Govt To Guarantee Community Development Funds For Hosting Communities

Faced by growing resistance across the country to mega electricity projects imposed on local communities by Chile’s power industry, President Michelle Bachelet announced two measures Tuesday evening designed to placate the opposition.

Speaking at the first annual evening dinner organized by Chilean electricity power leaders, Bachelet and Energy Minister Marcelo Tokman proposed, first, that license fees now paid by power companies be directed to the communities that will host the power plants. Currently, energy companies pay for their license in the community their home office is located in. Tokman said this administrative change could be made in 2009 and would take effect in 2010.

Second, the two leaders proposed that electricity companies be charged a fee for each MW of electricity their power plants creates, and that this fee be directed to social projects in the host community. This fee would only take effect if legislation submitted by the executive is passed by Chile’s Congress.

El Mercurio reported that when Bachelet first referred to this fee, there was an audible murmur of discontent from the assembled energy executives. The president noted their concern, but then cautioned her audience to hear her out. She went on to insist that the MW fee would not cost the energy companies any money, because the government would offset the cost of the fees with an equivalent amount in tax credits.

While the energy executives attending the event seemed to express general support for the two measures, the response by Chile’s environmental community was quite different. La Tercera reported that if the two measures become law, the community of Cochrane – close to the HidroAysen dam project - would be vastly enriched.

"I think this smells like a way to try and open the door for all the controversial energy projects going on here in our country," said Juan Pablo Orrego, director of Ecosistemas, an environmental NGO. "It really alarms me that the government is seeking a trade off with communities: you host this terrible, polluting, life- and planet-destroying energy complex, and we’ll pay you some money."

Orrego noted that this has been the modus operandi for many years now: large Chilean and multinational firms soothing local opponents with large amounts of cash. He pointed to Barrick Gold’s decision to pay US$60 million to communities near its proposed gold mine, and Celco’s payout to Mehuin fishermen opposed to the company’s waste duct in the Pacific Ocean.

"But giving compensation like this doesn’t do anything to counter or remove the noxious effects of coal-burning generators, and it is a pittance in comparison to the money the companies are making off of their environmentally toxic projects," Orrego said.

"There is something very complex going on in Chile just now, because people are completely disillusioned with their government and their environmental authorities. There is a total lack of confidence. In the case of the HidroAysen environmental statement, for example, all the government’s agencies were demanding a complete rejection of the project, yet it was approved by the regional governor, on direct orders from Santiago. So the system as it currently exists is completely fraudulent, and now the government appears willing to get throw its own money into the equation, to smooth the playing field for the corporate polluters. And that’s my money and the taxpayers’ money."

An energy shortfall in late 2007 and early 2008 brought Chile to the verge of an energy blackout because natural gas shipments from Argentina were curtailed and the nation’s hydropower capacity was reduced by drought.

Rather than devise a solid, forward looking energy plan using the nation’s abundant renewable energy resources, top government officials scrambled and gave a tentative nod to the HidroAysen dam project in far southern Patagonia and gave the green light to a host of other energy projects – including many coal-powered generators – around the nation. The most controversial projects, after HidroAysen, include AES’s Alto Maipo project in the Metropolitan Region, Colbún’s San Pedro project in Region VIII and SN Power’s Trayenko project in Paguipulli in southern Chile.

SOURCE: LA TERCERA, EL MERCURIO