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Republic of the Philippines he RECEIV
HOUSE OF REPRESENTATIVES ESEIy
Quezon City * care. 0

SEVENTEENTH CONGRESS
Third Regular Session

House Bill No._8013

Introduced by Rep. ARTHUR C. YAP

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

EXPLANATORY NOTE

This bill seeks to grant a franchise to construct, install, establish, operate and maintain
Distributable Power Technologies and Minigrid Systems, to provide electric power to customers
and end-users throughout the Philippines, to Solar Para Sa Bayan Corporation, a company with a
social mission to end poverty and mitigate climate change through the use of affordable
sustainable energy.

The National Electrification Administration estimates that, as of December 2017,
2,399,108 households in the Philippines remain without electricity, with 529,952 in Luzon,
524,040 in Visayas and 1,345,116 in Mindanao. Many more endure frequent power outages and
the highest electricity rates in Southeast Asia. Moreover, a Pulse Asia survey in June 2018
indicated that 82% of Filipinos favor having new options for electric service, and 89% of
inos favor increasing the use of renewable energy.

Unprecedented advances in technology offer hope for solving our country’s power issues:
An increasing number of Filipinos now source part of their energy from Distributable Power
Technologies such as solar rooftop systems, while batteries and hybrid technologies enable
Minigrid Systems to serve the energy needs of those for whom affordable and reliable clean
energy was once unreachable.

In March 2018, President Rodrigo Duterte called on the private sector to contribute to
improving electric service for all. Heeding this, Solar Para Sa Bayan Corporation installed
Southeast Asia’s largest minigrid for the town of Paluan, Occidental Mindoro to bring reliable
24/7 power for the first time in its history. It has since begun work on more minigrids at the
request of communities across the country.

This bill seeks to set out Solar Para Sa Bayan Corporation's rights and responsibilities in
serving customers and end-users throughout the Philippines, to enable Filipinos to enjoy not only
reliable and affordable but also cleaner energy, to achieve a more sustainable future and better
life for all.

In view of the foregoing, the approval of this bill is earnestly sought.

Hon. ARTHUR C. YAP


HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session

HOUSE BILL NO. 8013

Introduced by Rep. ARTHUR C. YAP

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

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:

Section 1. Nature and Scope of the Franchise. — Subject to the provisions of the Constitution
and applicable laws, rules and regulations, there is hereby granted to Solar Para Sa Bayan
Corporation, hereunder referred to as the grantee, its successors or assigns, a franchise to
construct, install, establish, operate and maintain in the public interest and for commercial
purposes, Distributable Power Technologies and Minigrid Systems to provide electric power to
customers and end-users throughout the Philippines. Likewise, the grantee is authorized to
engage in ancillary businesses and any related businesses which maximize the utilization of its
assets. The grantee shall have the right to open and non-discriminatory access to any
transmission or distribution system, and shall be eligible to become a member of the wholesale
electricity spot market.

The following terms shall have the meaning set forth herein

“Distributable Power Technologies (DPTs)” refers to devices, assets, facilities and other
technologies of any capacity that may connect directly to customers or end-users, or interconnect
with transmission or distribution systems or Minigrid Systems, such as but not limited to rooftop
or ground-mounted solar panels, wind turbines, hydrogen fuel cells, backup gensets, hybrid
power systems, wires, controllable loads, metering, communication equipment, electric vehicle
charging stations, and energy storage.

“Minigrid System” refers to an integrated group of loads and devices, assets, facilities and other
technologies of any capacity, including DPTs, that may operate either independently from or in
conjunction with transmission or distribution systems or other Minigrid Systems, and is distinct
from a distribution system or a generation facility

“Minigrid Company” refers to any person or entity which constructs, installs, establishes,
operates and maintains Minigrid Systems or DPTs, may sell, purchase, or trade electric power
with customers or end-users, and is distinct from a distribution utility or a generation company.

Section 2. Manner of Operations of Facilities. — All facilities, lines and systems for electric
services owned, maintained, operated or managed by the grantee, its successors or assigns, shall
be operated and maintained at all times in a proper and suitable manner. Whenever practicable
and for purposes of maintaining order, safety and aesthetics along highways, roads, streets, alleys
or right-of-way, the grantee may allow the use of free spaces in its poles, facilities, or right-of-


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way by interested parties upon reasonable compensation to the grantee considering costs incurred
to accommodate and administer the use of the grantee’s facilities by such parties.

Section 3. Ingress and Egress, and Excavation and Restoration Works. — For the purpose of
constructing, installing, establishing, operating and maintaining poles, DPTs, Minigrid Systems,
or any part thereof, and other supports for said facilities, wires or other conductors or for the
purpose of laying and maintaining said facilities, wires, cables or other conductors, it shall be
lawful for the grantee, its successors or assigns, with the approval of the Department of Public
Works and Highways (DPWH) or the local government units (LGUs) concerned, as may be
appropriate, to make excavations or lay conduits in any of the public places, highways, streets,
lanes, alleys, avenues, sidewalks, or bridges of said province, cities and/or municipalities
Provided, however, That any public place, highway, street, lane, alley, avenue, sidewalk or
bridge disturbed, altered, or changed by reason of the erection of poles or maintaining facilities
or other supports, or the laying of wires, other conductors or conduits, shall be repaired and
properly restored at the expense of the grantee, its successors or assigns, in accordance with the
standards set by the DPWH or the LGU concerned.

Section 4. Responsibility to the Public. — The grantee shall operate DPT’s and Minigrid Systems
in the least cost manner. In the interest of the public good and as far as feasible, the grantee shall
modify, improve or change its facilities and equipment for the purpose of providing efficient and
reliable service and reduced electricity costs. The grantee shall charge reasonable and just power
rates for its services to all types of consumers in order that business and industries shall be able
to compete.

Section 5, Rates for Services. — To achieve efficient service for its customers and end-users, the
grantee shall be authorized to charge rates equal to or lower than the average ERC-approved
distribution retail supply rates for the preceding year of the distribution utility with the capacity
closest to the grantee’s Minigrid System.

Section 6. Promotion of Consumer Interests. — The herein grantee shall establish a consumer
desk that will handle consumer complaints and ensure adequate promotion of consumer interests.
The grantee shall act with dispatch on all complaints brought before it

Section 7. Right of Government. ~ A special right is hereby reserved to the President of the
Philippines, in times of war, rebellion, public peril, calamity, emergency, disaster or disturbance
of peace and order, to temporarily take over and operate the facilities of the grantee or to
authorize the temporary use and operation thereof by any agency of the government upon due
compensation to the grantee for the use of the said facilities during the period when they shall be
so operated

Section 8. Tax Provisions, Charges and Other Requirements. — To achieve efficient service
and reduced electricity costs for end-users, the grantee, its successors or assigns shall pay a
franchise tax equivalent to three percent (3%) of its gross income derived by the grantee from its
operation under this franchise. Said franchise tax shall be in lieu of all taxes, such as but not
limited to, income tax, value-added tax, real property tax, business taxes, franchise taxes,
licenses, and any and all taxes, duties, fees, and charges of any kind, nature, or description
levied, established or collected by any authority whatsoever, local or national, on its franchise,
rights, privileges, receipts, revenues and profits and upon its facilities, assets and all real and
personal property used, owned or possessed by the grantee, from all of which taxes, duties and
charges the grantee is hereby expressly exempted.

‘The grantee shall file the return with the city or province where its principal place of business is
located and pay the taxes due thereon to the Commissioner of Internal Revenue or his duly
authorized representative in accordance with the National Internal Revenue Code (NIRC) and the
return shall be subject to audit by the Bureau of Internal Revenue.



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To achieve efficient service and reduced electricity costs for end-users, the grantee and its end-
users shall not be required to comply with the provisions, charges and requirements in: Section
34 of Republic Act 9136; Sections 289 to 294 of Republic Act 7160; and ERC Resolution No.
16, Series of 2014,

Section 9. Right of Eminent Domain. — Subject to the limitations and procedures prescribed by
law, the grantee is authorized to exercise the right of eminent domain insofar as it may be
reasonably necessary for the construction, installation, establishment, and efficient operation and
maintenance of DPTs or Minigrid Systems. The grantee is authorized to install and maintain its
poles, wires and other facilities over and across public property, including streets, highways,
forest reserves and other similar property of the Government of the Philippines, its branches or
any of its instrumentalities. The grantee may acquire such private property as is needed for the
realization of the purposes for which this franchise is granted, including property already devoted
to public use or with public character: Provided, this will result in greater benefit for the public:
Provided, further, That proper condemnation proceedings shall have been instituted and
applicable rules shall have been complied with.

Section 10. Warranty in Favor of National and Local Governments. — The grantee shall hold
the national, provincial, city and municipal governments of the Philippines harmless from all
claims, accounts, demands, or actions arising out of accidents or injuries, whether to property or
to person, caused by the construction, installation, operation and maintenance of the lines for
electric services of the grantee.

Section 11. Liability to Damages. ~ The grantee shall be liable for any injury and damage
arising from or caused by accident to persons and property by reason of any defective
construction under this franchise or of any neglect or omission to keep its poles and wires in a
safe condition.

Section 12. Sale, Lease, Transfer, Usufruct, etc. — The grantee shall not lease, transfer, grant
the usufruct of or sell this franchise or the rights and privileges acquired thereunder to any
person, firm, company or other commercial or legal entity, nor merge with any other company,
nor shall the controlling interest of the grantee be transferred whether in whole or in part, and
whether simultaneously or contemporaneously, to any such person, firm, company or entity
without the prior approval of the Congress of the Philippines, unless to a wholly-owned
subsidiary of the grantee or where the grantee is the surviving corporation: Provided, That any
such transfer, sale or assignment is in accordance with the constitutional limitations. Any person
or entity to which this franchise is sold, transferred or assigned shall be subject to the same
conditions, terms, restrictions and limitations of this Act.

Section 13. Equality Clause. — In the event that any competing individual, partnership or
corporation shall receive a similar permit or franchise with terms and/or provisions more
favorable than those herein granted or which tend to place the herein grantee at any
disadvantage, such terms and/or provisions shall be deemed part hereof and shall operate equally
in favor of the herein grantee: Provided, That any term and/or provision herein granted which are
not contained in other franchises that may hereafter be granted shall likewise be enjoyed by the
future grantees

Section 14, Separability Clause. ~ If, for any reason, any of the sections or provisions of this
Act is held unconstitutional or invalid, the other parts or provisions hereof which are not affected
thereby shall continue to be in full force and effect.

Section 15. Applicability Clause. — The grantee shall comply with and be subject to the
provisions of Commonwealth Act No. 146, as amended, otherwise known as the “Public Service
Act.”


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Section 16, Repealability and Non-exclusivity Clause. ~ This franchise shall be subject to
amendment, alteration, or repeal by the Congress of the Philippines when the public interest so
requires and shall not be interpreted as an exclusive grant of the privileges herein provided for.

Section 17. Reportorial Requirement. — The grantee shall submit an annual report of finances
and operations to the Congress of the Philippines.

Section 18. Terms of Franchise. — This franchise shall be for a term of twenty-five (25) years
from the date of effectivity of this Act

Section 19. Acceptance and Compliance. — Acceptance of this franchise shall be given in
writing within sixty (60) days after the effectivity of this Act.

Section 20. Repealing Clause. ~ All laws, decrees, orders, resolutions, instructions and rules
and regulations or parts thereof, which are inconsistent with this Act, are hereby deemed
repealed or modified accordingly.

Section 21. Effectivity Clause. — This Act shall take effect immediately from the date of its
publication, upon the initiative of the grantee, in at least two (2) newspapers of general
circulation in the Philippines.

Approved.