PRESIDENT Duterte, obviously mindful of the more than 20 million Filipinos tremendously supporting the Solar Para Sa Bayan Corp. (SPSBC) cheap electricity project, which I wrote earlier in my column, has granted a 25-year nonexclusive franchise to the private firm despite strong calls earlier raised by moneyed and monopolistic business groups.
The President authorized SPSBC, owned by Leandro L. Leviste, son of former senator and now Antique Rep. Loren B. Legarda, to operate a nonexclusive franchise to construct, install, establish, operate and maintain in the public interest and for commercial purposes microgrids utilizing renewable-energy technology to provide solar electric power to customers and end-users under Republic Act 11357.
The Department of Energy (DOE), which is not affected by the SPSBC franchise, is tasked to promulgate the necessary rules and regulations to operationalize this franchise without compromising the grid stability, the rate effect on consumers, the continued viability and sustainability of the grantee’s operations, and other technical and financial considerations.
Should any competing individual, partnership or corporation receive a similar permit or franchise with terms and provisions more favorable than those granted or which tend to place SPSBC at any disadvantage, such terms and provisions shall be deemed part of the Act and shall operate equally in favor of SPSBC.
No government subsidy
AS for its rates for services, the retail rate charged by SPSBC to end-users shall be the true cost and shall not be entitled to any government subsidy. Such retail rates shall be regulated by and subject to Energy Regulatory Commission (ERC) approval.
In June, business groups asked Duterte to allow his economic team to review the bill granting the franchise to SPSBC due to issues of corruption and alleged lack of deliberation.
According to them, the grant of the franchise “may defeat the President’s objective of leveling the playing field in the renewable-energy sector and would prejudice power consumers.”
The joint statement was signed by the American Chamber of Commerce of the Philippines, Financial Executives Institute of the Philippines (Finex), Makati Business Club (MBC), and the Management Association of the Philippines (MAP). The Semiconductor and Electronics Industries in the Philippines (Seipi) Foundation Inc. and the Women’s Business Council Philippines also signed the statement.
SPSBC claimed an estimated 12 million
Filipinos lack access to
electricity as of 2016. This translates to 10.4 percent of Philippine households without electricity. By island, 5.2 percent of households in Luzon is in need of power access, 7.6 percent in Visayas and 27.6 percent in Mindanao.
The DOE is eyeing to achieve 100-percent electrification by the end of Duterte’s term in 2022.
There is no proposed law in recent memory other than House Bill (HB) 8179, originally filed on September 3, 2018, that has gained tremendous public support for immediate approval, generating Facebook posts of more than 20 million Filipinos and drawing over 2 million likes, comments and shares.
The proposed bill grants SPSBC a nonexclusive right to operate microgrids in “remote and unviable, or unserved or underserved areas in selected provinces of the Philippines.”
Once approved, SPSBC will (1) enable projects without needing the consent of the existing utility, (2) cover underserved municipalities, (3) reduce approval requirements, (4) create an effective alternative, while respecting the rights of existing utilities and paving the way for others to offer better service to consumers.
Unlike the existing Qualified Third Party
program, which had energized just three barangays in 18 years and was highly
supported with billions in government funds, the
SPSBC and its advanced technology can finally provide to the people cheaper and better service at zero cost to the government.
Now operating in 12 towns, SPSBC brings 24/7 electricity for the first time to over 200,000 Filipinos, at zero cost to the government. According to Pulse Asia Director Ana Maria Tabunda, support for new options for cheaper electricity is consistent across all demographics in Luzon, Visayas and Mindanao.
In 2018, SPSBC completed the largest Solar-Battery Microgrid in Southeast Asia at zero cost to the government. With solar panels, Tesla batteries, and backup diesel generators, it serves Paluan 24 hours a day, 365 days a year, at 50 percent below the full cost of the local electric coop.
“Throughout our history, our town was denied
service by the electric coop because of lack of supply in the whole Occidental
Mindoro. Everything changed when Paluan sought SPSBC to provide stable, cheap,
clean energy. Our municipality now enjoys 24/7 electricity, which has opened
new opportunities for Palueños,” Paluan Mayor Carl
Here’s HB 8179’s final version: (1) Limits the scope to “remote and unviable, unserved, or underserved areas,” in selected provinces with less than 2 percent of the power demand of the Philippines; (2) Requires use of renewable energy; (3) Subjects the grantee to regulation by the ERC and DOE, pursuant to Electric Power Industry Reform Act (Epira); (4) Obligates the grantee to provide reliable service, with financial penalties; and (5) Explicitly states the grantee “shall not be entitled to any government subsidy.”
This incorporates inputs of industry stakeholders from extensive congressional hearings, to ensure the franchise is highly regulated and compliant with Epira and the Constitution, respects existing franchises, and enables DOE and ERC to impose further safeguards. This imposes even greater restrictions on SPSB than existing utilities, limiting it to marginal areas and prohibiting it from receiving any government subsidy.
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