Accountability for solar power fiasco

Neophyte politician Leandro Leviste had been in the headlines since he was elected as representative of the first district of Batangas last year, and has fashioned himself as an anticorruption advocate after divulging alleged bribe tries and possession of the so-called “Cabral files” that supposedly reveal the high-ranking proponents of questionable multibillion-peso budget “insertions” in the Department of Public Works and Highways (DPWH) budget.

Leviste, however, has recently found himself on the defensive after the Department of Energy (DOE) slapped his Solar Philippines Power Project Holdings Inc. (SPPHI) company with a massive P24-billion penalty for alleged failure to live up to its government contracts to deliver a combined renewable energy capacity of more than 11,000 megawatts (MW).

The DOE actually terminated some 163 contracts for 2024 to 2025 involving nearly 18,000 MW of committed capacity as part of the crackdown on noncompliant power producers, and 64 percent of these contracts covering solar, biomass, geothermal, hydro, and wind involved the Leviste-led company.

These canceled “zombie contracts” include 33 deals secured from the government’s green energy auction program, which is meant to fast-track the development of clean energy sources and shift the country’s energy mix away from fossil fuel-run power plants.

‘Unwarranted favor’

“It’s been a long time coming,” said Energy Secretary Sharon Garin, who wants the hefty penalties–mainly in the form of performance bonds–collected within the first quarter of the year.

Leviste, however, has struck a defiant tone and said that the sanctions were politically motivated, meant to silence him and stop his crusade against corruption.

Garin, however, countered that 15 of Leviste’s company’s contracts had been terminated in 2024, long before the corruption probe into flood control projects of the DPWH began. Plus, SPPHI has had a long history of underperformance and had consistently ignored the DOE’s reminders of its contractual obligations.

As if Leviste’s troubles from the DOE were not enough, Ombudsman Jesus Crispin Remulla claimed that Leviste had sold the 25-year franchise granted in 2019 through Republic Act No. 11357 to construct, install, and operate solar-powered micro or small power grids in remote areas all over the country–currently held by Solar Para Sa Bayan Corp. (SPBC)–to the group of tycoon Manuel V. Pangilinan and a probe has since commenced.

It was the same claim made by Palace press officer Claire Castro, who had charged Leviste of having “sold or flipped” the franchise granted to him as an “unwarranted favor” during the time of former President Rodrigo Duterte.

Leviste a billionaire

Leviste vehemently denied these claims and countered with a libel case against Castro, describing the supposed defamation as part of the continuing attempts to “distract or disrupt but our goal is for transparency.”

Meralco PowerGen Corp., for its part, quickly distanced itself from the controversy surrounding Leviste, emphasizing that what it bought into was SP New Energy Corp., which it took over in December 2023 after a series of transactions that made Leviste a billionaire to the tune of P34 billion and a “separate and distinct” corporate entity from the SPBC.

What all these fine legal distinctions and back-and-forth boil down to from the point of view of the DOE is the failure of the Leviste-owned company to fulfill its contractual obligations, thus throwing the entire renewable energy development campaign of the government into disarray.

Because Solar Philippines was only able to deliver 2 percent of its committed power, as Garin claimed, then that means time and opportunity to beef up the country’s power supply had been wasted.

Alternative and potentially more serious investors could have delivered power within the time frame, thus putting the Philippines closer to its goal of increasing the share of renewable energy in the energy mix to 35 percent by 2030 from the current 22 percent.

Legitimate investors

Instead, the Philippines is now left in the position of having to source the renewable energy elsewhere and much later than expected.

It is therefore a welcome development that the DOE is learning from this expensive experience and is set to impose tougher rules so that only legitimate investors and those with the right technical and financial capabilities will be awarded the contracts to undergo these crucial power development projects.

Congress should demonstrate the same resolve to undertake a review of the rules on franchises to ensure that the holders, such as SPBC, will fulfill their contractual obligations.

With a disturbing pattern of falling short of contractual obligations, first with the franchise and then the power plant contracts, Leviste should not be allowed to get away with technicalities.

Indeed, the appropriate punishment or sanction should be meted out to all violators of prescribed rules, no matter how rich, powerful, or how well connected they are.