Lawmaker wants Meralco franchise reviews ahead of 2028 expiration

A lawmaker over the weekend called on Congress to review the franchise of Manila Electric Company ahead of its 2028 expiration, citing the continued power rate hikes.

In a privilege speech, House Deputy Speaker Rodante Marcoleta said Congress should look into provisions of Meralco’s franchise, particularly on the electricity supply and the system-loss practice.

“Hindi naman kailangan na hintayin pa nating mag-expire ang kanilang prangkisa dahil maaari itong ipawalang bisa o kanselahin ng Kongreso kapag nagkaroon ng paglabag sa alinmang termino o probisyon sa batas ng kanilang prangkisa — ang Republic Act 9202,” he said.

(We do not need to wait for the franchise to expire because this can be revoked or canceled by Congress if they violate any terminologies or provisions of the law concerning their franchise — Republic Act 9202.)

Marcoleta, the representative of the SAGIP Party-list, was among the lawmakers who opposed granting ABS-CBN another 25-year franchise.

The lawmaker noted that under Section 4 of Meralco’s franchise, it is ordered to supply electricity to its captive market “in the least cost manner” and shall charge “reasonable, just, and competitive power rates.”

He also said that the franchise should do away with the so-called “system loss,” as he said consumers should not be faulted and charged for power thefts or losses.

According to Marcoleta, the removal of the system loss will not have a significant impact on Meralco’s earnings, noting its yearly net income of nearly P23 billion.

“Ito po ay tinatawag na ‘element of risks’ na alam na alam naman po ng mga kompanya na may kinalaman sa negosyo ng koryente. Ang ‘system loss’ ay dapat balikatin ng kompanya ng koryente — hindi po ng mga konsyumer,” he said.

“Maliit na kurot lamang po ito, Mr. Speaker, kung ikukumpara sa napakalaking tinutubo ng Meralco,” he added.

(This is called “element of risks” which the company is very knowledgeable about. The system loss should be shouldered by the companies and not the consumers. This will only be a slight loss compared to Meralco’s earnings.)

Meralco reported an 8.9% decline in its core net income to P21.71 billion in 2020, due to lower electricity sales amid a decline in power purchases. Reported net income fell 30% to P16.32 billion.

The company in November announced another rate hike, marking the eighth straight month that the firm adjusted its household power rates upward.

Compliant

Sought for comment, Meralco said it has been compliant with the provisions provided in its franchise, and with all pertinent policies contained in the measure.

The firm suspended the implementation of its Guaranteed Minimum Billing Demand in a bid to ease the payments of its customers with demand-based billing, of which the majority are small and medium enterprises.

“For all its customers, Meralco extended the installment payment option for unpaid bills and suspended disconnection of delinquent accounts during the ECQ and MECQ periods,” Meralco Spokesperson Joe Zaldarriaga said in a separate statement.

“To date, despite the lifting of the lockdowns, we still continue to provide help to customers who need our assistance,” it added.

Meralco also noted that it has been implementing programs and initiatives to help customers amid the pandemic, and it has provided relief assistance to hard-hit communities.

“We share the concern to seek ways to lower cost of power to our residential and business customers and will continue to proactively work with the DoE, ERC, and other government agencies towards this end,” Zaldarriaga said.

“Power rates in the Meralco franchise area is still lower compared to several years back and remains one of the lowest in the country to date,” he added. — DVM, GMA News