Two of the biggest electric cooperative (EC) groups in the country expressed grave concerns over the “publicity-driven” attempts of a private for-profit entity wanting to enter the power sector to “paint itself as a savior of rural electrification,” in what they tagged as a “concerted drive to undermine grassroots people’s organizations deeply embedded in the power distribution ecosystem in the countryside.”
The National Association of General Managers of Electric Cooperatives (NAGMEC) and Philippine Rural Electric Cooperatives Association (PHILRECA) reacted to recent reports that Solar Philippines Power Project Holdings, Inc., owned by the scion of a prominent political family, was considering 12 remote towns—including four municipalities in the popular tourist destination province of Palawan—as “possible sites” for mini grids under the private entity’s “Solar Para Sa Bayan” project. It is also applying a national franchise under the so-called “Solar ng Bayan” entity, which the House Committee on Franchises is reportedly scheduled to pass for plenary deliberations on Monday, September 3, 2018.
NAGMEC President Sergio Dagooc, who alleged that Solar Philippines “slyly” chose these locations in tourism-promoted locales as the creation of a power distribution footprint there is “always good for public and press relations.”
“The House Franchise Committee, should not hasten and think twice about expediting the grant of a national franchise to Solar ng Bayan, which is reportedly owned by the owner of Solar Philippines.”
“Wala pa ngang nagawa, binabandera na.Worse, their underhanded efforts are beginning to bear fruit with the reported impending passage of the Solar Ng Bayan national franchise in the Lower House,” he said.
Dagooc also warned that “any effort on electrification done without government subsidy is not sustainable because the consumers stand to pay the very expensive true cost of electrification. Only the ECs sustained it for close to 5 decades now because the government subsidized the cost.”
“The House Franchise Committee, should not hasten and think twice about expediting the grant of a national franchise to Solar ng Bayan, which is reportedly owned by the owner of Solar Philippines. Granting a franchise to a private entity by conducting only one meeting, without thoroughly hearing the positions of the stakeholders, is an exercise in haste and reflects the underhandedness of the proponents. Nakataya ang prangkisa ng mga electric cooperatives dito dahil buong Pilipinas ang inaplayan. This is basically a death sentence to ECs,” Dagooc said.
“Apart from good PR, any private entity wanting to enter the sector is already guaranteed its profits because of the assured economic activity in these tourism spots. It’s not as if Solar Philippines is engaging in missionary electrification work by building its grid in a depressed, insurgency-afflicted sitio in a remote corner of the country,” added Dagooc.
The NAGMEC head challenged Solar Philippines, Solar ng Bayan, and other private entities to not be choosy and instead prioritize remote, underserved locations first if they were truly sincere about supplying power to the countryside.
“They should first try servicing areas where people sometimes have their electricity cut because of plain inability to pay their monthly bills. Let’s see how the purely-for-profit business model works there long-term—and if these private groups can sustain their promised low initial energy fees. ECs, on the other hand, thrive because government subsidy ensures we help in carrying the burden of those who are economically challenged,” Dagooc said.
Meanwhile, PHILRECA president Presley De Jesus questioned whether the government was being selective and prone to unduly favoring for-profit groups in their push to enter the power sector.
“They should first try servicing areas where people sometimes have their electricity cut because of plain inability to pay their monthly bills.”
“We need to clarify if Solar Philippines and Solar ng Bayan underwent the proper bidding and qualification process,” De Jesus said.
“There are existing rules and issuances on electrification that electric coops follow. Did Solar Philippines and Solar ng Bayan undergo the strict selection process we undergo? Are its rates approved by the Energy Regulatory Commission (ERC)?” De Jesus added.
De Jesus also raised the matter of regulating the entry of private groups in light of Solar Philippines’ repeated declarations that its goals were “in line with plans by Malacañang to issue an executive order encouraging private investment in rural electrification.”
PHILRECA and NAGMEC have both criticized Department of Energy (DOE) Secretary Alfonso Cusi of being biased against ECs and its government regulating agency, the National Electrification Administration (NEA). They are also raising their opposition against the national franchise being considered by the House Committee on Franchises for Solar ng Bayan.
Last month during the budget hearings in Congress, the DOE proposed a P635 million cut in NEA’s budget.
The move prompted House Budget Committee chair Rep. Karlo Nograles to call the proposal “disturbing.” The Davao City lawmaker remarked that the reduction would seriously impair electrification efforts in faraway sitios all over the Philippines.
“The DOE’s approach is two-pronged. It wants to squeeze and impair the NEA and ECs by reducing the agency’s budget. At the same time, the DOE is strongly encouraging for-profit groups like Solar Philippines, Solar ng Bayan and other entities to enter the sector through this supposed executive order,” lamented De Jesus.
NAGMEC’s Dagooc additionally pointed out that “the DOE appears keen on slowly easing out grassroots people’s organizations which have for decades laid the foundation for rural electrification.”
“Sec. Cusi doesn’t see us as partners. To him, we are obstacles and threats to the DOE’s purported plan to fully embrace privatization,” he said.