House grants Meralco a 25-year franchise to operate

The House of Representatives has approved the bill granting a 25-year franchise to operate to Manila Electric Company (Meralco) on third and final reading.

This happened after 186 lawmakers voted in favor of House Bill 10296 against seven no votes and four abstentions during a vote in Wednesday's plenary session.

The bill mandates Meralco to supply electricity to its captive market in the least cost manner as well as supply electricity to the contestable market subject to conditions that may be prescribed in applicable laws, rules and regulations.

Likewise, the bill states that the Meralco should modify, improve, or change its facilities, poles, lines, systems and equipment for the purpose of providing efficient and reliable service and reduced electricity costs “in the interest of the public good and as far as feasible and whenever required by the Energy Regulatory Commission (ERC) or the Department of Energy.”

The present Meralco franchise is set to expire in 2028.

House ways and means panel chairperson Joey Salceda of Albay, one of the authors of the measure, said the bill should not face opposition in the Senate given Meralco’s performance.

“I expect quick passage in the Senate and perhaps even no bicam (bicameral conference committee for reconciling differing House and Senate versions). Meralco is an example of how service reliability can create economic growth and development,” he said in a statement.

Salceda then said that based on estimates from the Philippine Statistics Authority’s input-output tables and data from the Energy Regulatory Commission (ERC) on outages due to power supply by distribution utilities, the country would gain a net gross value added of P204.29 billion every year if all its cooperatives and utilities performed like Meralco.

“This is the fruit of some P220 billion that Meralco invested in reducing systems losses and system interruptions. No wonder as many as 40 localities have asked Meralco to cover them,” Salceda said.

He also said Meralco has fully complied with the ERC's rules and issuances with some P48.3 billion in consumer refunds already delivered in full.

“As I repeatedly assert, the role of the franchise review process in Congress is to see whether a grantee has complied with its mandates. In this regard, there can be little question. Meralco has fulfilled its end of the current franchise law,” Salceda added.

Pace of approval questioned

But lawmakers Dan Fernandez of Santa Rosa, Laguna and Raoul Manuel of Kabataan party-list questioned the speedy approval of the Meralco franchise.

Fernandez argued that Meralco is not compliant with its current franchise’s provision of submitted finance and operation reports to Congress.

“They are yet to fulfill the obligation to be public and transparent of their rates and more importantly, not abuse their market power as a natural monopoly in their franchise areas,” Fernandez said.

Manuel, for his part, said there is no rush to approve the Meralco franchise which is only set to expire four years from now.

“There is no urgency to approve this. This rushed renewal just shows that this is not for public interest. The people are suffering from high Meralco rates, and our country has one of the highest electricity rates in Asia,” he said.

“This is a huge burden not only for ordinary Filipinos, but also on small businesses,” Manuel added. — BM, GMA Integrated News