THE Senate has been asked by a consumers rights advocate to review and amend key provisions in the legislative franchise of the Manila Electric Company (Meralco) before approving the bill seeking to extend the franchise for another 25 years.
In a letter addressed to Senate President Francis Escudero and other senators, Romeo Junia said amendments to the provisions of the Meralco franchise should be considered to stop the power company from committing alleged consumer abuses owing to its monopoly of the power industry.
“The Philippines will not only maintain its dubious record of having the highest electricity costs in Southeast Asia as power cost will likely increase even further if nothing is done to curtail Meralco’s apparent abuse of market power. The franchise renewal represents a very rare occasion where Congress can put limits on Meralco’s power,” Junia said.
The Senate has yet to approve the proposed renewal of the Meralco franchise, which was approved by the House of Representatives last November.
House Bill No. 10962 granted the power firm another 25 years to maintain electric distribution systems in Metro Manila and nearby provinces.
Meralco’s franchise is set to expire in 2028. Its franchise area covers Metro Manila, Bulacan, Cavite, Rizal, and select areas in Pampanga, Laguna, Batangas, and Quezon.
Junia said that while safeguards are already included in the House-approved bill, these need to be reiterated in the Senate version, especially relating to penal provisions, including franchise cancellation, for violations or non-compliance with its commitments.
“At this point, when various stakeholders have already come forward with their concerns and views over the on-going effort to renew (the franchise)… (senators should) unequivocally show the intent of Congress to draw clear lines that Meralco cannot cross, even with and especially from its dominant position in the industry,” he said.
Among others, Junia highlighted the need to mandate the immediate enforcement of the Retail Competition and Open Access (RCOA) provision of the Electric Power Industry Reform Act of 2001; the net metering provision of the Renewable Energy Act; and prevent the awarding of power supply deals or increased use of supply from Meralco-affiliated companies which, he said, rely on coal or expensive plants while competitors offer cleaner or less expensive solutions.
He also said the new franchise should include provisions requiring Meralco to comply with laws against market power abuse, cross-ownership, and anti-competitive behavior.
Cross-ownership refers to generation companies associated with Meralco through common parent companies.
The Department of Energy, Junia said, has a policy related to the use of a competitive selection process to prevent abuse in awarding power supply contracts to Meralco’s own power plants.
Junia also told senators that Meralco is supposedly “disincentivized” to “effectively” implement the reforms and improvements in the energy sector as mandated under the EPIRA Act of 2001 and the Renewable Energy Act of 2008.
