WE OPPOSE HOUSE BILL 8179 OR THE SOLAR PARA SA BAYAN ...web.philreca.org/wp-content/uploads/2018/11/PP_Opposition-to-House... · Para sa Bayan Corporation a Franchise to Construct,

“United we stand, divided we fall.”

2nd Floor, PNB Building, No. 92 West Avenue, Quezon City, Philippines Telephone Nos.: 374-2538 / 374-1198 / 374-1199 / 372-4913 / Fax No. 374-2513

Website: www.philreca.org; e-mail address: [email protected]

POSITION PAPER 12 November 2018

WE OPPOSE HOUSE BILL 8179 OR THE SOLAR PARA SA BAYAN NATIONWIDE SUPERFRANCHISE BECAUSE

IT IS ANTI-EPIRA, ANTI-PEOPLE, AND ANTI-CONSTITUTION

Much has been said already about Solar Para Sa Bayan Corporation as well as the very controversial measure House Bill 8179 otherwise known as “An Act Granting Solar Para sa Bayan Corporation a Franchise to Construct, Install, Establish, Operate, and Maintain Distributable Power Technologies and Minigrid Systems Throughout the Philippines to Improve Access to Sustainable Energy”. Leandro Leviste Legarda, the man behind the start-up corporation has been dubbed as an innovator, entrepreneur, disruptor, and so many things. Whether these things are true or not depends on how much you know about the bill and the corporation. We have received 102,540 signatures (as of 08 November 2018) from the nationwide signature campaign opposing HB 8179 – and more signatures are coming in by the hour!

This position paper intends to put things into right perspective, among other

things. We summarize our submissions as follows: 1. The Passage of House Bill 8179 in the Committee Level Lacks Transparency. It

was Railroaded and Did not Go through Due Process.

2. Solar Para Sa Bayan Corporation Cannot Offer Cheaper and More Affordable Electricity and Energy Cost; Instead, It Will Only Charge the Consumers a Higher Rate which it Actually Does in Reality.

3. Solar Para Sa Bayan Made Deliberate Misrepresentation and Deception in Claiming that They Are Offering Cheaper and Affordable Cost than Neighboring ECs.

4. It Lacks Track Record as a Corporation and More Importantly, as an Energy Provider; It Doesn’t Deserve a Legislative Franchise.

5. Granting a Franchise to Operate in an Area where an Existing Distribution Utility Operates is a Violation of Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA).

6. Solar Para Sa Bayan Corporation Deliberately Disregards Qualified Third Party (QTP) and Other Private Sector Participation Procedures.

7. Electric Cooperatives Have Been and Will Always Be the Government’s Staunchest Partner in Rural Electrification.

We would like to reiterate – The rural electrification movement and all 121 electric

cooperatives are all for the utilization and development of renewable energy source. WE

http://www.philreca.org/mailto:[email protected]




ARE NOT AGAINST RENEWABLE ENERGY; WE ARE AGAINST THE SPECIAL TREATMENT AND VIOLATIONS COMMITTED BY THE SOLAR PARA SA BAYAN AS WELL AS THE SHORTCOMINGS OF HOUSE BILL 8179.

What follows are a more detailed discussion of our opposition to Solar Para Sa

Bayan and House Bill 8179.

1. The Passage of House Bill 8179 in the Committee Level Lacks Transparency. It Was Railroaded and Did not Go through Due Process.

House Bill 8179 has received tremendous amount of criticism, especially for the

reason that the House Bill did not go through public consultation or deliberations with other key players in the electric power industry and MCO as stakeholders.

Public consultation (i.e., committee hearings) as specified in Section 26, Rule IX of the Rules of the House of Representatives adopted by the 17th Congress guarantees that all positions will be heard – be it in support or in opposition to a certain issue being heard in Congress. To wit:

Section 26. Duties and Functions. - Committees shall study, deliberate on and act upon all measures referred to them inclusive of bills, resolutions and petitions, and shall recommend for approval or adoption by the House those that, in their judgment, advance the interests and promote the welfare of the people.

In furtherance thereof, committees shall establish appropriate systems and procedures to ensure that constituencies, sectors and groups whose interests are affected by any pending measure are given sufficient opportunities to be heard. Committees shall pursue dialogues and consultations with affected sectors and constituencies, conduct researches, and engage the services and assistance of experts and professionals from the public or private sectors as may be needed in the performance of their functions. [emphasis supplied]

No one from the private sector nor civil society was invited to partake in the

committee deliberation/hearing. In fact, during the session where the committee report was about to be approved, stakeholders from the private sectors were asked to leave the room to give way to an executive session. To our dismay and surprise, representatives from Solar Para Sa Bayan Corporation were invited to participate in the session! Where is the impartiality on that? Why the need for executive session with the proponents themselves (to the exclusion of stakeholders)?

A number of representatives find the process questionable, pointing out that the Bill has speedily gained committee approval in a very short period of time. To date, there are a few representatives opposing the bill and are urging to return HB 8179 to the Committee on Legislative Franchises for further deliberation.

In spite the claims for further deliberations with the L.F.C., there is a strong force

pushing for the bill to be sponsored and be presented in the plenary.





2. Solar Para Sa Bayan Corporation Cannot Offer Cheaper and More Affordable Electricity and Energy Cost; Instead, It Will Only Charge the Consumers a Higher Rate.

For Solar Para Sa Bayan Corporation to operate, it should either (1) usurp control

over an existing franchise and its existing facilities, or (2) build its own distribution system. The first option shows an ignorance or clear disregard of the legal framework provided for under the EPIRA, while the second option reflects deficiency in applying and understanding economic principles.

If, on one hand, SPSBC intends to replace an existing franchise and take over its distribution system, then, it appears to be disregarding the legal guarantee granted to that existing electric cooperative by the EPIRA to possess its franchise until the expiration of its full term.

If, on the other hand, SPSBC intends instead to build its own distribution system, then, this clearly reflects poor grasp of principles in Economics. As explained earlier, distribution utilities are natural monopolies because of the necessity of keeping costs low. SPSBC, if granted a national franchise to operate as a distribution facility, will then construct duplicate distribution system and redundant facilities to serve the same customers. The resulting cost of this duplication and the provision for the distribution utility’s profit will be recovered from its customers in the form of electric distribution rates. And surely, this would not be cheap. 3. Solar Para Sa Bayan Made Deliberate Misrepresentation and Deception in

Claiming that They Are Offering Cheaper and Affordable Cost than Neighboring ECs.

During the lone Public Hearing of the Committee on Legislative Franchise held at

the House of Representatives – South Wing Annex on August 29, Solar Para Sa Bayan claimed that it could offer electricity at an equal or much lower cost compared with the ERC approved rates of ECs. This is already far from its promise to its consumers (as mentioned in their official website – directly from the mouth of Mr. Leviste) that it can offer electricity at HALF THE COST of neighboring ECs. Occidental Mindoro Electric Cooperative’s (OMECO) rate is somewhere between Php 10 and 11 per kWh.

The case of the Municipality of Paluan was cited as an example where Solar Para

Sa Bayan confirmed before the Committee that the company is charging their consumers Php 8.00 per kWh. However, documents have surfaced (see Attachment A) to rebut this claim of cheaper rate as the company is actually charging more at Php 10.37 to 15.31 per kWh. We have validated this claim/documents in a visit to the Municipality of Paluan, where such rates were confirmed to be the cost of its electricity.

Such blatant misrepresentation and deception on the SPCBC’s end is tantamount

to committing a SCAM where scammers promise its potential customers of having cheap products, but in the end, will be charging the customers way more expensive than initially promised. We believe that such misrepresentation on the part of Solar Para Sa Bayan aimed to conceal the fact that corporation could not afford to offer lower rates.





The Committee on Legislative Franchise approved in just one (1) hearing HB 8015 (now HB 8179), but with such misrepresentation from Solar Para Sa Bayan, a second look on such a decision is definitely in order. 4. It Lacks Track Record as a Corporation and More Importantly, as an Energy

Provider; It Doesn’t Deserve a Legislative Franchise. Anyone who wishes to apply a national franchise to provide electrification services to the remote areas where even the veterans – the ECs – found it very difficult to electrify should manifest a good track record of delivering an excellent service. Solar Para sa Bayan – not even Solar Philippines – has no such background.

A. CABRA ISLAND SOLAR INSTALLATION – A FAILED EXPERIMENT On last quarter of 2017, Solar Philippines, the affiliate company of Solar Para Sa Bayan, has installed a 10kW Solar Electrification in one of the islands in the franchise area of LUBELCO in Cabra Island to show-off the company’s commitment to the local officials. It installed facilities that were able INITIALY to support seven (7) households in December 2017.

Consumers, however, complained that they were not allowed from using their electric irons and their refrigerators. Apparently, the solar installation of Mr. Leviste couldn’t handle the power requirements of these appliances. People in the area have no one to report these concerns to because Solar Philippines has been absent in the island since after the installation of the mini-plant.

In an ocular inspection to the area, it has also been found that the “distribution

system” (if it can be called as such) failed miserably in the meeting the standards for such facilities. In Attachment B of this paper, it can be seen that Solar Philippines used bamboo poles as electric posts! Using the pictures in the attachment, a technical consultation was made and we received the following findings:

It is a requirement of the law that electrical system be designed, constructed and operated following the provision of the Philippine Electrical Code (PEC) for safety reason. First, poles should be designed that can withstand traverse wind loading, especially during typhoon, in accordance with zonal location as well as the vertical loading of the conductors. In the case of Lubang Island, the zone design wind load should withstand 160km/hr based on the PEC and bamboo poles are not designed on that. Second, the copper wires used are heavier that again bamboo poles cannot sustain in the long run. Third, bamboo poles are not chemically treated that would eventually rot in a short period of time. Fourth, there should be a minimum clearance between the lowest wire to the ground as prescribe by the PEC which is 18ft for road crossing and 15ft for pedestrian.





Fifth, standard attachment of live wires should be used to poles to prevent electrocution in case of open wire which is not done in the pictures. Lastly, all connection should properly secured and insulated to prevent accident especially in the case of meter installation.

The Cabra Island installation failed in all safety requirements of the Philippine

Electrical Code. If it cannot meet such basic safety requirements, on an installation will supposedly show off your capability as an energy provider, then how can we even expect that it can do well in bigger area/installation?

As of May 2018, the solar installation of Solar Philippines in Cabra Island ceased operations and was abandoned by Mr. Leviste. Up to this time, the said Solar electrification facility remained not operational.

B. THE PALUAN SOLAR FARM – A CASE OF UNFULFILLED PROMISES Solar Para Sa Bayan Corporation/Solar Philippines brags of the Paluan Solar Farm

as one of its major accomplishments so far. It claims the following: 1. cheaper electricity 2. 24/7 availability of service; zero brownout

The receipts in Attachment A cannot be doubted – electricity is being offered at

equal or even higher cost than the nearby EC. In a recent expedition1 to the area, interviews revealed that the residents are being billed as such. Some residents even claim that they are now paying higher electric bills than before (pre-Solar).

The claim of having 24/7 electricity or zero brownout is nothing short of a lie.

Residents have been complaining of regular brownouts (from short to long periods of time). The brownouts are so frequent that some people have experienced of appliances being damaged because of the brownouts – refrigerators, freezers, lights, and even electrical socket/outlet. Clearly, the solar plant is unable to handle the power requirements of the area even after so many months of operation! Electrification is not a simple endeavor. Considering its very short existence, how can we be sure that they can handle natural calamities, react to emergencies caused by people (political-economic reasons), or manage other unprecedented events or calamities?

A detailed account of the Paluan-Cabra Island expedition is provided in

Attachment D of this paper.

5. Granting a Franchise to Operate in an Area where an Existing Distribution Utility Operates is a Violation of Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA).

1 October 18-19, 2018 – A group of researchers and technical experts conducted interviews and ocular inspection to the Municipality of Paluan and Cabra Island in Lubang to validate reports about the inefficiency of Solar Philippines in servicing its consumers.





Distribution is one of the major traditional sectors of the electric power industry distinguished from Generation, Transmission, and Supply. The distribution sector is governed by Republic Act 9136 also known as the Electric Power Industry Reform Act or “EPIRA” which states that:

The distribution of electricity to end-users shall be a regulated common carrier business requiring a national franchise. Distribution of electric power to all end-users may be undertaken by private distribution utilities, cooperatives, local government units presently undertaking this function and other duly authorized entities, subject to regulation by the ERC. 2

To understand this regulatory framework further, we provide the definition of

some related key terms under the same law:

1. Distribution of Electricity refers to the conveyance of electric power by a distribution utility through its distribution system;

2. Distribution System refers to the system of wires and associated facilities

belonging to a franchised distribution utility extending between the delivery points on the transmission or subtransmission system or generator connection and the point of connection to the premises of the end-user;

3. Franchise Area refers to a geographical area exclusively assigned or granted to a

distribution utility for distribution of electricity; [emphasis supplied]

4. Distribution Utility refers to any electric cooperative, private corporation, government owned utility or existing local government unit which has an exclusive franchise-to-operate a distribution system in accordance with this Act. [emphasis supplied]

This “exclusive franchise-to-operate a distribution system” granted to a

distribution utility stems from the physical fact that the distribution of electricity is a natural monopoly. In an article published in Electricity Policy website and Electricity Daily newsletter, the benefits of having a natural monopoly is provided: [I]n a given a natural monopoly, policy makers can provide lower cost power to

consumers by awarding a legal monopoly to such a single firm, while regulating its prices to only recover its costs. This combination of an exclusive right to serve together with cost-based regulation allowed the utility to achieve the low cost made possible by its economies of scale and scope, but prevented it from charging the above-cost prices that result from an unfettered monopoly.3 [emphasis supplied]

This shows that it is more efficient and cost effective when one centralized utility

will be tasked to distribute electricity to its end-users rather than competing utilities

2 Sec. 22 of Republic Act 9136 also known as the Electric Power Industry Reform Act or “EPIRA”. 3 Corneli, S. and Kihm, S. “Will distributed energy end the utility natural monopoly?” published both at

Electricity Policy website www.ElectricityPolicy.com and the newsletter Electricity Daily. (June 2016)

http://www.philreca.org/mailto:[email protected]://www.electricitypolicy.com/




constructing redundant poles and discriminating service from their respective customers or clients.

The Philippines in adopting the EPIRA follows a similar regulatory framework as what was described earlier – and for good reason: to protect the interest of the end consumers.

In his dissertation on Philippine Energy Law, Dr. Cagampang-De Castro points out that: “the distribution business is a natural monopoly with a captive market.”4 Dr. Cagampang-De Castro explains that transmission and distribution of electricity are natural monopolies. In his book, he states that:

[The natural monopoly of transmission/distribution of electricity] has the same reason as to why there is no competition for building and operating farm-to-market roads: (a) one access point from point A to point B is sufficient, assuming the road can handle the traffic or the (distribution/transmission) line can carry the necessary voltage; and (b) economies-of-scale make infrastructure building more efficient - it is better to install far reaching (distribution/transmission) lines than to duplicate them.

We see, therefore, that by granting an exclusive franchise to operate a

distribution system, the State prevents consumers bearing the exorbitant prices which will result from the recovery costs of building several electric posts and installation of wires when only one set of poles and wires is sufficient. 6. Solar Para Sa Bayan Corporation Deliberately Disregards Qualified Third Party

(QTP) and Other Private Sector Participation Procedures.

If Solar Para Sa Bayan is indeed interested in alleviating poverty through electrification, there already mechanisms that will allow them to do so without the need for a national franchise.

Section 59 of the Republic Act No. 9136 readily offers a way for interested private sector/s to participate in the energization of unviable, unserved, or underserved areas that the franchised distribution utility is unable to service due to recognized constraints, e.g., geographic (isolated areas, difficult terrain, absence of a road network) and socioeconomic and political constraints (right-of-way issues and peace and order). The Department of Energy has already issued the qualification criteria for qualified third party (QTP) accreditation.

Solar Para Sa Bayan Corporation wants to skirt and disregard QTP. It wants a national franchise to provide solar power to areas serviced by ECs without specifying the target areas it seeks to serve. Why?

Solar Para Sa Bayan application for a national franchise is a move to do away the

existing rules to participate in the electrification program of the government, particularly in the Off-Grid or SPUG Areas. Solar Philippines has failed to win in any bidding through

4 Cagampang-De Castro, JA; JSD. “Philippine Energy Law” Central Book Supply, Inc. First Edition. 2012.

Page 424.





a competitive selection process or CSP as mandated by the government. Examples of these attempts were the CSPs of QUEZELCO 2, ANTECO, and PROSIELCO to name a few. The CSP process was established by the government to ensure transparency in the procurement of power supply and to procure the least cost of electricity to the consuming public and to minimize the subsidy from the UCME. If Solar Para Sa Bayan claims it can offer an equal or cheaper cost of electricity, why did they lose the above CSPs?

In a fair competition, Solar Philippines’ failure to contract or enter to a PSA with

the ECs means there is or are some others much better than them. More unserved areas have already been made viable through QTP Program and

New Power Provider (NPP) Program, who took over in powering these areas. THESE PROGRAMS WORK! Here are the statistics of the served areas through QTP and NPP.

Operational QTPs QTPs in Process NPPs

LUZON 4 (4,134 households) 5 (3,133 households) 13 (127.32MW) VISAYAS 1 (771 households) 1 2 (4.89 MW) MINDANAO 1 (3,571 households) 2 -

The power sector is highly regulated in view of the nature of the industry. Thus,

regulatory rules were issued for compliance of the industry players, i.e., Electric Cooperatives and other Distribution Utilities, among others. What is the compelling reason for the exemption of Solar Para Sa Bayan in the mandated rules to include rate making methodology? In the current bill in question, they will be authorized to merely “charge rates equal to or lower than the average ERC approved distribution retail supply rate for the preceding year of the distribution utility with the capacity closest to the grantee’s Mini-grid System” without the proper procedure of rate application with ERC. 7. Electric Cooperatives Have Been and Will Always Be the Government’s

Staunchest Partner in Rural Electrification.

Going back to the premised why Solar Para Sa Bayan is offering its services, it claims that electric cooperatives are inefficient in terms of delivering electricity, thus justifying the need for entry of private businesses. These allegations are cannot be farther than the truth.

The National Electrification Administration (NEA) regularly conducts a performance assessment of electric cooperatives. NEA looks at the financial, institutional, technical and reportorial aspect of ECs. Based on 2016 EC Overall Performance Assessment, 78 out of 121 ECs received a rating of AAA, the highest rate that can be given. Furthermore, in 2017 EC Overall Performance Assessment, 87 out of 121 ECs received a rating of AAA while other ECs either improved or maintained their rating.

It is malicious and deceitful to generalize that ECs are inefficient. Only 8% of ECs are underperforming and this is usually caused by political and security issues. Even then, if there are underperforming ECs, do we see granting a nationwide franchise to a corporation with no proven track record to be the answer? If SPSBC is really interested and aims to provide power to unserved areas, why not go through the correct process instead of seeking a legislative franchise that is not necessary. What is its purpose?





Electric cooperatives have been staunch partners of the government in

accomplishing the electrification of the communities all throughout the country. For almost 50 years, the National Electrification Administration (NEA) and rural electric cooperatives have energized the countryside. Based on records, NEA and the EC’s has successfully energized 100% of the country’s provinces, cities and municipalities and 99% of the barangays. All areas within the ECs’ franchise have already been energized with the exception of 10 barangays declared as permanent danger zones or with peace and order problems. In terms of consumer connections, ECs have already energized 12.45 million out of the expected 15.04 million potential connections as of June 31, 2018.

The electric cooperatives are effective in pursuing their mandate and as the appropriate partner and key players in the government’s rural electrification program. The grant of a franchise for Solar Para Sa Bayan Corporation would seem to ignore these accomplishments.

The 121 electric cooperatives have only one primary objective – to supply low-cost electricity to their member-consumers including those living in the farthest parts of the country. We welcome other players, public or private, who share the same vision. But there are rules to follow and policies to consider if one would like to get into the task of rural energization.

The bill is unpopular because it seeks to undermine existing laws, regulations, and

framework. It is ill advised.

With the foregoing, we humbly request that House Bill 8179 be reverted to the Committee on Legislative Franchises for further review and deliberations and for the conduct of more committee hearings to be attended by all stakeholders, to include the Electric Cooperatives/Distribution Utilities and Member-Consumer-Owners for fair and transparent proceeding.

THE ENTIRE RURAL ELECTRIFICATION MOVEMENT – ITS 121 ELECTRIC

COOPERATIVES, ALMOST 13 MILLION CONSUMER-CONNECTIONS, AND MEMBER-CONSUMER-OWNERS – STRONGLY OPPOSE THIS BILL. Attachments:

A. Statement of Account from Solar Para sa Bayan

B. Electrical Facility/Solar Plant Installation in Cabra Island, Lubang where

Substandard Materials Were Used

C. Summary of Signature Campaign

Original and Copies of Signature Sheets were sent to the Office of President Rodrigo Roa

Duterte and House Speaker Gloria Macapagal-Aroyo.

D. A documentation from a recent visit in the areas of Paluan and Lubang (Cabra

Island), Occidental Mindoro to validate the reports of complaints, inefficiency,

and security risks from areas being “served” by Solar Para Sa Bayan/Solar

Philippines Corporation

###





Attachment A

Statement of Account from Solar Para Sa Bayan

Rate: Php 15.31 per kWh







Attachment B

Electrical Facility/Solar Plant Installation in Cabra Island, Lubang where Substandard Materials Were Used





Attachment C

Summary of Signature Campaign Original and Copies of Signature Sheets were sent to the Office of President Rodrigo Roa Duterte and House Speaker Gloria Macapagal-Arroyo.

# Cooperatives Number of Signatures Strongly Opposing HB 8179

1 QUEZELCO II 90

2 ISELCO I 360

3 LANECO 228

4 ZAMSURECO - I 3,410

5 PRESCO 2,498

6 PAMPANGA III 2,589

7 TARELCO 3,660

8 LEYECO I 4,057

9 NEECO II 5,762

10 ZAMECO II 2,357

11 ANTIQUE 1,471

12 DIELCO 1,410

13 SIARELCO 2,910

14 PELCO II 1,101

15 ISELCO I 840

16 ROMELCO 5,627

17 MORESCO I 551

18 CASURECO III 360

19 MORESCO II 3,904

20 Aurora Electric Cooperative, Inc 11,181

21 ISELCO – I 2,940

22 BATELEC – I 280

23 CELCO 48

24 ESAMELCO 106

25 BiLECO 151

26 ZAMECO 1,320

27 PELCO III 2,589

28 NEECO - I 1,501

29 QUEZELCO I 49

30 LEYECO II 1, 017

31 ILECO II 5, 227

32 DORELCO 15,510

33 LEYECO IV 3,010

34 LEYECO III 570

35 SAMELCO 1,401

36 LEYECO V 1,698

37 ZAMSURECO - II 1,980

38 CASURECA 1 420

39 DASURECO 332

40 PANELCO I 70

40 Miscellaneous 7,955

TOTAL 102,540





Attachment D

A DOCUMENTATION FROM A RECENT VISIT IN THE AREAS OF

PALUAN AND LUBANG (CABRA ISLAND), OCCIDENTAL MINDORO TO VALIDATE THE REPORTS OF COMPLAINTS, INEFFICIENCY, AND

SECURITY RISKS FROM AREAS BEING “SERVED” BY SOLAR PARA SA BAYAN/SOLAR PHILIPPINES CORPORATION

THE MYTH OF 24/7 ELECTRICITY

FROM SOLAR PARA SA BAYAN CORPORATION

We have received dozens of reports and claims from residents that Solar

Philippines/Solar Para Sa Bayan is not giving to its consumers what it promised when it

started its operations in their areas. To validate these concerns, a group of researchers

from PHILRECA, technical representatives and official of neighboring electric

cooperatives visited the Municipality of Paluan and Cabra Island in Lubang, Occidental

Mindoro to see first-hand the pet projects of Mr. Leandro Leviste’s Solar

Philippines/Solar Para Sa Bayan Corporation. Had the Committee on Legislative

Franchise known what we have found out, they would not have approved House Bill

8179 or the national franchise to Solar Para Sa Bayan Corporation.

UNFULFILLED PROMISES TO PEOPLE OF PALUAN

March 11, 2017 marked the inauguration of Solar Power Plant in Paluan Occidental

Mindoro with proclamation of “No more brownouts” and “Cheaper Electricity”, stirring

the minds of Paluaños that the event was the turning point for Paluan which never before

in history had 24/7 power.

Specific on their claims, Solar Philippines bragged during the birth of Solar Farm

that with 2 megawatts (MW) of solar panels, 2 MW hour of batteries and 2 MW of diesel

backup, it is designed to supply reliable power 24 hours a day, 365 days a year, at 50

percent less than the full cost of the local electric cooperative assuring the people of zero

brownout. But after months of operation, situations in the local scene are not depicting

the promise of Mr. Leviste.

Newspaper reports and articles commend Leviste’s Solar Para Sa Bayan initiative,

boasting the Paluan Island as one of the areas powered up by Solar Para Sa Bayan. Much

has been said on this but the statements released to the public are sugar-coated at the

very least. Real situations and sentiments of the consumers / beneficiaries are not

accurately reported.

With the expedition conducted, first-hand information was captured from selected

residents of Paluan revealing that “No brownout”, “Cheaper electric bill”, and “Zero

Government cost” are nothing but outright deceptions and lies.





Zero Brownout

After visiting the municipality and talking with the people, we know with absolute

certainty – all claims of Solar Para Sa Bayan are far from the truth.

Residents of Sitio Tikian, Sitio Igsuzu, and Sitio Absukot of Barangay Tubili

complained about continuous brownouts throughout the week. An average of 2 to 3 long

periods of brownouts is always expected and frequent on and off power outage is usual

everyday. Combined, these resulted to damaged or broken appliances such as

refrigerators, freezers, televisions, lights, and electrical sockets/outlets.

“Madalas ang brownouts dito, usually kapag madaling araw at hapon pero

wala man lang abiso. Biglaan nalang, sa sobrang regular, nakapag-adjust

na kami”, a resident said regarding brownouts in their barangay.”

A resident of Sitio Absukot whose only source of income is her sari-sari store,

complained about her damaged freezer. “Ito lang naman pinagkakakitaan ko, hindi na

nagyeyelo yung freezer paano pa ako magtitinda.” She had been using this freezer for 5

years. For 4 years, it worked fine but once Solar Para Sa Bayan started its service, she had

to pay for the repair of her freezer twice and in the end, she had to buy a new one since

the former was far too damaged by the frequent on and off power outage.

Another resident from Poblacion complained of damaged refrigerator and

electrical sockets/outlets. She is currently running a business and frequent brownout

caused her to invest in a circuit breaker to protect her appliances and the safety of her

family. She cannot leave her business and house in fear of fire accident.

Several residents of the barangay attended an assembly and voiced out their

concerns regarding the bad service of Solar Para Sa Bayan. The only excuse of SPSBC is

that there are problems with the battery and there’s not enough electricity supply to use

all kinds of appliances. A resident voiced her opinion, “Eh hindi na namin problema

yun”. This is clearly the responsibility of SPSBC and instead of making excuses, they

should start improving their services and management.

Rates

According to Mr. Leviste, he is offering a rate of P2.34 per kilowatt-hour (/kWh)

for the services rendered in the entire Paluan, Occidental Mindoro. He later changed it to

half of what the other electric cooperatives are offering.

Alarmingly, these claims are not true at all. From the benchmarking activities done

in Paluan, Occidental Mindoro, it was found that the rates charged by SPSBC is not half

of what the ECs are charging. In fact, some are charged either equal or more than that of

the rates charged by ECs (10.52 per kWh). From the 20 households visited, there is an





average of 10.97 rate per kWh charged by SPSB, a far cry from their claim of half of what

ECs are charging.

A resident even voiced her concern regarding the promise of SPSBC: “Sa una,

mababa lang ang singil samin pero nung tumagal, pataas na ng pataas. Halos parehas

lang naman nung dati (rates of EC), minsan mas mahal pa nga (rates of SPSBC).”

Aside from the abovementioned statements of the consumers, there are notable

observations that are learned and are worthy to share to the public.

A. Solar Philippines is using the existing distribution system of the OMECO. There

are even households in Paluan that are not yet powered up by solar despite the

existing distribution facilities of OMECO to distribute the electricity on a reason

that there are no additional secondary lines built by Solar Philippines to reach all

the consumers in the area. This is just a simple case that reflects Solar Philippines’

[un]readiness for complete total electrification process. It can’t even respond to the

needs of the neighboring houses in Paluan. How can it power up a bigger scope?

B. The area where the Solar Farm is installed is prone to flooding. The presence of

water beneath the solar panel is dangerous especially for electrical operations. Is

this the kind of system we will allow to operate in any areas in the country by

granting a legislative franchise? Are we willing to let the welfare of some of the

Filipinos be on the hands of this mediocre company?

CABRA ISLAND SOLAR INSTALLATION – A FAILED EXPERIMENT

The case of Cabra Island in Lubang, Occidental Mindoro is one testimony that

Solar Para sa Bayan’s track record is shaky, in contrast with their claims of having a good

track record of powering up 12 communities with just a span of 6 months.

The inconsistent operation within 5 months since the mini plant was installed, the

abandonment and the ceasing of its operation without diligent explanation to the seven

household it powered up is a manifestation of poor management and incapacitated

company to sustain a certain area. And yet it is pushing for a National Franchise

convincing the lawmakers on its capacity to “…Install, Establish, Operate, and Maintain

Distributable Power Technologies and Minigrid Systems Throughout the Philippines to

Improve Access to Sustainable Energy”

In an ocular inspection to the site recently, it was observed that the solar frames

are rusty. This is questionable in the maintenance standard of a solar plant. This is in

addition to the findings made before on the failure of the mini plant in meeting the

standard as distribution system.





In the pictures found in Attachment B, it can be seen that Solar Philippines used

bamboo poles as electric posts! Using the pictures in the attachment, a technical

consultation was made, and we received the following findings:

It is a requirement of the law that electrical system be designed, constructed and operated following

the provision of the Philippine Electrical Code (PEC) for safety reason.

1. Poles should be designed that can withstand traverse wind loading, especially during typhoon,

in accordance with zonal location as well as the vertical loading of the conductors. In the case

of Lubang Island, the zone design wind load should withstand 160km/hr based on the PEC and

bamboo poles are not designed on that.

2. The copper wires used are heavier that again bamboo poles cannot sustain in the long run.

3. Bamboo poles are not chemically treated that would eventually rot in a short period of time.

4. There should be a minimum clearance between the lowest wire to the ground as prescribe by

the PEC which is 18ft for road crossing and 15ft for pedestrian.

5. Standard attachment of live wires should be used to poles to prevent electrocution in case of

open wire which is not done in the pictures.

6. All connection should be properly secured and insulated to prevent accident especially in the

case of meter installation.

How can a company with this kind of performance and record be trusted for a wider

scope and bigger responsibility?

DOES SOLAR PARA SA BAYAN CORPORATION DESERVE A FRANCHISE?

Looking at the entire picture, Leviste’s company is definitely not equipped in

providing electric services in these areas. Worse, they are even claiming the exact

opposite in Congress. They are obviously using these areas to push their bill for a national

franchise.

How can Leviste’s company provide better services at lower costs on a national

scope when it cannot meet the promises it made to Paluan and Cabra Island in Lubang ,

Mindoro Occidental?

Before jumping in to the bandwagon and pushing for a bill started by an inefficient

company, let us look first at the people’s experiences on Solar Philippines’s services.

They had to adjust their lives to fit power outages, the appliances which they worked

hard for to buy were broken beyond repair, their businesses had to suffer, all while

paying for a price that was not what was promised to them.

Integrity is starting well, sustaining what you have started, and finishing well. Reliability is tested

with time, it is not abrupt, it is not flaunty.

It is high time for us to take a closer look on the track of this company desiring a

national franchise to cover up electrification of the country. Is this the kind of company

we want to entrust the electrification of the rest of the country?

Now that you have the facts, you can now decide.

Documents

WE OPPOSE HOUSE BILL 8179 OR THE SOLAR PARA SA BAYAN ...web.philreca.org/wp-content/uploads/2018/11/PP_Opposition-to-House... · Para sa Bayan Corporation a Franchise to Construct,