QuestionsQuestions (PVAO MEMORANDUM)
RA 11357 grants Solar Para sa Bayan Corporation a nonexclusive franchise to construct, install, establish, operate, and maintain Distributed Energy Resources (DERs) and microgrids using renewable energy technology (or a hybrid) to provide electric power in the public interest and for commercial purposes in remote and unviable, unserved, or underserved areas in specified provinces/municipalities/cities.
DERs refer to smaller power sources aggregated to meet regular demand; they also include demand-side and supply-side resources deployed throughout a network to meet energy and reliability needs, including renewable facilities, managed loads (e.g., EV charging), energy storage, and measures for incorporating renewables such as load management and ancillary services (reserves, voltage control, reactive power, black start capabilities).
A microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid, and it may operate in grid-connected or island mode.
It is a geographical area within the franchise area of a distribution utility where immediate extension of distribution lines is not economically feasible due to distance from the nearest facilities.
An area with no electricity access, no distribution system lines, no solar PV home systems, or no connection to any microgrid.
Areas served with electricity less than 24 hours daily, or noncompliant with the Philippine Distribution Code service parameters, or interrupted at least 12 times in the prior 12 months; also includes other reasons resulting in a failing mark based on latest annual evaluation of distribution performance versus ERC targets.
The Department of Energy (DOE) determines those areas in accordance with Sections 1 and 2 of the Act.
The grantee must secure from the ERC, DOE, or any other agency with jurisdiction the necessary certificate of public convenience and necessity and other applicable permits and licenses for construction and operation, while complying with rules under RA 9136 and RA 9513.
The grantee may excavate or lay conduits in public places, roads, highways, streets, lanes, alleys, avenues, sidewalks, tunnels, or bridges, subject to prior approval of DPWH or the concerned LGU in accordance with the Grid Code or Distribution Code (as applicable). Disturbed public infrastructure must be repaired/replaced at the grantee’s expense in workmanlike manner; failure after 15 days allows DPWH/LGU to repair and charge the grantee double costs.
It must operate in the least-cost manner; improve facilities for efficient and reliable service and reduced electricity costs; charge reasonable and just power rates approved by the ERC; and comply with DOE/ERC regulatory rules for private and public utilities under RA 9136 and RA 9513.
The grantee must establish a consumer desk to handle complaints, ensure adequate protection of consumer interests, and act with dispatch on complaints submitted.
Retail rate charged by the grantee to end users is the true cost and it is not entitled to any government subsidy; it is regulated and subject to ERC approval. Rates must be made public and transparent, and billing must identify and segregate components of the retail rate pursuant to RA 9136 (unless amended). Lifeline rates for marginalized end users must be implemented as mandated by RA 9136.
In times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, the President may temporarily take over and operate the grantee’s facilities or authorize their temporary use/operation by a government agency, upon due compensation.
Yes. Subject to limitations and procedures prescribed by law, the grantee may exercise eminent domain insofar as reasonably necessary for construction, installation, efficient operation, and maintenance of DERs/microgrids, including installing facilities over/across public property and acquiring private property as needed, provided there is greater public benefit and proper condemnation proceedings are instituted and legal requirements are complied with.
The term is 25 years from the date of effectivity unless sooner cancelled or revoked. It is deemed ipso facto revoked if the grantee fails to operate continuously for two (2) years.
Yes. RA 11357 states that no waiver of rights from franchised distribution utilities is necessary to operate DERs/microgrids in remote and unviable, unserved, or underserved areas as determined by the DOE.
No. It states the franchise does not affect DOE’s duty to promote private sector participation through competitive selection; other qualified third parties may participate even without a similar congressional franchise, as determined by DOE.
The grantee must submit an annual report to the ERC, DOE, and Congress (through specified committees) on or before April 30 of the succeeding year, including rollout updates, audited financial statements, latest GIS if applicable, DOE certification on permits/operations status, and ownership dispersal update. Failure to submit the annual report to Congress is penalized by P5,000 per working day of noncompliance, collected by DOE, separate from DOE reportorial penalties.
ERC must allow sufficient time to remedy any interruption, but not exceeding 30 days from issuance of a written notice. Continued failure beyond 30 days after written ERC notice is a basis for ERC financial penalties in accordance with RA 9136 and its IRR and ERC issuances. Penalties must be paid within 60 days after receipt of demand and are not regarded as expenditures of the grantee.
No. The grantee cannot sell, lease, transfer, grant usufruct of, or assign the franchise/rights, nor merge, nor transfer controlling interest to another entity without prior approval of Congress of the Philippines. Failure to report change of ownership renders the franchise ipso facto revoked.