A congressional leader on Sunday said the cancellation of Manila Electric Co.’s (Meralco) franchise loomed as the power utility failed to submit annual financial and operation reports required by the law, Republic Act 9209, which granted the franchise.
Surigao Del Sur Rep. Johnny Pimentel said records would show that Meralco submitted reports only for 2018 to 2022.
“The financial report is different,” Pimentel said in Filipino during recent public hearing conducted by the House committee on Legislative Franchises on the privilege speech of Laguna Rep. Dan Fernandez.
Fernandez earlier called for the split of Meralco’s mega-franchise for allegedly overcharging its customers and violating its franchise granted by Congress.
Pimentel is a member of the House Committee on Public Accountability.
“If you did not submit your reportorial requirement for these years, then well, basically, you have already violated Section 14 of Republic Act 9209,” he added.
Contrary to the claims it is not compliant with reportorial requirements, Meralco in a statement clarified that it has religiously submitted its annual financial and operating reports since it was granted its franchise in 2001.
Jose Ronald Valles, Meralco first vice president and head of regulatory management, said the company’s annual report is a public document and is easily accessible to the public.
Valles said Meralco has been submitting the same to the Philippine Stock Exchange and the Securities and Exchange Commission, since the company is a publicly listed entity and is bound by corporate reportorial requirements.
“Meralco also reiterates that it strictly adheres to the law and operates within the bounds of its franchise and the areas it serves,” Valles said.
Non-compliance with the law is ground for franchise cancellation or revocation per Republic Act 9209, or the act that granted Meralco the franchise to construct, operate and maintain a power distribution system to end-users in Metro Manila, Bulacan, Cavite and Rizal, and certain areas in Batangas, Laguna, Quezon and Pampanga provinces.
“It is very clear in Republic Act 9209 that the submission of reports should be done on a yearly basis. Now as stated by the ComSec (Committee Secretariat), they submitted only for several years,” Pimentel said.
A check made in the records showed that Meralco complied with the reporting requirement only seven times since getting its franchise in 2003, the solon asserted.
As Meralco’s franchise is already 20 years old, Pimentel said a total of 20 reports should have been submitted as required by the law.
“For the record, you have submitted only seven reports,” Pimentel said to officials of the firm.
He asked Meralco representatives present why Its franchise should not be cancelled in the wake of the violations. The representatives said they would try to reconcile the records.
Pimentel said this was an admission of uncertainty over whether the records have been submitted in compliance with the law.
Fernandez has urged Congress to split the mega-franchise of Meralco into three, accusing the “monopolistic” utility of failing to serve the interest of 7.6 million subscribers and overcharging them in the last nine years.
In a privilege speech last month, Fernandez said since Meralco has grown too big and dominant in the power industry, a review of its franchise to pave the way for its split into three was timely.
“It’s high time we renew its franchise to pave the way for the split of the mega-franchise we granted Meralco,” said Fernandez.
“If possible, we can split it into three franchises since Meralco actually operates in three sectors in Luzon — NCR (National Capital Region), South Luzon (Calabarzon) and North Luzon sector of Pampanga and Bulacan,” he added.
The Laguna lawmaker also said Meralco now controls at least 70 percent of Luzon’s electricity output that it is able to also manipulate the operations of power producers and sellers.
Because the franchise is too big, Fernandez said Meralco has already, in effect, divided it up to be able to manage it.
With 60 percent of the country’s gross domestic product coming from NCR, Fernandez said Meralco can manipulate the Philippines’ economic growth by having full control of electricity in Luzon.
“They are monopolistic,” said Fernandez.