Consumer group Laban Konsyumer Inc. (LKI) said lawmakers should instead find solutions to lower power rates than break up current franchises of distribution utilities (DUs).
LKI said expressed concern over recent criticisms against Manila Electric Co. (Meralco) of alleged overcharging.
The group in a statement said the Weighted Average Cost of Capital (WACC) which is one of the points raised by legislator, is a regulator-set mechanism that applies not just to Meralco but to other DUs as well.
“It is a fact that for a large utility distributor such as Meralco to effectively continue its operation in line with its objective of providing consumers best electricity service, it needs a robust domestic capitalization,” LKI said in a statement.
The group also cited a report released by Oxfam Pilipinas that around 2.4 million households or 11 million Filipinos need efficient and sufficient supply of electricity.
LKI said some provinces outside of Meralco’s franchise area are petitioning to allow the company to provide them with electricity supply, instead of relying on existing electricity cooperatives’.
“LKI is aware that Meralco’s franchise renewal is up at stake next year as expiration of its franchise draws near. We believe this is the main reason why negative and unwarranted news are currently circulating, a desperate move to block Meralco from continually provide consumers efficient electricity supply with the lowest power rates in the country,” the group said.
Meralco earlier its rates are fair and transparent based on the 2022 updated report published by the International Energy Consultants (IEC) on the Regional/Global Comparison of Retail Electricity Tariffs.
The IEC report assessed Meralco’s reasonableness of various components including taxes, as well as generation and distribution charges.
Based on such factors, IEC concluded that on average, Meralco’s regulated customers are currently paying a fair and reasonable price for electricity.
“We support IEC’s recommendation that for Meralco to hold or improve its position relative to tariffs in other markets in the region, regulators and legislators must focus on facilitating investment in new power generation to meet rapid demand growth,” LKI said.
