Power group seeks veto of solar firm’s franchise

Janina C. Lim | BusinessWorld | June 27, 2019

The Philippine Independent Power Producers Association, Inc. (PIPPA) asked President Rodrigo R. Duterte to veto a bill granting a renewable energy (RE) distribution franchise to Solar Para sa Bayan Corp.

“PIPPA respectfully urges the Office of the President to evaluate this bill and the repercussions of signing this franchise. PIPPA humbly requests that upon careful consideration, the ultimate conclusion is to veto this legislative franchise in its entirety. This franchise in favor of SPSB only serves to create chaos in regulation, act as a disincentive to investors, and show the public that undue advantages can be granted to people in power,” according to a statement Thursday issued by the group.

PIPPA questioned anew the need for a franchise, noting that SPSB can provide services without one.

“A legislative franchise in favor of SPSB is not necessary. This franchise is unconstitutional and violates the equal protection clause of the Constitution,” PIPPA said.

It proposed that government properly implement the Electric Power Industry Reform Act (EPIRA) of 2001 or Republic Act 9136, which governs the electric power industry and encourages competition among energy suppliers.

“Under the EPIRA, the generation of electricity is competitive and open; there is no franchise requirement for generation and supply. Only the distribution and transmission sectors are required to have a franchise. More importantly, the Renewable Energy Act, the Department of Energy, and the Energy Regulatory Commission provide for a framework and regulations where distributed power technologies and mini grids are addressed and implemented,” PIPPA added.

The group added that SPSB does not offer any novel technology which warrants special treatment by means of a franchise.

“The unbridled authority to operate at any capacity, of whatever kind, and in any part of the Philippines, is far too great a privilege for any entity,” the group said.

“The effect of this franchise is creating a monopoly in what should clearly be a competitive environment,” it added.

“The PIPPA stands together with all the power industry associations, stakeholders and all the other business groups and associations in its continuous opposition to this franchise simply because this bill is legally infirm and constitutionally flawed.”

The IPPA’s statement follows several business groups’ appeal on Wednesday for a Cabinet-level review of the franchise.

The American Chamber of Commerce of the Philippines, Financial Executives Institute of the Philippines, Makati Business Club, Management Association of the Philippines, Semiconductor and Electronics Industries in the Philippines, Inc. and the Women’s Business Council Philippines, in a joint statement, raised concerns on its effect on reducing competitiveness in the market.

Congress earlier this month ratified a bill awarding SPSB a legislative franchise to establish mini electricity grids in remote and unviable, unserved, or underserved areas in the country.

SPSB is a company controlled by Solar Philippines President Leandro L. Leviste, son of Senator Loren B. Legarda.

BusinessWorld has been seeking Mr. Leviste to comment on the matter but he has not replied as of press time.

Source: https://www.bworldonline.com/power-group-seeks-veto-of-solar-firms-franchise/