Senate backs franchise for Leviste solar firm, limited to 13 provinces

By Camille A. Aguinaldo – February 18, 2019 | 10:06 pm
from Business World

THE SENATE committees on public services and energy have recommended the approval of a “non-exclusive” franchise for Solar Para sa Bayan Corp. (SPSBC) subject to the adoption of amendments from the chamber.

In Committee Report No. 659 dated Feb. 7, the committees proposed amendments in House Bill No. 8179 for the SPSBC to be granted a “nonexclusive franchise” to operate distributed energy resources and microgrids using Solar PV Technology or a hybrid of it in “remote and unviable, unserved or underserved” areas covering 13 provinces.

The provinces named under the amendments are Aurora, Batangas, Bohol, Cagayan, Camiguin, Compostela Valley, Davao Oriental, Isabela, Masbate, Misamis Occidental, Occidental Mindoro, Palawan and Tawi-Tawi. The Department of Energy (DoE) is tasked to determine the areas to be served.

The bill defines remote and unviable areas as places where “immediate extension of distribution lines is not economically feasible due to the distance from the nearest facilities.” Unserved areas are places with no electricity access, while underserved areas are places with less than 24 hours’ power daily.

In the original House Bill No. 8179, SPSBC was allowed to provide electric power to customers in areas to be determined by the DoE, which must include unserved and underserved areas.

The SPSBC is an energy distribution company founded by Solar Philippines President Leandro L. Leviste, the son of Senator Loren B. Legarda. Several groups have opposed the granting of the company’s franchise due to possible conflicts with Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA law).

The Coalition for Rural Electrification or CoRE, a group composed of at least six entities in the power sector, is planning to challenge the franchise of SPSBC before the courts.

Under the bill, the company is also obligated to charge reasonable power rates as approved by the Energy Regulatory Commission (ERC). It is also directed to create employment opportunities and on-the-job training in their franchise areas.

The Senate committees also inserted amendments clarifying that the proposed franchise will not revoke existing franchises. They also proposed a provision stating that the franchise will “not affect the duty of DoE to promote private sector participation in the electrification of remove and unviable, unserved, and underserved areas.”

Other qualified third party microgrids may also participate “in any competitiveness selection to operate in any remove and unviable, unserved, and undeserved, as determined by DoE.”

The DoE, in consultation with ERC and other stakeholders, is directed to provide rules and regulations to operationalize the franchise “without compromising grid stability, the rate effect on consumers, and other technical and financial considerations” within the framework of the EPIRA law.

The committee report was signed by the chairpersons of the Senate committee on public services and energy, Senators Grace S. Poe-Llamanzares and Sherwin T. Gatchalian, respectively. It was also signed by 10 members of the committees and the four Senate leaders as ex-officio members.

Senator Paolo Benigno A. Aquino IV noted in the committee report that he would propose amendments “with regard to scope and any provisions that may be violative of the Philippine Competition Law.” Senate Minority Leader Franklin M. Drilon wrote that he has “serious reservations on constitutional issues” with the franchise.