Hogan Lovell OffshoreBook 2023 230809 OnlinePDF - Flipbook - Page 247
Offshore Wind Worldwide 2023
connection assets, like the grid connection.139 Said customer may include an RE
developer.
As an alternative arrangement, the
RE developer may also undertake the
construction of the grid connection at
its own cost and NGCP shall procure the
necessary rights-of-way. ERC Resolution
No. 25, Series of 2006, expressly allows
a generating plant to install its own
transmission facilities (including transmission lines or the grid connection).140
Moreover, the EPIRA explicitly states that
a generation company may develop and
own or operate dedicated point-to-point
limited transmission facilities.141
6.5 Costs and risks of legal challenges
As above discussed, there are 3 main
limitations to the FLA/MLA grant. First, it
may only be applied for when the President,
upon recommendation of the Secretary of
Agriculture, declares the foreshore land as
alienable and disposable. Thus, an RE developer will need to wait for such a declaration
before it can apply for the grant. Second,
the FLA/MLA grant is limited to Philippine
nationals.142 And third, the FLA/MLA cannot
be assigned, encumbered, or sublet in favor
of those not authorized to lease foreshore
lands (e.g., foreign corporations),143 and
without the prior consent of the Secretary of
the DENR.144
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The same nationality requirement is also
applicable to water permits, the FLAg, the
SAPA, and the purchase of private lands.
Further, private landowners cannot be
compelled by an RE developer alone to enter
into a lease/purchase agreement for grid
connection.
Nonetheless, most of these legal challenges
may be addressed if the RE developer enters
into the above discussed arrangements with
the NGCP. The NGCP must remain a Philippine national, and thus, it should have the
ability to enter into the needed contracts
to acquire rights-of-way. Further, the NGCP
may compel private landowners to lease/sell
their lands pursuant to its power of eminent
domain.
Alternatively, to the extent allowed under
applicable law, nationality restrictions can
also sometimes be addressed by organizing
a corporation that qualifies as a Philippine
national, and which will apply for and acquire the right to use such lands. It will then
construct and own the permanent improvements to be placed on the lands and then
provide services to a foreign-owned project
company.
139 Open Access Transmission Service Rules 2022, A1.
140 ERC Resolution No. 25, Series of 2006, Section 4.2.2
141 Electric Power Industry Reform Act of 2001, Republic Act No. 9136, Section 9.
142 DENR FLA Rules, Section 4.
143 DENR FLA Rules, Section 15(2).
144 DENR FLA Rules, Section15(1).
