Last January, the Department of Energy (DOE) showed some spine when it slapped a massive P24-billion penalty against the solar energy company of Batangas 1st District Rep. Leandro Leviste for failure to deliver on its commitment to produce some 11,000 megawatts (MW) of renewable energy.
But nine months later, Energy Secretary Sharon Garin admitted during the DOE budget hearing that the government had only managed to collect a measly P80 million out of the hefty fine on Solar Philippines Power Project Holdings Inc., a company that Leviste founded in 2013 which made him eventually a multibillionaire.
Yes, the DOE had taken measures to press Leviste’s company to pay the sizable fine by filing a criminal complaint with the Department of Justice (DOJ) and a civil case with the Office of the Solicitor General.
But the interminable delay in collecting on what is rightly due to the government has nevertheless reinforced growing pessimism and even outright dismissal of the government’s resolve to keep erring power companies in line.
Indeed, if power generators proven to have failed to honor their commitments to deliver contracted energy within the prescribed period go unpunished, then the entire energy development program is jeopardized.
Unequivocal message
Without an unequivocal message that these infractions will not be tolerated and that painful sanctions will be imposed, the DOE runs the danger of attracting power firms who are only interested in winning contracts for possible sale to other companies down the road and not on delivering the power.
Garin said as much when she justified the unprecedented fine against Leviste’s company. “Kung hindi natin gagawin ito, baka sumunod ang iba. Kukuha lang ng kontrata, maghihintay ng investor, laway lang ang ibebenta nila,” she said. (If we’re not going to do this, others would follow. They would get a contract, wait for an investor and just do some sales talk.)
Coming down hard on noncompliant firms, Garin added, was not meant to scare off investors but rather aimed to ensure that only “legitimate investors” with the necessary financial, technical, and legal capabilities will undertake energy projects in the Philippines.
Veering away from this right path is unacceptable and scams that should not be allowed to take root, especially at this time when the country urgently needs new energy sources to meet growing demand across the country, should not be tolerated.
‘Solar King’
Leviste indeed has much to answer for as of the 163 power supply service contracts that the DOE canceled from 2024 to 2025, Solar Philippines accounted for some 11,400 MW, about 64 percent of the total capacity.
Garin had said that Leviste was not being singled out in its sweeping crackdown on nonperforming power contractors, but the violations are just too big to ignore.
As much as Leviste has been hailed as the country’s “Solar King,” his group is in the government’s crosshairs for failure to live up to its end of the contract to deliver power by December 2025, although Leviste has consistently and vociferously denied that his company had failed to meet targets, claiming that many of them had not even been granted notices to proceed.
Leviste’s other company, Solar Para sa Bayan Corp., faces a similar complaint with the DOJ for “willful neglect and failure to fulfill the obligations” to install renewable energy-powered microgrids in remote and underserved areas across the country under a 25-year legislative franchise granted during the time of former President Rodrigo Duterte.
Over that time between winning contracts and DOE’s cases, Leviste has earned billions after selling some P24 billion worth of shares in SP New Energy Corp.—founded as Solar Philippines’ subsidiary—to the MVP Group’s Meralco PowerGen Corp. and other investors.
High price of failure
This means that as far as resources go, Leviste has more than enough to pay the fine if finally compelled by the courts.
It is indeed now up to the courts to promptly decide on the merits of the cases against Leviste that are increasing by the day, including estafa, graft, and even plunder.
But in the meantime, the DOE has to scramble for new investors that can be counted on to deliver the additional power to meet future demand and keep the power grids stable, and at the same time keep the country on track to meeting its goal of having renewable energy account for 35 percent of the total energy mix by 2030 from the current level of roughly 25 percent.
To the DOE’s credit, it has stepped up its crusade against violators by instituting clear sanctions against noncompliant power generation companies that will range from a formal warning to suspension and contract cancellation and corporate blacklisting after a third offense, a sanction that for Akbayan party list Rep. Chel Diokno should be meted out on Leviste’s company.
The DOE should keep up the pressure and take violators to task as Filipinos will ultimately pay the high price of failure in the form of expensive power rates and unstable energy supply.