Senate urges Meralco to amend its franchise bill

Senate urges Meralco to amend its franchise bill

In order to better safeguard consumers from future increases in power rates, a consumer rights advocate urged the Senate to change several important clauses in the proposed legislation to renew the Manila Electric Co. (Meralco) franchise.

Romeo Junia, a consumer rights advocate, wrote to Senate President Francis Escudero and other senators, stating that as long as the Meralco franchise renewal bill is not changed, it "will simply continue Meralco's ability to abuse its dominant position as the largest distribution utility and energy player in the country."

"The Philippines will not only maintain its dubious record of having the highest electricity costs in Southeast Asia; power costs 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 goal of approved House Bill 10926 is to extend Meralco's 25-year franchise so that it can continue to operate its electric distribution networks in Metro Manila and the neighboring provinces. The Senate is still considering the corresponding bill.

Junia mentioned the Electric Power Industry Reform Act of 2001 (Epira), the Renewable Energy Act of 2008, and the planned Philippine Natural Gas Industry Development Act as examples of laws and pending legislation that have improved and reformed the energy industry.

He noted that although Meralco is essential to accomplishing the goals of these legislation, the distribution utility is only "disincentivized" to carry them out successfully.

"It will seek to increase its power in the energy industry by leveraging on its monopoly status, giving more business to favored power plants at the expense of competitors," he said in his letter.

In order to prevent Meralco from crossing industry lines, Junia has urged senators to include certain clauses in the proposed franchise renewal.

These clauses include the Open Access provision of Epira, stopping the delay of net metering, prohibiting power supply agreements, and requiring Meralco to abide by laws prohibiting the abuse of market power, cross-ownership, and anti-competitive behavior.

He hopes that all issues will be addressed by the Senate and that the final franchise law will include protections.