Master franchise for solar firm opposed in Congress



By Rose de la Cruz


Two bills filed in the House of Representatives seeking to grant master franchise to Solar Para sa Bayan Corp, a company found by a senator’s son, is being opposed by at least 15 congressmen citing that it violates the Constitutional provision against monopolies and the Electric Power Industry Reform Act or EPIRA law of 2001.


Rep. Michael Romero of 1-PACMAN partylist, filed House Resolution 2182 seeking to have HB 8013 and 8015 sent back to the committee on legislative franchises for further deliberations and scrutiny. He said the bills virtually grants a “super monopoly” to Solar Para Sa Bayan.


The opposing congressmen said the two bills run counter to the provisions of the Constitution on monopolies and Republic Act 9136, the Electric Power Industry Reform Act of 2001 or EPIRA Law.


"HB 8013 and HB 8015 were clearly railroaded. These bills speedily coasted from filing to Legislative Franchises Committee and to the rules committee in less than a month. It ran super charged. We had to stop it in its tracks and turn it around," Rep. Romero said.


Romero presented a timeline that the bills went through: August 6 filing of both bills; Aug. 8—first reading referred to the Committee on Legislative Franchises; Aug 29 the committee deliberated on the measures; Sept 3 Legislative Franchises approved the committee report 848 containing HB 8179 in which HB8013 and 8015 were consolidated into; Sept.4 Legislative Franchises referred Report 848 to the Committee on Rules.


"Not only should the franchises committee rework the bill, the committee leadership should be reprimanded for acting with extreme haste," Romero added.


HB 8179 grants Solar para sa Bayan Corp. a franchise to construct, install, establish, operate and maintain distributable power technologies and MiniGrid systems throughout the Philippines to improve access to sustainable energy.


 “The unconstitutional nature of this Bill grants Solar Para sa Bayan Corporation (SPB) a master Franchise to operate all throughout the Philippine archipelago. This is a blanket authority that would allow it to infringe and encroach on all existing franchises of main transmission grids like NGCP, all 121 Electric Cooperatives (EC), all 19 Distribution Utilities (DU) plus MERALCO, and are more superior to all the Independent Power Producers (IPP) which now need a Competitive Selection Process (CSP) to supply electricity which the Solar franchise would circumvent,” Romero explains.


“This un-limitless feature of the bill grants SPB the ability to put up mini-grids anywhere they want throughout nationwide even if these areas are already served and electrified by other players. There are enough laws today for Solar to compete in all levels of the electric power sector. So, the need for this law is utmost questionable and will likely bring in a monopoly of a super corporation,” he pointed out.


Where the EPIRA law has unbundled the whole power sector, the SPB bill bundled into one the electric power sectors’ distribution, transmission, as well as power generation into one “Super Monopoly.” This by itself is a “Super Super Franchise” which is worth more than $2 Billion at the onset. Solar will be the only player in the power industry to engage into not just one or two but all parts of the electric power industry’s value chain.


Whereas all other electric power industry players are highly regulated by the ERC, DOE, NEA and others, the SPB will be created by law and would stand alone as the only power franchise that is not regulated by any government agency – a god among mortals.


The grant of a congressional franchise to SPB bill is not needed and is unprecedented in nature. The opposition to this bill is 100% of the electric power sector, including PIPPA (Philippine Independent Power Producers Association, Inc.), PHILRECA (Philippine Rural Electric Cooperatives), PEOPOA (Philippine Electric Plant Owners Association) and MERALCO, among others.


Lawmakers who signed House Resolution 2182 think that the incentives asked by the Solar Para sa Bayan is likewise a mockery of the Duterte government’s quest to reform our taxes through TRAIN 1 and 2. SPB through its original bill asks for a mere 3% gross income tax in lieu of all the taxes that will be bestowed by the government, giving this company undue advantage over the rest of the mere mortal power sector industry players.


The House Resolution was filed by Buhay Rep. Jose L. Atienza and PACMAN Reps. Romero and Enrico A. Pineda among others. The legislators also noted that the bill was passed after only two committee hearings.


The bill was also opposed by associations of solar power developers, who cited its hasty approval without the necessary consultation.


“We all agreed that we are going to sign a common statement to register our opposition against House Bill 8179… We want to articulate our position and convey why we are against this particular bill,” according to Ma. Theresa C. Capellan, president of the Philippine Solar and Storage Energy Alliance (PSSEA), in a news conference on Thursday in Makati City.


Aside from PSSEA, the other groups that oppose the franchise are the Confederation of Solar Developers of the Philippines, Inc. (CSDP); Renewable Energy Association of the Philippines (REAP); Organization of Socialized and Economic Housing Developers of the Philippines, Inc.; and Philippine Rural Electric Cooperatives Association, Inc., she said.


Capellan noted that such a franchise also disadvantages developers like REAP, a group of small and medium enterprises (SMEs) that install solar rooftops.


“It will practically destroy the SMEs in solar,” she said.


Don Mario Y. Dia, president of CSDP, said there is no need for the issuance of the franchise for Solar Para sa Bayan.


“There is no legal necessity to grant the proposed franchise to a specific entity,” he said, pointing out that the solar energy sector is vibrant and competitive. “What is so special about this franchise given to this specific entity?”


In their joint statement, the associations called on Congress to “junk” HB 8179.


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Friday, 24 May 2019
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