Court challenge looms for Solar Para Sa Bayan franchise

A GROUP of private entities involved in renewable energy projects has signalled plans to pursue legal action against the granting of a franchise to Solar Para Sa Bayan Corp., saying the move is anti-competitive and unconstitutional.
The Coalition for Rural Electrification, or CoRE, said House Bill 8179 as it is currently worded my not hold up to a court challenge. Its members declined to be identified individually but said the coalition is composed of at least six entities, which include distribution utilities, renewable energy developers and industry associations.
In a news conference on Wednesday, representatives of the group said granting Solar Para Sa Bayan a “non-exclusive” franchise discourages a fair and competitive playing field.
The bill seeks to grant the company led by Leandro L. Leviste a franchise to construct, install, establish, operate and maintain distributable power technologies and minigrid systems throughout the Philippines to improve access to sustainable energy.
The House of Representatives approved the franchise last year, while a Senate technical working group is fine-tuning the wording of the proposed legislation. CoRE has expressed fears that the franchise would be granted before senators go on recess this week.
In a statement issued during the conference, the coalition said that despite the proponents of the bill claiming that the franchise is non-exclusive, “a franchise discourages the participation of capable renewable energy SMEs (small and medium enterprises) who do not have the resources nor political clout to undergo this process.”
“This will create a distorted playing field and will discourage private sector investment,” CoRE said. “The sector needs private sector investment from as many sources as possible to drive innovation and meet electrification targets.”
“Without a level playing field, there will be no incentives for improvement or change,” it said.
CoRE said the National Renewable Energy Board (NREB), a group that advises to the Department of Energy (DoE), is an “observer” in the coalition. NREB was represented during the briefing.
“A level, competitive playing field — not a concentration of favorable concessions to one player with political influence to secure a franchise — is critical to advance rural electrification across the country,” CoRE said.
It said if current laws alone are properly implemented, industry participants would be able to compete and provide clean, reliable, and affordable electricity to the most remote communities.
The group said there is no legal necessity for a franchise to provide energy nationwide, citing existing laws for rural electrification.
“As a matter of fact there are already several implemented rural electrification projects that did not need a franchise,” it said.
CoRE also questioned the constitutionality of granting a franchise to Solar Para Sa Bayan, saying there is not substantial distinction that makes the company uniquely positioned to provide power utilizing renewable energy technology.
“Granting [Solar Para Sa Bayan] a franchise is against the equal protection clause,” it said, adding that the company does not have “proprietary rights, unique skills, expertise or skills that justify special treatment.”
CoRE said the franchise also contradicts the spirit of Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA), the law that restructured the energy sector.
It said the franchise enables Mr. Leviste’s company to engage in the whole value chain of the power industry that EPIRA has unbundled into four separate sectors.
“It skirts the prohibition against cross subsidies and cross ownership,” it said, adding that it exempts Solar Para Sa Bayan from various laws and regulations that govern all other power industry players.
It said the bill encroaches on the franchise areas of the National Transmission Corp. and National Grid Corporation of the Philippines as well as other distribution utilities and electric cooperatives.
CoRE also invited a representative from Philippine Independent Power Producers Association, Inc. (PIPPA).
“[It’s] a signal to legislators that you are passing a law that can be easily questioned,” said Anne Estorco Macias, managing director of PIPPA.
“We support the position of CoRE that’s why we’re here,” she said. — Victor V. Saulon