A lawmaker is pushing for the renewal of the legislative franchise of the Manila Electric Company for another 25 years as it will ensure continuous and uninterrupted distribution of quality and reliable power supply.
This comes as Albay Second District Representative Joey Salceda House Bill 9793, which will amend Republic Act 9209 and give Meralco another 25 years to “construct, operate and maintain a distribution system for the conveyance of electric power to end-users.”
Meralco’s latest franchise was issued under RA 9209 in 2003. It will expire in 2028.
The firm supplies power in 38 cities and 73 towns of Metro Manila, Bulacan, Cavite and Rizal and certain areas in Batangas, Laguna, Quezon, and Pampanga; key political and economic centers of the country that includes major air and seaports; main offices of government; and centers for trade and commerce.
Salceda, the House Ways and Means Committee chair, pointed out that Meralco supports the competitiveness of industrial and commercial customers that total to more than 7.6 million by the end of 2022.
“For the year 2022 alone, Meralco delivered 48,916 gigawatt-hours of electricity to these end-users at an average retail rate of Php9.52 per kilowatt-hour. Electricity consumption in the Meralco franchise area already represented more than 50 percent of the country's total electricity consumption in 2022,” said Salceda.
He added that while many people cite the country’s power rates as “among the highest in the region, a report from the International Energy Consultants noted that tariffs in countries like Indonesia, Malaysia, and Thailand are subsidized fully or substantially by their governments, while Philippine power prices are reflective of the actual cost of electric service.”
Furthermore, even with the recent spikes in international fuel prices in 2022, IEC found that "if subsidized markets are excluded, then Meralco's tariff is 13% lower than the world average."
The resilience of Meralco's tariffs has been attributed by IEC to its "generation contract portfolio that appears to be very well managed," according to Salceda.
Recently, upon Meralco's initiative that was followed by an Energy Regulatory Commission decision directing the refund of distribution-related charges arising from ERC's final review of 2012-2015 rates and delays in the regulatory reset process, the power firm completed a Php48 billion refund to customers, which brought the company’s distribution prices down further, explained Salceda.
As part of the societal obligation to marginalized customers within its franchise area, Meralco implements a lifeline mechanism with a range of 20 to 100 percent discount to customers with a monthly consumption of 100 kWH and below, subsidized by other customers.
The maximum discount and range of consumption are the largest among Philippine Distribution Utilities.