* My column in BusinessWorld yesterday, June 18, 2019.
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 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.
----------------
See also:
BWorld 337, Smart energy: Use more conventional sources, June 11, 2019
BWorld 338, MORE employment and labor productivity, June 12, 2019
BWorld 339, MORE passenger safety and the LTFRB, June 17, 2019
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