June 17, 2019 | 10:31 pm By
Bienvenido S. Oplas, Jr.
Among the records of the outgoing
Congress is the legislation of a cronyist bill, the Solar Para sa Bayan Corp.
(SPSBC) franchise. It is so unpopular that perhaps all other power developers
and generation companies (gencos), both conventional and renewable energy (RE),
perhaps all private distribution utilities (DUs) and electric cooperatives
(ECs) in the country have opposed it.
Among the questionable, cronyist
provisions of HB 8179 are the following:
One, it originally wanted a
nationwide franchise in electricity distribution for unserved and underserved
areas, later limited to 16 provinces plus certain cities and municipalities of
Batangas and Quezon, for a total of 18 provinces. No other franchised DUs or
ECs have this privilege.
Two, there is nothing significant in
its power generation but it has a franchise while all other gencos including
other RE developers do not have a franchise. SPSBC claims it is competitive yet
it requires a Congressional franchise and a franchise by nature is a monopoly,
anti-competitive.
Three, the Electric Power Industry
Reform Act (EPIRA) of 2001 unbundled energy players into transmission,
generation, distribution, and supply companies; SPSBC is a generation,
distribution, and supply company rolled into one.
Surprisingly, the Department of
Energy (DoE) and the Energy Regulatory Commission (ERC) did not raise strong
opposition to the franchise bill. Perhaps the reason is that the mother of the
owner of the majority owner of SPSBC is the Chairperson of the Senate Committee
on Finance, which handles the budgetary appropriation of government agencies.
Four, a new insertion in the
bicameral report — not in the original HB 8179 and seemingly just came out of
thin air — expanded the definition of an “underserved area.” The Chairman of
the Senate Committee on Energy, Senator Sherwin Gatchalian, gave an Objection
Speech (June 3, 2019) to HB 8179 as amended by the Senate and argued that the
bicameral report should not be ratified. His objection was based mainly on the
said insertion, where underserved areas now include “where electricity services
have been interrupted at least twelve (12) times in the twelve (12) months
preceding the date of the determination that such area is underserved.”
Sen. Gatchalian cited two reasons
why this insertion is wrong: (a) “There is no basis for the frequency of interruptions
indicated in the bicameral report. Currently, the standard for the frequency of
interruptions is determined by the ERC and is updated regularly… To legislate a
regulatory parameter would tie the hands of the regulator…”, and (b)
“there is no definition of the word ‘interruptions’ in the bicameral report…
frequency interruptions are not only a function of the performance of the DU
but also of power plant performance, availability of power supply, kind of
power plant, and even calamities… to legislate a low and unfounded bar for an
area to be considered underserved would be a disservice not only to the
community but would be unfair to the franchised DU.”
The SPSBC franchise bill appealed to
the gullible public because it somehow presented itself as a solar power
company — and solar is cool; it helps “save the planet” while giving “cheap,
reliable” power to the public.
Far out.
Even among the richest economies in
the world which have wide solar farms — Germany, Italy, and Australia. among
them — the contribution of solar to total electricity generation remains low.
And many of our neighbors in East Asia like Hong Kong, Singapore, Indonesia,
Malaysia, Vietnam, and Taiwan have zero or very small solar contribution to
their power generation (see table).
The SPSBC franchise bill is a
political project that favors a single newbie corporation. President Duterte
should veto it. If he signs it into law, it will set a new precedent and pave
the way for many other cronyist bills to be filed in the next three years. This
will further weaken the EPIRA law and weaken the rule of law in the country.
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