Senate approves franchise of Legarda son's solar company

MANILA, Philippines – The Senate on Monday, May 27, approved the bill seeking to grant a franchise to Solar Para sa Bayan (SPSB), a firm owned by Leandro Leviste, the son of Senator Loren Legarda.

A total of 16 senators voted in favor of the bill, while Legarda abstained.

The Senate version of House Bill 8179 seeks to grant SPSB a "non-exclusive" 25-year franchise to provide electricity to customers in "remote and unviable, unserved, or underserved areas."

Unlike the approved House bill, the Senate version limited the areas that SPSB can serve. These include the barangays, municipalities, and cities of the provinces of:

The Department of Energy has the power to determine the specific areas in the 13 provinces.

Remote and unviable areas refer to geographical areas "within the franchise area of a distribution utility where immediate extension of distribution lines is not economically feasible due to the distance."

Unserved areas refer to areas "with no electricity access, no distribution system lines, no solar PV home systems, or no connection to any micro-grid."

Underserved areas refer to places "currently served by individual solar home systems or distribution utilities whose services are less than 24 hours daily."

The Senate bill states that SPSB's franchise "shall not revoke existing franchises" and "no waiver of rights from the franchised distribution utilities shall be necessary to operate" in identified areas.

This means Leviste's firm may soon be able to tap into areas without needing the approval of private distribution utilities or electric cooperatives covering them, which was the usual practice under the qualified third parties (QTP) program of the Electric Power Industry Reform Act (EPIRA).

The Senate version also states that SPSB's franchise "shall not affect the duty of the Department of Energy to promote private sector participation in the electrification" of far-flung and unserved areas and that QTP rules would still apply.

Some questions

Lawmakers and industry stakeholders, including independent power producers that are the big guns in the generation sector, solar players, and rural electric cooperatives opposed the House-approved bill, citing violations of the law as well as the equal protection and non-impairment of contracts guarantees in the 1987 Constitution.

During the interpellation in the Senate, Minority Leader Franklin Drilon and Senator Panfilo Lacson also questioned the bill.

Lacson said there was "no need" to grant SPSB a congressional franchise since it is involved in power generation.

Under EPIRA, only two sectors – transmission and distribution – require a franchise. Solar firms usually do not need to get a franchise to install panels for businesses and houses.

Drilon, for his part, questioned the possibility that SPSB's franchise might extend even outside the areas indicated in the bill.

The House swiftly approved SPSB's franchise application after only 4 months. Under the rules, a franchise bill must first be passed in the House before it is transmitted to the Senate.

Leviste earlier denied his mother's involvement in his company's bid to obtain a franchise.

"Ang masasabi ko lang (All I can say) is, the projects we have already completed out of our own merit should be able to speak for themselves, if anything. The sensitivities that have been raised have made us more conscientious that we need to earn the privilege that Congress is deciding to grant," Leviste told reporters last December.

"Walang kinalaman kung sino man kamag-anak 'nino man dito (This has nothing to do with relatives of whoever). This is purely on the basis of merit," he also said. – Rappler.com

Camille Elemia

Camille Elemia is Rappler's lead reporter for media, disinformation issues, and democracy. She won an ILO award in 2017. She received the prestigious Fulbright-Hubert Humphrey fellowship in 2019, allowing her to further study media and politics in the US. Email camille.elemia@rappler.com

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