Albay Rep. and House Ways and Means Committee chairman Joey Sarte Salceda is pushing for the renewal of the legislative franchise of Manila Electric Co. for another 25 years to ensure the continuous and uninterrupted distribution of quality and reliable power supply and “in consideration of the nature of the vital service it provides.”
Meralco’s latest franchise was issued under Republic Act 9209 in 2003 and will expire in 2028.
Salceda recently filed HB 9793 to amend RA 9209 and give Meralco another 25 years to “construct, operate and maintain a distribution system for the conveyance of electric power to end-users.”
The company distributes power to 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 said Meralco provides reliable and world-class electric service to homes and supports the competitiveness of industrial and commercial customers that total to more than 7.6 million in number 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 P9.52 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,” he said in explanatory note.
The lawmaker said Meralco’s proven track record over a span of 120 years assisted greatly in the development of the country’s key economic growth areas.
Salceda said that while many people cite the country’s power rates as “among the highest in the region, a report from the International Energy Consultants [IEC] 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.”
The IEC found that “if subsidized markets are excluded, then Meralco’s tariff is 13 percent lower than the world average” even with the spikes in international fuel prices in 2022.
The resilience of Meralco’s tariffs has been attributed by IEC to “Meralco’s ability to source low-cost PSAs4” and a “generation contract portfolio [that] appears to be very well managed.”
Salceda said that upon Meralco’s own initiative that was followed by an Energy Regulatory Commission decision directing the refund of distribution-related charges arising from the final review of 2012-2015 rates and delays in the regulatory reset process, the company completed a P48-billion refund to customers, which brought the company’s distribution prices down further.
Meralco also implements a lifeline mechanism with a range of 20 percent to 100 percent discount to customers with a monthly consumption of 100 kwh and below, subsidized by other customers, as part of the societal obligation to marginalized customers within its franchise area.
The maximum discount and range of consumption are the largest among the country’s distribution utilities.
Meralco also assisted 6,376 low-income families in its franchise area through its household electrification advocacy, allowing them access to electric service.
Meralco also invested more than P220 billion from 2003 to 2022 for new connections, asset renewals, and load growth projects to serve more customers and their expanding electricity needs to support economic development and improve the people’s quality of life, while continuing to support government projects.
