Leviste power firm awaits approval by the Senate of 25-year franchise

By Vanne Elaine Terrazola

The Senate is poised to grant a 25-year franchise to the solar power corporation owned by Leandro Leviste, son of outgoing Senator Loren Legarda.

The chamber already approved on second reading the House Bill 8179, which seeks to grant the Solar Para Sa Bayan Corporation (SPSB) a congressional franchise to be able to “construct, install, establish, operate, and maintain distributable power technologies and minigrid systems throughout the Philippines”.

But Senate President Vicente Sotto III allayed fears over its approval, saying the Upper House’s version does not grant the firm a “mega-franchise”, as dubbed by oppositors.

“Hindi na ‘mega’. Pumasa sa amin sa second reading pero napakadaming amendments. Kasi ‘yon nga ang iniiwasan, ‘yong ‘mega’ (It’s not ‘mega’ anymore. We passed it on second reading but we made several amendments. Because that’s what we are preventing, for it to be a ‘mega’ franchise),” Sotto said in a radio interview.

“Doon sa version na pumasa sa amin, franchise na lang, hindi na ‘mega’ (In the Senate’s version, it is a mere franchise, not a ‘mega-franchise’),” he stressed.

Before its approval, HB 8179, sponsored by Senator Grace Poe’s Committee on Public Services, faced the grilling of senators during their interpellations last Wednesday.

Sen. Panfilo Lacson questioned the need to grant the solar firm a congressional franchise when it is engaged in power generation and is not considered a public utility operation.

He cited Section 6 of the Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA) which states that power generation and electricity supply need not secure a national franchise.

In response, Poe said SPSB uses micro-grid technology and is also engaged in transmission and distribution of energy, which, under the EPIRA, requires congressional approval.

“While it is true generation does not require a national franchise, It is significant to note that micro-grid does not only involve generation, but also transmission and distribution of electric power for which a franchise is required,” Poe explained.

“Moreover, when EPIRA was enacted in 2001, they could not have envisioned the micro-grid technology, considering that such technology is relatively new in the Philippines” she added, to which Sen. Francis Escudero, who was already a member of Congress then, agreed.

Lacson also raised that the EPIRA prohibits cross-ownership in power generation and distribution, which Leviste’s SPSB might violate.

Senate Minority Leader Franklin Drilon likewise raised the need for franchise when SPSB is already authorized by the Department of Energy (DOE) to operate without a legislative franchise.

Sen. Sherwin Gatchalian, co-sponsor of the measure, said the bill seeks to permit the company to operate not only in remote and unviable areas, but in unserved and underserved parts of the country, or those not supplied with electricity 24/7.

The Senate’s version of the bill states that the SPSB can operate in barangays, municipalities and cities of Aurora, Batangas, Bohol, Cagayan, Camiguin, Compostela Valley, Davao Oriental, Isabela, Masbate, Misamis Occidental, Occidental Mindoro, Palawan, and Tawi-Tawi.

Gatchalian assured that the firm cannot operate outside the enumerated provinces.

The proposed franchise, he added, does not grant the SPSB the exclusive rights over these areas. He said that it still has to go through a competitive selection process along with other private firms before being allowed to operate in these areas.

Senators also made sure that the DOE will not encroach on Congress’ authority in granting franchises to public utility companies.

After its second reading approval, the Senate is expected to pass HB 8179 in third and final reading next week.

The Senate and House of Representatives would then have to reconcile their versions before ratifying in their respective chambers, and transmitting it for the President’s signature.

Amid concerns over the possible conflict of interest, Sotto clarified that they merely acted on the House-approved measure and did not railroad the passage of the bill.

He said oppositors may take to court the granting of the franchise to SPSB.

“As far as we are concerned, we take it as it is. ‘Yong constitutional interpretation they can take to the court, the proper court to address that. Kasi sa samin, aaksyunan namin kung ano ang dumating sa amin,” the Senate leader said.

https://news.mb.com.ph/2019/05/25/leviste-power-firm-awaits-approval-by-the-senate-of-25-year-franchise/