Energy and subsidiarity

Ike Señeres

AS it is now, our energy supply chain is fragmented into the generation, transmission and distribution components. As everyone knows, the distribution component in the major cities is handled by big companies while the rest of the country is handled by local electric cooperatives, under the supervision of the National Electrification Administration (NEA). That is the way it is now, but should that be the way to do it forever? Our immediate answer might be yes, but our answer could change if start about independence from imported fossil based fuels on one hand, and setting renewable energy targets on the other hand. It will also change if we start talking about enabling local electric cooperatives so that they could do the generation and distribution on their own, perhaps excluding the transmission component.

If we stick to the status quo and keep doing the way it is now, we will never become independent from imported fossil based fuels and in a manner of speaking, we will never become economically independent, even if we are living with the legal fiction that we are supposedly politically independent too. As I see it, the idea of reducing dependence from imported fossil based fuels and increasing the dependence on renewable energy has not really entered the consciousness of our national government yet, and it does not seem practical to expect some significant changes soon. It seems that our dependence on imported fossil based fuels is a national addiction that we could not stop as of now, and there seems to be no plans for rehab sooner or later. Conversely, there seems to be no real targets to eventually declare partial or total freedom from imported fossil based fuels.

As I understand it, there are moves to transfer the supervision of electric cooperatives from the NEA to the Cooperatives Development Authority (CDA). This process appears to be moving slowly, and it seems that this is an issue that the government has to resolve internally. In the meantime, there are bills in Congress proposing the appointment of Cooperatives Development Officers (CDOs) at the municipal, city and provincial levels. We do not know yet how these bills will come out as laws, but I do hope that this issue of jurisdiction between the NEA and the CDA will not get in the way. As I see it however, the real challenge is not solving the jurisdiction issue; instead, the real challenge is how to empower the local electric cooperatives so that they could go into the business of power generation, in addition to their existing business of power distribution.

In theory, it is highly possible that the generation of solar power could be done by individual homeowners who would produce solar energy for their own needs, and selling whatever surplus they have to a local grid that could be owned by a local electric cooperative. However, if it could be done that way, it should not stop the local electric cooperative from also producing its own solar energy that could be transmitted to the local grid for distribution to local consumers that could either not produce their own solar energy, or could not produce enough of it. Of course, it should be made clear that the local electric cooperatives should also tap other renewable energy sources such as wind, wave and hydro. In many successful cases all over the world, it has been proven that the best solution is always a mix of solutions.

Subsidiarity is principally a political term, an organizing principle that says that matters ought to be lowest, smallest or least centralized entity, rather than by a central authority at the top. Be that as it may, it may also be interpreted as an economic term, wherein business decisions should be made at the lowest levels, and in connection with this topic, at the level of the local cooperatives. As it is now, the existing energy supply chain is centralized so to speak, because electrical power is presently generated by a central source before it is transmitted and distributed to the local levels. If and when the subsidiarity principle is applied, electrical power would be generated by the household level which is the lowest entity. In this case, surplus energy from the household level would be uploaded to the local grid, and not the other way around.

Strictly speaking, an electric cooperative should be owned and managed by its own members, supposedly being the customers or users of the electrical power that is being supplied. Although it could be said that these electric cooperatives should be able to operate as free enterprises, they should benefit from the incentives that could be provided by the government, either at the national level or the local level. Needless to say, they would have to be subject to the regulatory powers of the government. For whatever it is worth however, it is time for the local customers or users of the electrical power to come forward to take control of their own local destiny, to be able to declare their own energy independence in an environment of energy democracy.

E-mail: iseneres@yahoo.com