by Diego Morra
Batangas Rep. Leandro Leviste would fail in his logic class if he insists that the 25-year franchise granted to him through Republic Act No. 11357 (RA 11357) to operate solar microgrids in 12 provinces, 31 cities and towns in Batangas and 29 municipalities in Quezon and energize underserved areas withered away in 2022 after he claimed, unfortunately, that most of those areas rejected his venture.
Leviste thus argues the congressional franchise was like a royal writ to which he was entitled and no one, but no one, could question why his lavishly-praised solar power generation project ended up a business disaster. Let us look at the dates first. RA 11357 was enacted in July 2019 when Leviste was only 26, a world record of sorts, and it came midway the unlamented regime of Rodrigo Duterte. In three years, he shepherded the franchise holder, Solar Para Sa Bayan Corp. (SPBC), to bankruptcy or pushed it to a precipice, all because local government units (LGUs), perhaps some electric cooperatives, or even the big boys in the power generation business, found it a viable proposition to extend their power pylons to underserved zones.
The way Leviste is talking, RA 11357 is his personal franchise, a gift from Duterte at a time when he needed the support of lawmakers, including Leviste’s mamma mia, Sen. Loren Legarda. The bleeding heart that Loren is, the teeming, unshod and miserable millions deserve power so much that her solar power installer son must come to their succor. Did Congress study the impact of the franchise for Leandro? Perhaps they did, or dispensed with it, since it took barely several weeks for the proposal to be approved despite stern opposition from several sectors that spent an eternity before getting their own franchises approved.
Before Leviste resumes promoting legal fiction and disseminating logical fallacies in order to wiggle out of the mess that he had created, he should reread Sec. 18 of RA 111357, which says “the grantee shall not sell, lease, transfer, grant the usufruct of, nor assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation or other commercial or legal entity, nor merge with any other corporation or entity, nor the controlling interest of the grantee be transferred, simultaneously or contemporaneously, to any such person, firm, company, corporation, or entity, without the prior approval of the Congress of the Philippines.”
The law forbids the sale or merger of SPBC with other persons, firms, corporations or other legal entities without the prior approval of the Congress of the Philippines. Surely, the Filipino people learned only about the fate of SPNEC, which was expressly organized to abide with the requirements of the franchise. Without a market that the franchise provides, would MGen or the Pangilinan group purchase Solar Power Nueva Ecija Corp. (SPNEC)? Without the franchise, SPNEC would be supplying to no one. The franchise provided SPBC with the added corporate functions of exercising eminent domain, the use of power lines, land and public assets to transmit power and distribute the same.
So, the SPBC franchise was not sold? Yet, the very benefits accruing from the franchise was to be enjoyed by SPNEC, which has, as of now, been burdened with producing only 400 megawatts (MW) of electricity. In short, the hype about SPBC and SPNEC producing 12,000 MW of power is unadulterated bunk. Has Leviste explained to Congress what happened to the franchise that he enjoyed with gusto since 2019? Sec. 20 of RA 111357 requires Leviste to submit an annual report to the Energy Regulatory Commission (ERC), Department of Energy (DOE) and Congress, through the Committees on Legislative Franchises and Energy of the House of Representatives and the Committees on Public Services and Energy of the Senate, on its compliance with the terms and conditions of the franchise and on its operations on or before April 30 of the succeeding year.
The annual report, the law said, includes updates on the roll-out, development, operation and/or expansion of business, audited financial statements; latest General Information Sheet officially submitted to the SEC, certification of the DOE on the status of its permits and operations and an update on the dispersal of ownership undertaking, if applicable. Leviste made a pile by selling SPNEC and now he claims to be centavos poorer because SPBC collapsed in 2022, the same year that another law was enacted to “scrap” congressional franchises for microgrids. Leviste seeks shelter in a law that cannot apply to him.
Has Leviste submitted annual reports from 2020 onward? If he claims that SPBC collapsed in 2022, then it took him only three years to see the downfall of his mighty corporation and franchise, in time for the enactment of another law, RA 11646, signed into law on Jan. 21, 2022, that promotes the use of microgrid systems in unserved or underserved areas nationwide. Operating microgrids would no longer require congressional franchises. Would this save Leviste? No. And neither did Duterte save him despite his signing another law rto favor Leviste. The DOE has slapped Leviste with a P24-billion fine for not producing the electricity he was required to produce under 43 contracts, 33 of which were complete failures.
