Two legislators supported a proposition to divide the franchise of the Manila Electric Company (MERALCO) into three parts.
The Manila Times reported that Representative Ma. Rene Ann Lourdes Matibag from the 1st District of Laguna expressed her support for the proposal by Santa Rosa City Representative Dan Fernandez to split the franchise of the power firm into three.
Matibag explained that MERALCO holds a dominant position as a “monopsony” in the Philippine electricity market, with it being the largest distribution utility with more than half of the country’s electricity demand.
Furthermore, the representative questioned the increase in power rates from Php 3 per kilowatt-hour (kWh) in 2000 to Php 12 kWh, suggesting that MERALCO chose to profit as a supplier rather than use its market power to reduce rates.
That being said, she proposed two options: dividing MERALCO, as suggested by Congressman Fernandez, or MERALCO letting go of its interest in the supply of electricity.
Additionally, Matibag shared that the high electricity rates in the country constrain foreign investments and urged fellow House members to support Fernandez’s resolution, prioritizing the interests of the Filipino people.
ACT Teachers Rep. France Castro agreed with Matibag, stating she supported Fernandez’s call for a review of MERALCO’s franchise and emphasized the need to hold the Energy Regulatory Commission (ERC) accountable for its lapses over the years.
In response to this proposition, MERALCO’s Vice President and Head of Corporate Communications, Joe Zaldarriaga, opposed Matibag’s claims, asserting that MERALCO does not control 70% of Luzon’s electricity.
Zaldarriaga stressed that a large portion of industrial and commercial consumption in the MERALCO area is supplied by competitive retailers, not the distribution utility.
Moreover, the vice president emphasized MERALCO’s compliance with government regulations, transparency, and its refund of over P48 billion in distribution charges in 2023, as directed by the ERC.
