Review of Solar Para sa Bayan franchise sought

Janina C. Lim | BusinessWorld | June 27, 2019

Business groups are urging President Rodrigo R. Duterte to order a Cabinet-level review of the bill that granted Solar Para sa Bayan Corp. (SPB) a renewable energy (RE) distribution franchise, citing the undue advantage it will have over other RE players.

The joint statement was issued on Wednesday by 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.

“The grant of the franchise will create an undue competitive edge in favor of SPB Corporation and put at a disadvantage other renewable energy companies now operating in our country,” the business groups said in a Wednesday statement.

The bill granting SPB the legislative franchise was ratified by Congress earlier this month, and is now awaiting Mr. Duterte’s signature.

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

“This will make less viable the operations of the other renewable energy companies and Qualified Third Parties (QTPs), which have been operating after compliance with substantive and formal requirements set by law,” the business groups said, adding this defeats the government’s objective to level the playing field in the RE sector.

The business groups also noted SPB’s franchise bill was approved “swiftly” and may have been passed “without sufficient deliberation to thresh out fundamental constitutional, legal and economic issues.”

“In view of the impact of the SPB’s franchise bill on small, mini and micro grids now operating in the country, as well as to the power consumers in general, we appeal to His Excellency to have the members of the Economic Cluster of the Cabinet review this franchise bill prior to any executive action,” the groups said.

This is not the first time that the private sector has expressed opposition to SPB’s franchise bill. The Philippine Solar and Storage Energy Alliance, Philippine Rural Electric Cooperatives Association, Philippine Electric Plant Owners Association, and Manila Electric Co. have all issued statements against the measure.

The SPB’s franchise bill was approved amid objections of Senator Sherwin T. Gatchalian, the head of the Senate’s energy committee.

Mr. Gatchalian argued that the insertion of the definition of an “underserved” area where SPB can exercise its authority, will now include areas where electricity services have been interrupted at least twelve times in the twelve months preceding the date of the determination that such area is underserved.

He said there is no basis for the frequency of interruptions indicated in the bicameral report as this is determined by the Energy Regulatory Commission which regularly updates this.

The regulator’s current standard for frequency interruptions for on-grid and off-grid areas, for instance, is 20 times per year.

“To legislate a regulatory parameter would tie the hands of the regulator and would substitute our unfounded judgment for their expertise,” Mr. Gatchalian said in a statement issued earlier this month.

Mr. Gatchalian also argued that the bicameral report did not provide a definition for the word “interruptions,” noting frequency interruptions derive from many factors: the performance of distribution utilities and power plants, availability of power supply, kind of power plant, and calamities.

“As such, to legislate a low and unfounded bar for an area to be considered underserved would be a disservice not only to the community but would be unfair to the franchised distribution utility,” he added.

Mr. Leviste was sought for comment but has not replied as of press time.

Source: https://www.bworldonline.com/review-of-solar-para-sa-bayan-franchise-sought/