Franchise renewal bids need Senate scrutiny

The proposal to renew the franchise of the Manila Electric Co. four years before it expires has been causing a stir in the power sector.

Although it has received support from some members of the House of Representatives, many are urging government regulators to remain vigilant and ensure that the utility giant undergoes a thorough performance review before being granted a franchise extension.

For former chairman of the Senate Committee on Energy Senator Sherwin Gatchalian, now is the best time to “scrutinize” Meralco whether it remains effective as the country’s largest power distributor or not. 

“These franchise renewals, my view always is that we have to use this opportunity to review the performance of the grantee. And that's a good way of putting accountability to the grantee. I will look at the performance of Meralco,” Gatchalian said at the sidelines of an energy forum last week. 

“The price, for example, since they buy power, and the service which includes connection, brownouts, speed of repairing lines, etc,” he added.

No Senate backing yet 

House Bill (HB) No. 9813 seeks to extend Meralco’s existing franchise, which will expire in four years or 2028. 

However, Gatchalian noted that the bill has not yet secured support from the Senate. 

“Typically, the franchise emanates from the House. We cannot move until they transmit the franchise to the Senate. So, that's how the process works. No one has filed yet a franchise renewal with the Senate.

In this case, I think we will have to wait for the House to transmit it to us,” the senator said.

Advocacy groups United Filipino Consumers and Commuters and People for Power Coalition had been urging lawmakers to launch a thorough review of Meralco’s franchise renewal bid due to its allegedly ill-timing.

Last week, the Energy Regulatory Commission (ERC) signified its intention to actively explore ways to address regulatory barriers to initiate a much-needed reevaluation of the power distributor.

Under a regulatory review, the commission evaluates Meralco's performance and adjusts electricity rates as needed.

“We are undertaking the reset exercise now, which includes an assessment of its performance,” ERC chairperson Monalisa Dimalanta said. 

“We were initially targeting to complete the reset within the year but Meralco and its intervenors filed motions we need to resolve before proceeding. The reset involves an audit of Meralco’s assets, revenues, expenses, and performance,” she added.