Solar Philippines seeking ‘mega-franchise’ for electrification ventures

Published September 4, 2018, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2018/09/04/solar-philippines-seeking-mega-franchise-for-electrification-ventures/

The subsidiary of Solar Philippines – the Solar Para sa Bayan Corporation – is seeking a mega-franchise on the deployment of solar technology so it can extend electricity service in any part of the country.

Dubbed as the power industry’s “super franchise”, the measure if passed into a law will allow Solar Para sa Bayan Corporation to go into generation, transmission, distribution and supply to end-users.
The proposed legislation indicated that the franchise for Solar Para Sa Bayan Corporation will be an answer to President Rodrigo Duterte’s call for the electrification of remaining 2.3 million households that are not enjoying electricity service until now – and will also be served with the flourishing solar technology, largely touted as a cleaner energy option for end-users.

Nevertheless, the electric cooperatives have been sounding off opposition to the legislative measure, with them stipulating that such will be an encroachment into their respective franchise areas and they also decry the fact that affected stakeholders were not fully consulted on the scope and implications of the proposed franchise.

Under incumbent practice in the industry, there’s cross ownership ban between the generation and transmission sub-segments of the industry; and the same prohibition applies to that of distribution to transmission ventures. In the Solar Para sa Bayan franchise, however, cross-ownership across business segments is being allowed.

The proposed ‘super franchise’ similarly allows the company to do business anywhere in the country, without restriction – even in areas already served by franchised distribution utilities and electric cooperatives.

The solar firm may not also be necessary to be under the regulatory mandate of the Energy Regulatory Commission (ERC), that there are explicit exemptions for it from the need to obtain certificate of compliance (COC), a fundamental requirement to ensure that the operations of a power plant is within industry standards and for consumers not to be compromised on the safety and reliability of electricity service provision.

At the same time, the company will be exempted from paying universal charges – which is a non-bypassable charge under the Electric Power Industry Reform Act (EPIRA), which entails that under existing rules, all consumers are bound to pay this line item in the electric bills.

It is being raised that if the company-franchisee will not be under ERC regulation or any agency for that matter, it is not clear how consumers will be protected or what recourse an end-user with a complaint may have.

The two legislative measures sponsored by Representatives Maria Carmen S. Zamora and Arthur C. Yap were filed August 6 this year; and was immediately referred to the Committee on Legislative Franchises last August 8.

It was deliberated and approved by the same committee on August 29 and the committee report was scheduled for hearing on Monday (September 3), and after that, the measure is to be transmitted for plenary deliberations immediately.

The two bills propounded that they set out Solar Para sa Bayan Corporation’s “rights and responsibilities in serving customers and end-users throughout the Philippines, to enable Filipinos to enjoy not only reliable and affordable but also cleaner energy.”