1 MW
installed capacity of hydropower plant will require a capital of about
$1.5M.
d. There is tremendous interest in developing renewable energy projects

among developed countries especially in Europe, because of their
commitments to reduce greenhouse gas emissions under the Kyoto
Protocol. Developed countries are looking into such investments in
developing countries. The Philippines however has yet to endorse the
Kyoto Protocol.
e. Potential adverse environmental and social impacts of large dams like

the Ambuklao, Binga and San Roque can be effectively addressed, but
extensive public consultations need to be conducted to educate the
public and the stakeholders as well.
f. The Electric Power Industry Restructuring Act (EPIRA) prevents

NAPOCOR from signing new power purchase agreements--- any new
energy producer would have to sell directly to a power distributor such
as other rural electric cooperatives (RECs) and private power utility
like Manila Electric Company (MERALCO). Attendant to this, there
are two issues that need to be addressed:
g. Financiers of power plants will have to be convinced of the capability

of buyers-- only a few buyers (mainly rural electric cooperatives) are
acceptable to financiers because even MERALCO is currently in a
serious financial problem.
h. Private power utilities and electric cooperatives are not very keen on
entering into new power purchase agreements because of the glut of
power in Luzon, which may last up to 2007.
2. RDC-CAR can pursue the goal of CAR as a major energy producer through
the following:
a. Lobby for the immediate ratification of the Kyoto Protocol by

Congress to enhance the attractiveness of renewable projects in the
Philippines;
b. Support the forthcoming proposal for a new law that will grant special
incentives to renewable projects to enable healthy competition against
fossil fuels especially coal-fired plants;
c. Support the plan to promote the consolidation of rural electric

cooperatives to strengthen them financially and technically and
ultimately enable them to become power off-takers;
d. Initiate the establishment of some sort of one-stop center for potential

investors in renewable energy projects in CAR; and
66
e. Educate the locals on the true benefits and costs of allowing
sustainable development;
3. Barriers to Developing Small Scale Hydropower in the Philippines by Engr.

Ronquillo, Hydro Development Corporation (HEDCOR)
The challenges in developing hydropower, based on existing laws and

government policies are as follows:
Market – the electric coops are the major market of power; only a
handful of electric coops are bankable
Wheeling power – high cost of wheeling power and difficult conditions

imposed by NAPOCOR in wheeling power
Finance – long-term loans at development rates are not available
The suggested measures to promote the development of mini-

hydropower are as follows:
a. Create a market – require utilities to purchase a portion of their

power consumption from non-renewable energy sources.
b. Reduce wheeling fees – eliminate or reduce wheeling fees for

non-renewable energies and/or charge wheeling fees based on
average monthly use.
c. DOE / DENR to initiate steps to augment the revenue of mini-

hydropower developers, possibly through CDM (Clean Dust
Mechanism)
d. Exempt mini-hydropower plants from technical requirements

imposed on bigger plants (i.e. spinning reserve, back-up
reserve, SCADA, reactive power capability, system frequency
limits, etc.)
4. Other issues raised by participants to the provincial consultations:
a. Slow pace of implementation of the hydropower projects in CAR. The

region is recognized to have the highest hydropower potentials
nationwide;
b. Absence of feasibility studies of potential projects;
c. Desire to be disperse national investment program for mini- and small-

hydropower;
d. Perceived priority for development of coal power projects over hydro

projects by the national government;
e. Selection of “best sites” in view of Build-Operate-Transfer (BOT) or

LGU/private investor collaboration;
f. Apprehensions/opposition of affected communities on the hydro

development projects due to the past experiences of big dams;
67
g. Perceived environmental disturbances and displacement of people and
tribal heritage in affected communities.
h. Issues on the roles of “host-community”
i. Lack of public advocacy.
j. Past failure of the development planners to fully consult effected

communities.
k. Investors perceived peace and order problem particularly in the

northern provinces;
l. High initial capital investment for hydropower projects
m. High power rates/ PPA issue
n. Unregulated physical disturbances
o. The Kyoto Protocol
The 1997 Kyoto Protocol is a milestone in global efforts to protect the

environment and achieve sustainable development. It marked the first time
that governments of industrialized countries accepted legally binding
constraints on their greenhouse emissions.
The protocol also broke new ground with its innovative “cooperative
mechanisms” aimed at cutting cost of curbing these emissions. As it does not
matter to the climate where emission reductions are achieved, sound
economics argues for achieving them where they are least costly.
The protocol has three market-based mechanisms, aimed at achieving

cost-effective reductions they are Emission Trading, Joint Implementation and
the Clean Dust Mechanism (CDM).
The CDM contained in Article 12 of the Kyoto Protocol is the main

aspect of the Protocol that has the most significant impact on developing
countries. It strives to promote sustainable development in developing
countries, while allowing developed countries to contribute to the goal of
reducing atmospheric concentrations of greenhouse gases. The CDM has a
potential to assist developing countries in achieving sustainable development
by promoting environmentally friendly investment from industrialized
countries to implement emission reduction projects in developing countries.
The CDM could include projects in the following sectors:
1. Renewable energy
2. Fuel switching
3. Energy efficiency improvements
4. Agriculture
5. Industrial processes
6. Afforestation and
7. Reforestation.
The investors in CDM projects from industrialized countries will

receive credit in the form of “certified emissions reductions” which they may
count against their national reduction targets. Most CDM projects will entail
68
not only carbon reduction benefits, but also produce a wide range of
environmental and social benefits within developing countries. Sustainable
development benefits could include reductions in air and water pollution
through reduced fossil fuel use, especially coal, but also extend to improve
water availability, reduced soil erosion and protected biodiversity. For social
benefits, many projects could create employment opportunities in target
regions or income groups and promote local energy self-sufficiency.
With the recent ratification of the Philippine Senate of the Kyoto

Protocol, the Philippine government would now be able to participate in the
CDM. Through the CDM, the Philippines would be able to attract foreign
investments for projects that assist in the shift to a more prosperous but less
carbon-intensive economy and that facilitate the transfer of environmentally
sustainable technologies. Additionally, the Philippines will be able to assist in
the mitigation of human-induced climate change through global action to
reduce emissions of carbon dioxide and other green house gases.
Even with the explicit US repudiation of the protocol, it is expected

that soon the Kyoto Protocol will come to force. The European Union, Japan
and Canada have already ratified. Funds from these countries will soon be
available and implementation of the protocol and the CDM will commence.
Considering the potentials in the Cordilleras, it will not be long when

investors will look deeper into what is in store for them. The LGUs and other
well meaning Filipinos should pave the way for business enterprises in
hydropower production.
5. Factors that currently constrain the accelerated development of indigenous

and renewable resources as mentioned in the Medium-Term Philippine
Development Plan are:
a. Inadequate incentive system and low priority for research and

development;
b. Social acceptability of energy projects; and
c. Need for a program to make the country an attractive investment for
energy resource exploration and development.
I. Prioritized Hydropower Project Proposals
The provincial consultation minimum of at least one project endorsement was

met with the exception of the province of Benguet considering that at present it is self
sufficient in terms of its power requirement and has been exporting the same. Table
19 shows the major hydro project proposal for the provinces.
Table 19. Top Hydro Project Proposals by Province

Provincial Current Proposed Installed Percent
Province Potential Power Project/ Capacity to
(MW) Requirement Location (MW) Total
(MW) Potential
Abra 671.03 5.8 Tineg A Mini Hydro, Tineg 9.9 1.48
Apayao 1,327.92 4.0 Agbulu Mini Hydro, Calanasan 4.0 0.30
Benguet 534.66 40.0 Bakun E, Bakun 7.0 1.31
Ifugao 154.29 2.5 Malulon Mini Hydro, Lamut 9.68 7.05
Kalinga 601.64 3.0 Maling Mini Hydro, Balbalan 3.75 0.62
Mt. Province 297.49 2.4 Talubin Mini Hydro, Bontoc 2.5 0.84
C.A.R. TOTAL 3,587.04 57.7 36.23 1.01
69
J. Other Existing and Potential Hydropower Projects
The other existing and potential hydro projects are shown in Tables 20-29.
Table 20. Potential Hydropower Projects in Abra
Project Type Municipality Installed Type of Data Priority

Title/Site of Capacity Development Status Source Project
Hydro In MW Ranking
Malabo RIS Mini Bangued 0.32 Run-of-River Potential NEA
Upper Bucloc Mini Daguioman 0.75 Run-of-River Potential NEA 2
Lower Bucloc Mini Daguioman 1.40 Run-of-River Potential NEA 2
Agamanay
Falls Mini Luba 0.11 Run-of-River Potential NEA
Caba Falls Mini Luba 0.22 Run-of-River Potential NEA
Luba Mini Luba 3.60 Run-of-River Potential NEA
Dumanil A Small Luba 17.70 Run-of-River w/ det. Design NPC 3
Binongan Large Lacub 175.00 Reservoir Potential NPC
Sinalang Mini Peñarrubia 1.15 Run-of-River Potential NEA
Tineg Mini Tineg 0.50 Run-of-River Potential NEA
Tineg D Mini Tineg 5.30 Run-of-River Potential NPC 6
Tineg A Mini Tineg 9.90 Run-of-River Potential NPC 1
Tineg B Small Tineg 17.40 Run-of-River Potential NPC
Anayan A Small Tineg 24.33 Run-of-River Potential NPC
Palsiguan Small Tineg 31.00 Reservoir Potential 4
Tineg C Small Tineg 41.68 Run-of-River Potential NPC
Alaoa Large Tineg 175.00 Reservoir Potential NPC
Utip A Small Tubo 23.57 Run-of-River under FS NPC 5
Supo Large Tubo 142.10 Reservoir Potential NPC
Supo, Alaoa, Binongan and Palsiguan are proposed for a
TOTAL 671.03 series of run-of-river type of development
Table 21. Potential Hydropower Projects in Apayao
Project Title/ Type Installed Type of Data Priority

Site of Municipality Capacity Development Status Source Project
Hydro in MW Ranking
Aoan Mini Calanasan 0.70 Run-of-River Potential NEA
Agbulu Large Calanasan 390.00 Reservoir W/ FS NPC 1/6
Aoan Large Calanasan 196.50 Reservoir Potential NPC 2
Nabbuayan A Mini Conner 6.00 Run-of-River Potential NPC
Baren A Mini Conner 8.90 Run-of-River Potential NPC
Nagbabalayan Mini Kabugao 0.65 Run-of-River Potential NEA
Agbulo Mini Kabugao 1.20 Run-of-River Potential NEA
Gened Mini Kabugao 1.20 Run-of-River Potential NEA
Dagara Mini Kabugao 6.70 Run-of-River Potential NPC 4
Mallag Micro Kabugao Run-of-River Potential DOE
Baractinagan
Falls Micro Luna 0.00004 Run-of-River Potential NEA
Bayugao Creek Mini Luna 0.20 Run-of-River Potential NEA
Ziwanan Mini Luna 0.68 Run-of-River Potential NEA
Luna Large Luna 51.70 Run-of-River Potential NPC
Zumigue Large Luna 54.70 Run-of-River Potential NPC
Apayao River Luna Run-of-River Potential
Pusuak Falls Luna Run-of-River Potential
Bubulayan Mini Pudtol 0.59 Run-of-River Potential NEA
Abulog Mini Pudtol 3.00 Run-of-River Potential NEA 5
Gened Large Pudtol 600.00 Reservoir Under FS NPC 3
Natulud A Mini 5.20 Run-of-River Potential NPC
Agbulu, Gened and Aoan are proposed for a series of
TOTAL 1,327.92run of-river type of development
70
Table 22. Existing Hydroelectric Plants Projects in Benguet
Project Title/ Type Installed Type of
Site of Municipality Capacity Development Status Operator
Hydro in MW
Irisan Mini Baguio City 1.20 Run-of-River Existing HEDCOR
Lower Labay Mini Bakun 2.40 Run-of-River Existing HEDCOR
Lon-oy Mini Bakun 3.60 Run-of-River Existing HEDCOR
Engr. FLSingit Mini Bakun 5.20 Run-of-River Existing HEDCOR
Ampohaw Mini Sablan 8.00 Run-of-River Existing HEDCOR
Bakun A Small Bakun 35.00 Run-of-River Existing HEDCOR
Bakun C Small Bakun 35.00 Run-of-River Existing HEDCOR
Ambuklao Large Bokod (75.00) Reservoir Existing NAPOCOR
Binga Large Itogon 100.00 Reservoir Existing NAPOCOR
Bineng 2b Mini La Trinidad 0.75 Run-of-River Existing HEDCOR
Bineng 2 Mini La Trinidad 1.80 Run-of-River Existing HEDCOR
Asin 2 Mini Tuba 1.00 Run-of-River Existing HEDCOR
Philex Mini Itogon 0.50 Run-of-River Existing Philex Mines
Sal-angan Mini Itogon 2.40 Run-of-River Existing HEDCOR
TOTAL 207.36
Table 23. Potential Hydropower Projects in Benguet

Site of Municipality Capacity Development- Status Remarks*
Hydro in MW
Club John Hay Mini Baguio City 0.56 Run-of-River Potential
Bakun E Mini Bakun 7.00 Run-of-River under FS 1
Malaya A Small Bakun 11.31 Run-of-River under FS 3
Bokod Mini Bokod 0.12 Run-of-River Potential
Nawal Mini Bokod 0.16 Run-of-River Potential
Bantan Creek Mini Bokod 0.32 Run-of-River Potential
Pesak Creek Mini Bokod 0.32 Run-of-River Potential
Benneng A Small Bokod 14.48 Run-of-River under FS 4
Capuyoan Micro Buguias 0.0001 Run-of-River Potential
Baculungan Mini Buguias 3.60 Run-of-River Potential
Agno Mini Kabayan 1.90 Run-of-River Potential
Batan A Mini Kabayan 5.60 Run-of-River Potential
Toking Mini Kabayan 6.80 Run-of-River Potential
Batan Mini Kabayan 8.70 Run-of-River Potential
Kabayan Mini Kabayan 10.00 Run-of-River Potential
Timbac Mini Kabayan 10.00 Run-of-River Potential
Upper Agno Mini Kabayan 10.00 Run-of-River Potential
Balang Mini Kabayan 10.00 Run-of-River Potential
with FS rejected by
Nalatang A Small Kabayan 28.90 Run-of-River the people
with FS rejected by
Nalatang B Small Kabayan 46.70 Run-of-River the people
Amburayan Large Kapangan 80.00 Reservoir under FS
Amburayan C Small Kibungan 30.20 Run-of-River under FS 5
Amburayan A Small Kibungan 32.80 Run-of-River under FS 6
Amburayan B Small Kibungan 45.44 Run-of-River Potential
Gadang Micro Kapangan 0.00001 Run-of-River Potential
Atok 1 Mini Kapangan 0.40 Run-of-River Potential
Atok 2, Poket Mini Kapangan 1.00 Run-of-River Potential
L.Sacburoy Mini Kapangan 2.38 Run-of-River Potential
Gadang Large Kapangan 132.50 Reservoir Potential
Bineng 4 Mini La Trinidad 5.00 Run-of-River Potential
Andorol Mini Tuba 0.12 Run-of-River Potential
Bued Mini Tuba 0.25 Run-of-River Potential
Asin Mini Tuba 0.30 Run-of-River Potential
Asin 4 Mini Tuba 0.60 Run-of-River Potential
Bued A Mini Tuba 5.30 Run-of-River Potential
Galiano Mini Tuba 10.00 Run-of-River under FS 2
Ambalanga A Small Tuba 11.90 Run-of-River potential
Amburayan and Gadang are proposed for a series of run-of-
TOTAL 534.66 river type of development
71
Table 24. Existing Hydroelectric Plants in Ifugao

Site Of Municipality Capacity Development Status
Hydro in MW
Operational
Cambulo Micro Banaue 0.07000 Run-of-River
Operational
Umalbong Micro Hingyon 0.60000 Run-of-River
Operational
Ba-ang Micro Hungduan 0.00010 Run-of-River
Operational
Polod Micro Hungduan 0.00010 Run-of-River
Operational
Operational
Operational
Gode Micro Hungduan 0.00300 Run-of-River
Operational
Abatan Micro Hungduan 0.10000 Run-of-River
Magulon Micro Mayoyao 0.00010 Run-of-River Operational
Binablayan Micro Tinoc 0.00075 Run-of-River Operational
Poblacion Micro Tinoc 0.00500 Run-of-River Operational
TOTAL 0.78280
Table 25. Potential Hydroelectric Projects in Ifugao
Project Title/ Type Installed Type of Priority

Site Of Municipality Capacity Development Status Project
Hydro in MW Ranking
Siffu B Small Aguinaldo 17.96 Run-of-River Potential 5
Hagalap Mini Asipulo 3.20 Run-of-River Potential
Mappit Mini Asipulo 1.50 Run-of-River Potential
Ubuag Micro Hingyon 0.03000 Run-of-River Potential
Hungduan Large Hungduan 55.00 Run-of-River Potential
Panghinawan Mini Kiangan 1.20 Run-of-River w/ detailed design 3
Ibulao Mini Kiangan 9.90 Run-of-River Potential
Hungduan Mini Kiangan 10.00 Run-of-River Potential
Bangbang Mini Kiangan 8.60 Run-of-River Potential 4
Bokiawan Mini Kiangan 6.90 Run-of-River Potential 6
Alimit Mini Lagawe 0.96 Run-of-River Potential
Ibulao Mini Lamut 6.56 Run-of-River Potential
Malulon Mini Lamut 9.68 Run-of-River w/ FS 1
Lamut A Small Lamut 12.00 Run-of-River under FS 2
Inwaloy Micro Mayoyao 0.00010 Run-of-River Potential
Tapao Small Tinoc 10.80 Run-of-River Potential
TOTAL 154.29
Table 26. Existing Hydroelectric Plants in Kalinga

Site Of Municipality Capacity Development Status
Hydro in MW
(6) Barangays Micro Lubuagan 0.08 Run-of-River Operational
Ngibat Micro Pasil 0.035 Run-of-River Operational
Cagaluan Micro Pasil 0.02 Run-of-River Operational
Pantikian Micro Tinglayan 0.01 Run-of-River Operational
Tulgao East Micro Tinglayan 0.01 Run-of-River Operational
Tulgao West Micro Tinglayan 0.01 Run-of-River Operational
Dananao Micro Tinglayan 0.01 Run-of-River Operational
Buscalan Micro Tinglayan 0.01 Run-of-River Operational
Lookong Micro Tinglayan 0.01 Run-of-River Operational
Butbut Micro Tinglayan 0.01 Run-of-River Operational
TOTAL 0.205
72
Table 27. Potential Hydropower Projects in Kalinga

Site of Municipality Capacity Development Status Project
Hydro in MW Ranking
Balantoy Micro Balbalan 0.0001 Run-of-River Potential
Maling Mini Balbalan 3.75 Run-of-River w/ detailed design 1
Saltan A, Salegseg Mini Balbalan 8.00 Run-of-River FS updating 5
Saltan B, Salegseg Small Balbalan 24.00 Run-of-River FS updating
Pasil A Mini Lubuagan 2.00 Run-of-River Potential
Pasil B Small Lubuagan 16.00 Run-of-River FS updating 2
Pasil D Small Pasil 12.00 Run-of-River FS updating 4
Pasil C Small Pasil 16.00 Run-of-River FS updating 3
Saltan Mini Pinukpuk 1.28 Run-of-River Potential
Mabaca A Small Pinukpuk 14.00 Run-of-River Potential
Mabaca B Small Pinukpuk 14.40 Run-of-River Potential
Chico RIS III Mini Tabuk 0.12 Run-of-River Potential
Chico RIS IV Mini Tabuk 0.12 Run-of-River Potential
Chico RIS I Mini Tabuk 0.70 Run-of-River Potential
Chico RIS II Mini Tabuk 0.77 Run-of-River Potential
Mallig Mini Tabuk 4.40 Run-of-River Potential
Chico Mini Tabuk 9.80 Run-of-River Potential 6
Naneng Large Tabuk 82.20 Reservoir Potential
Chico IV, Tomiangan Large Tabuk 370.00 Reservoir Potential
Tanudan D Small Tanudan 10.10 Run-of-River FS updating
Tinglayan B Small Tinglayan 12.00 Run-of-River FS updating
Chico IV, Tomiangan and Naneng are proposed for a
TOTAL 601.64 series of run-of-river type of dev’t
Table 28. Potential Hydropower Projects in Mt. Province

Hydro in MW Ranking
Amuyao Mini Barlig 0.60 Run-of-River Potential
Tanudan Mini Barlig 1.30 Run-of-River Potential
Tanudan A Mini Barlig 8.10 Run-of-River Potential 5
Tanudan B Small Barlig 27.00 Run-of-River Potential 4
Guinsadan Mini Bauko 0.20 Run-of-River Potential
Ampasit, Sadsadan Mini Bauko 2.00 Run-of-River Potential
Dumayen Micro Besao 0.09 Run-of-River Potential
Entaptap Falls Mini Besao 0.28 Run-of-River Potential
Layugan Mini Besao 6.22 Run-of-River Potential 2
Bayyo Mini Bontoc 0.15 Run-of-River Potential
Pamasar Mini Bontoc 0.19 Run-of-River Potential
Talubin Falls Mini Bontoc 0.35 Run-of-River Potential
Ab-ab Mini Bontoc 0.42 Run-of-River Potential
Maggang Mini Bontoc 0.88 Run-of-River Potential
Balitian Mini Bontoc 0.89 Run-of-River Potential
BDC, Chico River Mini Bontoc 2.50 Run-of-River Potential 3
Talubin River Mini Bontoc 3.05 Run-of-River With FS 1
Chagchag Mini Bontoc Potential
Poblacion Micro Natonin 0.0001 Run-of-River Potential
Siffu I Mini Paracelis 0.70 Run-of-River Potential
Siffu 2 Mini Paracelis 1.10 Run-of-River Potential
Borobor, Banahaw Mini Paracelis Potential
Mallig River Mini Paracelis Potential
Capandangan Mini Sabangan 0.30 Run-of-River Potential
Sadanga Large Sadanga 238.20 Reservoir Potential
Bunod-ok Micro Sagada 0.08 Run-of-River Potential
Tetep-an Falls Mini Sagada 1.60 Run-of-River Potential
Masla Mini Tadian 0.60 Run-of-River Potential
Pandayan Mini Tadian 1.50 Run-of-River Potential
Inodey Falls Mini Tadian 1.69 Run-of-River Potential
Sadanga (Large) is proposed for a series of run-of-river
TOTAL 297.4901 type of development
73
Table 29. Existing Hydroelectric Plants in Mt. Province

Hydro in MW Ranking
Balintuagan Micro Bauko 0.0001 Run-of-River Operational
Poblacion Micro Natonin 0.0012 Run-of-River Operational
TOTAL 0.0013
K. Resolutions
Provincial Development Council resolutions endorsing the development of

hydro projects including other renewable and clean sources of energy to include
wind, solar and biomass resources with the possible equity participation of LGUs and
;local communities were unanimously approved in the CAR provinces except in
Benguet where the private sector was adjudged proceeding well and government
intervention was not significantly needed..
Table 30 & 31 show the details when the resolutions were duly approved and
executed. Copy of the resolution are in Appendix F.
Table 30. List of Provincial Development Council Resolutions endorsing the

CEPMP
PROVINCE Res. No. Date Signatories

Governor PDC Secretary
Abra 02 Series of 2003 Jan. 29, 2003 Vicente P. Valera Philip M. Tingonong
Apayao 02 Series of 2003 Feb. 12, 2003 Elias K. Bulut Henry B. Caluducan
Benguet 41-2002 Dec. 22, 2002 Raul M. Molintas Alex E. Balangcod
Ifugao 01 Series of 2003 Jan. 21, 2003 Teodoro B. Baguilat Jr. Carmelita B. Buyuccan
Kalinga 01 Series of 2003 Jan. 8, 2003 Macario A. Duguiang Norma Frances U. Damian
Mt. Province 19 Series of 2003 Jan. 23, 2003 Sario Malinias Mary Jane S. Tumapang
Table 31. List of Sangguniang Panlalawigan Resolutions endorsing the CEPMP
PROVINCE Res. No. Date Signatories

Vice Governor Sangguniang Secretary
Abra
Apayao
Benguet
Ifugao 2003-895 May 19, 2003 Nora D. Dinamling, Acting VGov Miguel B. Dimalnat, Jr.
Kalinga
Mt. Province 360 May 5, 2003 Anthony D. Wooden Josephine F. Villanueva
L. The Consultation Team
The team that facilitated the consultations was composed of the Provincial Planning
and Development Coordinators (PPDC), Rural Electric Cooperative (REC) Representatives,
State Colleges and Universities (SCU) Representatives, Philippine Information Agency
(PIA), Department of Energy (DOE) Representatives, HEDCOR Representatives,
NAPOCOR Representatives, NEDA Technical Staff and the Project Consultant.
74
VI. THE HYDRO POWER DEVELOPMENT
A. The Situation
1. The national picture of power supply and demand at the present appears
favorable, a surplus being reported by the DOE. But DOE likewise reports
that by 2008 for Luzon and Visayas grids and 2005 for the Mindanao grid, at
current power capacity, a power deficit is expected at the rate of 46.36%, if no
new power plants are established within the interval. By 2005, some 7,015
MW additional capacity is required. Already, power deficit is being
experienced in the Visayas.
2. The national picture of supply distribution by source of power in MW

production and percentage distribution in the years 1991 to 2003. Table 32
below shows a shifting trend from imported to local sources of power
comprised by hydropower, natural gas, geothermal, NRE and others. In the
2013 projection imported sources shall decrease to 31.8% from 50.1% in
2003. Also hydropower share shall reduce to 15.3% in 2013 from 18.9% in
2003, but in absolute figures will actually increase from 2,865 MW to 3,215
MW or an increase of 350 MW in 10 years time.
Table 32. Supply Distribution by Source of Power, Philippines
Source of Power 1991 2003 2013 Projection

MW % MW % MW %
1. Imported fossil fuel 18,878 65.7 7,673 50.1 6,700 31.8
2. Hydro power 2,155 7.5 2,865 18.9 3,215 15.3
3. Natural gas, Geothermal, NRE, others 7,700 26.8 4,695 31.0 11,119 52.9
TOTAL 28,733 100.0 15,233 100.0 21,034 100.0
3. Hydropower is clean energy because it emits little or no harmful by-products.

Conventional energy technologies, on the other hand, are known to emit
greenhouse gasses that are responsible for climate change that has significant
adverse effect on global environment and has already begun.
4. A major HEP operator in CAR expressed its sentiments as follows: “Current

Philippine policy practically discourages the development of clean energy
technologies by slapping high taxes on indigenous sources like geothermal
and natural gas while imposing only a small levy or negligible import tax on
coal,” thus, in effect, abetting pollution arising from coal fired power plants.
Correcting this observed anomaly will boost the clean energy sources.
5. Transmission lines are needed to make hydro projects viable; otherwise,

developers should locate initial projects near transmission and/or distribution
lines of the rural electric cooperatives or RECs.
6. Consultations with local policy makers (the consultations were made under
the auspices of the provincial development councils with expanded NGO and
private sector participation) confirmed that the following project planning
considerations of sustainability, social and political acceptability, economic
viability, and mutual benefit should guide any project undertaking in
hydropower development in the Cordilleras and all of them satisfactorily
addressed at the community, barangay, municipal LGU and provincial LGU
levels.
75
7. The consultation participants in the provinces also generally confirmed the
acceptability of the proposed scheme of hydropower project development that
would involve local equity arrangements, except in Benguet where the
prevailing general sentiment was to allow the private sector (with HEDCOR
of Aboitiz group of companies having trail-blazed the development and
remains the sole private HEP developer-operator of note in the area)
continued leeway in hydropower development. The development approach in
Benguet thus should not be the same as that in the other CAR provinces owing
to the advance stage of private sector involvement in hydropower
development in Benguet.
8. According to HEDCOR and Luzon Hydro experiences, hydropower cannot be

expected to be the mainstay of energy power source; rather it should be
viewed as a gap-filling or supplemental source. Field validation of existing
mini- and small-hydro electric plants in Benguet revealed wide fluctuations of
seasonal water volume that renders inconsistent the actual outputs of HEPs on
month-to-month basis. According to NPC, only 30% of an HEP’s annual
capacity may be realizable.
9. The biggest problem that faces mini- and small-hydro power development is
where to market the produce hence the need to co-opt the local RECs as
equity partners of proposed hydro projects, to ensure the initial market and,
therefore, the project viability in initial years. This approach also addresses
REC concern of energy power supply, additional sources of income and the
institutional need of being in greater control of one’s business environment.
10. The present power supply and demand picture in CAR provinces is presented
in Table 33 below. Benguet is more than self-sufficient; the other provinces
are not.
Table 33. Power Supply and Demand by Province, CAR
Province Production Demand

in MW in MW
Abra 5.8
Apayao -- 4.0
Benguet & Baguio City 207.36 40.0
Ifugao 0.7828 2.5
Kalinga 0.2050 3.0
Mountain Province 0.0013 2.4
TOTAL 214.3351 57.7
11. While LGUs and RECs are empowered with sufficient legal basis to engage in
the development and operation of hydropower projects, this prospect has yet
to see significant initiatives in the Cordilleras. The crux of the matter has to
do with finding a workable formula to develop local resolve and
determination to (a) seriously consider to exploit their hitherto untapped local
water resources for power generation; and (b) take the initiative to mobilize
local resources (albeit admittedly direly limited versus the staggering capital
requirements of hydropower undertakings) and organize the same and use it to
access the more abundant external investment resources for HEP development
purposes.
The national government through the DOE purportedly has facilities to assist
LGUs in hydropower development and operation. The Min-Hydro Law and
the Local Government Code provide the basic framework for these.
76
12. It is thus seen to be necessary for LGUs and RECs to partner in this novel
proposed Cordillera hydropower development program with external technical
assistance. While the Regional Development Council is the primary
interventionist in the initiative, the provincial LGU is envisioned as the main
initiator (to be the initiating principal stakeholder who will invite other local
stakeholders and arrange and mediate partnership arrangements, cause basic
project studies and other preparatory arrangements, facilitate development,
etc.) while the REC is envisioned to ensure the initial market of the project
(each sub-project is to be technically designed to address the local REC’s
current and projected power needs).
13. The Ambuklao and Binga HEPs are the big dams found in Cordillera. They
were constructed in a different era and while they serve the country well, their
construction had left a lot of social issues, which up to the present remain not
fully settled. The historical issues experienced with these two big dams will
not be repeated in subsequent hydropower projects under this master plan.
14. The proposed Cordillera HEP development program in order to be responsive

should be sensitive to local conditions. It appears best to proceed from the
assumption that the local stakeholders (officials of LGUs and RECs, local
businessmen, local investors) are beginners on the subject of HEP investments
and are generally risk averse to it especially on the subject of local equity.
While the local policy makers consulted demonstrated interest and enthusiasm
to the prospects of developing local HEP potentials, they confided being in the
dark on how to go about the process. The situation necessitates creative and
innovative approaches of development interventions, local capital
mobilization and equity formation. The conventional approaches which favor
the more advance areas and capital abundant sectors may not work in the
Cordilleras.
15. Also needed are the patient and painstaking methodologies and techniques of
community organizing and development especially in light of the finding that
some degrees of radical thinking were demonstrated in few places or
communities that host potential and prospective hydropower projects. This
radical thinking sometimes includes misinformation and anti-government
sentiments that seem to stem from warped understanding or mis-appreciation
of development realities, possibly the consequence of constant barrage of
leftist teachings in Cordillera hinterlands during the last 3-1/2 decades. The
situation remains to this day, albeit the local populace has increasingly grown
skeptical of leftist teachings. In sum, the local populace is critical with new
development projects; the implication is that competent handling in the
context of community organizing and development is seen to be critically
needed.
16. The CAR RDP has a challenging vision for the energy sector: The Cordillera
is seen as the leading hydro-based power supplier in Luzon.
The vision is a foregone reality, Cordillera being host, or the source of, water
to the big HEPs and a number of micro-, mini- and small-hydro HEPs in
North Luzon. Just the same, the vision calls for sustaining or strengthening
the status, especially in the Cordillera provinces, other than Benguet, where
numerous hydropower potentials abound but remain untapped. Benguet
Province is the location of the big HEPs and a number of mini- and small-
HEPs that also serve as models.
77
B. The Mission, Goals and Objectives
The Mission
To draw up a prototype strategy and program of hydroelectric projects

development for local governments with potential multi-sectoral participation in the
Cordillera provinces which shall comprise the core of the Cordillera Energy Producer
Master Plan and produce a guide in developing and harnessing the unique
comparative advantage of hydropower resources to drive rural development and
modernization in the Cordilleras.
The Goals
The master plan intends to help attain the following ultimate goals:
1. Improvement of hydropower resources development and management.
The CEPMP hopes to provide the blueprint for the development of

Cordillera hydropower resources to significantly contribute to the country’s
power development and help assure a consistently adequate power supply,
help reduce the country’s current dependency on imported oil- and coal-based
power sources, help reduce power cost to consumers, and help make the
country globally competitive.
2. Improvement of watershed development and management.
The CEPMP hopes to provide reinforcing rationale for establishing

and sustaining local effort to improve watershed management in critical river
basin headwaters in the Cordilleras with the end view to restore the year-
round consistency and constancy of adequate quality water supply of said
headwaters.
3. Improvement of LGU capacity in natural resources management.
The CEPMP hopes to help CAR LGUs develop their capabilities to

explore and harness the region’s unique geographic comparative advantages,
hydropower resources in this instance, as among the significant potentials,
opportunities and forces to propel rural development and modernization in
Cordillera communities, generate related local industries and businesses,
improve the valuation of local assets and expand the tax base for additional
LGU revenues, create employment, and otherwise help raise and improve the
quality of life in communities.
The Objectives
Specifically the master plan intends to accomplish the following tasks:
1. On the basis of information gathered from strategic provincial consultations,

assess and select from the inventory of HEP potentials in each Cordillera
province the most appropriate potentials for project start-ups;
2. Formulate and suggest a broad development scheme of LGU and multi-

sectoral partnership by which the proposed projects may be approached and
realized to the satisfaction of all key stakeholders;
3. Formulate a prototype work program in broad steps to guide implementation.
78
C. The Concept of the Proposed Strategic Mini- and Small-Hydropower
Development in CAR
Features:
1. This proposed strategic mini- and small-hydropower development in the

Cordilleras follows an entrepreneurial paradigm and combines business
development with project development.
2. Five initial HEP projects, one in each of the Cordillera provinces other than
Benguet, are envisioned to be pursued in the 2004-2010 medium term period;
the rest of potential HEPs may later on be likewise planned for development
after that period as may be warranted by the business performance of the first
start-ups.
3. The concept of business and project development combined in this master

plan is envisioned to follow a scheme whereby local stakeholders (particularly
the provincial and municipal LGUs, the RECs, local businessmen/investors,
et.al.) may become co-owners of the HEP business as equity shareholders.
This arrangement would automatically address in a positive manner the wide
range of issues pertaining to the exploitation of local resources, in these cases,
the hydropower resources that surfaced in the consultations. The
considerations of social and political acceptability, cultural compatibility,
mutual benefit, sustainability in terms of caring for the environment (the
watershed) are seen to be readily addressed with considerable facility due to
the presence of significant local co-owners of the HEP business.
4. The proposed project start-ups are intended to first attain provincial self-
sufficiency and serve as “learning laboratories” on HEP operation and
management for the local owners. As the local owners gain expertise on the
business and the industry of HEPs and depending on their future capability to
expand their service area (e.g., co-opting neighboring RECs as additional
markets), expansion plans may ensue to develop other prospective potential
HEPs and thereby increasingly contribute to the continuing effort to improve
the power supply situation of the country.
5. A key ingredient seen to be critical at the initiating stage is a powerful

development interventionist who will put together the project stakeholders;
mediate the arrangements and coordinate the setting forth of stakeholder roles,
equity, other responsibilities; and otherwise organize the stakeholders toward
project realization and viability. Under the auspices of the RDC-CAR, an
interagency team from energy-related regional line agencies and institutions
with major participation of the DOE, and possibly some selected NGOs, is
envisioned to provide such needed development intervention services.
The development approach of the master plan is thus a unique collaborative

endeavor among LGUs, RECs, the DOE, the RDC, local investors, and other
stakeholders including NGOs, and possibly the donor community (the greater
bulk of project financing is planned to be sourced from ODA or venture
capitalists).
79
6. The cycle and stages of business and project development in this master plan
are as follows:
(a) The provincial LGU, with the help of DOE and the regional
development interventionist team (RDIT), creates a local power
corporation (LPC) with itself, the REC, municipal LGUs, local
businessmen, individual investors from the community, and other
interested parties as original equity shareholders.
(b) The new LPC acquires a franchise or permit to operate HEP on the
proposed first start-up HEP.
(c) The LPC then seeks out a technical/industrial partner and together
form a new power corporation (Corp-2).
(d) Corp-2 then seeks out project financing – ODA or venture capital.
(e) Project implementation ensues after project funding is obtained.
(f) The LPC learns the “ropes” of the HEP business and industry and
develops its expertise.
(g) The LPC may opt to wean itself out of Corp-2 or continue with Corp-2
and expand operations as it expands its market and develop additional
HEPs.
7. Benguet Province follows a different strategy. Based on the indicated

preferences of political leaders as relayed in the consultations, Benguet is seen
to continue a non-interventionist stance with the private sector developing
HEP resources in the province. Although Benguet might also want to venture
into the LPC proposition.
D. Basic Assumptions
1. There are investors willing to venture into hydropower development provided

reasonable incentives are present and certain recognized risks are mitigated,
e.g., the Aboitiz Equity Ventures who own HEDCOR and the Luzon Hydro
Corporation.
2. The local stakeholders, namely the LGUs, RECs, local business sectors,
NGOs, and the community people positively support the proposed
development for as long as their own concerns and interests are genuinely
considered and addressed. The concerns and interest of the local stakeholders
may be broadly summarized as follows:
a) LGUs want to improve their delivery of basic services and enhance

their economic assets and revenue streams;
b) RECs want cheaper power and more sources of income;
c) The local business sector want reasonably priced reliable and stable
power, as well as new directions for new business activities;
d) NGOs want development that is fair and beneficial to all stakeholders,

not exploitative nor taking advantage of certain marginalized sectors,
80
friendly to the environment, compatible to the local culture and
enhancive of socio-economic development in general; and
e) The community people support projects that do not negatively impact

on them and in the event that specific individuals are adversely
affected (e.g., when land properties are needed for right-of-way), they
would want to be assured of fair compensation arrived at in amicable
negotiations.
3. A clear and transparent project terms of reference that is communicated as

widely as possible should engender project social acceptance, forestall
opposition and otherwise build stakeholder confidence – this is one purpose of
the master plan.
4. Because it is in the highest interest of the national government to promote and

realize hydropower development through the DOE wherever it is strategically
advantageous, it is reasonable to expect the DOE to support and help put in
place some proposed policies, new or revision of existing ones, that are seen
necessary to propel the proposed hydropower development program.
5. A bridging mechanism between the national government and local project

stakeholders is needed – this is the role of the RDC who is the proponent of
this master plan and the expected advocate for its implementation.
E. Operationalizing the Concept: The Strategic Actions
To operationalize a strategic mini- and small-hydropower development

program in the Cordilleras entails the formulation and implementation of a
Cordillera-customized hydropower development program. To help ensure the long
term viability of the hydropower industry, however, will need the adoption of
additional key policies at the national level, which this master plan also advocates.
Policy Recommendations:
The policies recommended for national level adoption are aimed at creating a
more conducive playing field to the various stakeholders of hydropower development
by unclogging certain hindering bottlenecks and by providing incentives to facilitate
the flow of investments and development resources to the sector. Key considerations
include how to raise the awareness and knowledge levels of local stakeholders on
availing hydropower technologies for their untapped resources, and how to invite
venture capitalists/investors into the novel investment prospects of hydropower
development in the Cordilleras.
The recommended policies this master plan advocates are contained in the
legislative proposal of the DOE on renewable energy sources, An Act To Further
Promote The Development, Utilization And Commercialization Of Renewable Energy
Sources And For Other Purposes. Of particular interest seen to boost the growth of
the hydropower industry in the Cordilleras are the following:
1. Mandating the DOE the additional power and function of facilitation
of entry of foreign expertise and resources in order to accelerate the
pace of technology transfer and development of local expertise;
2. Mandating the DOE to expedite the processing, certification and

approval of applications for renewable energy sources projects;
81
3. Mandating the National Transmission Corporation (TRANSCO) to
ensure the interconnection and access of renewable energy generating
facilities to the grid;
4. Institutionalization of Area Renewable Energy Centers or ARECs.

Technical assistance and extension services to LGUs for hydropower
development is a critical need in the Cordilleras;
5. The non-fiscal incentives for renewable energy developers particularly

on priority dispatch, exclusion from payment of ancillary services, and
exclusion from payment of interconnection and wheeling charges; and
6. The fiscal incentives for renewable energy commercialization. The

hydropower industry in the country, notwithstanding that big HEPs
have been with us for decades, is as yet in its infancy stage. The
proposed national and local tax incentives and duty-free importation
privileges could indeed boost the growth of the renewable energy
(including hydropower) industry and its support sub-industries and
services.
F. The Proposed Investment Program of Hydro Electric Projects in the Cordilleras
The Cordillera Energy Producer Master Plan (CEPMP) aims to develop within
the planning period of 2004-2013 a total of 36 hydroelectric power projects
distributed in six provinces that will generate a combined installed capacity of 401.29
MW. While this projected generated power is just a small eleven percent of the
regions total potential of 3,587.03 MW (Table 34), the same would be a giant step at
jumpstarting a larger mass-based, popularly supported energy development program
in the Cordilleras, befitting its avowed development niche as the leading hydro-based
power producer.
Table 34. Potential Hydroelectric Power Projects, By Province, CAR, 2004-2013

Province Potential (MW) Percent to Total
Abra 671.03 18.71
Apayao 1,327.92 37.02
Benguet 534.66 14.91
Ifugao 154.29 4.30
Kalinga 601.64 16.77
Mt. Province 297.49 8.29
C.A.R. TOTAL 3,587.03 100.00
1. The top six preferred HEP potentials were selected in each province from the provincial
inventories as candidates for initial start-up HEP projects. Criteria for selection
included the local preferences gathered during the consultations and the practical
considerations of distance to the nearest NPC transmission line, distance to the nearest
road, and the potential capacity in terms of power output which should exceed or be
about the same to the current and projected provincial power demand. The priority
projects are shown in Table 35 on the next page.
82
Table 35. Priority Hydroelectric Power Projects, CAR, 2004-2013
Priority/ Province Type of Installed

Project Title Hydro Dev’t. Municipality Capacity
(Megawatts)
First Priority (Start-up) 28.55
Abra Tineg A Mini Tineg 6.80
Apayao Agbulo Mini Calanasan 5.00
Ifugao Malulon Mini Lamut 3.50
Benguet Bakun E Mini Bakun 7.00
Kalinga Maling Mini Balbalan 3.75
Mt. Province Talubin Mini Bontoc 2.50
Second Priority 51.37
Abra Lower/Upper Bucloc Mini Daguioman 2.15
Apayao Aoan Mini Calanasan 5.00
Benguet Galiano Mini Tuba 10.00
Ifugao Lamut A Small Lamut 12.00
Kalinga Pasil B Small Lubuagan 16.00
Mt. Province Layugan Mini Besao 6.22
Third Priority 54.26
Abra Dumanil A Small Luba 17.70
Apayao Gened Mini Pudtol 5.00
Benguet Malaya A Small Bakun 11.31
Ifugao Panghinawan Mini Kiangan 1.20
Kalinga Pasil C Small Pasil 16.00
Mt. Province BDC-Chico Mini Bontoc 3.05
Fourth Priority 99.78
Abra Palsiguan Small Tineg 31.00
Apayao Dagara Mini Kabugao 6.70
Benguet Benneng A Small Bokod 14.48
Ifugao Bangbang Mini Kiangan 8.60
Kalinga Pasil D Small Pasil 12.00
Mt. Province Tanudan B Small Barlig 27.00
Fifth Priority 106.83
Abra Utip A Small Tubo 23.57
Apayao Abulog Mini Pudtol 3.00
Benguet Amburayan C Small Kibungan 30.20
Ifugao Siffu B Small Aguinaldo 17.96
Kalinga Saltan B Small Balbalan 24.00
Mt. Province Tanudan A Mini Barlig 8.10
Sixth Priority 60.50
Abra Tineg D Mini Tineg 5.30
Apayao Agbulu B Mini Calanasan 5.00
Benguet Amburayan A Small Kibungan 32.80
Ifugao Bokiawan Mini Kiangan 6.90
Kalinga Chico Mini Tabuk 9.80
Mt. Province Siffu I Mini Paracelis 0.70
Total 401.29
Generally first priority hydropower project proposals are geared to address the
province energy requirements, second to fifth priority projects to augment the neighboring
provinces needs and excess energy generated to the Luzon Grid. Sixth priority projects are
exclusively geared to the Luzon Grid considering that by that time all the energy
requirements of the provinces in CAR and adjoining provinces shall have been adequately
provided.
83
2. Project costs were estimated using the DOE estimation factors of a low of $1.2M to a
high of $1.5M per MW output multiplied with the start-up project output capacity
which were set at levels about the same or slightly exceeding present provincial
power demands. A particular project may have potential output far greater than the
designed output capacity; the excess untapped potential output can be considered
reserve for future expansion. The initial start-up capacity output was set to determine
the project cost in a way that factor in the current financial capacity of the proponent
LGU. The project cost estimates is shown in the table below.
The desired HEP output capacity is key to project cost determination and
project design. To calibrate the desired start-up project output capacity considering
the market of the expected energy to be produced and the cost of establishing the
project in relation to the financial capacity of the proponent LGU, the practical
approach was to set the start-up project capacity at just about equal to or slightly
exceeding the REC demand for the service area. Say, the current demand is 3.8 MW
with projected demand for the next 10 years at 4.8 MW (current plus additional
demand); thus. the proposed project capacity should be set at 5.0 MW, from which
project cost estimation and design may proceed.
Table 36 and Figure 9 shows that over the planning period of ten years (2004-
2013) an aggregate capital outlay of PhP 33.106 Billion is needed to finance the
projected capacity of 401.29 MW. First priority or start-up projects needs P2.355
Billion and will generate 28.55 MW; Second priority projects P4.238 Billion with
51.37 MW; Third Priority Projects P4.476 Billion with 54.26; Fourth Priority Projects
P8.231 Billion with 99.78 MW; Fifth Priority Projects P8.813 Billion with 106.83
MW and 6th Priority Projects P4.991 Billion with 60.50 MW of hydropower projects
in the region. In the next ten (10) years the bulk of this power generated will supply
the needs of the adjacent provinces and the Luzon Grid requirement, and a slight
portion will address the need of the rural electric cooperatives.
Table 36. Investment Requirements: LGU & Private Sector Collaboration

Hydro (MW)
Dev’t.
First Priority 28.55 2,355.38
(Start-up)
Abra Tineg A Mini Tineg 6.80 561.00 The province’s
Apayao Agbulo Mini Calanasan 5.00 412.50 The province’s
Benguet Bakun E Mini Bakun 7.00 577.50 Adjoining provinces and
the Luzon Grid
Ifugao Malulon Mini Lamut 3.50 288.75 The province’s
Kalinga Maling Mini Balbalan 3.75 309.38 The province’s
Mt. Talubin Mini Bontoc 2.50 206.25 The province’s
Province requirement of 2.4 MW
Second Priority 51.37 4,238.03
Abra Lower/ Mini Daguioman 2.15 177.38 Ilocos Sur and the Luzon
Upper Bucloc Grid
Apayao Aoan Mini Calanasan 5.00 412.50 Northwestern Cagayan
and the Luzon Grid
Benguet Galiano Mini Tuba 10.00 825.00 Adjoining provinces and
the Luzon Grid
Ifugao Lamut A Small Lamut 12.00 990.00 Nueva Vizcaya and the
Luzon Grid
Kalinga Pasil B Small Lubuagan 16.00 1,320.00 Cagayan and the Luzon
Grid
Mt. Layugan Mini Besao 6.22 513.15 Ilocos Sur and La Union
Province and the Luzon Grid
84
Table 36. Investment Requirements: LGU & Private Sector Collaboration
Priority/ Type of Installed Cost

Province Project Title Hydro Municipality Capacity (PhPMilli Potential Market
Dev’t. (MW) on)
Third 54.26 4,476.45
Priority
Abra Dumanil A Small Luba 17.70 1,460.25 Ilocos Sur and the
Luzon Grid
Apayao Gened Mini Pudtol 5.00 412.50 Northwestern
Cagayan and the
Luzon Grid
Benguet Malaya A Small Bakun 11.31 933.08 Adjoining
provinces and the
Luzon Grid
Ifugao Panghinawan Mini Kiangan 1.2 99.00 Nueva Vizcaya and
the Luzon Grid
Kalinga Pasil C Small Pasil 16.0 1,320.00 Cagayan and the
Luzon Grid
Mt. BDC-Chico Mini Bontoc 3.05 251.62 Ilocos Sur, La
Province Union and the
Luzon Grid
Fourth 99.78 8,231.85
Priority
Abra Palsiguan Small Tineg 31.00 2,557.50 Luzon Grid
Apayao Dagara Mini Kabugao 6.70 552.75 Luzon Grid
Benguet Benneng A Small Bokod 14.48 1,194.60 Luzon Grid
Ifugao Bangbang Mini Kiangan 8.60 709.50 Luzon Grid
Kalinga Pasil D Small Pasil 12.00 990.00 Luzon Grid
Mt. Province Tanudan B Small Barlig 27.00 2,227.50 Luzon Grid
Fifth 106.83 8,813.47
Priority
Abra Utip A Small Tubo 23.57 1,944.52 Luzon Grid
Apayao Abulog Mini Pudtol 3.00 247.50 Luzon Grid
Benguet Amburayan C Small Kibungan 30.20 2,491.50 Luzon Grid
Ifugao Siffu B Small Aguinaldo 17.96 1,481.70 Luzon Grid
Kalinga Saltan B Small Balbalan 24.00 1,980.00 Luzon Grid
Mt. Province Tanudan A Mini Barlig 8.10 668.25 Luzon Grid
Sixth 60.50 4,991.25
Priority
Abra Tineg D Mini Tineg 5.30 437.25 Luzon Grid
Apayao Agbulu B Mini Calanasan 5.00 412.50 Luzon Grid
Benguet Amburayan A Small Kibungan 32.80 2,706.00 Luzon Grid
Ifugao Bokiawan Mini Kiangan 6.90 569.25 Luzon Grid
Kalinga Chico Mini Tabuk 9.80 808.50 Luzon Grid
Mt. Province Siffu I Mini Paracelis 0.70 57.75 Luzon Grid
1st to 6th Priority Projects Total 401.29 33,106.43
85
Figure 9. PROPOSED MINI AND SMALL HYDROELECTRIC POWER
PROJECTS 2004-2013
86
3. The factors considered in the determination of the financial viability of the
First Priority proposed Hydropower Projects are:
a. Capacity Factor.
The annual potential electric energy (in kwh) that can be generated by
micro/small hydro is calculated by multiplying the capacity of the plant in kw with
the total hours of one year (8,760 hours). However, a mini/small hydro plant scheme
will not be able to generate its rated output or capacity throughout the year as the
water would be insufficient at times (dry periods or other water uses such as
irrigation). Further deductions need to be made for those times when the plant is shut
down for maintenance, or during floods. The capacity factor is the ratio of the average
output to the installed capacity over a period of usually one year. The capacity factor
for grid-connected schemes is typically 50% to 60%. For the master plan we used the
average at 55% capacity factor.
b. Annual Energy Output.
The mini/small hydroelectric plant annual energy output is calculated by

multiplying the installed capacity (kw) by 8,760 hours then by the capacity factor.
c. Operation and Maintenance Cost
Typically, 2% to 4% of investment cost per annum is computed to cover for

operation and maintenance costs. This includes costs of personnel, spare parts,
equipment, repairs and overhauls, company overheads, water use fees and land fees.
For the master plan we used the average at 3% capacity factor.
d. Debt Servicing
Usually, investors will have to borrow money from the banks and have to
repay the loan inclusive of interests. They have to service this debt on an annual
basis. Debt service charges are typically are estimated at 12% of the loan (inflation
corrected). Return of equity capital is treated in the same way since developers want
to have at least the same profit on their money as the banks can achieve on their
loans. Hence, annual costs of investment (called annuity of investment) are typically
12% of total costs.
e. Unit production Cost.
This cost can be estimated by taking the sum of Operations and Maintenance
Cost; Debt Service Cost and Return on Equity Capital then dividing them by the
annual energy output (kwh) of the plant.
f. Power Purchase Tariff
The unit production cost needs to be compared with the average sales price,
which the plant can achieve. If the plant is connected to the NPC grid, then the hydro
developer and NPC have to negotiate a power purchase agreement (PPA), which,
among others things, determines the power purchase tariff. Knowing the unit
production cost for the plant, the developer has a clear indication of how the purchase
tariff can be negotiated (break-even tariff). For purchase tariffs lower than the unit
production cost he would operate at a loss.
The Unit Production Cost, of the five (5) proposed start-up hydropower
projects, at the low end is P2.1227/kwh and at the high end is P2.5473/kwh. The
87
current NAPOCOR generation charge to BENECO is 2.4734/kwh, which is 12%
higher than their actual unit production cost of P2.2084. This shows a very viable
undertaking. Assuming that the energy produced using the computed annual
generation of 105,996,000 kwh will be sold to the RECs at P2.2084/kwh, it will
generate a return of P9.8 Million/annum and at P2.4734/kwh this translates to an
annual income of P37.17 Million! NAPOCOR current charges are 12% higher than
its unit production cost.
Table 37 and 38 shows the unit production cost the proposed hydropower
projects both the low and high ends.
Table 37. Low-end Unit Production Cost of

Proposed Hydroelectric Power Projects
% IC Amount
Investment Cost (IC) 1,500,000,000.00
Operation and Maintenance
Cost (O&M) 3.0 45,000,000.00
Debt Servicing (DS) 12.0 180,000,000.00
Annual Charges (AC)
=O&M + DS 225,000,000.00
Annual Generation (AG) in
kilowatt-hours 55.0 105,996,000
from the 22 MW hydropower
projects
Unit Production Cost (UPC)
PhP/Kilowatt-hour
=AC/AG 2.1227
Table 38. High-end Unit Production Cost of

Proposed Hydroelectric Power Projects
% IC Amount
Investment Cost (IC) 1,800,000,000.00
Organization and Management
(O&M) 3.0 54,000,000.00
Debt Servicing (DS) 12.0 216,000,000.00
Annual Charges (AC)
=O&M + DS 270,000,000.00
Annual Generation (AG) in
kilowatt-hours 55.0 105,996,000
from the 22 MW hydropower
projects
Unit Production Cost (UPC)
PhP/Kilowatt-hour
=AC/AG 2.5473
88
4. Risk Analysis.
Investment Risks Recommendations
▪ Market not yet fully ▪ Create a market – require utilities to purchase a

develop. Only a portion of their power consumption from non-
handful of rural renewable energy sources
electric cooperatives ▪ Support the forthcoming proposal for a new law
are bankable. that will grant special incentives to renewable
projects to enable healthy competition against fossil
fuels especially coal-fired plants
▪ Support the plan to promote the consolidation of
rural electric cooperatives to strengthen them
financially and technically and ultimately enable
them to become power-off takers
▪ Initiate the establishment of some sort of one-stop
center for potential investors in renewable energy
projects in CAR
▪ Educate the locals on the true benefits and costs of
allowing sustainable development;
▪ Wheeling power – ▪ Reduce wheeling fees – eliminate or reduce

high cost of wheeling wheeling fees for non-renewable energies and/or
power and difficult charge wheeling fees based on average monthly use
conditions imposed
by NAPOCOR in
wheeling power
▪ Hydro power has a ▪ Active involvement of the LGUs

history of cost ▪ Better site engineering studies through extensive
overruns mainly site investigations and geological testing
caused by acquisition ▪ Consider increasing contingency costs
and detailed ▪ Exempt mini-hydropower plants from technical
engineering requirements imposed on bigger plants
miscalculations
▪ Hydrology risk on ▪ Study long term hydrological record of the site

run-of-river types. ▪ Ascertain watershed support and cooperation of
Sustained supply of concerned residents to sustain the biodiversity of
water to firm-up plant the area
capacity/output
▪ Availability of ▪ The government through the DOE provides a loan

Financing package equivalent to 56% of the Total Project
Cost the balance of which shall be provided by the
private sector
▪ Avail of the funds brought about by the Kyoto
Protocol (Clean Dust mechanism)
▪ Local Government collaboration with private
investors
▪ Provide long-term loans at development rates
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5. SWOT Analysis.
STRENGTHS WEAKNESSES
▪ CAR has the highest hydro potential ▪ CARs rugged topography and
nationwide remoteness of potential projects
▪ Cordillerans support the ▪ Underdeveloped road infrastructure
development of run-of-river ▪ Unbankable rural electric
mini/small hydropower projects cooperatives
▪ Experienced in hydro development ▪ Lack of local skills in hydropower
both government and private development
OPPORTUNITIES THREATS
▪ CAR is the watershed of Northern ▪ Unstable peace and order situation

Luzon due to insurgency and tribal
▪ Increasing Cost of imported energy conflicts
▪ Can significantly contribute in the ▪ Perceived damaged to region’s
energy shortage fragile eco-system
▪ Energy Projects seen as source of ▪ Participation of traditional
supplemental LGU revenues politicians on LGU-Private sector
▪ Job opportunities collaboration
▪ Attain energy self-sufficiency ▪ Unstable Philippine economy
▪ Low maintenance cost of ▪ Issue on the roles of “host-
hydroelectric plants community”
▪ Incentive to LGU and private sector ▪ Lack of public advocacy
▪ There is tremendous interest in ▪ Past failure of the development
developing renewable energy planners to fully consult effected
projects among developed countries communities.
especially in Europe, because of
their commitments to reduce
greenhouse gas emissions under the
Kyoto Protocol. Developed
countries are looking into such
investments in developing countries.
▪ On-going implementation of the
Cordillera Roads Improvement
Project which when completed will
link all its provinces through a trunk
line and secondary roads
▪ Avenue for public advocacy on the
benefits for clean energy projects
The resultant analysis shows that weaknesses and threats can be properly addressed
by considering the region’s strengths and opportunities. Most of the issues were properly
ventilated and favorable responses were provided.
The potential of the Cordillera as the water cradle of Northern Luzon should not be
over emphasized rather there is no other time than now…the proposed hydropower projects
has satisfied the risk and viability parameters.
90
VII. INFORMATION, EDUCATION AND COMMUNICATIONS (IEC) PLAN
One of the most essential components of power development project is the

aspect on socio-political acceptance. The community’s familiarity and eventual
support on power projects guarantee a smooth physical project execution. To assure
better understanding and appreciation, an advocacy through a pre-design IEC should
be an indispensable project component.
This study component demonstrates a plan to institute full awareness of the

stakeholders on hydro power projects.
A. Goals
1. To develop the vast hydro-based power potentials of the Cordillera Region.

2. To contribute in addressing the foreseen nationwide power shortage by year
2008.
3. To create better awareness and understanding among stakeholders on hydro-
based power projects.
B. Specific Objectives
1. To promote socio and political acceptability of mini and small hydro projects.
2. To enlighten the prospective host communities on the advantages of
developing mini and small hydro projects.
3. To give value to the indigenous people’s rights over their ancestral domain
and natural resources.
C. Strategies
Social Mobilization
This entails the involvement of all stakeholders particularly the affected

villages and attainment of a higher level of understanding, to include among others
but not limited to approaches such as: tapping the traditional and formal community
leaders, inter-personal communication/ socialization, meetings, media, consultation
fora, etc.
Advocacy
Conduct of appreciation trips to existing mini and/or hydro projects and host
communities, distribution of information brochures.
Showcasing of Community Benefits
Advance funding to implement community development projects in order to

entice prospective host communities to support hydro projects. Funding may be
provided by the LGU and/or the private investor, i.e., access road to project site via
existing settlements and school buildings.
D. Audience and Message
The information should be delivered to the appropriate audience. The

following are the key stakeholders:
91
LGU Officials - bringing awareness among local government executives as a way to
develop their natural resources and as a source of additional revenue.
Local Media – giving emphasis on the role of media in delivering accurate

information to the people and effectively shaping public perception on hydro-power
projects.
Educators – highlighting their role to disseminate information on the sustainable

development of our natural resources.
Indigenous Communities – putting into focus their rights over their ancestral domain.
Civil Society and Religious Sector – considering their influence on the advocacy on
people’s rights and society values.
Strategic Messages:
• Hydro-power projects are additional revenue and employment source for the
LGUs
• The region could effectively contribute to national development and help
address the foreseen energy crisis.
• No electricity is more expensive than having electricity.
• We need to drastically reduce country’s dependence on imported energy.
• Mini and small run-of-river types of hydroelectric power projects are
environment friendly.
• Carbon dioxide (CO2) emission from fossil-fuel power plant can not be
reduced which is a major culprit on green house effect and global climate
change.
• Big hydroelectric power dams lead to land losses by inundating villages, tracts
of agricultural lands, forests and other wildlands.
• Hydroelectric power plants require relatively low maintenance cost.
• Our vast water resources could be tapped as major source of livelihood.
• We should actively get involve in development of our community.
• Effective management of our watersheds secures our future.
• We can develop and manage our natural resources into more productive
ventures.
• Irrigation component could be integrated in the hydroelectric power project.
• Big hydroelectric power dams cause involuntary resettlement that leads to the
disturbance of established cultural and social systems.
• Recognize the rights of the indigenous communities over their ancestral
domain
• Public and private sectors can collaborate to pursue economic growth in the
countryside
• A natural resource is valuable only when developed
• And similar others that may be developed subsequently
E. The Implementation Scheme
The carrying-out of the IEC Plan will largely depend on:
• The availability of logistical support from the concerned national line

agencies, concerned LGUs and private investors
• Cooperation and support of the Local Government executives
• Active participation of all stakeholders
92
Action Agenda:
• Gather related updates on hydro project development to improve

information materials
• Information Materials preparation and distribution
• Design and conduct of broadcast media program
• Establish and firm-up linkages with organizations/ institutions with
similar undertaking
• Conduct of meetings/ consultations with concerned communities
93
VIII. THE IMPLEMENTATION PLAN: WORK PROGRAM FEATURES
The implementation plan remains an integral part of customizing the proposed

Cordillera hydropower development program to the unique local peculiarities of the
region. From the feedback of the multi-sectoral consultations, the considerations of
sustainability, cultural compatibility, social and political acceptability, economic
viability, and mutual benefit should guide any and all HEPs in the Cordilleras and all
of them satisfactorily addressed at the community, barangay, municipal LGU and
provincial LGU levels. The following proposed core features of the implementation
work plan, therefore, should endeavor to comply with these conditionalities.
1. Establishing the Local Power Corporation (LPC).
Envisioned as the principal role of the initiating LGU, the provincial

government forms and incorporates a local power corporation where the
incorporators include itself, the municipal LGU where the potential HEP is
located and other interested and willing municipal LGUs, the rural electric
cooperative or REC of the province, some local businessmen and investors,
and other interested and willing potential shareholders or investors from the
barangays and local communities.
The arrangement of equity sharing during the incorporation period will

be a matter of negotiations among the incorporators, conditioned by, among
others, financial capability and the investment risk aversion of the key
participants. For obvious reasons, however, it is recommended that the
government sector combined should obtain controlling interest. Also, a
portion of the shares should be allocated to community interests that may not
be represented at incorporation time and which may have to be paid out by the
LGUs.
The level of capitalization should be such that the cash paid-up capital
shall be enough to finance subsequent work to undertake whatever it takes to
obtain the HEP franchise or permit to operate HEP, which is the next work
program item. It is seen that a comfortable working budget to pursue
subsequent activities will be around P1.5 to P2.0 million. It is suggested each
provincial LGU will appropriate this amount from their 20% development
fund for the purpose explained.
Preparatory work to LPC formation is seen to require extensive and

intensive information and education campaign as well as community
organizing work at all levels from the communities to the provincial boards.
These are seen to be provided by the DOE and the regional interagency
development interventionist team (RDIT).
2. Obtaining the HEP Franchise or Permit to Operate HEP.
When obtained, this will be the most valuable asset of the LPC, which
shall constitute its negotiating leverage in seeking out the industrial partner to
develop and operate the HEP. To be obtained with the assistance of the DOE
and the RDIT, this may entail a special arrangement that might require
legislation if not obtainable under the present DOE Law. The local
congressmen may have to be co-opted to help realize the HEP projects.
94
3. Partnering with an HEP Developer/Operator with Proven Track Record.
The LPC is primarily a device for HEP asset ownership by the locals.
It is a devise that ensures more than the existing token benefits provided by
law to LGUs for the exploitation of national wealth. It should, therefore,
decisively address the issue of mutual benefit on the part of local stakeholders
(as the external capitalist cum investor cum developer will certainly extract its
due or will otherwise not enter the partnership).
It is also through the LPC that the other HEP development criteria of
sustainability, cultural compatibility, and social and political acceptability
could be facilitated. Being part owners of the HEP business, the local
stakeholders are expected to address the above concerns.
However, developing and operating an HEP is a highly technical

matter, hence the LPC needs to seek out and partner with a proven HEP
developer/operator. Here again, the assistance of the DOE and the RDIT will
be crucial. Local and foreign potential partners should be scouted to enrich
the range of choices for partners.
When the suitable industrial partner is found, the LPC and the
industrial partner would next form a second corporation (Corp-2) under terms
and conditions to be negotiated. Oversight by the DOE and the RDIT
possibly with expert advice from consultants will again be needed at this time.
Corp-2 would be the entity to technically develop and operate the start-up
HEP. Its first task shall be to undertake full-blown project feasibility studies
and other documents needed to obtain funding and financing, either through
venture capital or ODA.
4. Negotiating for Funding and Financing.
Official development assistance and/or venture capital are the

envisioned possible sources to fund and finance the HEP development. Corp-
2, with assistance from the DOE and the RDIT, shall undertake whatever it
takes to obtain project funding, such as project feasibility studies and scouting
for funding sources.
5. Project Implementation.
Project implementation ensues after project funding is finally obtained.
6. Monitoring and Evaluation.
Monitoring and evaluation shall be undertaken under the regional

project monitoring system or RPMES.
7. Other Implementing Concerns
This master plan is not self-implementing even after it shall have been
legitimized by adoption of the Regional Development Council. It is
envisioned that as part of the implementing plan, a subsequent hydropower
development extension program will be formulated and implemented by the
RDIT to catalyze the master plan implementation, the funding to come from
the RDC-CAR share from the ER – 1-94 Fund from the DOE.
95
The RDC of the Cordillera Administrative Region has earlier in Year
2002 adopted the policy that its share from the ER–1-94 Fund will be utilized
to help other provinces without HEPs to develop their own. Hence, the
subsequent shares of the RDC-CAR should be devoted to consistent
intervention to implement this master plan. No other undertaking can be
regarded as encompassing in objective to compete for the use of the said fund.
Regarding the policy recommendations, the RDC-CAR is set to

forward its resolution endorsing the DOE-drafted proposed act on renewable
energy sources.
8. Mini-Hydropower Project Cycle
The Department of Energy in pursuance to Republic Act No. 7156 or

the “Mini-hydroelectric Power Incentives Act” provides the Table 39 shows
the step-by-step guide on how to go about the implementation of a mini-
hydropower project:
Table 39. Step by step Guide to Implementing Mini-hydro Projects
Step Time Required Remarks

1. Identify potential site/s Consult DOE, NEA, NPC and NIA lists;
project profiles or own investigation (LGUs)
2. Apply for non-exclusive Minimum of 2 weeks Application to DOE: Privileges/rights to study
reconnaissance permit area
3. Conduct reconnaissance study Minimum of 3 Contract foreign or local consultants or use
months and own technical capabilities
4. Submit reconnaissance report to maximum of 1 year DOE evaluates submitted report and informs
DOE inclusive of conduct the developer of the results
5. If site looks feasible, conduct of feasibility study Contract foreign or local consultants or use
feasibility study own technical capabilities
6. Apply for Environmental Application with DENR
Compliance Certificate Note: EIS or IEE are basic requirements
7. Apply for Water Right Permit Application with NWRB.
Note: ECC is a requirement
8. Negotiate PPA with NPC or Minimum of 6
electric cooperatives concerned months
9. Land acquisition With concerned land owners
10. Finalize financing plan Apply for concessionary loans from donor or
financial assistance packages from financial
institutions
11. LGU Endorsement With local government unit concerned
12. Apply for operating contract Application to DOE: DOE evaluates and
and accreditation as PSGF checks all the necessary documents.
13. Tender for construction and 3 months Individual tenders for civil construction,
installation works and evaluate electrical works and electro-mechanical
bids; negotiate and sign contracts equipment supply, or turn-key contract.
14. Scheme construction Minimum of Submission of quarterly progress report to
9 months DOE
15. Commissioning and test runs 3 months In the presence of electricity inspector and
experts in mini-hydropower development
TOTAL TIME REQUIRED Minimum of 24 mos.
9. Nonexclusive Reconnaissance Permit
The permit is valid for 3 months, extendible as warranted, but in no case shall
the total permit period exceed one year. Pursuant to Section 6 of R.A. 7156, the DOE
is authorized to issue nonexclusive reconnaissance permit over mini-hydropower
potential areas to any prospective developers for the conduct of various studies and to
determine the feasibility of development.
96
Documents needed for the application of reconnaissance permit:
o Letter of application
o Application fee of PhP500.00 for estimated capacity up to 1,000kW and
additional PhP 0.50 per kW in excess of 1,000 kW
o Technical description indicating the geographical coordinates of the
proposed dam site and powerhouse
o Location plan or vicinity map showing the proposed mini-hydro project
site/s
o Endorsement from concerned LGU
o An endorsement of Free and Prior Informed Consent (FPIC) from the
ICCs or IPs within the area pursuant to R.A. 8371 or the “Indigenous
Peoples Act of 1997”
o Work program or schedule for three months (Gantt Chart)
o Profile of technical capability of proponent and/or its consultant
10. Operating Contract
The Mini-hydroelectric Power Development Operating Contracts are issued

by DOE to qualified developers granting the rights to construct mini-hydropower
plants and generate electricity over a period of 25 years. If the conditions and
obligations of the original contract are met satisfactory another 25 years contract is
renewed.
Documents to accompany an application for an operating contract:
o Certificate of Registration from the SEC for private corporations or

organizations with a copy of Articles of Incorporation; and DTI for single
proprietorship
o Proposed MOA and/or PPA between the developer and the NPC,
franchised electric utility, or other end-user on sale of power and/or
wheeling fees on the use of existing transmission lines
o Comprehensive feasibility study
o Processing fee of PhP 2.00/kW of estimated installed capacity
o ECC from the DENR
o Water rights permit from the NWRB
o Endorsement letter from the concerned LGU
o Audited and un-audited financial statements
o Proof of technical and financial capability
11. Accreditation as Private Sector Generating Facility (PSGF)
Pursuant to Article II, Section 1 of E.O. 215, the DOE through the Energy
Industry and Administration Bureau (EIAB) has the overall jurisdiction in the
accreditation of qualified PSGFs.
Contents of application for accreditation as PGSF:
o Name and address of the applicant and location of propose facility

o Project Organizational Set-up
o Names of cooperating/participating companies, equity participation,
incorporation documents, audited financial statements for the last two
fiscal years, and records of successful experience in similar activities over
the last five (5) years
o Project financing plans
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o Administrative and technical manpower complement
o Facility classification and general plant description
o Sale of PSGF operation (whether generation is solely for sale to the grid,
dedicated to an electric utility, or for internal use with provision for sale of
excess power to the grid
o Projected mode of operation (base load or peaking)
o Power and annual energy production (in kW and kWh, respectively) of the
proposed facility
o Projected forced outage rate, maintenance days, dependable capacity, and
station energy use
o Projected economic life of project and proposed duration of
interconnection/cooperation period
o Interconnection plans with NPC or other utility
o Detailed project timetable, including target periods for financial closing,
groundbreaking, installation of major plant equipment, testing and
commissioning of the facility
o Any other information as may be required or as may be deemed necessary
by EIAB for evaluation purpose.
12. Endorsement from LGU and Application of Business Permit
o Any mini-hydro project shall secure an endorsement from the concerned

LGU to avoid conflicts and/or resistance of the project
o The proposed mini-hydro project shall coincides with the local
development plan
o Endorsements may be in the form of Barangay, Municipal and Provincial
government resolutions
o Necessity of registration of the business (project) in the concerned LGU
prior to the issuance of business permit.
13. Registration of the Business with the SEC
This registration authorizes the company and/or corporation to do business at

the national level. Basic requirements are:
o Corporate name
o Articles of Incorporation
o By-laws
o Treasurer’s Affidavit
o Bank Certificate of Deposit
o Authority to verify bank accounts
o Registration Data Sheet
o Subscribers Information Sheet
o Undertaking to change name
o Statement of Assets and Liabilities
o For Foreign subscribers – resident, ICR/ACR/Visa and non-resident, proof
of inward remittance
o Filling fees
-Articles of Incorporation PhP0.001 of authorized capital stock plus 20%
but not less than PhP 500.00
-By-laws PhP 200.00
-Legal Research Fee: 1% of Filling Fee
14. Application for Water Rights Permit from NWRB
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As required under the provisions of the National Water Coder, no person shall
divert or appropriate water without first securing a water permit from the National
Water Resources Board.
Documentary requirements:
o Location and conceptual plans on convenient scale showing the source of

water, layout of proposed works, and point of diversion determined by its
latitude and longitude
o Brief description of project, including among others, how water will be

used, amount of water needed, power expected to be generated if
applicable, amount of water to be taken, measures to insure that such
water is not polluted, other relevant information
o Articles of Incorporation or Articles of Partnership in case applicant is a

private corporation or partnership, or certificate of registration in case of
cooperatives
15. Application for Environment Compliance Certificate (ECC)
An ECC is issued by DENR to ensure that the proposed mini-hydro project

will not cause significant negative environmental impacts.
o For min-hydro projects with proposed capacities of less than 6,000 kW or 6

MW, only an Initial Environmental Examination (IEE) is required. The
contents include:
- project description (basic information, location. Rationale, alternatives and

phases of the project)
- baseline environmental conditions (describes environmental conditions of
land, water, air and people in the project site)
- Impact and Risk Assessment ( describes impact identification, prediction and
evaluation of the project)
- Environmental Management Plan (defines environmental impacts and
monitoring action plan of the project environment)
o For mini-hydro projects with proposed capacities grater than 6 MW and with
20 million cubic meters of water impoundment, an Environmental Impact
Statement (EIS) is needed and the Outline is:
- Table of Contents
- Executive Summary which includes Brief Project Description; Methodology,
Scope and Duration; Project Setting; Summary Scoping (information and
assessment requirements are established to provide the proponent with the
scope of work for EIS) Report; Summary Matrix of Impacts, Mitigation
Measures and Environmental Management Plan; and Summary Presentation
of the Environmental Initial Assessment Process or Process Documentation
o Project Description
- Basic Project Information
- Project Location
- Project Rationale and Alternatives of the Project
- Description of Project Phases (Pre-construction. Construction, Operational
and Abandonment phase)
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o Baseline Environmental Conditions
- Land, Water, Air and People
o Impact Assessment and Mitigation

- Impact Identification, Prediction and Evaluation
- Future Environmental Conditions without the Project
- Future Environmental Conditions with the Project
- Unavoidable and Residual Impacts
o Environmental Management Plan

- Mitigation/Enhancement Measures Plan
- Construction Contractor’s Environment Program
- Social Development Program (resettlement, relocation, livelihood)
- Contingency Response Plan and Abandonment Plan
- Environment Monitoring Action Plan
- Information Education Communication Plan
- Cost Estimate/Viability
o Proposal for an Environmental Monitoring and Guarantee Fund if required

\
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MASTER PLAN PROJECT
APPENDIX “A”
TERMS OF REFERENCE
101
MASTER PLAN PROJECT
TERMS OF REFERENCE (TOR)
I. APPLICATION
The Cordillera Regional Development Plan 2001-2004 envisions capitalizing on

and developing a significant number of the region’s vast hydro energy potentials towards
its goal as a “major energy producer.” Within the planning period, the Cordillera is being
prepared to bolster its status as the leading hydro-based power supplier in North Luzon
through the development of environment-friendly and culturally compatible mini and
small hydro projects. In a long term, the region would occupy a strategic position in
national energy development and security as imported fuels are expected to become
increasingly expensive and highly vulnerable to external price fluctuations.
The master planning project was conceptualized by the Regional Development

Council of the Cordillera Administrative Region (RDC-CAR) through its Infrastructure
Committee (Infracom) as a strategic implementing step to operationalize the foregoing
vision. The project was adopted for assistance by the Department of Energy (DOE) with
funding under the DOE Energy Reg. No. 1-94.
This project, which is the subject of this TOR, is envisaged to be undertaken by a

local consulting firm herein referred to as Consultant with an inter-agency project team.
II. RATIONALE
The Philippines, like most developing countries, abounds with largely untapped
new and renewable energy (NRE) sources. The development of these potentials is given
emphasis under the Energy Sector of the Medium Term Philippine Development Plan
(MTPDP) 2001-2004 where one major strategy is the “improvement of energy self
sufficiency, with the emphasis on the use of sustainable renewables.” The Philippine
Energy Plan for 1999-2008 also sets, among other strategies, to raise the level of the
country’s energy self-reliance by means of increased production from NRE or indigenous
energy sources through an intensified “promotion and technology development.”
Consistent with this strategy, one of the programs is to “assess and disseminate
information on potential resource availability.” Last year, the enactment of the Electricity
Power Industry Reform Act (EIRA or R.A. No. 9136), initiated the restructuring of the
energy industry and opened up power generation opportunities to investors, specially the
development of indigenous energy sources of NREs.
As of year 2000, the country’s installed generating capacity was 13,196

megawatts (MW), of which 60 percent are privately generated. In terms of power
generation mix, the share of indigenous energy, comprised by geothermal, hydroelectric,
local coal and natural gas, accounted for 47 percent. In other words, more than half of the
country’s electricity had been generated with imported fuels.
In the long term, imported fuels are expected to become increasingly more
expensive. The development of indigenous energy sources therefore presents itself as the
preferred future strategic option. This is where the Cordillera region becomes nationally
significant because of its considerable but yet under-tapped hydro-based energy
potentials. This under-tapped potential, in turn, is the underlying premise that led to the
formulation of the regional vision of the CAR as a “major energy producer.”
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Only about 30 percent of the Cordillera region’s known and recorded potential
hydro-based energy generation estimated at around 3,000 MW is presently developed. If
fully developed, and realized, the Cordillera’s significant power contribution to the
Luzon grid would displace some 64 Million Barrels of Fuel Oil Equivalent (MBFOE)
resulting to considerable foreign exchange savings.
Based on the latest figures, CAR has 648 MW presently installed generation
capacity. The existing facilities include: Ambuklao Dam, 75 MW; Binga Dam, 100 MW;
Magat Dam, 360 MW; Bakun Mini-hydro, 70 MW; and several independent power
producers (IPPs) of mini-hydro plants contributing some 43 MW. San Roque Multi-
purpose Dam, 345 MW, whose energy comes from the Agno River in Benguet, is also
expected for completion by 2004.
The hydro projects with feasibility studies in Benguet, Kalinga and Apayao
account for some realizable 307 MW. The rest of known but less documented potentials
would account for 2,400 MW. These are among the target studies of this project. In
developing these potential resources, however, past failures and difficulties compel us to
heed the lessons from Cordillera history, particularly the value of respecting the
indigenous people’s rights over their ancestral domain and lands.
In the early 1970s, the Chico Dam Project in Kalinga became an impetus of a new
consciousness among the indigenous people, in particular, their resistance against
hydropower dams. In the 1990s, another big hydro project that stirred resistance from the
Cordillera people is the San Roque Dam. Though the power plant is located in
Pangasinan, its reservoir will cover portions of Itogon, Benguet as its water source comes
from Agno River. The dam pushed through after series of consultations that at times
involved no less that the President of the Republic and is expected for commissioning by
year 2004. The recently commissioned Bakun hydro project, on the other hand, is an
example of implementor and community collaboration and of a properly prepared project.
Three important imperatives are derived from the foregoing Cordillera

experience:
a. Environment-friendly project designs;

b. Culturally compatible project development approaches; and
c. Competent project communication and handling with all significant stakeholders.
III. OBJECTIVES
Primarily, the project aims to produce a master plan and implementation

program for the development of a significant number of mini and small hydro-electric
projects in the six Cordillera provinces following environmental friendly and socio-
culturally compatible approaches consistent with the economic development needs of the
region and the national energy development program.
Specifically, the project will undertake to achieve the following objectives:
1. To firm-up a systematic inventory, conduct evaluations of the region’s recorded

mini-to small hydro energy source potentials and produce professionally prepared
information materials for public consultations on the same;
2. To conduct a series of effective local consultation dialogues with officials of

potential host provinces, municipalities, barangays and other stakeholders with the
end vision of encouraging potential host LGUs and communities to own the project
proposals and champion them;
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3. To process, analyze, evaluate and interpret the data and information gathered and
formulate the Cordillera Energy development Master Plan incorporating an
implementation strategy and action program; and
4. To design and prepares an information, education and communication program

(IEC) for a continuing program to increase acceptability of hydropower generation
projects among potential host community stake holders. The materials should also
serve investment and marketing promotion purposes.
IV. METHODOLOGY AND PROCEDURES
Approach
The RDC-CAR is the project owner and through its Infrastructure Committee
shall be responsible in the over-all supervision of the project. Operational management of the
project shall be the responsibility of the Project Team leader, who shall coordinate an inter-
agency project team and a project consultant hired for the purpose in undertaking the master
planning activities.
The approach required in the conduct of this project is goal-oriented: the

project output shall serve as resource guide to invited investors exploring to apply any of the
different BOT variants. The project shall entail regional development planning methodology,
which incorporates resource assessment, risk and viability analysis, and investment program
formulation and promotion module design. The stakeholders’ participation shall be given
emphasis through the conduct of local consultation dialogues to assure socio-political
acceptance of the development of energy resource projects. Within the dimension of
sustainable development, should determine the risks and potential negative impact(s) of the
energy source projects. Correspondingly, should provide steps/mitigating measures to
prevent these from happening.
Moreover, the master plan is to be formulated within the contextual

framework of the Local Government Code of 1991 and the Electric Power Industry Reform
Act (EPIRA) or RA 9136.
The master plan shall attract investments on mini to small hydro and would
lead to increased economic activities in the locality. It is preferred that the host LGUs act as
project proponents and champions with assistance and support from national government
agencies. The plan should also serve as a guide to project shepherding.
V. PROJECT OUTPUTS
5.1 Scope of Work
The Project Team and Consultant shall cover, but not necessarily be limited to, four broad
sets of activities with corresponding sets of outputs, to wit:
1. Systematic Inventory of Energy Potentials
Review of secondary data of potential hydro-based energy sources to include project

ideas, proposals and status of preparation, programming and implementation. Proposals
reviewed shall be categorized as:
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a. With feasibility studies (FS)/ pre-feasibility studies (PFS);
b. With project profile;
c. Simple project concept; and
d. Others.
This shall primarily be the Consultant’s work. The Consultant shall produce the documents
and pertinent materials of the prospective hydro projects to serve as inputs to the consultation
dialogues. Prior to the series of consultations, however, preliminary provincial visits shall be
conducted to validate the inventory with the assistance of the LGU officials or provincial
sub-teams.
2. Generating Local Stakeholders Inputs
Comprehensive consolidation dialogues with the local officials and community

concerned at the provincial, municipal, barangay or combined levels. An inter-agency group
from the regional and provincial levels shall spearhead the consultations. The consultations
shall endeavor to achieve socio political interest and support through public enlightenment
and appreciation by the prospective host communities on hydro-based energy projects as
local economic enterprises in partnership with the national government and private sector
investors, local and/or international. Tangible outputs would be LGU “no objection”
endorsement at minimum and manifestation of project co-ownership via equity participation
at best. These activities are expected to be extensive and difficult due to the rugged
topography of the region not to mention the uncertain socio-psychological readiness of the
intended consultees. The Project Team is in-charge in the conduct of the consultations while
the Consultant shall be responsible of documentation and consolidation of
proceedings/inputs.
3. Data Processing and Master Planning
An investment program shall be the major component with prioritized energy

potentials project development proposals. Verification trips may be conducted to validate
information. In view of the results of the public consultations the earlier inventoried project
proposals are again re-evaluated (i.e., risk analysis, viability analysis/alternative setting, etc.)
and programmed for investment promotion/fund sourcing and eventual implementation.
Likewise, the master planning stage shall look into appropriate implementing agency or body
who will implement the proposed projects – whether by national government agencies or by
LGUs. The Consultant is responsible of the technical work while the Project Team is the
policy group.
4. Information, Education and Communication (IEC) Program and Investment

Promotion Program
The Consultant is responsible of the technical work while the Project Team is the
policy group.
5.2 Reporting and Expected Time Frame
The project time frame shall not exceed 12 months, which shall commence from the
date of signing of the Contract and receipt of the Notice to Proceed.
The work to be done by the Consultant shall be described in conclusions and

recommendations presented, together with the evidence to support them, in the following
reports:
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1. Inception Report (6 copies). To be submitted within one (1) month after
commencement of services. It will outline the detailed work program for the
execution of the study indicating timing for all tasks and out puts; and
describe the methodology proposed to meet the TOR. The report shall include
the preliminary findings as well as the preliminary layout of forms of
inventory and consultation dialogue methodology.
2. Monthly Report (3 copies). To be submitted a month after submission of

Inception Report and first week of every month thereafter as update on study
activities.
3. Interim Report (6 copies). To be submitted not later than the end of the 3 rd
month after the commencement of the services. It results of the initial
activities (data gathering and analysis, systematic inventory of energy
resources, consultation methodology). The report will form the basis of public
consultations at various LGU levels (6 provinces, number of
municipalities/barangays).
4. Draft Master Plan (14 copies). To be submitted one and a half (1 ½) months
before the project completion date giving details of the consultation results,
findings and recommendations based on the scope of work outlined in the
TOR. The report will summarize its master plan and IEC module design. The
report shall also include all relevant information, which supports the
conclusions and recommendations of the study.
5. Final Master Plan (14 copies). To be submitted within 30 days of the receipt
of comments on the draft final report from RDC-CAR through the
Infrastructure Committee, incorporating all appropriate revisions.
VI. PROJECT MANAGEMENT
The RDC-CAR Infrastructure Committee (InfraCom) constitutes itself as the

Project Coordination Committee (PCC), which shall be responsible for the oversight of the
project on behalf of the RDC-CAR, to review the project outputs to ensure its technical
integrity.
The InfraCom Sub-Committee on the Niche on Energy Producer shall be reactivated

to act as the Project Team.
The Project Team shall be responsible for the operational management of the project,
to include linkages with concerned agencies and local government units (LGUs) and conduct
technical review and evaluation of the project outputs. This shall be tasked as over-all coordinator in
the conduct of the series of consultation-dialogues with the local officials, communities’ concerned
and other stakeholders. The Consultant shall serve as the technical secretariat during the proceedings
and consolidation of consultation results.
The Project Team shall be composed, as far as practicable, by appropriate

representatives from the National Economic and Development Authority (NEDA) – CAR, as team
leader, and members from the National Power Corporation (NPC), National Electrification Authority
(NEA), Department of Interior and Local Government (DILG) – CAR, and the Department of Energy
(DOE). The Project Team may organize sub-teams at the provincial level composed of
representatives from the LGUs, rural electrification cooperatives (RECs), state colleges and
universities (SCUs), Philippine Information Agency (PIA), and other stakeholders as appropriate and
applicable.
The Project Team shall constitute the Pre-qualification, Evaluation and Awards
Committee (PEAC) pursuant to the Executive Order No. 164 dated May 5, 1987 and the
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Implementing Rules and Regulations on the Procurement of Consulting Services for Government
projects, as amended on October 7, 1998.
VII. SCHEDULE OF PAYMENTS
1. Twenty percent (20%) of the contract amount (as advance payment for mobilization)
after approval of detailed proposal study outline, signing of Contract and issuance of
Notice to Proceed by the PCC through the Project Management Team.
2. Twenty percent (20%) of the contract amount after submission of the Inception Report.
3. Twenty percent (20%) of the contract amount after submission of the Interim Report.
4. Twenty percent (20%) of the contract amount after submission of the Draft Master Plan
to continue the study incorporating suggestions from the review of the submission.
5. Ten percent (10%) of the contract amount after submission of Final Master Plan Report
and other requirements to complete the project.
6. Ten percent (10%) of the contract amount, thirty days after Final Master Plan shall have
been submitted, incorporating the essential comments of the Infrastructure Committee, in
the required number of copies and formally accepted by the same and submitted to the
department of Energy.
VIII. PRE-QUALIFICATION REQUIREMENTS
To pre-qualify, the Consultant-proponents must posses the following:
8.1 Legal Requirement
For a single-entity Consultant-proponent, must be a Filipino or, if the

proponent is a corporation, it must be duly registered with the Security and
Exchange Commission (SEC) and owned up to at least sixty percent (60%) by
Filipinos.
8.2 Experiences or Track Record
1. The proponent must be a bonafide consultant firm.
2. The consultant-proponent or member or participating entities must have

successfully undertaken a project(s) similar or related to regional
development planning, project development, social and environmental
engineering, local consultations, and infrastructure planning. Experience on
energy resource development is an added qualification.
3. The principal and key personnel of the consultant-proponent must have

sufficient experience in the relevant aspect of schemes similar or related to
the project study.
IX. SUBMISSION REQUIREMENTS
For pre-qualification purpose, consultant-proponents are required to submit the following:
1. Three (3) sets of project-study technical and financial proposals; and
107
2. Three (3) sets of consultant-proponent backgrounds and other related documents
indicating their experiences and profiles of successful previous and current
undertakings related to the subject project-study.
The Consultant is asked to present his proposal for the execution of the studies
described in this TOR. The technical and financial proposal is expected to reflect the
knowledge and experience of the Consultant concerning the subject project. The proposal
shall include:
1. General comments on the TOR (if considered necessary by the Consultant);
2. Short description of methods and procedures and chronological sequence proposed

for the execution of the studies;
3. A bar-chart of major activities and milestones (presentation of reports, intermediate

and final approvals);
4. A detailed breakdown in the form generally used for consulting services contracts
(fees as a result of man-months unit rate and duration of involvement distinguishing
different allowances, reimbursable items such as international travel; and lump sum
items such as production of reports and out-of-pocket expenses); and
5. Complete and submit all said requirements to the point person and address below:
Regional Development Council – CAR

c/o Dir. Juan B. Ngalob
Head, RDC-CAR Secretariat
Botanical Garden, Leonard Wood Road, Baguio City
The PEAC shall inform the pre-qualified consultant-proponents of the details of the other
submission requirements upon issuance of the bid and tender documents.
X. EVALUATION OF BIDS
The evaluation of bids shall be undertaken through the:
1. Assessment of the Technical Proposal:
a. Technical soundness – application of related Philippine national standards;
b. Operational feasibility – proposed organization, methods and procedures

must be well defined and feasible;
c. Environmental standards – proposed design and technology to be used must

be within the Philippine government standard; and
d. Linkages with government organizations and concerned non-governmental

organizations (NGOs).
XI. RIGHT TO REJECT AND ACCEPT BIDS
The Pre-qualification, Evaluation and Awards Committee (PEAC), as empowered by

the RDC-CAR through its InfraCom, reserves the right to reject any or all bids, waive any
minor defects therein and accept the offer most advantageous to the government.
XII. BIDDING SCHEDULE
All qualified bidders shall be informed of the bidding schedule by the PEAC.
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MASTER PLAN PROJECT
APPENDIX “B”
NOTICE OF AWARD
109
110
MASTER PLAN PROJECT
APPENDIX “C”
NOTICE TO COMMENCE WORK
111
112
MASTER PLAN PROJECT
APPENDIX “D”
ENERGY SEMINAR REPORT
113
Republic of the Philippines
Regional Development Council
Infrastructure Committee
C/O NEDA-CAR, Botanical Garden, Leonard Wood Road, Baguio City
Cordillera Energy Producer Master Plan
HIGHLIGHTS OF THE SEMINAR ON ENERGY

DEVELOPMENT
November 15, 2002, NEDA-CAR, Baguio City
I. ATTENDANCE
Line Agencies/RDC Members/NGOs
1. Mr. James Degsi - DBM

2. Mr. Jerold Cabacuñgan - DPWH
3. Mr. Lino Cungihan - DTI
4. Mr. Basilio C. Munar, Jr. - DOH
5. Mr. Frederick Balanza - DA
6. Ms. Evelyn Simon - DENR
7. Mr. Perfecto B. Tamani - NPC
8. Mr. Noel Calavera - REO
9. Mr. Gerardo P. Verzosa - BENECO
10. Mr. Johnny Laoyan, Jr. - NIA
11. Mr. Bial A. Palaez - CIMC
12. Mr. Rafael Macabiog - PICE
13. Mr. Rene V. Valera - DILG
14. Dir. Juan B. Ngalob - NEDA
15. Mr. Arturo S. Aro - NEDA
16. Mr. Jerome B. Agaloos - NEDA
17. Ms. Caroline B. Carulla - NEDA
18. Ms. Carmel P. Chammag - NEDA
19. Ms. Gemma Bango - NEDA
20. Ms. Nyra Rillon - NEDA
21. Ms. Emelie Daquipil - NEDA
22. Ms. Virginia L. Anceno - NEDA
23. Mr. Cirilo Palafox - NEDA
Provincial Representatives:
24. Mr. Danilo C. Falgui - KASC

25. Mr. Jude A. Domoguen - MOPRECO
26. Mr. Daniel K. Likigan - PPDO - Mt. Province
27. Mr. Joseph G. Lacbawan - MOPRECO
28. Mr. Emiliano T. Dinamling - PPDO - Ifugao
29. Mr. Gerry M. Donaal - DPWH - Kalinga
30. Mr. Christopher W. Lipas - MPSPC
31. Mr. Ben E. Moga - PIA
32. Mr. Philip M. Tingonong - PPDO – Abra
33. Mr. Romeo T. Lopez - LGU – La Trinidad
34. Mr. Zacarias G. Torres - BENECO
35. Mr. Joselito Villarey - BENECO
36. Mr. Prescillano N. Bermudez - PIA – Abra
114
37. Mr. Nathan S. Alcantara - PIA – Benguet
38. Mr. Vency D. Bulayungan - PIA – Ifugao
39. Mr. Paterno Balansi - PIA – Kalinga
40. Mr. Constantino T. Sudaypan - BSU-ANEC
Resource Persons:
41. Mr. Ronnie N. Sargento DOE

42. Mr. Oliver O. Cruz - DOE
43. Mr. Ramon D. Cabazor - DOE
Consultants:
44. Mr. Fernando M. Lacsamana - Terramount Foundation

45. Engr. Janice Kaye C. Lacsamana - Terramount Foundation
46. Engr. Pedro E. Aquino, Jr. - Terramount Foundation
II. HIGHLIGHTS OF DISCUSSION AND AGREEMENTS
ISSUES DISCUSSION/AGREEMENTS
Electric Power Industry Reform Act/Energy Regulations No. 1-94
1. Universal charge: Will cost To be collected from all end-users, this was raised to
of power be cheaper? be a major issue since it will eventually mean
additional charges resulting to higher electric bill.
2. Performance of SPUG BENECO General Manager Verzosa cited the poor

performance of the SPUG in Benguet. He
recommended that existing old units be
replaced/phased out to make these SPUG more
efficient.
3. Watershed Management NPC undertakes the oversight function to see to it that
watersheds are managed properly. The communities,
on the other hand, must spearhead the implementation
of watershed management projects.
4. Unbundling of NPC rates DOE explained that unbundling of rates will show to
the consumers how their money is being spent. It
simply itemizes electric bill for transparency and for
the end-users to be well informed of the detailed
charges.
Mini-hydro Power Development in the Philippines
5. Disposition and allotment It was inquired how taxes will be allotted for chartered
of taxes for chartered cities component cities. DOE responded that RA 7156 does
not mention any classification, 60% is allotted for the
cities.
6. How much is the estimated In order to readily inform the stakeholders, in future
cost for FS, construction and consultations, the costs of having a mini-hydropower
working capital of a mini-hydro project, the DOE gave an approximation on the
project following activities:
• Detailed engineering/FS preparation – PhP
1M (also dependent on TOR with the
consultant)
• Construction – US$ 1,500-2,500/kW
• Working capital – 1.5: 1
• Debt to Equity Ratio 3: 1
115
In addition to this, the DOE informed the participants

that DBP is financing loans for energy development
projects. Existing electric cooperatives may also
engage in the operation of hydropower projects.
7. Requirement of LGU To make the project feasible in the long run, DOE
counterparts for micro-hydro engages the local community. In case funds are not
power projects accessible, the community invests in terms of labor to
establish ownership of the project. Meanwhile, testing
facilities funded by Japan for micro-hydro
development projects will be available by early next
year; therefore proponents are encouraged to
communicate with DOE in availing the use of these
facilities.
8. Clear government policy Since the establishment of a micro-hydro project by
governing the establishment of the local communities might be a disadvantage to the
micro- and mini-hydropower electric cooperative business, DOE always requires the
projects by the communities concerned communities to secure a clearance/approval
from the cooperative who owns the franchise.
Cooperatives are also encouraged to work in
partnership with the community considering that they
are also interested in tapping such resource.
9. How long is the value Seven (7) years from start of operation and the
added tax exemption and how application fee is P600.00 per 100kw
much is the application fee?
10. Presentation of an actual DOE responded that a mini-hydro power project
case of a successful mini-hydro established in Southern Cebu could serve as a
project from inception to successful model. It incorporates an eco-tourism
implementation stage to the approach wherein a resort exists in the area. A model
communities within the Cordillera could be the Ampuhaw plant
operated by the HEDCOR. A micro-hydro project in
Leyte can also be showcased wherein the community
was involved even at the planning phase. Since mini-
hydro power projects are mostly handled by the private
sector, success stories on micro-hydro power projects
especially demo projects are the ones that can be
readily provided by DOE.
11. Competitiveness of power
generated from mini-hydro
projects considering peak
production DOE proposed another bill to address matters
12. Prioritization of identified concerning renewable energy. The issues raised were
potential mini-hydro projects some of the concerns not comprehensively dealt with
13. In what manner could in the EPIRA Law.
government protect small scale
hydro-power plants to compete
in the market
14. Sharing scheme of host The Secretariat was tasked to reproduce the document
communities that details the said sharing scheme for distribution to
interested participants. The scheme is as follows: ¼ of
one centavo for cost of power generated and to be
distributed as 5% to Designated resettlement areas,
20% to host barangay, 35 % to Host Municipality/City,
30% to host Province and 10% to host Region.
116
15. Is the disposition of taxes At the moment, micro-hydro power projects are
applicable to micro-hydro unregulated hence they are not being taxed.
power projects
16. Which hydro projects ▪ Under 1,000 KW no ECC required only a
require Environmental certification of non-coverage
Clearance Certificate (ECC) ▪ Under 10 MW a MOA with DENR is required
▪ All hydro projects needs an NCIP & FPIC clearance
17. IPPs will kill local electric On the contrary, it will make available to the
cooperatives cooperatives cheaper power and an opportunity to be
partners/investors in the proposed local power
corporations.
18. Most part of the region is ▪ Accessibility to GRID -expand string on
isolated from the Luzon Grid distribution/transmission lines
what factors will make power ▪ Financial Viability
producers competitive? ▪ Deregulated market
▪ Healthy competition among existing power
producers
▪ CAR is currently an import power user and with the
development of mini-hydros the region will become
a net exporting power producer
III. SCHEDULE OF PRELIMINARY VISITS/CONSULTATION
It was agreed that the Provincial Planning and Development Coordinators (PPDCs)
would serve as contact persons in the provinces. Participants to the visits/consultation will be
composed of the following: 1) Provincial Board, 2) Mayors, 3) ABC Presidents, 4) SCUs, 5)
Electric Cooperatives, 6) NGOs, 6) others – e.g. chieftains. The PPDCs will be tasked to
determine other expected participants. In addition to this, they are assigned to gather
additional issues on energy development and give an account of energy potentials. An
estimated fifty (50) participants are projected to participate in the said consultation. The
following table lists the tentative schedule of preliminary visits.
Province Tentative Date

st
Abra 1 week of January
Apayao 3rd week of December
Benguet 2nd week of January
Ifugao 3rd week of January
Kalinga 1st week of December
Mountain Province 2nd week of December
117
MASTER PLAN PROJECT
APPENDIX “E”
CONSULTATION SUMMARY
118
TABLE OF CONTENTS
Title/Description Page
Executive Summary 113-114
Rationale 113
Primary Consultation Output 113
Priority Projects Proposed 114
The Consultation Team 114
The Consultation Proceedings 115
Date and Venue of Consultations 115
Composition of Participants 115
Priority Potential Project Ranking Criteria 116
Potential Hydro Projects 116-119
Abra 116
Apayao 116
Benguet 117
Ifugao 118
Kalinga 118
Mt. Province 119
Proposed Top Potential Priority Projects 120
Highlights of the Presentation and Discussions 120-124
A. Making the Cordillera the Leading Energy Producer in Northern 120
Luzon
B. Project Brief of the Cordillera Energy Producer Master Plan 121
C. Clean Energy 122
D. Barriers to Developing Small Scale Hydropower in the Philippines 123
E. Legal and Business Context: Salient Features of RA 9136 and RA 123
7156
Open Forum Results 125-131
Abra 125
Apayao 127
Benguet 127
Ifugao 127
Kalinga 129
Mt. Province 130
Attendance to Consultations 132-140
Abra 132
Apayao 135
Benguet 135
Ifugao 136
Kalinga 136
Mt. Province 138
119
CONSULTATION SUMMARY
CORDILLERA ENERGY PRODUCER MASTER PLAN
EXECUTIVE SUMMARY
RATIONALE:
One of the major components of the project is to generate stakeholders’ input through
the conduct of comprehensive consultation dialogues with the local officials and
communities concerned. The Project Team headed by the NEDA-CAR Regional Director
with members of the Project Coordination Committee (PCC) through the INFRACOM Sub-
Committee on the Niche on Energy Producer and the Consultant conducted a series of
consultation-dialogues with all the Provincial development Councils in the Cordillera
Administrative
The master-planning project gives emphasis on the importance of consultation to

assure for the existence of a favorable socio-political environment and promote acceptability
of the hydropower projects. Through the consultation process, the LGUs and prospective
host communities were able to appreciate the project. Past experiences show that a socially
sound and culturally compatible project will have a greater likelihood of acceptance by the
affected communities if they are consulted right from the beginning or conception of projects
to be implemented in their respective communities. The consultation guarantees that past
failures and difficulties will not be repeated. It is expected that the value of respecting the
indigenous people’s rights over their ancestral lands and natural resources are integrated in
the project development.
Primary Consultation Output:
The response of all the six (6) Provincial Development Council (PDC) to the
proposed energy projects in their respective localities was very encouraging and enthusiastic.
The projected output of LGU’s “no objection” endorsement at minimum and manifestation of
project co-ownership via equity participation at best has been attained. This was manifested
by the approval of a PDC resolution endorsing the development of hydropower and other
renewable energy projects in their respective provinces, which will include among others:
1. To adopt the CEPMP Project as a strategy of socio-economic development of

the province;
2. To create a Local Power Corporation that will spearhead the development of

hydropower resources; and
3. To create a committee that will undertake the prioritization of hydropower

potential projects in the province.
120
The consultations also firmed-up the position of the people of the Cordilleras not to
allow the construction of large reservoir types of hydro electric plants that will submerge
ancestral lands and the right to uphold the principle of free, prior, informed and written
consent of the indigenous cultural communities or indigenous people concerned.
Priority Projects Proposed:
Estimated Planned
Province Potential HEP Capacity Capacity of Remarks
(MW) Start-Up (MW)
Abra 1. Tineg A, Tineg 9.90 6.8 Meets the
2. Lower and Upper Bucloc, 2.15 province’s
Daguioman requirement of
3. Dumanil A, Luba 17.7 5.8 MW
Apayao 1. Agbulo, Calanasan 50.00 5.0 Meets the
2. Aoan, Calanasan 196.00 province’s
3. Gened, Pudtol 600.00 requirement of
4.0 MW
Ifugao 1. Malulon, Lamut 9.68 3.5 Meets the
2. Lamut-A, Lamut 12.00 province’s
3. Panghinawan, Kiangan 1.20 requirement of
2.5 MW
Kalinga 1. Maling, Balbalan 3.75 3.75 Meets the
2. Pasil-B, Lubuagan 16.00 province’s
3. Pasil-C, Pasil 16.00 requirement of
3.0 MW
Mt. 1. Talubin, Bontoc 2.50 2.5 Meets the
Province 2. Layugan, Besao 6.22 province’s
3. BDC-Chico, Bontoc 3.05 requirement of
2.4 MW
Note: Benguet follows a different development approach hence not included above.
The Consultation Team
The team that facilitated the consultations was composed of the Provincial Planning
and Development Coordinators (PPDC), Rural Electric Cooperative (REC) Representatives,
State Colleges and Universities (SCU) Representatives, Philippine Information Agency
(PIA), Department of Energy (DOE) Representatives, HEDCOR Representatives,
NAPOCOR Representatives, NEDA Technical Staff and the Project Consultant.
121
THE CONSULTATION PROCEEDINGS
DATE AND VENUE OF CONSULTATIONS:
PROVINCE DATE VENUE

ABRA January 29, 2003 Social Hall, Provincial Capitol, Bangued
APAYAO February 12, 2003 Mawanan, Sta. Filomena, Calanasan,
Apayao
BENGUET December 16, 2002 Provincial Capitol, La Trinidad, Benguet
IFUGAO January 21, 2003 DepEd District Hall, Lagawe, Ifugao
KALINGA January 08, 2003 Davidson Hotel, Bulanao, Tabuk, Kalinga
MT. PROVINCE January 23, 2003 Multi-Purpose Building, Bontoc,
Mt. Province
COMPOSITION OF PARTICIPANTS:
ABRA APAYAO BENGUET IFUGAO KALINGA MT. PROV. TOTAL
Provincial Development Council (PDC) Members

Governors 1 1 1 1 1 1 6
Vice Governors 1 - 1 1 - 1 4
SP Members 7 - 4 4 9 4 28
Mayors 7 4 3 3 5 2 24
Other members 7 16 6 5 2 1 37
Sub-total 23 21 15 14 17 9 99
Other Participants
Provincial - 4 - - 3 1 8
Officials
Vice Mayors - 1 - - - 1 2
SB Members 3 4 - - - 1 8
Municipal 2 2 - - 3 3 10
Officials
Punong Barangays 6 2 - - - 1 9
Barangay Officials 1 - - - - - 1
Provincial 10 12 17 11 10 10 70
Employees
Municipal 12 5 - 4 - 14 35
Employees
Line Agency 1 26 2 8 19 22 78
Representatives
Electric Coop 5 - 1 2 1 4 13
Representatives
NGO 4 3 2 - - 7 16
Representatives
Media 3 - - - 1 - 4
Residents & 47 2 - - - 2 51
Others
Sub-total 90 62 22 25 27 66 292
Total number of 113 83 37 39 44 75 391
persons consulted
Resource Speakers 7 6 12 6 8 6 45
& Guests
122
PRIORITY POTENTIAL PROJECT RANKING CRITERIA
1. With Feasibility Study (FS)

2. Under FS
3. Meets current and projected provincial power requirements
4. Potential market for excess power to adjacent province and to the Grid
5. Proximity to existing power distribution lines
6. With local officials recommendation/endorsement
POTENTIAL HYDRO PROJECTS IN ABRA

Hydro In MW Ranking
Tineg A Mini Tineg 9.90 Run-of-River Potential NPC 1
Lower Bucloc Mini Daguioman 1.40 Run-of-River Potential NEA 2
Upper Bucloc Mini Daguioman 0.75 Run-of-River Potential NEA 2
Dumanil A Small Luba 17.70 Run-of-River w/ det. Design NPC 3
Palsiguan Small Tineg 31.00 Reservoir Potential 4
Utip A Small Tubo 23.57 Run-of-River under FS NPC 5
Alaoa Large Tineg 175.00 Reservoir Potential NPC
Supo Large Tubo 142.10 Reservoir Potential NPC
Binongan Large Lacub 175.00 Reservoir Potential NPC
Tineg C Small Tineg 41.68 Run-of-River Potential NPC
Anayan A Small Tineg 24.33 Run-of-River Potential NPC
Tineg B Small Tineg 17.40 Run-of-River Potential NPC
Tineg D Mini Tineg 5.30 Run-of-River Potential NPC 6
Luba Mini Luba 3.60 Run-of-River Potential NEA
Sinalang Mini Peñarrubia 1.15 Run-of-River Potential NEA
Tineg Mini Tineg 0.50 Run-of-River Potential NEA
Malabo RIS Mini Bangued 0.32 Run-of-River Potential NEA
Caba Falls Mini Luba 0.22 Run-of-River Potential NEA
Agamanay Falls Mini Luba 0.11 Run-of-River Potential NEA
Supo, Alaoa, Binongan and Palsiguan are proposed
TOTAL 671.03 for a series of run-of-river type of development
POTENTIAL HYDRO PROJECTS IN APAYAO

Hydro In MW Ranking
Agbulu Large Calanasan 390.00 Reservoir W/ FS NPC 1/6
Aoan Large Calanasan 196.50 Reservoir Potential NPC 2
Gened Large Pudtol 600.00 Reservoir Under FS NPC 3
Zumigue Large Luna 54.70 Run-of-River Potential NPC
Luna Large Luna 51.70 Run-of-River Potential NPC
Apayao River Luna Run-of-River Potential
Pusuak Falls Luna Run-of-River Potential
Baren A Mini Conner 8.90 Run-of-River Potential NPC
Dagara Mini Kabugao 6.70 Run-of-River Potential NPC 4
Nabbuayan A Mini Conner 6.00 Run-of-River Potential NPC
Natulud A Mini 5.20 Run-of-River Potential NPC
Abulog Mini Pudtol 3.00 Run-of-River Potential NEA 5
Agbulo Mini Kabugao 1.20 Run-of-River Potential NEA
Gened Mini Kabugao 1.20 Run-of-River Potential NEA
Aoan Mini Calanasan 0.70 Run-of-River Potential NEA
Ziwanan Mini Luna 0.68 Run-of-River Potential NEA
Nagbabalayan Mini Kabugao 0.65 Run-of-River Potential NEA
Bubulayan Mini Pudtol 0.59 Run-of-River Potential NEA
Bayugao Creek Mini Luna 0.20 Run-of-River Potential NEA
Baractinagan Falls Micro Luna 0.00004 Run-of-River Potential NEA
Mallag Micro Kabugao Run-of-River not operating DOE
Agbulu, Gened and Aoan are proposed for a series of
run-of-river type of development
TOTAL 1,327.92
123
EXISTING AND POTENTIAL HYDRO PROJECTS IN BENGUET

Site of Municipality Capacity Development Status Operator
Hydro in MW
Binga Large Itogon 100.00 Reservoir Existing
Ambuklao Large Bokod 75.00 Reservoir Existing
Bakun C Small Bakun 35.00 Run-of-River Existing HEDCOR
Bakun A Small Bakun 35.00 Run-of-River Existing HEDCOR
Ampohaw Mini Sablan 8.00 Run-of-River Existing HEDCOR
Engr. FLSingit Mini Bakun 5.20 Run-of-River Existing HEDCOR
Lon-oy Mini Bakun 3.60 Run-of-River Existing HEDCOR
Lower Labay Mini Bakun 2.40 Run-of-River Existing HEDCOR
Sal-angan Mini Itogon 2.40 Run-of-River Existing HEDCOR
Irisan Mini Baguio City 1.20 Run-of-River Existing HEDCOR
Bineng 2b Mini La Trinidad 0.75 Run-of-River Existing HEDCOR
Philex Mini Itogon 0.50 Run-of-River Existing Philex Mines
Amburayan A Small Kibungan 32.80 Run-of-River under FS 6
Amburayan C Small Kibungan 30.20 Run-of-River under FS 5
Amburayan Large Kapangan 80.00 Reservoir under FS
Benneng A Small Bokod 14.48 Run-of-River under FS 4
Malaya A Small Bakun 11.31 Run-of-River under FS 3
Galiano Mini Tuba 10.00 Run-of-River under FS 2
Bakun E Mini Bakun 7.00 Run-of-River under FS 1
Amburayan B Small Kibungan 45.44 Run-of-River Potential
Ambalanga A Small Tuba 11.90 Run-of-River potential
Kabayan Mini Kabayan 10.00 Run-of-River Potential
Timbac Mini Kabayan 10.00 Run-of-River Potential
Upper Agno Mini Kabayan 10.00 Run-of-River Potential
Balang Mini Kabayan 10.00 Run-of-River Potential
Batan Mini Kabayan 8.70 Run-of-River Potential
Toking Mini Kabayan 6.80 Run-of-River Potential
Gadang Large Kapangan 132.50 Reservoir Potential
Batan A Mini Kabayan 5.60 Run-of-River Potential
Bineng 4 Mini La Trinidad 5.00 Run-of-River Potential
Bued A Mini Tuba 5.30 Run-of-River Potential
Baculungan Mini Buguias 3.60 Run-of-River Potential
L.Sacburoy Mini Kapangan 2.38 Run-of-River Potential
Agno Mini Kabayan 1.90 Run-of-River Potential
Atok 2, Poket Mini Kapangan 1.00 Run-of-River Potential
Club John Hay Mini Baguio City 0.56 Run-of-River Potential
Atok 1 Mini Kapangan 0.40 Run-of-River Potential
Bantan Creek Mini Bokod 0.32 Run-of-River Potential
Pesak Creek Mini Bokod 0.32 Run-of-River Potential
Asin Mini Tuba 0.30 Run-of-River Potential
Nawal Mini Bokod 0.16 Run-of-River Potential
Bokod Mini Bokod 0.12 Run-of-River Potential
Andorol Mini Tuba 0.12 Run-of-River Potential
Capuyoan Micro Buguias 0.0001 Run-of-River Potential
Gadang Micro Kapangan 0.00001 Run-of-River Potential
Asin 4 Mini Tuba 0.60 Run-of-River Potential
Bued Mini Tuba 0.25 Run-of-River Potential
with FS rejected by
Nalatang A Small Kabayan 28.90 Run-of-River the people
with FS rejected by
Nalatang B Small Kabayan 46.70 Run-of-River the people
Amburayan and Gadang are proposed for a series of
TOTAL 534.66 run-of-river type of development
124
EXISTING HYDRO PROJECTS IN IFUGAO

Site of Municipality Capacity Development Status
Hydro in MW
Umalbong Micro Hingyon 0.60000 Run-of-River Operational
Abatan Micro Hungduan 0.10000 Run-of-River Operational
Ba-ang Micro Hungduan 0.00075 Run-of-River Operational
Gode Micro Hungduan 0.00300 Run-of-River Operational
Polod Micro Hungduan 0.00010 Run-of-River Operational
Magulon Micro Mayoyao 0.00010 Run-of-River Operational

Cambulo Micro Banaue 0.07000 Run-of-River Operational
Binablayan Micro Tinoc 0.00075 Run-of-River Operational

Poblacion Micro Tinoc 0.00500 Run-of-River Operational
TOTAL 0.78280
POTENTIAL HYDRO PROJECTS IN IFUGAO

Hydro in MW Ranking
Malulon Mini Lamut 9.68 Run-of-River w/ FS 1
Lamut A Small Lamut 12.00 Run-of-River under FS 2
Panghinawan Mini Kiangan 1.20 Run-of-River w/ detailed design 3
Hungduan Large Hungduan 55.00 Run-of-River Potential
Siffu B Small Aguinaldo 17.96 Run-of-River Potential 5
Bangbang Mini Kiangan 8.60 Run-of-River Potential 4
Bokiawan Mini Kiangan 6.90 Run-of-River Potential 6
Hungduan Mini Kiangan 10.00 Run-of-River Potential
Ibulao Mini Kiangan 9.90 Run-of-River Potential
Ibulao Mini Lamut 6.56 Run-of-River Potential
Hagalap Mini Asipulo 3.20 Run-of-River Potential
Mappit Mini Asipulo 1.50 Run-of-River Potential
Alimit Mini Lagawe 0.96 Run-of-River Potential
Ubuag Micro Hingyon 0.0300 Run-of-River Potential
Inwaloy Micro Mayoyao 0.0001 Run-of-River Potential
Tapao Small Tinoc 10.80 Run-of-River Potential
TOTAL 154.29
EXISTING HYDRO PROJECTS IN KALINGA

Hydro in MW
Pantikian Micro Balbalan 0.020 Run-of-River Operational
Cagaluan Micro Tinglayan 0.035 Run-of-River Operational
Ngibat Micro Tinglayan 0.010 Run-of-River Operational
Tulgao East Micro Tinglayan 0.010 Run-of-River Operational
Tulgao West Micro Tinglayan 0.010 Run-of-River Operational
Dananao Micro Tinglayan 0.010 Run-of-River Operational
Buscalan Micro Tinglayan 0.010 Run-of-River Operational
Lookong Micro Tinglayan 0.010 Run-of-River Operational
Butbut Micro Tinglayan 0.010 Run-of-River Operational
(6) Barangays Micro Lubuagan 0.080 Run-of-River Operational
TOTAL 0.205
125
POTENTIAL HYDRO PROJECTS IN KALINGA
Hydro in MW Ranking
Maling Mini Balbalan 3.75 Run-of-River w/ detailed design 1
Pasil B Small Lubuagan 16Run-of-River FS updating 2
Pasil C Small Pasil 16Run-of-River FS updating 3
Pasil D Small Pasil 12Run-of-River FS updating 4
Balantoy Micro Balbalan 0.0001 Run-of-River Potential
Saltan A, Salegseg Mini Balbalan 8Run-of-River FS updating
Saltan B, Salegseg Small Balbalan 24Run-of-River FS updating 5
Pasil A Mini Lubuagan 2Run-of-River Potential
Saltan Mini Pinukpuk 1.28 Run-of-River Potential
Mabaca A Small Pinukpuk 14Run-of-River Potential
Mabaca B Small Pinukpuk 14.4 Run-of-River Potential
Chico IV, Tomiangan Large Tabuk 370 Reservoir Potential
Naneng Large Tabuk 82.2 Reservoir Potential
Chico Mini Tabuk 9.8Run-of-River Potential 6
Chico RIS I Mini Tabuk 0.7Run-of-River Potential
Chico RIS II Mini Tabuk 0.77 Run-of-River Potential
Chico RIS III Mini Tabuk 0.12 Run-of-River Potential
Chico RIS IV Mini Tabuk 0.12 Run-of-River Potential
Mallig Mini Tabuk 4.4Run-of-River Potential
Tanudan D Small Tanudan 10.1 Run-of-River FS updating
Tinglayan B Small Tinglayan 12Run-of-River FS updating
Chico IV, Tomiangan and Naneng are proposed for a
TOTAL 601.6401 series of run-of-river type of dev’t
EXISTING HYDRO PROJECTS IN MT. PROVINCE

Hydro in MW
Balintaugan Micro Bauko 0.0001 Run-of-River Operational
Poblacion Micro Natonin 0.0012 Run-of-River Operational
TOTAL 0.0013 Run-of-River Operational
POTENTIAL HYDRO PROJECTS IN MT. PROVINCE

Hydro in MW Ranking
Talubin River Mini Bontoc 3.05 Run-of-River With FS 1
Layugan Mini Besao 6.22 Run-of-River Potential 2
BDC, Chico River Mini Bontoc 2.5 Run-of-River Potential 3
Ampasit, Sadsadan Mini Bauko 2.0 Run-of-River Potential
Inodey Falls Mini Tadian 1.69 Run-of-River Potential
Tetep-an Falls Mini Sagada 1.6 Run-of-River Potential
Pandayan Mini Tadian 1.5 Run-of-River Potential
Tanudan Mini Barlig 1.3 Run-of-River Potential
Siffu 2 Mini Paracelis 1.1 Run-of-River Potential
Tanudan A Mini Barlig 8.1 Run-of-River Potential 5
Tanudan B Small Barlig 27 Run-of-River Potential 4
Siffu I Mini Paracelis 0.7 Run-of-River Potential 6
Amuyao Mini Barlig 0.6 Run-of-River Potential
Masla Mini Tadian 0.6 Run-of-River Potential
Ab-ab Mini Bontoc 0.42 Run-of-River Potential
Talubin Falls Mini Bontoc 0.35 Run-of-River Potential
Capandangan Mini Sabangan 0.3 Run-of-River Potential
Entaptap Falls Mini Besao 0.28 Run-of-River Potential
Guinsadan Mini Bauko 0.2 Run-of-River Potential
Pamasar Mini Bontoc 0.19 Run-of-River Potential
Bayyo Mini Bontoc 0.15 Run-of-River Potential
Dumayen Micro Besao 0.09 Run-of-River Potential
Bunod-ok Micro Sagada 0.08 Run-of-River Potential
Poblacion Micro Natonin 0.0001 Run-of-River Potential
Chagchag Mini Bontoc Potential
Borobor, Banahaw Mini Paracelis Potential
Mallig River Mini Paracelis Potential
Sadanga Large Sadanga 238.2 Reservoir Potential
Sadanga(Large) is proposed for a series of run-of-river type
TOTAL 297.4901 of development
126
PROPOSED TOP POTENTIAL PRIORITY PROJECT:
PROVINCE Provincial Current Proposed Installed Start-up

Potential Power Project/ Capacity Capacity
(MW) Requirement Location (MW) (MW)
(MW)
ABRA 671.03 5.8 Tineg A, 9.90 6.80
Tineg, Luba, Abra
APAYAO 1,327.92 4.0 Agbulu Small 50.00 5.00
Hydro,
Calanasan, Apayao
BENGUET 534.66 40.0
IFUGAO 137.29 2.5 Malulon Mini 9.68 3.50
Hydro,
Lamut, Ifugao
KALINGA 601.64 3.0 Maling Mini Hydro, 3.75 3.75
Balbalan, Kalinga
MT. 297.49 2.4 BDC, Chico River 2.50 2.50
PROVINCE Mini Hydro, Bontoc
C.A.R. 3,570.03 57.7 75.83 21.55
TOTAL
HIGHLIGHTS OF THE PRESENTATIONS AND DISCUSSIONS
A. Making the Cordillera the Leading Energy Producer in Northern Luzon by Mr.
Rufino B. Bomasang, President and Chief Executive Officer, PNOC Exploration
Corporation
❑ The Cordillera possesses enormous energy potential, which, when developed on a

sustainable basis, can be the springboard for poverty alleviation in the region.
❑ Hydropower remains the biggest potential of the Cordillera, including wind and
solar power. These can be developed to supply not only the region’s power
requirements, but the rest of Northern Luzon as well.
❑ Renewable energy development is capital intensive and need the participation of

private investors, including foreign investors – 1 MW installed capacity of
hydropower plant will require a capital of $1.5M.
❑ There is tremendous interest in developing renewable energy projects among

developed countries especially in Europe, because of their commitments to reduce
greenhouse gas emissions under the Kyoto Protocol. Developed countries are
looking into such investments in developing countries. The Philippines however
is yet to endorse the Kyoto Protocol.
❑ Potential adverse environmental and social impacts of large dams like the
Ambuklao, Binga and San Roque can be effectively addressed, but extensive
public consultations need to be conducted to educate the public and the
stakeholders as well.
❑ The Electric Power Industry Restructuring Act (EPIRA) prevents NAPOCOR

from signing new power purchase agreements--- any new energy producer would
have to sell directly to a power distributor such as other rural electric cooperatives
127
(RECs) and private power utility like MERALCO. Attendant to this, there are
two issues that need to be addressed:
o Financiers of power plants will have to be convinced of the capability of

buyers–only a few buyers (mainly rural electric cooperatives) are
acceptable to financiers because even MERALCO is currently in a serious
financial problem.
o Private power utilities and electric cooperatives are not very keen on
entering into new power purchase agreements because of the glut of power
in Luzon, which may last up to 2007.
❑ RDC-CAR can still pursue the goal of CAR as a major energy producer but
should actively support current DOE initiatives to attain this:
o Lobby for the immediate ratification of the Kyoto Protocol by Congress to

enhance the attractiveness of renewable projects in the Philippines;
o Support the forthcoming proposal for a new law that will grant special
incentives to renewable projects to enable healthy competition against
fossil fuels especially coal-fired plants;
o Support the plan to promote the consolidation of rural electric

cooperatives to strengthen them financially and technically and ultimately
enable them to become power-off takers;
o Initiate the establishment of some sort of one-stop center for potential

investors in renewable energy projects in CAR;
o Educate the locals on the true benefits and costs of allowing sustainable
development;
- Project Brief of the Cordillera Energy Producer Master Plan and Mini-
Hydro Power and the Environment by Dir. Juan B. Ngalob, NEDA-CAR
❑ The Master Plan has been conceptualized as a strategic step to operationalize the
2001-2004 CAR Regional Development Plan’s goal as the “leading hydro-based
power supplier in North Luzon.”
❑ The Master Plan aims to prepare an implementation program for the development
of mini and small hydroelectric projects in CAR. The plan will incorporate
resource assessment, risk and viability analysis, and investment program
formulation and promotion of module design, in consultation of the stakeholders.
It aims to undertake the following:
o To firm-up a systematic inventory, evaluation of recorded mini to small

hydro energy source potentials, and produce information materials for
public consultations;
128
o To conduct a series of effective local consultation dialogues with the
officials of potential host stakeholders with the end view of encouraging
host LGUs and communities to own the project proposals and champion
them;
o To process, analyze, interpret and evaluate the gathered data and

information toward the formulation of the CEPMP, including an
implementation strategy and investment plan; and
o To design an information, education and communication (IEC) program

for a continuing program to increase acceptability of hydropower
generation projects among potential host communities and stakeholders.
o Implementation mechanism for an LGU as IPP can be based from Section

17 of the Local Government Code (R.A. 7160). The following alternative
models may be carried-out:
o Power generation cooperative – organization by the LGU of a power

generation cooperative. This requires huge amounts of investments and
manpower expertise.
o LGU organizes a power corporation – LGU alone may organize a power

corporation, if it has its own financial resources and the necessary
expertise.
o LGU participation in a consortium – private sector resources shall be

tapped in view of LGU’s financial and manpower limitations.
- Clean Energy by Engr. Rene Ronquillo, Chief Operating Officer,

HEDCOR
❑ The primary legal bases of mini-hydro power development are: a) Executive Order
No. 215 – An order amending Presidential Decree No. 40 and allowing the private sector
to engage in electric power generation; b) Republic Act 7156 – An act granting incentives
to private individuals and / or corporations who engage in mini hydro electric power
development;
❑ The other laws affecting the development of mini-hydropower are: a) Republic Act
9136 – Electric Power Industry Reform Act; b) Republic Act 6957 or the BOT Law; and
the c) National Grid Code;
❑ Clean energy refers to energy technology, which has little or no adverse effect on the
environment because it emits little or no harmful by-products, in contrast to conventional
energy. On the other hand renewable energy refers to clean energy technologies utilizing
sources, which are infinite, like mini hydros.
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❑ The monetary benefits received by LGUs are:
o Real Property Tax – HEDCOR for example remitted some P 43.329 M in Real
Property Tax to host municipalities as of December 2000.
o Business Tax – Local municipal units receive 70% share of the business tax
paid by the Hydro Group amounting to P 4.729 M as of December 2000.
o Donations – HEDCOR donated P 50.515 M to host municipalities and

barangay units as of October 2000
o Special Privilege Tax Remittance – HEDCOR paid P 36 M as special

privilege tax – 30% of this is given to the host municipality the other 30 % is
given to the host province.
- Barriers to Developing Small Scale Hydropower in the Philippines by

Engr. Ronquillo, HEDCOR
❑ The challenges in developing hydropower, based on existing laws and government

policies are as follows:
1. Market – the electric coops are the major market of power; only a handful of
electric coops are bankable
2. Wheeling power – high cost of wheeling power and difficult conditions imposed
by NAPOCOR in wheeling power
3. Finance – long term loans at development rates are not available
❑ The suggested measures to promote the development of mini-hydropower are as

follows:
1) Create a market – require utilities to purchase a portion of their power

consumption from non-renewable energy sources.
2) Reduce wheeling fees – eliminate or reduce wheeling fees for non-renewable

energies and/or charge wheeling fees based on average monthly use.
3) DOE / DENR to initiate steps to augment the revenue of mini-hydropower

developers, possibly through CDM (Clean Dust Mechanism)
4) Exempt mini-hydropower plants from technical requirements imposed on

bigger plants (i.e. spinning reserve, back-up reserve, SCADA, reactive power
capability, system frequency limits, etc.)
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- Legal and Business Context: Salient Features of the Republic Act No. 9136 or
Electric Power Industry Reform Act of 2001 (EPIRA) and Republic Act No.
7156 or Mini-Hydropower Law by Jerome B. Agaloos, NEDA-CAR
The salient features of related energy laws are as follows:
o There are four major laws related to the power industry namely: (a) Electric
Power Industry Reform Act of 2001 (EPIRA); (b) Mini-Hydroelectric Law of
1991; (c) Local Government Code of 1991; and (d) Executive Order No. 215 of
1987 (amending P.D. No. 40)
o The EPIRA introduces two (2) major reforms: (a) restructuring of the power
industry; and (b) privatization of the National Power Corporation (NPC). The
Mini-Hydroelectric Power Law provides incentives to the independent power
producers (IPPs). The Local Government Code of 1991 provides that the LGU
can be involved in mini-hydro development and into economic enterprise. The
law also mandates the LGUs revenue share from the national wealth tax. The
E.O. No. 215 of 1987 opens the power industry to private sector participation.
This amended the P.D. No. 40, which gave sole responsibility to NPC in terms
of power generation and transmission.
The presentation focused on the EPIRA and the Mini-Hydroelectric Law:
Electric Power Industry Reform Act of 2001 (EPIRA)
o The old industry structure indicates that NPC/ IPPs are involved in power
generation while NPC is solely responsible in the distribution. The power is
delivered to the distribution utilities (Dus) and rural electric cooperatives
(RECs).
o The new industry relationship has three major agencies involved; namely: (a)
Energy Regulatory Commission replacing the Energy Regulatory Board
(ERB), mandated to regulate energy pricing; (b) Power Sector Assets and
Liabilities Management Corp. (PSALM), mandated to liquidate the NPC assets
to settle the NPC’s P 801 B. debts; and (c) Dept. of Energy (DOE), to serve as
an oversight to other agencies in the power sector, i.e. NPC, TRANSCO, NEA,
Dus, and RECs.
o The Joint Congressional Power Committee (JCPC) is responsible in the review

of the PSALM output (bidding of NPC assets) before its recommends to the
President of the Republic for approval. Likewise, the JCPC is mandated to
review the weaknesses and flaws of EPIRA for possible amendment.
o The generation facilities are to be clustered into Generation Companies

(GENCOs), unbundling of electric tariffs for transparency, opening up of high
voltage lines. There shall be a competition in the generation sector and
transmission and distribution sectors shall be regulated.
o Wholesale Electricity Spot Market (WESM) – serves as the clearing and

dispatching center of electricity.
o The Universal Charge shall be collected from all end-users to utilize as (a)
payment for stranded debts, (b) missionary electrification, (c) equalization of
tax and royalties for indigenous and NRE against imported fuels, (d)
environmental charge, & (e) mitigate cross-subsidy removal.
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o Other Provisions: (a) mandated rate reduction of P 0.30/kWh; (b) lifeline rate
for marginalized end-users; & (c) removal of cross subsidies.
Mini-Hydro Law of 1991 (RA No. 7156)
o The old industry structure indicates that NPC/ IPPs are involved in power
generation while NPC is solely responsible in the distribution. The power is
delivered to the distribution utilities (Dus) and rural electric cooperatives
(RECs).
o The hydropower facilities are classified into: (a) micro – up to 100 kiwi; (b)
Mini – 101 kiwi to 10 MW; (c) Small – more than 10 MW to 50 MW; and (d)
Large – above 50 MW.
o Advantages of Mini-hydropower – (a) indigenous and renewable, (b) fuel is

free, (c) pollution free, (d) environment friendly, (e) socially acceptable, (f) low
operation & maintenance costs; (g) can co-exist with other water resource
projects.
o Incentives are: special privilege tax rates, tax & duty-free importation of
machinery, tax credit, special realty tax rates, VAT exemption, and tax holiday
o Nonexclusive reconnaissance period (conduct of FS): 3- 12 months.
o Operating contract: 25 plus another 25 years extension
o The share of the host LGUs and the national government from the taxes
generated was also presented.
OPEN FORUM
ABRA
Issues/Comments Discussion/Recommendations/Agreements
Effect of mini or
- In constructing a mini or small hydro project, an environmental study is
small hydro
conducted to determine any negative effect that the project may pose to the
projects on the
environment. This study includes the existing aquatic resources and other
local aquatic
activities within one (1) km. from the proposed site. This is to ensure that no
resources and on
environmental damage is done after the project is implemented.
irrigation systems
- mini hydros do not totally tap the rivers, it only divert the needed volume of
water and after passing through the turbines it goes back to the river system.
This in effect will not harm its aquatic resources unlike in a reservoir type
where in water will be depleted on the downstream side.
- As an example, the Balili River where garbage and sewer from Baguio and
La Trinidad flows is being use to run a series of mini-hydro plants. After the
dirty water passed through the hydro system, a cleaner water (tailrace) is
released back to the river. This has restored aquatic resources at the lower
stream of the Balili River and also improved the agricultural productivity of
the area considering that irrigation pipes are connected to the conveyance line.
Mini or Small - Mini or Small Hydro is Run-of-river type, which only use a portion of the
Hydro System river flow. This is diverted through a weir or small dam to run the turbine.
The capacity is Mini – 101 kW to 10 MW and Small – more than 10 MW to
50 MW. Mr. Montoya invited the LGU officials to visit the mini hydro
projects in Benguet to better appreciate the system.
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The possibility of - The affected communities rejected the NPC-proposed large hydro project
reconfiguring the because it will require the construction of a big dam that will submerge
big Binongan settlements and farmlands. The mega dams were designs during the 1970s
HEP into series of and early 1980s, similar with the proposed Chico Dam in Kalinga, which was
mini or small opposed by the people in 1970s.
hydro plants. - The new strategy calls for the conversion of the proposal from singular dam
into a series of mini or small hydros.
Need for - By years 2006 to 2008, there is a projected power crisis similar to the
renewable and experience in early 1990s. Thus the need to develop new power plants. Coal
clean energy power plants, which are environmentally destructive, are not being proposed
sources. but rather clean energy potentials particularly mini and small hydros.
What is the - We are proposing that the provincial government initiates the creation of a
proposal for the local power corporation. The development of a hydro project can be in
LGU to be able to collaboration with private investors and the local electric cooperative. If the
develop a mini power corporation is in place, they can identify sites that will be developed.
hydro project, The prime consideration for prioritization, however, is “business” not
since it is “political.”
expensive to put- - Assuming we have constructed one hydro plant, after satisfying the power
up a mini hydro, needs of the province the excess generation will be sold outside Abra by
the LGU does not wheeling it through the Transmission Corporation (TRANSCO). This would
have the financial be similar to the case of Asin Hydro in Baguio in which the production is
capability to being sold to San Fernando, Pampanga.
construct one? - The LGU could allocate some funds as capitalization of the local power
corporation and start the ball rolling. This is highly dependent on the LGUs
capability. However, if it is in partnership with a foreign investor, only 40 %
share is allowed. Thus, the locals should provide the 60% share.
Is it possible for - The private investor can handle the capitalization, as long as the affected
the private communities support the project. But local participation would be better
investors to do it considering that they are stakeholders and though they have small capital they
alone? have a say in the business. The people will also take care of the watershed
and LGUs participation is necessary to assure market of power generated.
- It was also pointed out that if we get involved in a local power corporation,
we also enjoy a larger share from the benefits of our resources not only
limiting the same to the private investors.
- Mr. Tingonong also stressed that the host communities will benefit aside
from their share from the National Wealth Tax and Special Privilege Tax,
benefits are provision of access roads and additional jobs.
- Abra Electric Cooperative (ABRECO), through its BOD President,

Ready Market of responded that they would buy the power generated as long as it is of lower
the Power rate compared to NPC.
Generated - HEDCOR responded that this is possible since by year 2006, energy
generation sector will be in open market. By then, the electric cooperatives
can already renegotiate with NPC or enter into contract with IPP offering
lower rates. Their franchise for power distribution would have expired and
therefore can now negotiate with other entities aside from NPC/TRANSCOR.
- We also involved the RDC because we need to influence the National
Government to support the efforts of the region. In case, we will be producing
power, the national government should also ensure healthy competition in the
energy sector because there might be big private investors in Metro Manila
that will put up.
Assurance of HEDCOR actually sells power at 12% lower than NPC. The host
lower power rate communities will also be energized like in Bakun, which does not have
electricity because there were no transmission lines from the electric
cooperative.
- ABRECO BOD President commented that the construction of mini-hydro in
Abra will also boost the electrification program in the province particularly
the remote barangays, as host communities, will be energized.
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Status of the - The proposed site is between Tineg (Abra), Ilocos Sur and Ilocos Norte. The
proposed system will utilize the headwaters of Palsiguan River for a run-of-river type of
Palsiguan Hydro hydro project.
Project in Tineg - According to Mr. Tingonong, the Palsiguan project has two components –
hydropower and irrigation system. It is designed to irrigate 24,000 ha. In
Ilocos Norte and Ilocos Sur, while the power plant will be located in Nueva
Era, I.N. Negotiations are now in progress between the Governments of the
Philippines and Japan with OECF as the funding institution.
- Under the past Provincial Board, it was negotiated that an irrigation
component for Abra area be included to cover Tineg, San Juan, Dolores, La
Paz, Lagayan and Danglas.
- Ilocos Norte offered to waive in favor of Abra, their share from the National
Wealth Tax because their only interest is the water for irrigation.
- If accepted by Abra, an act of Congress shall be passed to guarantee the
waiver because without it the next members of the SP Ilocos Norte might not
honor such agreement.
Mini Hydro - the Tubo participants endorsed the run-of-river type of hydro potentials in
Endorsements their municipality to be the priority projects
- Mayor Taverner of San Juan, endorsed the development of the Malanas and
Tineg Rivers for hydropower and assured the body that they are willing to
invest and considering that the two rivers are accessible.
- Governor Valera gave his preference for those projects located in Tineg and
Daguioman
APAYAO
The participants were encouraged to raise issues or clarificatory questions but none was
raised considering that they are unanimous in the concept of developing their hydropower potentials .
BENGUET
Issues/Comments Discussions / Recommendations / Agreements

How the barriers on The Master Plan will help address these issues as part of its action plan.
mini hydropower
dev’t be resolved
Balancing the It was resolved that there is need to create a market and doing so would
supply and demand mean policy reforms in the energy sector as well as increase in economic
of energy activities that requires demand on energy.
Possible opposition HEDCOR suggested that probably the development of micro hydro help
of the community resolve this issue. Besides, development of micro hydro is affordable, does
on energy projects not entail importation of materials and equipment, and it is good enough to
power the requirements of a barangay, apart from the fact that the facility
can also be used on a multi-purpose basis. The DOE also supports this
program through Affiliate Non-Conventional Energy Center.
Dir. Ngalob also indicated that the RDC would help address basic social
issues (endorsement and agreement of the socials) relative to energy
development.
IFUGAO
Cordillera’s vision to - Dir. Ngalob responded that the Energy Master Plan’s main objective,
be a Major Energy which details the aspirations of Cordillera in relation to the national energy
Producer and the requirements. As a part of this plan, potentials across provinces are
features of the master enumerated and will be presented in a prioritized form. The plan will serve
plan as a resource book, a guide for development workers, investors, and even
for local planners. To prioritize the potentials, there is a suggested
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criterion but at the end the major criteria is “business” which will depend
on the investor.
How can the hydro - Mayor Kindipan claimed that since Ifugao has the least potentials,
potential sites in investors would probably look into provinces with the most potential sites
Ifugao be increased - Mr. Ngalob encouraged the identification of other potential sites to be
included in the list. And submit the same to the PPDO or to NEDA-CAR.
- Mr. Lacsamana stated that while Ifugao has only a few mini-hydros
listed, its potential capacity is second to that of Benguet. It is easier to
develop a plant with bigger capacity than a series of smaller mini-dams.
The proximity of the mini-hydros to end users and the grid line are other
factors that should be taken into consideration by investors to assess its
technical and financial viability.
- Dir. Ngalob assured the Ifugao local government that the master plan
presentation would be as neutral as possible in so far as potentials are
concerned. He solicited the support and assistance of the locals to realize
the dream of putting up of at least one mini-hydro in each of the provinces
in the Cordillera.
Market for generated - Mr. Montoya responded that the idea of the EPIRA Law is to deregulate
power considering the power industry to whoever can sell at the cheapest cost. He cited the
electric cooperatives SEFCO (San Fernando Electric Cooperative) who now have an existing
existing contract with contract with NPC. They renegotiated its contract so it can buy power
NPC. (Jaime Pe from Asin Plant, which is operated by HEDCOR. The rate is 12% lower
Benito,GM IFELCO) than NPC rate. Likewise, BENECO is buying part the province’s energy
requirement from HEDCOR.
- Mr. Lacsamana pointed out that there are no existing IPPs in Ifugao
except for NPC. The Master Plan is being prepared in anticipation of the
projected energy crisis by year 2006-2008. The electric cooperatives can
renegotiate their contract with NPC. Since NPC is on its phasing out
period, the market for power will be like a stock exchange, i.e. those with
the lowest power rates is where the cooperative will buy.
Possible occurrence - Mr. Montoya explained that mini-hydros are run-of-river types and do
of black-out or not impound water. During dry spells, the same amount of power
brown-out generated can’t be expected. He expressed that brownouts can’t really be
(Bd. Member Hon. avoided during summer.
Gayyum Accatan) - Dir. Ngalob stressed the importance of protecting and managing
watersheds to ensure sufficient supply of water. He shared his observation
that in Ifugao, river flows abundantly even during summer. This is a sign
that watersheds are being properly maintained. Accordingly, it was
observed that broad leaf trees are better for watershed than pine trees.
- Mr. Lacsamana agreed with Dir. Ngalob’s contention that the
maintenance of watershed is with prime importance. In this regard, the
selection of a project site potential, which has good volume of water even
during summer is critical.
LGU putting-up a - as an initial approach to mini-hydro power development, the provincial
local power government should spearhead the creation of a local power corporation.
corporation - In the municipality of Alfonso Lista, it was suggested that a parallel
move be made to revive its intention on energy dev’t with the province.
- The idea is not to create as many corporations as possible, but for the
LGUs to take the initiative. The DOE should then take care of bridging
with the national government for assistance.
- It was clarified that the LGU having a local power corporation will
ultimately benefit from the endeavor.
- Assuming that Ifugao LGU establishes one, the provincial government

may own 50% of the equity, probably offering 10% to the municipality
and another 10% to the barangays and the rest offered to private investors.
Other schemes can also be considered.
Sample of feasibility - Mr. Montoya mentioned the fact that feasibility studies costing millions
studies as guide for of pesos, are not usually given out for free. As an alternative, Dir. Ngalob
hydro-power recommended the LGU to put up its own local power corporation,
development negotiate with HEDCOR to be its partner and develop the project them.
initiatives The MOA usually states that HEDCOR will take the technical aspect. In
135
(Mayor Kindipan) this way, HEDCOR can show the plans since the LGU is the co-owner of
the project.
- Cost of Feasibility Study normally is about 10 percent of Total Project
Cost
Establishment of - Vice-Mayor Cattiling suggested the establishment of a substation in
Substation Alfonso Lista considering that the construction of a mini-hydro costs
millions of dollars.
- Dir. Ngalob conveyed a minor problem that might crop up in case a
substation is established. When you talk about substation, it becomes the
domain of distribution rather than of generation. This means the source of
the main power that passes through the substation has the jurisdiction over
it. Nevertheless, he assured that this suggestion be further studied.
- Mr. Lacsamana encouraged the negotiations with Magat HEP for the
construction of a sub-station. He stressed that if Ifugao will have its own
power generating units, it will allow them control to sell power at its own
terms and conditions after approval by ERC. - - Mr. Montoya added that
HEDCOR is also studying the possibility of developing mini-hydros on a
BOT scheme. A hydro plant will be constructed and operated by
HEDCOR where shares will be given to the municipality. Turnover of
facilities and operations will then be given to the municipality after a
certain period of time.
Additional potential - It was mentioned that there are more potential sites other than the ones
sites enumerated in the list. Dir. Ngalob proposed that a discussion with the
consultants to get more details regarding these sites.
How to develop - For Ifugao’s potential to be developed the soonest possible time, Dir.
energy potentials of Ngalob suggested three items; a PDC resolution to adopt and endorse the
Ifugao Cordillera Energy Program; create or task force or a committee to
prioritize the list of potentials as basis of the initiative to bring the matter
to the national government for assistance through DOE and to give
incentives to those enthusiastic local government units.
- be in tandem with local power producers (hydro developers preferably
local)
Criteria for - Dir. Ngalob suggested four criteria for prioritization of hydro projects,
prioritization which will eventually be done by the local government.
(Mayor Charles L. First, the affected communities, through a resolution, should
Cattiling) approve and recommend the development of mini-hydros in their area.
There’s no way a project will push through if there is disapproval from the
communities.
Second criterion is the capacity of the hydro against local energy
demand. The capacity must meet if not exceed the market demand for
power.
Third criterion is the estimated costs of development. An option
that the local government can consider is for the LGU to give its own
investment in cooperation with a private investor. Other institutions and
foreign fund sources can also be taken into account.
Fourth criterion is the commitment and affordability of the LGUs.
There must be a consensus among the municipalities in support of the
development of hydro resources in the province. The endorsement of the
provincial government of hydropower development and other renewable
energy projects serves a commitment to pursue this endeavor.
KALINGA
Cost of energy Mr. Montoya stated that power is being sold at a rate 12% below the NPC
rate. For example, if NPC sells the power at P 1.00/ kWh, HEDCOR sells at
0.88 centavos.
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Possible energy - Mr. Montoya responded that for energy development to be implemented by
development by HEDCOR in Kalinga, a number of factors are being considered. Assuming
HEDCOR in that all factors are considered and assessed to be advantageous to the host
Kalinga community and HEDCOR, then energy development is well on its way. In
fact, a resolution from Balbalan (two years ago) and another one in Pasil has
already been passed regarding energy development. Coincidentally,
construction of three (3) hydro plants in Benguet was ongoing that time hence
the lack of manpower. Nevertheless, with the assurance of the local officials
and the communities, a meeting can be set between them and HEDCOR.
- Mr. Lacsamana added that the future needs on energy should also be
considered in putting up a hydro plant and not just the existing power demand
of the province.
Peace and Order - Mr. Montoya inquired on the peace and order situation in the area
considering this is one of HEDCOR's concern prior to committing itself to
hydro project development
- Mayor Mangaoang of Balbalan assured him that the peace and order in the
area have greatly improved and he will personally accompany HEDCOR
personnel when they visit his municipality
- Gov. Duguiang likewise reiterated that Kalinga is a peaceful province. It is
the media that sensationalize local problems to a point that people perceive the
province having peace and order problems. Bringing developmental projects
like hydropower generation will enhance the peaceful setting of the province,
he concluded.
Proposed Priority - Mayor Mangaoang proposed the Maling Mini Hydro to be the 1st project for
project Kalinga it meets the requirements of the province and it has a FS
MT. PROVINCE
Alleged non- Mr. Montoya informed the body that said observation is incorrect
prioritization of considering an existing agreement with the local community that qualified
Bakun local applicants is given preference. The employees of the Bakun Hydro Plant hail
residents for not only from Benguet but also from Mt. Province. The only positions held
employment (Gov. by the lowlanders are the executive vice president and assistant vice
Malinias) president for administration and operations. HEDCOR has 90-95% of its
staff from Cordillera.
Addressing of - Mr. Montoya responded that HEDCOR has a policy of only implementing
issues/ complaints hydro-projects when all issues raised are addressed appropriately. “We do
from affected local not go where we are not wanted”, he further stated.
residents - The only issues with difficulty to address are the unreasonable pricing of
- Were there affected land areas. Like in Lon-oy, Benguet, a landowner was asking for P
complaints or 5-6 M. for ½ ha. of land located in a ravine. We were left no option but to
problems in Bakun withdraw the project, which will result in the laying off about 1,500 local
and how were they manpower. The landowners were then pressured by the town’s people to
addressed? (Fr. reconsider and came back with an offer of P300,000 for that particular piece
Solang) of land. HEDCOR accepted the same and implemented the project with out
hitch.
- A committee composed of residents and HEDCOR representatives and
other concerned entities unresolved issues such as those in Ampusungan and
Bakun Central.
- It was recommended that proper coordination with DENR be undertaken to
resolve problems related to the watershed.
- Dir. Ngalob said that if a project can be owned, let the LGU settle problems
at their own level and not burden the developer.
Possibility of - The Master Plan is to identify energy potentials and not to come up with
conducting a the detailed feasibility study on such. Feasibility studies can only be
feasibility study for undertaken upon the unconditional approval of the local government,
hydro power affected residents and stakeholders. This can be initiated by the LGU’s
projects concerned.
- Concerned municipalities, such as Paracelis, were requested to submit
137
additional listing of other potentials not earlier identified. It is important that
the exact location for energy potentials be identified. Sites with good
watershed and all year round water flow are preferred as potentials.
Importance of - Hydroelectric plants are dependent on watersheds. Watersheds produce
watershed water for the rivers. Mt. Province has quite a number of denuded
watersheds, while neighboring Ifugao still has a good watershed. In Bineng,
La Trinidad, tramlines were used to deliver materials instead of roads due to
minimize environment degradation particular erosion and to prevent the area
from logging.
- The PENRO supplemented that the mini hydros are actually protecting the
watershed by helping suppress siltation. The whole catch basin of Chico
River was declared as a watershed purely for the purpose of protecting it
from logging. He favors the endorsement of mini-hydro-run-of the river type
of hydro-electric plants for the province.
Over-supply of - Dir. Ngalob explained that as forecasted by the DOE, there would be a
power generated by nationwide power shortage by year 2006 if no additional power plants were
hydro power plants constructed. This is expected to get worse by year 2008. Presently, power
- If BDC is shortage is already being felt in the Visayas region. A strategy to sell power
rehabilitated, where outside of Cordillera is the best way to address the issue of excess energy
will we sell power? production. The market for power is the whole country. It is important that a
(MPDC of Barlig) local power corporation be established. TRANSCO (Transmission
Corporation) is mandated to make available the transmission lines to wheel
the power products to the market.
- Vice-Governor Wooden supplemented that Mt. Province’s present energy
consumption is more than 2.4 MW. The proposed 2.5 MW BDC Hydro, is
sufficient to supply the current requirements of the whole province.
Revival of old - The PENRO suggested to revive the BDC hydro in Bontoc to address the
hydro plant in power needs of the province
Bontoc - Dir. Ngalob pointed out that the appropriate body for the proposed local
power corporation would discuss its restoration or rehabilitation.
- Mr. Montoya added that developing a hydro project needs huge initial
capital. A small mini-hydro in Benguet cost about P 150 Million. On the
positive side, returns are big after 5 to 10 years. The proposal to develop the
old Bontoc 2.5 MW mini-hydro would cost about P300M need another
study. He supported the recommendation to form a local power corporation
to undertake this endeavor.
IPs ownership of - The Governor responded that we are all considered indigenous people and
the resources be we should not distinguish a group from the others. Therefore, we are all
recognized and working for the development of our locality.
appropriately - Dir. Ngalob supplemented that we should respond to this concern in
compensated. accordance with all applicable laws such as the IPRA. Some of its provisions
- IPs own the are perceived to be a “turn-off” for investors especially on the provision that
sources of water development projects cannot be implemented without FPIC (free-prior-
and conversely the informed and consent of the indigenous people affected by the project). He
value of the project, further elucidated that we should conceptualize hydro projects and
in the case of BDC implements them by ourselves and works with the government.
estimated to cost
P300M, the same
amount should be
paid the indigenous
people affected by
the project? (Fr.
Democ)
List of hydro power - The Vice-Governor suggested that local offices like PPDO and PENRO be
potentials tapped to assist in mapping all hydro potentials in the province. It should
also indicate whether or not water is flowing in the rivers the whole year
round.
Micro hydro - Dir. Ngalob responded that micro-hydros are encouraged; however, it is
development limited for lighting purposes only. It is suited for far-flung areas. To
- Why not build commercialize power and make it available at all times, mini and small
micro-hydros only? hydros are the most appropriate.
Proposed - Dir Ngalob responded that on share from the use of national wealth is
138
percentage sharing provided by law, 40% to the national Gov’t; 30% to the Provincial Gov’t and
scheme from the 30% to the Municipal Gov’t. However, on the share form the income of the
power the sale of proposed local power corporation depends entirely on how much the local
power produced government put into it in terms of equity or other forms of investment.
Conduct study on - Mr. Montoya responded that no study made to determine the social
the social acceptability of the projects. However, citing the benefits and privileges host
acceptability of communities obtained from hydropower projects in the province of Benguet,
mini and small it was not only financially acceptable but also socially acceptable
hydropower plants considering that there were no issues properly addressed and it is hoped that
- Is there a study to the same will hold true in Mt. Province.
prove that - Dir. Ngalob pointed out that after master planning shall have been
hydroelectric conducted and assuming that there is a local power corporation, the next step
projects are socially would be the surveys and preparation of feasibility studies. But even before
acceptable? (Dr. DOE will grant franchise for the permit to develop the specific power
Ngodcho) potential, they will inquire the endorsement of the affected LGU and
- Could we be communities and other agencies concerned. DENR will issue the
provided with the Environmental Compliance Certificate or the ECC and the Environmental
Feasibility Study of Impact Statement or EIS.
Bakun Hydro - Mr. Montoya added that before any FS are conducted, HEDCOR made
Project so we can sure that the affected communities accept the project.
use the same as a - The FS of Bakun Hydro is not for public consumption, proprietary rights
pattern for our remains with the corporation. However, we can assist the municipalities in
proposals? (Mayor assessing potentials provided they will formally request the same through a
Claver) provincial/municipal/or barangay resolution.
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PROVINCIAL CONSULTATIONS ATTENDANCE SUMMARY
ABRA
Provincial Development Council

1. Hon. Vicente P. Valera - Governor, Abra
2. Hon. Jaime A. Lo - Vice-Governor, Abra
3. Hon. Victor Valera - SP Member, Abra
4. Hon. James B. Bersamin - SP Member, Abra
5. Hon. Victorino Baroña - SP Member, Abra
6. Hon. Perfecto B. Cardenas - SP Member, Abra
7. Hon. Jonathan Beroña - SP Member, Abra
8. Hon. Edgar Flores - SP Member, Abra
9. Hon. Ramon O. Dickson - SP Member, Abra
10. Hon. Benido Balao-as - Mayor, Boliney, Abra
11. Hon. Edwin Crisologo - Mayor, Tineg, Abra
12. Hon. Felix Castillo - Mayor, Langiden, Abra
13. Hon. Leo R. Baroña - Mayor, Lacub, Abra
14. Hon. Gregorio Sayen - Mayor, Luba, Abra
15. Hon. Lizardo A. Sinogo, Jr. - Mayor, Lagangilang
16. Hon. Medel C. Taverner - Mayor, San Juan, Abra
17. Victor Batawang - PNP, Abra
18. Generoso S. Padamoda - DENR – Abra
19. Evelyn A. Garcia - DILG – Tineg, Abra
20. Romeo M. Advincula - OIC, NIA –Abra
21. Menandro B. Buenafe - DOST – Abra
22. Prescillano N. Bermudez - PIA-Abra
23. Philip M. Tingonong - PPDC, Abra
Sangguniang Bayan (SB) Members
1. Orlino P. Ramirez - SB Member, Tineg, Abra
2. Pedro Q. Enon, Sr. - SB Member, Tineg, Abra
3. Resty G. Eduarte - SB Member, Tineg, Abra
Municipal Officials
1. Federico Layugan - MPDO – Tineg, Abra
2. Raymund P.V. Alcid - G.O./M.O. , Abra
Provincial Employees
1. Jesusa Feir - PPDO, Abra
2. Michelle Albolote - PPDO, Abra
3. Jean Barcena - PPDO, Abra
4. Raquel Sanchez - PPDO, Abra
5. Rosalinda Baga - PPDO, Abra
6. Randy Destado - PPDO, Abra
7. May Fe Atmosfera - PPDO, Abra
8. Cornelio Adame - PPDO, Abra
9. Santos Bernardez - PPDO, Abra
10. Edgardo Daria, Jr. - PPDO, Abra
Local Government Unit (LGU) Employees
1. Nards Andanan - LGU – Bangued, Abra
2. Conde T. Turqueza - LGU-Dolores, Abra
3. Rosalino Gayyed - LGU – Luba, Abra
4. Rosalino Gayyed - LGU-Luba, Abra
5. Manuel Daipan - LGU – Malibcong, Abra
6. Dionicio Balutoc - LGU – Malibcong, Abra
7. Perfecto Matnao - LGU - Malibcong, Abra
8. Camilo B. Agabas - LGU – Manabo , Abra
9. Nestor Reyes - LGU – Tayum, Abra
10. Roberto L. Tinong - LGU – Tineg , Abra
11. Teodoro Tangangeo - LGU – Tubo, Abra
12. Edwin Gubing - LGU – Tineg , Abra
Punong Barangays (Barangay Chairmen)
1. Joseph Duggay - President, ABC , Abra
2. Amante Sagubo - Brgy. Chairman, Lacub, Abra
3. Benjamin Managro Sr. - Brgy Chairman, Lacub, Abra
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4. Federico Sagao - Brgy. Chairman, Abra
5. Ricardo Quinto - Brgy. Chairman, Lacub, Abra
6. Esteban Pauline - Brgy. Chairman, Abra
Barangay Officials
1. Mendez Magalin - Bgry Secretary, Tineg, Abra
Line Agency Representatives
1. Celestino Echave - PNP, Abra
Non-Government Office (NGO) Representatives
1. Celerina M. Zabala, SSpS - SODEC, Abra
2. Asuncion Reyes - Social Dev’t. Center, Abra
3. Mel Espiritu, Jr. - School Volunteer, Abra
4. Myrna L. Caoagas - CCAGG, Abra
Media Representatives
1. Alex Cayod - TIEMPO (Media) , Abra
2. Pura Sumangil - DWCB/ CCAGG, Abra
3. Merla Q. Ruiz - DZPA-CMN, Abra
Electric Cooperative Representatives
1. Macario Daloos - BOD President, ABRECO, Abra
2. Jovencio P. Elveña - BOD Member, ABRECO, Abra
3. David B. Guzman, Jr. - BOD Member, ABRECO, Abra
4. Elmerande P. Acmata - ABRECO, Abra
5. Gilman P. Barcarse - ABRECO, Abra
Residents and Others

1. Junine Brillantes - Bangued, Abra
2. Belmonte Balagso, Jr. - Daguioman, Abra
3. Caesar L. Bolaoit - Ableg, Daguioman, Abra
4. Emilio B. Baluden - Cabaroyan, Daguioman, Abra
5. Pepito W. Lomioan - Tui, Daguioman, Abra
6. Fariñas B. Dongaoas - Pikek, Daguioman, Abra
7. Alejandro Feraren, Jr. - Lacub, Abra
8. Pedro Parudag - Lacub, Abra
9. Alipio R. Bagoon - Lacub, Abra
10. Sofia Benido - Luba, Abra
11. Silverio Manuel - Luba, Abra
12. Renato Agcalno - Luba, Abra
13. Lino C. Gayyed - Lunluno, Luba, Abra
14. Geraro Roy A. Cabarrubias - Poblacion, Luba, Abra
15. Palmera A. Blando - Luzong, Luba, Abra
16. Rodrigo Guinandigo - Gacab, Malibcong, Abra
17. Eduardo B. Osing - Mataragan, Malibcong, Abra
18. Romeo Dalloy - Gacab, Malibcong, Abra
19. Manuel Daipan - Gacab, Malibcong, Abra
20. Loreto B. Malaggay - Malibcong, Abra
21. Amado B. Tatom - Binasar, Malibcong, Abra
22. John Siddayao - Pob., Malibcong, Abra
23. Pio Crisologo - Ex-Mayor, Tineg, Abra
24. Tarona Dareng - Anayan, Tineg, Abra
25. Lucky Paul Baoit - Pob. Agsimao, Tineg, Abra
26. Conrado Magalim - Bebat, Tineg, Abra
27. Santos Magucusay - Kili, Tubo, Abra
28. Jose S. Gabriel - Tabacda, Tubo, Abra
29. Magno S. Domas - Tabacda, Tubo, Abra
30. Jimmy Padaoil - Amtuagan, Tubo, Abra
31. Robert Andulay - Dilong, Tubo, Abra
32. Mauricio Baybay - Kili, Tubo, Abra
33. Andrew Salimbey - Taripa , Abra
34. Lucas Baggas - Bgry. Umnap, Abra
35. Mariano Agwoking - Brgy. Alangtin, Abra
36. Appayan Quillayen - Brgy. Tabacda, Abra
37. Arthur Balawag - Brgy. Latneg, Abra
38. Claro Anacew - Brgy. Dulao, Abra
39. Allan Senke - Abra
40. Jodel Molina - Abra
41. Andy Cayyong - Abra
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42. Paul E. Bernal - Abra
43. Romulo Iwon - Abra
Resource Speakers and Guests
1. Dir. Juan B. Ngalob - Regional Director – NEDA-CAR
2. Romy Montoya Liaison Officer, Hedcor
3. Jerome B. Agaloos - NEDA CAR
4. Fernando M. Lacsamana - Consultant – Terramont
5. Janice Kaye C. Lacsamana - CE Researcher – Terramount
6. Pedro E. Aquino - CE Researcher – Terramount
7. Juanito Way-yas - NEDA-CAR
APAYAO CONSULTATION ATTENDANCE SUMMARY

1. Hon. Elias K. Bulut, Sr. - Governor, Apayao
2. Hon. Johnny U. Ilayat - Mayor, Pudtol, Apayao
3. Hon. Betty C. Verzola - Mayor, Luna, Apayao
4. Hon. Richard De San Jose - Mayor, Flora, Apayao
5. Hon. Evelyn B. Martinez - Mayor, Sta. Marcela, Apayao
6. Henry Caluduccan - PPDC, Apayao
7. Diego B. Ambatali - PENRO, DENR-Apayao
8. Jose B. Brown - OIC-Dist. Supt., DepEd-Apayao
9. Crescencio J. Calina - PD, DILG-Apayao
10. Jocelyn A. Loyon - DSWD-Apayao
11. Enrique Bernardino, Jr. - PHO, Apayao
12. Joseph Amino - PD, APPO SCORT, Apayao
13. Domingo Onza - PIO, NIA-Apayao
14. Lorenzo J. Tadios - President, ASC, Apayao
15. Rogelio Layugan - PSWDO, Apayao
16. PSSupt Rodolfo Anogonan - PD, PNP-Apayao
17. Victoria T. Patayan - OIC, NCIP-Apayao
18. Corazon D. Claveria - Prov’l. Head, DTI-Apayao
19. Merwin Anidao - DOLE-Apayao
20. Debbie Glynn Vicerra-Manangkil - PSTO, DOST-Apayao
21. Wilfredo Enciso - District Engr. DPWH – Apayao II
Provincial Officials
1. Cesar R. Soliven - Prov’l. Prosecutor, DOJ, Apayao
2. Fernando B. Cosidon - Prov’l. Ofcr., NAPOLCOM, Apayao
3. Conrado S. Sidsip - Prov’l. Treasurer, Apayao
4. Pablito P. Lapdawan - PBMO, Apayao
Vice Mayors
1. Hon. Marcelina L. Balicat (rep.) - Vice-Mayor, Luna, Apayao
1. Crispin A. Basilag - SB, Calanasan, Apayao
2. Nolan de San Jose - SB Member, Flora, Apayao
3. Jun Conde - SB Member, Flora, Apayao
4. Edgar Valiente - SB Member, Flora, Apayao
Municipal Officials
1 Benavidez Ignacio - MPDO, Calanasan, Apayao
2. Arthur B. Basseg - MPDO, Kabugao, Apayao
1. Romina P. Morales - P.B., Marag Luna, Apayao
2. Rolly Guiang - President, ABC - Sta. Marcela, Apayao
1. Andy Lanag - PEO, Apayao
2. Macrino Baguec - PEO, Apayao
3. Lily T. Juan - OGS, Apayao
4. Robert B. Bulsao - PGO, Apayao
5. Ma. Liberia Joven - PGO, Apayao
6. Rebecca B. Tamaken - PGO, Apayao
7. Editha Echanique - PPDO, Apayao
8. Jeana Marie Bayani - PPDO, Apayao
9. Arnold Castillo - PPDO, Apayao
10. Leonel Basquez - PPDO, Apayao
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11. Dennis Lojebo - PPDO, Apayao
12. Soledad T. Espita - PPDO, Apayao
1. Kathleen B. Ravelo - LGU-Calanasan, Apayao
2. Laurence P. Buslig - LGU-Calanasan, Apayao
3. Donato Vacuite - LGU-Flora, Apayao
4. Harold Gacuya - LGU-Kabugao, Apayao
5. Teddy Zuniga - LGU-Pudtol, Apayao
1. Liza C. Sadao - ASC, Apayao
2. Roener H. Federico - ASC, Apayao
3. Florencio F. Tadios - ASC, Apayao
4. Edwin A. Caluducan - COA-Apayao
5. Romanico A. Cabuyadao - COA-Apayao
6. Digna D. Villanueva - DA-ROS, Luna, Apayao
7. Reynaldo L. Bagasat - DA-ROS, Luna, Apayao
8. Nelie N. Villanueva - CARPO, DAR-Apayao
9. Jeptuneh C. Cablog - DepEd, Apayao
10. Eduardo Ramos, Jr. - DILG-Apayao
11. Benelito Micu - DILG-Apayao
12. Linda C. Taeza - ARD, DOLE-CAR
13. Jane Y. Adalan - DOLE-CAR
14. Darwin Hombrebueno - DOLE-Apayao
15. Jojo Villanueva - DOLE-CAR
16. Wayne A. Nabaan - DPWH-Apayao
17. Daisy C. Maranag - DPWH-Apayao
18. Bernadine Agonos - DPWH-Apayao
19. Antonio L. Baguec - DPWH-Apayao
20. Rustom Marinez - DPWH-Apayao
21. Benjamin C. Dugay, Jr. - Manager, Land Bank, Apayao
22. Leo Caban - Land Bank, Apayao
23. Rodelio S. Ci-o - Land Bank, Apayao
24. Pablo Undalos - PNP-Apayao
25. Freddie Langpawan PNP-Apayao
26. Juanito P. Peralta - PNP, Apayao
1. Federico Palacay - President, PCL-Apayao
2. Ferdinand P. Gonzales - E.D., POST (NGO), Apayao
3. Randolf Balyao - AIAS, Apayao
1. T. Suguiam - Apayao
2. Rey Busa - Apayao
4. Nathan E. Alcantara - PIA – CAR
5. Pedro E. Aquino - CE Researcher – Terramont
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BENGUET CONSULTATION ATTENDANCE SUMMARY

1. Hon. Raul Mencio Molintas - Governor, Benguet
2. Hon. Edna C. Tabanda - Vice Governor, Benguet
3. Hon. Wasing D. Sacla - SP Member, Benguet
4. Hon. Marvin Atos - SP Member, Benguet
5. Hon. Sario M. Copas - SP Member, Benguet
6. Hon. Concepcion D. Balao - Mayor, Atok, Benguet
7. Hon. Mauricio T. Macay - Mayor, Bokod, Benguet
8. Hon. Ernesto T. Matuday - Mayor, Kabayan, Benguet
9. Hon. Materno R. Luspian - Mayor, Mankayan, Benguet
10. Dr. Julie C. Cabato - Exec. Dir., Shontoug Foundation, Benguet
11. Dr. Salvadora C. Serrano - La Trinidad MABIBAK, Benguet
12. Mr. Bial A. Palaez - Movement for Good Governance, Benguet
13. Mr. Marcelo A. Abela - CBB, Cooperative Foundation, Benguet
14. Dr. Carlos Buasen, Jr. - Tublay Federation of Multipurpose Coop.,
Benguet
15. Engr. Alex E. Balangcod - PPDC, Benguet
1. Engr.Tuho Chapdian - PPDO, Benguet
2. Roy Nabus - PPDO, Benguet
3. Ernesto Pideli - PPDO, Benguet
4. Art Tanacio - PPDO, Benguet
5. Perla Mariano - PPDO, Benguet
6. Susan Padio - PPDO, Benguet
7. Lolita Sabo - PPDO, Benguet
8. Fidela Luis - PPDO, Benguet
9. Mike Epie - PPDO, Benguet
10. Arwin Cabradilla - PPDO, Benguet
11. Joseph Cervantes - PPDO, Benguet
12. Erlyn B. Aguirre - PPDO, Benguet
13. Gunrey M. Balong - PPDO, Benguet
14. Romeo P. Balangay - PPDO, Benguet
15. Leonides G, Dionisio - PPDO, Benguet
16. Jun Cuilan - PPDO, Benguet
17. Tomas Polking - PPDO, Benguet
1. Engr. Edgar M. Molintas - BSU-ANEC
2. Nathan Alcantara - PIA, Benguet
1. Efren Cabato
2. Domingo Pasdong
1. Engr. Vedasto A Augusto - BENECO, Benguet
1. USec. Rufino B. Bomasang - President & CEO, PNOC Exploration Corp.
3. Engr. Mario Marasigan - Dept. of Energy, Manila
4. Engr. Ronnie N. Sargento - Dept. of Energy, Manila
5. Michael Fontanos - Dept. of Energy, Manila
6. Engr. Rene Ronquillo - Chief Operating Officer, HEDCOR
7. Romy Montoya - HEDCOR
8. Israel Buenaobra - HEDCOR
9. Fernando M. Lacsamana - Consultant – Terramount
11. Dolores J. Molintas - NEDA CAR
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IFUGAO CONSULTATION ATTENDANCE SUMMARY

1. Hon. Teodoro R. Baguilat, Jr. - Governor, Ifugao
2. Hon. Bella G. Takinan - Vice Governor, Ifugao
3. Hon. Gayyum Accatan - SP Member, Ifugao
4. Hon. Jose A. Atluna - SP Member, Ifugao
5. Hon. Rufino N. Guinid - SP Member, Ifugao
6. Hon. Fernando Bahatan - SP Member, Ifugao
7. Hon. Alex D. Kindipan - Mayor, Hungduan, Ifugao
8. Hon. Jordan T. Gullitiw - Mayor, Asipulo , Ifugao
9. Hon. Tito A. Candelario - Mayor, Banaue, Ifugao
10. Hon. Tomas U. Pullupol - Vice-Mayor, Asipulo , Ifugao
11. Hon. Florante I. Tulao - Vice-Mayor, Lamut , Ifugao
12. Hon. Aquilino Namingit - Vice-Mayor, Hingyon, Ifugao
13. Hon. Charles L. Cattiling - Vice-Mayor, Alfonso Lista, Ifugao
14. 14. Carmelita Buyuccan - PPDC, Ifugao
1. Rey Towanna - Ofc.of the Vice Governor (OVG) , Ifugao
2. Julieta Baawa - OVG, Ifugao
3. Lourdes B. Buyuccan - OVG, Ifugao
4. Sharon Ribao - PGO, Ifugao
5. Catherine Buenaventura - PPDO, Ifugao
6. Emil Dinamling - PPDO, Ifugao
7. Arnel D. Belebli - PPDO, Ifugao
8. Dennis Dimalnat - PPDO, Ifugao
9. Daisy Ingosan - PPDO, Ifugao
10. Annie Bess Lablabong - PPDO, Ifugao
11. Margie N. Ngitit - PPDO, Ifugao
1. Cesar Lidio - LGU – Banaue , Ifugao
2. Lino Madchiw - LGU – Banaue, Ifugao
3. Janet B. Sambrano - LGU – Lamut, Ifugao
4. Constancio Pedro Jr. - LGU – Lamut , Ifugao
5. Cesar Lidio - LGU – Banaue , Ifugao
6. Lino Madchiw - LGU – Banaue, Ifugao
7. Janet B. Sambrano - LGU – Lamut, Ifugao
8. Constancio Pedro Jr. - LGU – Lamut , Ifugao
1. Juliet K. Cablinan - Principal, DBHS, DepEd, Ifugao
2. Pedro H. Pumihic, Jr. - CDA, Ifugao
3. Ezequiel A. Serrano - WSSPMP, DILG-CO, Ifugao
4. Max Bernard Codamon - DOST, Ifugao
5. Johnny Dulnuan - DTI, Ifugao
6. Epifania Gomultim - IFWO, Ifugao
7. Jina Shirley Dacmay - PIA, Ifugao
8. Vency Bulayungan - PIA, Ifugao
9. Juliet K. Cablinan - Principal, DBHS, DepEd, Ifugao
10. Pedro H. Pumihic, Jr. - CDA, Ifugao
11. Ezequiel A. Serrano - WSSPMP, DILG-CO, Ifugao
12. Max Bernard Codamon - DOST, Ifugao
13. Johnny Dulnuan - DTI, Ifugao
14. Epifania Gomultim - IFWO, Ifugao
15. Jina Shirley Dacmay - PIA, Ifugao
16. Vency Bulayungan - PIA, Ifugao
1. Jaime Pe Benito - GM, IFELCO, Ifugao
2. Alejandro C. Cleofas - BOD Member, IFELCO, Ifugao
3. Jaime Pe Benito - GM, IFELCO, Ifugao
4. Alejandro C. Cleofas - BOD Member, IFELCO, Ifugao
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2. Romulo B. Montoya - Liaison Officer, HEDCOR
KALINGA CONSULTATION ATTENDANCE SUMMARY

1. Hon. Macario Duguiang - Governor, Kalinga
2. Hon. Wilfredo J. Dugayon - Mayor, Pinukpok, Kalinga
3. Hon. Johnny Maymaya - Mayor, Tinglayan , Kalinga
4. Hon. Sonny C. Mangaoang - Mayor, Balbalan , Kalinga
5. Hon. Artemio B. Dalsen - Mayor, Pasil, Kalinga
6. Hon. Camilo Lammawin, Jr. - Mayor, Tabuk, Kalinga
7. Hon. Arthur Dalsen - SP Member, Kalinga
8. Hon. Pio Saga-oc - SP Member, Kalinga
9. Hon. William M. Puday - SP Member, Kalinga
10. Hon. A. Abbacaw - SP Member, Kalinga
11. Hon. Farnan A. Claver - SP Member, Kalinga
12. Hon. Pedro P. Bulait - SP Member, Kalinga
13. Hon. Warlord Alunday - SP Member, Kalinga
14. Hon. Gonsaga Busal - SP Member, Kalinga
15. Hon. Tommy S. Pallogan - SP Member, Kalinga
16. Hon. James Alunday - SP Secretary, Kalinga
17. Norma Frances U. Damian - PPDC, Kalinga
1. Jeffrey L. Uyam - Provincial Assessor, Kalinga
2. Elpidio Tubban - Provincial Engineer, Kalinga
3. Jerson E. Angoa - Provincial Attorney, Kalinga
Municipal Officials
1. Julio C. Bangayon - MPDC, Kalinga
2. Julian Asbucan - MPDC, Kalinga
3. Felix Belgica - OIC-MPDC, Kalinga
1. Gerry Donaal PPDO, Kalinga
2. Arcely Abayan - PPDO, Kalinga
3. Clodelia Dammang - PPDO, Kalinga
4. Flor G. Moldero - PPDO, Kalinga
5. Remy Mariano - PPDO, Kalinga
6. Alia Busiley - PPDO, Kalinga
7. Anne Sugguiyao - PPDO, Kalinga
8. Karen M. Laongan - PPDO, Kalinga
9. Glory L. Guasi - PPDO, Kalinga
10. Evangeline B. Gupaal - PPDO, Kalinga
1. Grace Baluyan - DTI, Kalinga
2. Col. A. L. Bernate - DBC, 501 BDE, Phil. Army, Kalinga
3. LTC Efraim Ororio - Phil. Army, Kalinga
4. Cpt. Victor Tanggawon, Jr. - Phil. Army, Kalinga
5. John Dongui-is - ICDC, Kalinga
6. Travis A. Gawigawen - IS/NIA, Kalinga
7. Alexander G. Acuat - DILG, Kalinga
8. King Gamatero - DILG, Kalinga
9. Charlie Saguipo - PPM, Kalinga
10. Digna B. Dalutag - PSWDO , Kalinga
11. Agustina M. Duyan - OIC-CARPO – DAR, Kalinga
12. Larry Lopez - PIA, Kalinga
13. Jay Sugguiyao - NCIP, Kalinga
14. Ceferino M. Cawaon - Asst. Supt. – DepEd CAR, Kalinga
15. Stefania T. Warimag - PTO/LICCO IV, Kalinga
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16. Robert Salabao - PCO, Kalinga
17. Noe, Dannong - PBO, Kalinga
18. Roy Gavino - PHO-OHS, Kalinga
19. Juliana B. Aclam - OAS, Kalinga
Media Representatives
1. Hazel A. Gub-ay - DZRH, Kalinga
1. Jose Cariño - GM, KAELCO, Kalinga
1. Perfecto B. Tamani - NPC-GENCO2
3. Romulo B. Montoya Liaison Officer, HEDCOR
5. Janice Kaye C. Lacsamana - CE Researcher – Terramont
MT. PROVINCE CONSULTATION ATTENDANCE SUMMARY

1. Hon. Sario M. Malinias - Governor, Mt. Province
2. Hon. Anthony D. Wooden - Vice Governor, Mt. Province
3. Hon. Franklin Odsey - SP Member, Mt. Province
4. Hon. Eduardo Solang Sr. - SP Member, Mt. Province
5. Hon. Francis Dangiwan - SP Member, Mt. Province
6. Hon. Ezra Gomez - SP Member, Mt. Province
7. Hon. Louis F. Claver, Jr. - Mayor, Bontoc, Mt. Province
8. Hon. Donald Alubia - Mayor, Barlig, Mt. Province
9. Hon. Bart P. Guzman - Vice-Mayor, Besao, Mt. Province
10. Ciriaco M. Filog - Office of the Congressman, Mt. Prov.
1. Hon. Bruno Wadwadan - SB Member, Natonin, Mt. Province
1. Arsenio L. Donga-el - Provincial Engineer, PEO, Mt. Province
Municipal Officials
1. Walter B. Dalang - MPDO-Barlig, Mt. Province
2. Anthony P. Chinalpan - MPDO-Sadanga, Mt. Province
3. Franklin P. Tudlong - MTO, Mt. Province
1. Ernesto B. Emilio - PGO, Mt. Province
2. Jimmy Pakipak - PGO, Mt. Province
3. Julius Ya-os - PGO, Mt. Province
4. Daniel K. Likigan - PPDO, Mt. Province
5. Helen B. David - PPDO, Mt. Province
6. Rosemarie L Bandas - PPDO, Mt. Province
7. Berfre O. Panyo - PPDO, Mt. Province
8. Sahlee Cherwaken - PPDO, Mt. Province
9. Mary Jane S. Tumapang - PPDO, Mt. Province
10. J. Dawayen - PPDO, Mt. Province
1. Francis Malabong - LGU-Sagada, Mt. Province
2. Max Guting - LGU-Barlig, Mt. Province
3. Nestor Padioan - LGU-Tadian, Mt. Province
4. Julie O. Lamitocon - LGU-Barlig, Mt. Province
5. Jane K. Likigan - LGU-Sagada, Mt. Province
6. Gaspar S. Monoten - LGU- Sadanga, Mt. Province
7. Bernard Foryasen - LGU-Natonin , Mt. Province
8. Mildred B. Battateng - LGU-Bauko , Mt. Province
9. Nemesio Corce - LGU-Sagada, Mt. Province
10. Federico Onsat - LGU-Paracelis, Mt. Province
11. Amor P. Liban - LGU-Paracelis, Mt. Province
12. Willy L. Sinoli - LGU-Paracelis, Mt. Province
13. Gina Dizon - LGU , Mt. Province
14. Narciso Tarnate - LGU , Mt. Province
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1. Rey Matinez - Barangay Captain-Suyo, Sagada, Mt.
Province
1. Ed Salgaca - PIA, Mt. Province
2. Andrew Doga-ong - PIA, Mt. Province
3. Reynald F. Yawan - PENRO, DENR, Mt. Province
4. Cornelio Diego - DENR, Mt. Province
5. O. Panilas - DENR, Mt. Province
6. Chester Bawayan - DENR, Mt. Province
7. Michael Chokowen - DENR, Mt. Province
8. Michael Dapiyen - DENR, Mt. Province
9. Norberto M. Cobaldez - DOST, Mt. Province
10. Andres L. Canancial - DPWH, Mt. Province
11. Charles C. Sokoken - DPWH, Mt. Province
12. Andrew Magwilang - NCIP, Mt. Province
13. Gerald Lumiwes - NCIP, Mt. Province
14. Eduardo G. Umaming, Jr. - NCIP, Mt. Province
15. Luz Fesway - DWFR, Mt. Province
16. Ida Joy Tecan - DWFR, Mt. Province
17. Josephine M. Ngodcho - MPCU, Mt. Province
18. Apollo Padaen - RNB, Bontoc, Mt. Province
19. Frank Armas - MPSPC, Mt. Province
20. Caridad B. Fiar-od - MPSPC, Mt. Province

21. William Todcor - MPSPC, Mt. Province
22. Roger Sacyaten - PAFC, Mt. Province
1. Fr. Val Dimoc - SADC, Mt. Province
2. Wagner Chugsayan - MOPNGO, Mt. Province
3. Joaquin Sumeg-ang - MOPNGO, Mt. Province
4. John C. Bagni - NGO, Mt. Province
5. Andrew P. Kaleo - NGO, Mt. Province
6. Alejandro O. Donato Sr. - NGO, Mt. Province
7. Pablo Buyagon - EDNP, Mt. Province
1. Joseph G. Lacbawan - MOPRECO, Mt. Province
2. Alexander Pit-og - MOPRECO, Mt. Province
3. Teofilo B. Carias - MOPRECO, Mt. Province
4. Johnny Comila - MOPRECO, Mt. Province
1. Ahrens Comaad - Tucucan, Bontoc, Mt. Province
2. Joseph Yagyaken - Tucucan, Bontoc, Mt. Province
2. Romulo B. Montoya Liaison Officer, HEDCOR
148
MASTER PLAN PROJECT
APPENDIX “F”
PROVINCIAL DEVELOPMENT COUNCIL and

SANGGUNIANG PANLALAWIGAN RESOLUTIONS
ENDORSING THE DEVELOPMENT OF
HYDROPOWER PROJECTS
149
150
151
152
153
154
155
156
157
158
159
160
161
MASTER PLAN PROJECT
APPENDIX “G”
VISUAL AIDS USED

in the
CONSULTATIONS
162
CONTENTS
Title Page
Hedcor Hydro Electric Development Corp. Hydro System 161
The Mini-hydro System 162
Schematic layout of a mini-hydro plant 162
Brief Definition of a mini-hydropower plant 163
Hedcor Mini-hydro Power Plant Capacity 163
Hydropower Categories 164
Dam or Weir 164
Bineng 1 Dam during high flow 165
The Desander 165
The Conveyance Line (Flume) FLS System 166
The Conveyance Line, Asin P3, Labay and Bakun FLS 166
Conveyance Line, Bineng 1 and Labay Catenary 167
Bineng 1 Catenary 167
The Forebay 168
The Surge Tank 168
Bineng 3 Penstock 169
The Power Plant, FLS and Irisan Plants 169
The Power Plant 170
Turbine Runner 170
Generator, Asin Plant 1 170
Bakun AC Small Hydro System 171
The Transmission Lines 171
Barriers to Developing Small Scale Hydropower in the Philippines 172
About Hedcor and Cleanergy 172-174
Small-Scale Hydropower Development in the Philippines 175
Mini-hydroelectric Power Incentives Act 175
Electric Power Industry Reform Act 176
Built Operate Transfer Act 177
National Grid Code 178
Challenges in Developing Hydropower 178-181
Challenges in Financing Mini-hydropower 181-183
Challenges in Developing Mini-hydropower 183-185
Electric Power Industry Act of 2001 and its IRR; Milestones/Highlights 186
Old Industry Structure 187
New Industry Relationships 187
The New Structure of the Industry 188
Electricity Sector Reform 188
Wholesome Electricity Spot Market (WESM 189
Retail Competition and Open Access 189
Universal Charge 190
Other Provisions 191
Energy Regulation No. 1-94 as amended Legal basis 192
Mechanics 193
Beneficiaries 193
General Procedures 194
Flow Chart of Activities for the Availment of the Electrification Fund 195
Flow Chart of Activities for the Availment of the Non-Electrification Fund 195
Preferred Development Projects 196
Preferred Livelihood Projects 196
Preferred Health Related Projects 197
Preferred Reforestation and Watershed Mgt. Projects 197
Integrated & Sustainable Program Approach Under E.R. R. 1-94 198
Mini-hydro Power development in the Philippines; Introduction 199
Hydro Power Sector 200
Hydropower Classification 200
Advantages of Mini-hydropower; Mandate 201
Republic Act No. 7156; Incentives 202
Mini-hydro Contract System 203
Permit Requirements 203
Contract Requirements 204
Disposition and Allotment of Taxes 204
Existing Mini-hydroelectric Plants in Cordillera Administrative Region 205
Hydropower Potentials Identified in CAR 206
163
164
\
165
166
167
168
169
7
170
171
172
173
174
Barriers to
Developing Small Scale
Hydropower in the
Philippines
A Presentation for the
Climate Change Information
Center
Dec. 10, 2002
About Hedcor
Hedcor
Hydro Electric Development Corporation
• Is an affiliate of Aboitiz Equity Ventures
• Owns and/or operates 14 mini-hydro plants
• Total generating capacity of about 39 MWs
• Generating about 150 GWhrs annually
175
About Hedcor
Hedcor
O&M contractor of 70 MW
Bakun AC hydro plant
• 1st and only BOT hydro project
in the Phils.
About Hedcor
Hedcor
• Mini Hydropower
Development
(design, construction,
maintenance & rehabilitation)
176
About Hedcor
Hedcor
• Fabrication & Machining
• Watershed Management
• Liaisoning
About Hedcor
Hedcor’s vision:
We lead in the promotion
and development of clean energy.
177
Small-Scale Hydropower Development
in the Philippines
3 laws & a code that affected the

development of mini-hydropower:
•R.A. 7156 - Mini-hydroelectric
Power Incentives Act
• R.A. 9136 – Electric Power
Industry Reform Act
• R.A. 6957 B.O.T. Law
•National Grid Code
Mini-hydroelectric Power Incentives Act
R.A.7156
defines mini-hydro as:
100 kws < MINI < 10 MWs
Micro-hydro < 100 KWs
178
Republic Act 7156

• Grants incentives to mini-hydro developers (tax
free importation of eqpt.)
• Obligates NPC to buy generation at avoided cost
• Vat-exempt status for mini-hydro
• Special Privilege Tax of 2%
• Enacted September 1991
Electric Power Industry Reform Act
REPUBLIC ACT 9136

• The Power bill was suppose to bring
transparency.
• Deregulation, privatization & competition
were to lower cost to “true cost of power”
• Instead we have higher subsidies
179
Electric Power Industry Reform Act
REPUBLIC ACT 9136

• SEC. 2. (h): To promote the utilization of indigenous and
new and renewable energy sources in power generation
in order to reduce dependence on imported energy.
• SEC. 37. (e) (i): Encourage private sector investments in
the electricity sector and promote development of
indigenous and renewable energy sources.
• No specific IRRs
Build Operate Transfer Act
REPUBLIC ACT 6957 & 7718

• Provided a framework of risk sharing between
the private developer and GOVERNMENT
• Developers could negotiate BOT contracts w/
LGU’s, government agencies and GOCC’s
• Typically, a developer bids for a contract,
constructs and operates the project for 25 yrs,
and then turns the project over
180
National Grid Code
The Code that all power plants comply with:

• SCADA requirements
• Tele-protection requirements
• Communication requirements
Challenges in Developing Hydropower
MARKET
• Most mini-hydro schemes are in remote areas
and therefore usually in coop franchises
• Electric coops have small loads and poor load
factors
• Run-of-river hydro schemes cannot maintain
firm capacity whole year round
181
MARKET
• Most mini-hydro schemes are in remote areas
and therefore usually in coop franchises
• Only a handful of electric coops are bankable
WHEELING POWER
• High cost of wheeling power:
– Transmission rate: P0.3076
– Sub-transmission rate: P0.0362
182
WHEELING POWER
• The wheeling fee is based on the monthly
peak demand.
WHEELING POWER
• The customer’s demand charges will only be
reduced if the generator is able to generate at a
firm level for the entire billing period
183
Finance
Long term loans at developmental rates are
not available.
Challenges in Financing Mini-

hydropower
Finance
• Development banks receive foreign loans at
developmental rates to help promote the
development of mini-hydropower
• And lend to developers at near commercial
rates
• Full collateral requirements
184
hydropower
Finance
• Commercial banks are unfamiliar with
hydropower projects
• Uncomfortable taking hydrological risks
• Required parent company guarantee
• More expensive than rates extended by
development banks

hydropower
FINANCE
When we started (JEXIM):
• 15.5% per annum (+ GRT)
• 8 yr term – 21 equal quarterly payments
• 3 yr grace period on principal
• fully secured by parent company
– NO project financing available
185
hydropower
Probable commercial banking terms today:

• banks are not very excited to lend to power projects
• 90-day T-bills + 2.0% spread or about 12.0% (exclusive
of GRT)
– must be fully secured + parent guarantee
– 70/30 debt equity requirement
– Project finance using local currency not available
Challenges in Developing Mini-

hydropower
Suggested measures to promote the

• Create a market
– require utilities to purchase X% of their
consumption from NRE’s
– public awareness campaign on clean energy
186
hydropower

• eliminate or reduce the wheeling fees for NRE’s
• charge wheeling fees based on average monthly
use (i.e. kwhrs/hrs x rate)

hydropower

• DOE/DENR to initiate steps to augment the
revenue of mini-hydropower developers
– possibly through CDM
187
hydropower

• exempt mini-hydropower plants from technical
requirements imposed on bigger plants (i.e.
spinning reserve, back-up reserve, SCADA,
reactive power capability, system frequency
limits, etc.)
www.hedcor.com
188
Electric Power Industry
Reform
Act of 2001
Milestones/Highlights
ESTABLISHMENT OF LEGAL FRAMEWORK
08 June 2001 - PGMA signed into law RA 9136
26 June 2001 - Effectivity date of the Act
Approval and Signing of the IRR by the Joint

27 February 2002 -
Congressional Power Commission
22 March 2002 - Effectivity date of the IRR
SECONDARY LAWS
19 December Promulgation of Philippine Grid Code and
-
2001 Distribution Code
26 June 2002 - Unbundled Rates of NPC and TRANSCO
Promulgation of Wholesale Electricity Spot

28 June 2002 -
Market (WESM) Rules
189
Old Industry Structure
GENERATION TRANSMISSION DISTRIBUTION END -
SECTOR SECTOR SECTOR USERS
NPC / IPPs NPC DUs
GENERATION TRANSMISSION DISTRIBUTION

FACILITY ASSETS ASSETS
SUBTRANSMISSION ASSETS
4
New Industry Relationships

JCPC
ERC PSALM DOE
Corp.
NPC NEA
WESM Industry
IndustryParticipants
S
Participants P
U
G
GENCOs Suppliers/ DUs

TRANSCO
Aggregators PUs ECs
LEGEND:
Oversight Regulation Coordination Ownership/ Policymaking Operation Supervision
Control
Competitive Regulated
190
The New Structure of the Industry
tion
genera
ive
petit
Com r n
sect
o issio
transm ctors
d e
ulate on s
Reg istributi
d
and icity
▪ Creation of several
ive electr
GENCO clusters petit ders
Com e provi
ic
serv
▪ Unbundling of electricity
tariffs for transparency rs
-use
End
▪ Opening up of high voltage
transmission lines for easy access of
distributors and large consumers
▪ Opening up of distribution lines for contestable

End-
End-users
Electricity Sector Reform

What has been done?
▪ Promulgation of Grid and Distribution Codes in Dec. 2001
▪ Approval of the Implementing Rules and Regulations (“
(“IRR”
IRR”) on 27
February 2002
▪ Signing of Executive Order 100 on Tax Equalization of Indigenous Source

of Energy on 03 May 2002
▪ Unbundling of NPC Rates on 26 June 2002

▪ Promulgation of WESM Rules on 28 June 2002
▪ Signing of Executive Order 119 on the Restructuring Program for Electric
Cooperatives (ECs
(ECs)) last 28 August 2002
▪ Approval by the Lower House of Congress the TRANSCO Franchise Bill

Bill on
03 September 2002
▪ Approval by the President of the TRANSCO and NPC Generation Assets

Assets on
04 October 2002
191
Wholesale Electricity Spot Market
▪ DOE to establish WESM composing of industry
participants;
▪ WESM Rules shall define among others:
• Merit order dispatch instructions for each time period of central
dispatch period;
• Market-clearing price for each time period;
• Administering the market-entry and exit to market; and
• Transition from the Interim Market to Full Market
Implementation.
▪ Generators, distribution utilities, suppliers, bulk

consumers/end-
consumers/end-users and other ERC authorized entities
shall become members of the WESM; and
▪ DOE to constitute Autonomous Group Market Operator

(composed of industry participants).
Retail Competition and Open

Access
▪ To be implemented not later than 2004, except
within franchise areas of ECs which is by 2006;
▪ Threshold level is placed at those end-

end-users with
average peak demand of at least 1 MW;
▪ Eventually reduced to 750 kW by 2006 and

aggregators will be allowed to supply electricity;
and
▪ ERC to gradually reduce threshold level until it

reaches household demand level according its
market assessment.
192
Retail Competition and Open Access
Conditions precedents:
▪ Establishment of WESM.
❖ This is deemed to have occurred upon effectivity of the WESM
Rules and initial operation of the WESM.
▪ Approval of unbundled transmission and distribution wheeling

charges.
❖ This is deemed complied with upon approval by ERC of the
unbundled rates of NPC and distribution utilities one (1) year
from the effectivity of the Act.
▪ Initial implementation of cross-

cross-subsidy removal scheme.
❖ Interpreted to have occurred on the next billing period after ERC
issued the approval of the removal scheme.
▪ Privatization of at least 70% of total capacity of generating

assets of NPC in Luzon and Visayas.
Visayas.
▪ Transfer of management and control of at least 70% of total
energy output of power plants under contract with NPC to IPP
administrator.
Universal Charge
▪ To be collected from all end-
end-users;
▪ To be determined, fixed and approved by ERC one (1)
year from the effectivity of the Act for the following
purposes:
❖ Payment for the stranded debts in excess of the amount assumed
by NG and stranded contract costs of NPC and distribution utilities;
❖ Missionary electrification;
❖ Equalization of tax and royalties applied to indigenous and
renewable sources of energy vis-à-vis imported energy fuels;
❖ Environmental charge (P0.0025 per kWh) for watershed
rehabilitation and management, to be managed by NPC; and
❖ Mitigate cross-subsidy removal.
▪ To be administered by PSALM Corp.;
▪ End-
End-users not connected to the grid and self-
self-generating
entities shall remit their corresponding universal charge to
TRANSCO;
▪ Distribution utilities to remit to PSALM on or before the
15th day of the succeeding month, net of any amount due
to distribution utility.
193
Other Provisions
▪ Mandated Rate Reduction
❖ P0.30/kWh rate reduction from NPC rates to be given to
residential end-users
❖ To be reflected as a separate item in the customer’s billing
Lifeline Rate
❖ For marginalized end-users to be set by the ERC
❖ End-users covered by the lifeline rates are exempted for 10
years from the removal of cross-subsidies
❖ Distribution utilities to file with ERC the level of consumption
to be qualified
Removal of Cross Subsidies

❖ All forms of cross subsidies shall be gradually phased out
within 3 years from the establishment of universal charge
❖ Period for removal may be extended to a maximum of one
year to mitigate impact
Thank You!
For further information:

visit website at: http://www.doe.gov.ph/power
For inquiries:
call at telephone number: 840-14-01 to 21
194
ENERGY REGULATIONS NO. 1-
94
(as amended)
A DOE Presentation
Legal Basis
◼ A device formulated by DOE pursuant to

Section 5(i) of RA 7638 (DOE Charter);
◼ Collaborated by Section 66 (Benefits to

Host Communities) of RA 9136 (EPIRA).
o Detailed in Rule 29, Part A of the IRR of EPIRA
195
Mechanics
Generation Companies and/or Energy Resource Developers provide a
set of financial benefits equivalent to P0.01 per kWh electricity
electricity sales,
distributed as follows:
◼ ½ of P0.01 ➔ Electrification Fund (EF)

◼ ¼ of P0.01 ➔ Development and Livelihood
Fund
◼ ¼ of P0.01
➔ Reforestation,Watershed
Mgmt., Health, and
Environment Enhancement
Fund (RWMHEEF)
Beneficiaries
Communities that host energy generating facilities and/or
energy resource development projects, prioritized as follows:
▪ barangay where the facility is located;

▪ municipality or city;
▪ the province; and
▪ the region.
196
General Procedures
▪ Host LGU coordinates with the Generating Company and/or

Resource Developer for the preparation of Project
Proposal/s.
▪ Project proposal/s shall be submitted to DOE
o Upon receipt of COMPLETE supporting documents, DOE shall,

within 13 days, process and evaluate the application;
o DOE to issue NTP for the projects; and
o MOA to be forged among concerned parties.
General Procedures
▪ LGU to bid project/s in accordance with existing laws, rules

and regulations;
o Submits to DOE result of competitive public bidding.
▪ DOE to process the release funds;
▪ LGU to implement the project/s; and
▪ DOE to conduct financial and technical audit.
197
FLOW CHART OF ACTIVITIES FOR THE AVAILMENT OF THE
ELECTRIFICATION FUND
Required Documents
1. Staking Sheets; Project Implementation
2. Bill of materials/cost estimates; Audit
by FDU
3. For NREs, project proposals, plans, designs & (Days=?)
specifications.
Submit requirements to DOE for

review and evaluation Findings
(Days=10) Release of funds to
FDU
Evaluation, Approval and Release of

Fund By DOE Turn over of
Approval of projects and signing of DV Project to FDU
are as follows: Signing of MOA
> 5 M - Secretary
>1 M<5 M - Undersecretary
< 1 M - Director
(Days=13)
The estimated number of days is based on the assumption that the submitted project
proposal is COMPLETE. For non-
non-appearance of MOA signatories, routing of MOA to
signatories takes 30 days.
FLOW CHART OF ACTIVITIES FOR THE AVAILMENT OF THE NON-

NON-
ELECTRIFICATION FUND (DLF AND RWMHEEF)
By LGU/Region (Assisted by PP COMREL)

1. List of projects/Work program (Not Review/evaluation of project
later than March 15 of every year) Turn over of
proposal by NPC and endorsement
2. Sanggunian/RDC resolution project to LGU/RDC/
to DOE
3. Project proposal (Form 2) sanctions
(Days=10)
• Justification
• List of beneficiaries
• Location map
• Program of works/Cost estimate
• Drawings/Plan for infrastructure
Evaluation, Approval and Release of Findings
projects
4. Accreditation from CDA for projects Fund By DOE
Approval of projects and signing of DV
to be undertaken by cooperative are as follows:
5. Legal document supporting public > 5 M - Secretary
property ownership of project site >1 M<5 M - Undersecretary
6. Endorsement from DENR Region/ < 1 M - Director
Watershed Management Administrator
7. Relevant permits from concerned (Days=13) Audit
agencies (i.e, LWUA)
Signing of MOA
Project Implementation
Release of funds to By LGU/RDC
LGU/RDC (Days=?)
The estimated number of days is based on the assumption that the submitted project
proposal is COMPLETE. For non-appearance of MOA signatories, routing of MOA to
signatories takes 30 days.
198
Preferred
Development Projects
▪ Street Lighting Projects ▪ Fish Ports

▪ Farm to Market Road ▪ Seawalls
▪ Multi-Purpose Pavement ▪ Day Care Center
▪ Farm Produce Collection and ▪ School Building
Buying Station ▪ Public Market
▪ Rice/Corn Milling ▪ Slaughterhouse
▪ Communal Irrigation System ▪ Public Drainage/
▪ Small Water Impounding Sewerage System
Projects ▪ Bridge/Flood Control
Measures
Preferred
Livelihood Projects
▪ Food Production/Processing ▪ Carpentry/Furniture Shop

▪ Ice Plant ▪ Radio, Refrigerator and TV
▪ Livestock and Poultry Production Servicing
▪ Handicraft Production ▪ Garment Weaving
▪ Aquaculture ▪ Engine Mechanic Services
▪ Skills Training for LGU-
LGU- ▪ Electrical Wiring and Design
Administered Livelihood Projects ▪ Dressmaking
▪ Vegetable Seed Farm ▪ Gold and Silver Trading and
▪ Small-
Small-Scale Services livelihood Jewelry Making
projects: ▪ Blacksmith Shop
o Corn/Rice Milling ▪ Welding Shop
199
Preferred
Health-Related Projects
▪ Water supply system

▪ Municipal Hospital
▪ Medical equipment/facilities
▪ Medicinal plant gardens
Preferred Reforestation and

Watershed Management Projects
▪ Improvement of forest cover

▪ Vengineering measures
▪ Community-
Community-based forestry management
▪ Agro-
Agro-forestry
▪ Conservation of Mangroves
▪ Seedling nursery
200
INTEGRATED
INTEGRATED&
&SUSTAINABLE
SUSTAINABLEPROGRAM
PROGRAMAPPROACH
APPROACH
UNDER E. R.
UNDER E. R.1-94
1-94
DOE
OTH ER GOVE RNMENT AGENCIES NPC/PNOC/
IPP
INTEGRATED/WHOLISTIC &
SUSTAINABLE APPROACH
FINANCIAL
BENEFITS
(EF, DLF, E LE CT RICITY
RWMHEEF) OT HE R
SUP PORT
PROGRAM SE RVICE S
MONITORING AND L IVE LIHOO D
EVALUATION
DENR/DOH/DA/DPWH/DSWD/DECS CAPA BLE G ROUP
LGU & CRO IN FRAST RUCTU RE
TECHNI CAL
ASSISTANCE /
CONSULTANCY &
COORDINATION/ 1. PLANNING: PROJECT ID,
PARTNERSHIP PRIORITIZATION, CONSULTATI ON,
PROPOSAL PREP.; 2. IMPLEMENTATION;
MONITORING & EVALUATION.
END OF PRESENTATION
THANK YOU!
For inquiries, pls. contact:
ELECTRICITY DIVISION
Tel. Nos. 840-
840-2120 or 840-
840-2267
201
Department of Energy
Mini-hydro power
Development in the
Philippines
Introduction:
The DOE shall continue with the
government’s thrust of harnessing the
country’s indigenous energy resources
through an integrated and intensive
exploration, development, and
management of its hydropower
resources in partnership with the
private and public sector.
202
Hydropower Sector:
POLICY:
❖Administer programs for hydropower
development and promote development incentives
to encourage private sector participation.
❖Continuous promotion of hydropower sites to
private sector.
❖Exercise supervision and control on hydropower
development in the country.
❖Extend technical assistance to hydropower
developers and proponent.
HYDROPOWER
CLASSIFICATION
 Micro-hydro - up to 100 kW
 Mini-hydro - 101 kW to 10 MW
 Small hydro - >10 MW to 50 MW
 Large hydro - above 50 MW
203
ADVANTAGES OF MINI-
HYDROPOWER
 Indigenous and Renewable

 Fuel is Free
 Pollution Free
 Environment Friendly
 Socially Acceptable
 Low Operation and Maintenance Costs
 Can co-exist with other Water Resource
Projects.
Mandate:
Regulate, promote and administer
mini-hydroelectric power
development in the Philippines
pursuant to Republic Act No. 7156
and its Implementing Rules and
Regulations
204
Republic Act No. 7156
“An Act Granting Incentives to

Mini-Hydroelectric Power
Developers and for Other Purposes”
The law was approved on 12 September 1991

while its IRR took effect on 25 March 1992
Incentives:
❖ Special Privilege Tax Rates
❖ Tax- and Duty-free Importation of
Machinery, Equipment and Materials
❖ Tax Credit on Domestic Capital Equipment
❖ Special Realty Tax Rates on Equipment and
Machinery
❖ Value-Added Tax Exemption
❖ Income Tax Holiday
205
Mini-hydro Contract System:

Mini-hydro Nonexclusive Reconnaissance
Permit ( OEA Office Circular No. 92-11-23 )
minimum of 3 months, extendible but should not
exceed 12 months
Mini-hydroelectric Power Development

Operating Contract
25-year term, extendible for another 25 years
PERMIT
REQUIREMENTS
 Letter of Application
 Endorsement from concerned LGU
 Payment of Application Fee
 Work Program
 Vicinity Map Showing the Location of the Proposed
Project
 Coordinates of the Diversion Structure and
Powerhouse
 NCIP or FPIC Clearance
 Profile of Technical Capability of Proponent and/or
its Consultant
206
CONTRACT
REQUIREMENTS
 Letter of Application
 SEC Registration
 Comprehensive Feasibility Study (3 copies)
 Environmental Compliance Certificate
 Water Rights Permit
 Payment of Contract Fee of P2.50/kW of Installed Capacity
 Copy of the Project Description and Watershed Development
Plan
 Power Purchase Agreement
 Endorsement from concerned LGU
 Proof of financial and technical capability
Disposition and Allotment

of Taxes
❖If the Plant is located in the city:
⚫ 60% of taxes goes to the City
⚫ 40% to the National Government
❖If the Plant is located in the municipality:
⚫ 30% of taxes goes to the Municipality
⚫ 30% goes to the Province
⚫ 40% goes to the National Government
207
EXISTING MINI-
MINI-HYDROELECTRIC POWER PLANTS IN
CORDILLERA AUTONOMOUS REGION
LON-OY (3,200 kW)

Bakun, Benguet
F. L. SINGIT (6,400 kW) OMICO-CAUYAS (2,400 kW)
Bakun, Benguet Itogon, Benguet
LOWER LABAY (2,400 kW) PHILEX (500 kW)
Bakun, Benguet
Itogon, Benguet
CLUB JOHN HAY (560 kW)
Baguio City, Benguet
BINENG 1, 2, 2B, & 3 (9,850 kW)

Sablan, Benguet
AMPOHAW (8,000 kW)

Sablan, Benguet
IRISAN (1,200 kW) ASIN 1, 2, & 3 (3,050 kW)
Tuba, Benguet Tuba, Benguet
EXISTING LARGE-
LARGE-HYDROELECTRIC
POWER PLANTS IN CAR
AMBUKLAO (75 MW)

Bokod, Benguet
BINGA (100 MW)

Itogon, Benguet
208
Implement
Consultati
Infrastruct
MASTER
SECTOR
Social
Legal
CONSULT
ENVIRON
ENERGY
SITUATIO
INVESTM
CONSUL
DEVELO
IEC MODULE
PRIORITY
DETAILE
Stake
LGU
Economic
Framewor
Services
PLAN
ation
ure,
RESOURC
SECTORA
MENTALAL
on
ATION
TATION
PMENT
NAL
ENT
PROJECT
Holders
D
Endorsem
Sector
Dialogues
GOALS
Transport
CONDITI
FRAMEW k &
L
E
STRATEG
REVIEW:
ANALYSIS
PROCESS S
PLAN
PROPOS
STRATEGY
-DEVELOP
RDP
with ent
OBJECTI
ation
ONS
ASSESSM
RDR
ORKYLGU/
-Concerns/
ALS and
Prospectiv
Communi
VES
MENT.
ENT
Issues
-Socio-
- Consultation
-cations
eEnviro
Host
Framework
Cultura
Communit
l nm
iesent
-Social
al
Impact
Crit
& Risk
eria
- Analysi
s Possi HYDROPOWER POTENTIALS IDENTIFIED IN
- ble CAR
soluti
Mitigati APAYAO
ngons I BENGUET
CAR
to 8 Sites (8.0 MW) II 23 Sites (115.4 MW)
Measu
Issue
res MT. PROVINCE KALINGA
s/Pro 17 Sites (18.4 MW)
III
14 Sites (54.7 MW)

blem IV
V
s IFUGAO
- ABRA VIII
9 Sites (45.2 MW)
Harness 9 Sites (23.5 MW) VI
Potentials IV
VII
X
IX ARMM
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CEPMP FINAL REPORT-colored (Edited)

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CEPMP FINAL REPORT-colored (Edited)

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Republic of the Philippines

Cordillera Administrative Region

CORDILLERA ENERGY PRODUCER

TERRAMONT FOUNDATION, Inc.

This project was made possible by the

NATIONAL POWER CORPORATION

Department of National Power Regional

Name of Project : Cordillera Energy Producer Master Plan

Project Cost : P 1,800,000.00

Date of Project Approval : 18 June 2002

Implementing Agency : The RDC-CAR through an

Consultant : Terramont Foundation, Inc.

The Cordillera Energy Producer Master Plan is a product of a series of multi-sectoral

The Project Team

BRIEF DESCRIPTION OF THE CORDILLERA ADMINISTRATIVE REGION (CAR)

The Cordillera Administrative Region popularly known as CAR is a landlocked and

THE CONTEXTUAL FRAMEWORK

The Cordillera Regional Development Plan (CRDP) 1999-2004 followed by its

SOLAR POWER POTENTIALS

In 1996, the Department of Energy conducted a pre-feasibility study in 12 selected

HYDRO POWER POTENTIALS

MOST VIABLE RENEWABLE ENERGY POTENTIAL IN CAR

ENERGY DEMAND-SUPPLY OUTLOOK

At the National Level

Energy consumption is expected to increase with the Medium Term Philippine

In hydropower alone, the Department of Energy Renewable Energy Policy

At the Regional Level

Existing Power-Generating Facilities in CAR

In hydropower development, interference with the ecosystems where they are

Priority Hydroelectric Power Projects, CAR, 2004-2013

Potential Hydroelectric Power Projects, By Province, CAR, 2004-2013

Information, Education and Communication (IEC) Plan

INVESTMENT REQUIREMENTS, 5th and 6th PRIORITY PROJECTS

Priority/ Type Installed Cost

THE CEPMP IMPLEMENTATION PLAN

The Policy Context

Initiating Hydropower Development at Local Levels

In the case of Benguet, there appears no compelling pressure for government

LGU Initiatives with national Government Assistance

The key implementation approach contemplated in the master plan attempts to

1. To establish a local power corporation with the provincial, municipal government,

a. Policy support from the Regional Development Council (RDC);

The Rationale for Establishing a Local Power Corporation

Past histories of natural resource exploitation/development in the Cordillera have

This approach is seen to automatically address the conditionalities to exploiting and

The Cordillera Regional Development Plan 2001-2004 envisions capitalizing

The Regional Development Council of the Cordillera Administrative Region

Project Study Background and Objectives

The master plan intends to serve as a strategic implementing step to

The Regional Development Council (RDC-CAR) through its Infrastructure

a) To prepare a systematic inventory of the region’s recorded mini to small

b) To conduct a series of local consultation dialogues with the officials of

d) To design an information, education and communication (IEC) program for a

Study Approach and Methodology

The approach required in the conduct of this project is goal-oriented: the

The master plan is also envisioned to be used to attract investments on mini-

The master plan is to be formulated within the contextual framework of the

Scope and Focus of the Study

As outlined in the technical proposal and the methodology stipulated under

A. National Situationer on Energy Supply and Demand

Overall Development Framework

The continuous and sustained development of the energy sector is necessary

Energy consumption is expected to increase with the MTPDP’s GDP growth

Table 1. Primary Energy Mix, 1999-2002