Monday, November 26, 2007

Endesa SA plans 5 additional dams to coincide with the HydroAysen Project


(June 28, 2007) Water rights - as they relate to hydro-power in the south, industrial needs in the northern mines, or irrigation in the Central Valley vineyards – are a big issue in Chile. But who owns Chile’s water rights, who administers them, and are fears justified that Chile’s water could be monopolized by an economic juggernaut?

The General Water Directorship, or DGA, administers the nation’s water code, which is supposed to regulate water rights and to prevent monopoly ownership. The DGA was in the news last week when Chilean legislators cited a 2002 DGA report documenting substantial damage to Chilean glaciers by Canada’s Barrick Gold. The damage occurred during extra-official surveying work done at Barrick’s Pascua Lama gold mine (ST, June 26), but the DGA report was not considered by Chilean environmental authorities when they later granted Barrick authorization for their project.

In May the government’s Free Competition Defense Tribunal, FCDT, ordered the Endesa energy company to report about its water rights holdings throughout the country in order to determine the effect the proposed Aysen dam project – developed by Endesa and the Colbún Electrical Company - would have on the energy market.

Endesa responded to the FCDT enquiry reporting that while it owned substantial water rights in Regions XII and IX, most of its water rights were concentrated in Region X. Its water rights holdings, said the company, are all confined within the Interconnected Central System (SIC) of energy and total 40 percent of the total water rights within the SIC.

Endesa said it already generates 3,400 megawatts of power; its proposed collaboration with Colbún on the Aysen dam project would give it an additional 2,400 megawatts of power generating capacity.

The company also outlined additional water rights applications now in process before the DGA. If approved, these new water rights would open the door for five additional hydro projects that would generate another 1,081 megawatts of power.

Also in May, various Chilean farming operations sued the DGA, saying it wrongfully charged them exorbitant licensing fees under new provisions in Chile’s water code. The farmers hold water rights titles allowing them to exploit groundwater on their property, but were recently placed on a DGA list of “non-complying” companies that allegedly owe thousands of dollars in licensing fees.

Here is the full article.