Solar power: No justification for nationwide franchise

"The Philippine Competition Commission's opinion should be sought on this issue."


House Bill No. 8179 should not have become controversial. After all, it is part of the effort to raise this country’s renewable energy capability—and thereby reduce its carbon footprint—and all that it seeks is a legislative franchise for Solar Para Sa Bayan (SPSB), a solar energy producer owned by Leandro Leviste, a son of Senator Loren Legarda.

The bill should not have attracted controversy, but it has. Why? Because of one word: Nationwide. The bill seeks a nationwide franchise for SPSB.

Leviste and the bill’s principal sponsor, Rep. Arturo Yap— former President Gloria Macapagal Arroyo’s secretary of Agriculture—have sought to counter the negative impact of the phrase “nationwide franchise” by emphatically saying that the franchise would be non-exclusive. “(T)he bill clears the way for other new players to apply for their own non-exclusive franchise,” Rep. Yap has said. It bears noting that Yap speaks of other new players’ applying for their own non-exclusive franchise, not their own non-exclusive nationwide franchise. That’s a glaring omission.

To render acceptable SPSB’s quest for a nationwide franchise, Leviste, Rep. Yap and H.B. No. 8179’s other proponents have raised the bugaboo of “existing monopolies of traditional utilities,” which have allegedly “fallen behind in improving the quality and cost of their service.” Leviste insists that the time has come to “end the existing monopolies on electricity because....consumers deserve new choices for better service at lower cost.”

As additional arguments for the grant of a nationwide franchise to SPSB, Leviste and Rep. Yap have pointed to SPSB’s having bought around-the-clock power to municipalities in five provinces—Cagayan, Aurora, Masbate, Mindoro and Palawan—and have claimed that over 100,000 individuals have signed petitions supportive of H.B. No. 8179.

Given the need to substantially increase the share of renewable energy in this country’s energy mix, SPSB’S operations are commendable. Even more commendable are the mini-grid projects that it has completed in the provinces mentioned above. Leviste’s company has become a major player in the Philippine solar power industry. But a nationwide franchise? Why?

There is absolutely no need for SPSB to be granted a nationwide franchise. The fact that the sought-for franchise would be non-exclusive does not demolish the unnecessariness of a nationwide franchise. And it is gratuitous for H.B. No. 8179’s proponents to say that anyway “other new players can apply for their own non-exclusive franchises.” There is no need for them to say that, because other new players have the right to apply for such franchises. Considering that the Philippine Development Plan accords high priority to the development of the renewable-energy industry, obtaining congressional franchises for each of SPSB’s projects cannot be all that difficult. I have a sneaking feeling that Mr. Leviste fancies SPSB as becoming the Meralco (Manila Electric Co.) of the solar-sourced electricity industry.

Apparently, Mr. Leviste, Rep. Yap and the other proponents don’t realize that the word “nationwide” is an awesome word and that any legislative or regulatory action of nationwide scope has a fearsome impact. Nationwide franchise may sound innocent today, but there is no guarantee that a mischievous interpretation will not be given to “nationwide franchise” in the days ahead.

A final thought given the potential impact of a nationwide franchise on competition in the solar power industry, the Philippine Competition Commission’s opinion should be sought on this issue.

Topics: House Bill No 8179 , Leandro Leviste , Loren Legarda , Solar Energy , Gloria Macapagal Arroyo

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