Power industry challenges solar firm’s franchise bid at Senate

By: Leila B. Salaverria - 04:57 AM January 29, 2019

https://business.inquirer.net/264302/power-industry-challenges-solar-firms-franchise-bid-at-senate

The application for a congressional franchise of Solar Para sa Bayan, a company led by a son of Sen. Loren Legarda, has met with opposition from the power industry which has criticized it as unnecessary and anticompetition.

Sen. Sherwin Gatchalian raised concerns about the bill during a Senate hearing on Monday, saying the operationalization of the franchise should allow the smooth delivery of electricity and not create trouble in the industry.

Solar Para sa Bayan offers a new kind of technology — the minigrid system — in areas with inadequate or without power supply.

Gatchalian, who led the hearing as chair of the energy committee, said this was why the new system needed regulations and policy.

Leandro Leviste, Solar Para sa Bayan president, said the main consideration should be whether his franchise application was good for consumers, given its goal to help the government bring power to unserved and underserved areas.

Leviste also said the franchise application was nonexclusive and would not grant Solar any subsidies.

Is franchise needed?

Its cheaper cost, he said, must still be approved by the Energy Regulatory Commission.

“Perhaps it keeps on being glossed over that anybody can apply for this, and many others in this room have intention to apply,” Leviste said.

But Gatchalian said one question that should be resolved was if Solar needed a franchise in the first place.

During the hearing, Anne Estorco-Macias of the National Renewable Energy Board (NREB) said the franchise application, as worded, was “legally flawed” and “completely unnecessary.”

The NREB does not want a bill that gives undue advantage to just one particular renewable [energy] resource, Macias said.

“To grant the franchise this wide in scope for one particular company or a particular entity and isolating one [renewable energy] technology would be giving them an undue advantage,” she said.

Against cross-ownership

The franchise also encompasses generation, supply and distribution of power, which is against the Electric Power Industry Reform Act’s provision on cross-ownership, she said.

Jay Layug of the Developers of Renewable Energy for Advancement Inc. also said Solar’s franchise bill was unnecessary and would create a franchise requirement when there was none in the first place.

The bill would also contradict franchises given to existing utilities, said Layug.

These utilities have already contracted their own power supply, but at any given time, Solar would be able to go in and offer a better price, he said.

National Electrification Administration lawyer Gwen Kyanko said the agency wanted to avoid a situation where Solar’s franchise area would be the same as the franchise areas of existing public distribution utilities.