The open letter of the Philippine Solar and Storage Energy Alliance (PSSEA) to President Duterte, which saw print in the Philippine Daily Inquirer’s June 26, 2019, issue, asking the President to veto House Bill 8179, the enrolled bill that grants Leandro Legarda Leviste’s Solar Para Sa Bayan (SPSB) company a 25-year renewable energy franchise seriously caught my attention.
Like the PSSEA, on a personal note and as chairman of the Federation of Philippine Industries (FPI), I am also concerned about the monopolistic impact of the SPSB franchise to construct, install, establish, operate and maintain distributable power technologies and mini-grid system throughout the Philippines to the country’s power distribution industry.
The SPSB franchise gives the Leviste company undue advantage over competition, making the Philippine Competition Law and the Philippine Competition Commission practically irrelevant as far as the power sector is concerned. Under the Electric Power Industry Reform Act (Epira) and the Renewable Energy Act, there are already provisions that allow the adoption of distributed energy resources and micro grids even without a legislative franchise.
Already, SPSB is operating in many towns in the country. Thus, there might not even be a need for a renewable-energy franchise for SPSB as the company can operate anyway, anywhere in the country where access to electricity is a problem. Otherwise, this will only discourage investors and existing power distributors, even with their current franchise, to develop and/or expand power projects, as the SPSB privilege would virtually be like a sword of Damocles, ready to pierce the competition.
I remember one of the Senate hearings on the SPSB franchise where I attended, I asked the young Leviste about the problems encountered by his company in its current operations to bring power to many towns in the country. Unfortunately, though, I was not clearly clarified on that.
The point that I wanted to drive at was that, if SPSB has no problem with its current operations, then there might not even be a need for a renewable-energy franchise for the company. Why fix something that is not even a problem?
Electricity is, indeed, a necessity, not only for every household, but all industries, as well. But prudence dictates that, as the PSSEA says, consistency in policy and law by the government is most important. The Epira law already allows the operation of renewable-energy mini grids to underserved communities, and granting a redundant renewable-energy franchise that would favor one service provider would practically negate the purpose of the Philippine Competition Law as the Solar Para sa Bayan franchise could serve to stifle the competition.
Dr. Arranza is the chairman of the Federation of Philippine Industries and Fight Illicit Trade, a broad-based, multisectoral movement intended to protect consumers, safeguard government revenues and shield legitimate industries from the ill effects of smuggling.