SNAP, NIA ink ‘settlement deal’ on unutilized water for power generation
By Myrna M. Velasco – August 12, 2021, 5:48 PM
from Manila Bulletin
A ‘settlement and release agreement’ had been inked between SN Aboitiz Power Inc. (SNAP) and government-run National Irrigation Administration (NIA) on the treatment as well as resolution of concerns for the Magat dam and linked hydro facilities in Northern Luzon – primarily those relating to unutilized water for power generation; as well as the enforcement of applicable water fees during spilling conditions, including their corresponding periodic adjustments.
In a statement to the media, SNAP emphasized that the pact reached by the parties set the middle ground on “outstanding issues relating to the interpretation of their Operations and Maintenance (O&M) agreement” – or the legal document the binds SNAP and NIA’s partnership on the use of resources for the specified assets.
The settlement deal was signed on August 3 this year between SNAP President and CEO Joseph Yu and NIA Administrator General Ricardo Visaya. SNAP is a joint venture between Philippine firm Aboitiz Power Corporation and Norwegian firm Scatec (previously SN Power).
According to SNAP, “the settlement agreement was finalized following years of discussions and negotiations,” and it covers the non-power components of the Magat dam which is under the ownership and management of government-run NIA.
The water output of the Magat dam is allocated primarily for irrigation purposes; and power generation is serving as its secondary purpose, hence, NIA has that business covenant with SNAP.
“As part of the settlement, SNAP-Magat turned over service fees amounting to P19.9 million to NIA,” the Aboitiz-Scatec joint venture firm expounded.
For the parties finally reaching ‘mutually acceptable pact’ after years of protracted discussions, Visaya asserted that the offered remuneration from the settlement deal will come as “a big help in the rehabilitation of the Magat dam and reservoir.”
The NIA chief further remarked “I am truly delighted that we have come to this point after so many years,” with him adding that dispute resolution via “cooperative discussion” is still the best remedy that parties can pursue especially for critical sectors, such as water and power — because disruption on these services could have very critical impact on the public.
On the other pressing issues, SNAP stated that it will “continue good faith negotiations to reach a mutually acceptable resolution to the remaining discussion points.”
Yu propounded that the agreement “is proof that through collaboration and dialogue, we can solve complicated issues and arrive at an agreement that benefits everybody.”
SNAP-Magat is the owner and operator of the 360-megawatt Magat hydroelectric facility as well as the 8.5MW Maris hydro plant that have been drawing water from the NIA-managed Magat dam for electricity generation ventures.
