National minigrid franchise could conflict with RE law — NREB

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THE National Renewable Energy Board (NREB) said granting a franchise to a single entity to build and operate minigrid systems nationwide could result in possible conflict with the provisions of the Renewable Energy Act of 2008.

“The original intention for the franchise created under House Bill 8179, was to provide affordable electricity access to unserved and underserved areas, as determined by Department of Energy (DoE). The franchise bill must provide definitions or guidelines on how these areas are to be determined, to avoid duplication of facilities that provide the same distributive service,” NREB said in a position paper.

The board’s position is in response to House Bill 8179, an act that seeks to grant Solar Para Sa Bayan Corp. a franchise to construct, install, establish, operate and maintain distributable power technologies and minigrid systems throughout the country. The bill is supposed to improve access to sustainable energy.

“The franchise bill in its current form may also have some inconsistencies with other provisions or mechanisms of the RE Act. In this regard, it is respectfully requested to have such amendments to align with the policies of the RE Act, such as Renewable Portfolio Standards, and the Green Energy Option Program,” it added.

NREB, which serves as an advisory body to the DoE on issues relating to renewable energy, said it believes RE developers and other stakeholders should have the space to articulate their concerns regarding the franchise bill and to propose changes to the bill in its current form.

The board said the RE Act, or Republic Act No. 9513, does not discriminate among any of the renewable energy technologies, but the name of the proposed grantee itself “may provide solar an undue advantage over other RE technologies.”

It said Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001 (EPIRA), was promulgated to promote competition in the sector in order to provide affordable electricity to end users.

NREB said renewable energy developers are currently forced to compete with non-RE developers in the captive and retail electricity markets by following policies on competitive selection process (CSP) or retail competition and open access (RCOA).

“The franchise bill will further create a separate RE sector for the grantee, which prevents the grantee from undergoing CSP or complying with the requirements of RCOA, seems to be an unfair advantage of the grantee over other functionally similar RE developers,” it said.

CSP requires power supply agreements between distribution utilities and power developers to be opened up to challengers that can offer a lower electricity rate. RCOA allows electricity users who have reached a pre-set threshold to buy power from retail electricity suppliers, which may offer lower rates than franchised distribution utilities.

“In view of this, NREB respectfully requests the Senate to modify the franchise bill to remove any undue advantage the franchise grantee may have over other RE developers,” the board said. — Victor V. Saulon