Parañaque City 2nd District Rep. Gustavo Tambunting (File photo from the House of Representatives)
MANILA, Philippines — While the Manila Electric Company (Meralco) was able to respond to concerns raised during the hearing on its proposed new franchise, Parañaque City 2nd District Rep. Gustavo “Gus” Tambunting said another hearing may be set to discuss other apprehensions about the power distributor.
In a statement, Tambunting — chair of the House committee on legislative franchises — said they found the explanations of Meralco on different issues to be sufficient.
Some of the concerns raised were the supposed delay on Meralco’s rate reset process.
“Marami silang napaliwanag (They were able to explain many things) that we accept. We found them sound and reasonable,” Tambunting said on Tuesday, after the hearing on Meralco’s new franchise.
“But, of course, there are some that would need further clarification,” he noted.
Former speaker and House committee on energy chairperson Marinduque Rep. Lord Allan Velasco said it will be up to the Energy Regulatory Commission (ERC) to resolve the rate reset issue.
“We really have to look at the ERC because that’s the heart of the whole energy industry,” Velasco said.
READ: Meralco new franchise would be good for PH, says Cagayan de Oro lawmaker
The rate reset pertains to Meralco’s weighted average cost of capital (WACC), which Santa Rosa City Rep. Dan Fernandez observed was too high.
The WACC determines the return a company should be getting to make its investments viable.
A higher WACC means the company needs to make more profit to run its operations.
A lower WACC indicates that the company does not need to make a profit in a level too high to sustain its investments.
Fernandez claimed that Meralco’s 14.9 percent WACC set in 2010 was no longer accurate, as it should be allegedly cut down to 9.2 percent — which would lower the electric bills of consumers.
READ: Meralco’s capital cost too high, passed on to customers – House rep
Several lawmakers like Cagayan de Oro City 2nd District Rep. Rufus Rodriguez and Albay 2nd District Rep. Joey Salceda have filed bills seeking to renew Meralco’s franchise for another 25 years.
READ: Salceda: New Meralco franchise good for economy; Makabayan wants no rush
Meralco’s franchise is set to expire in 2028.
Several groups and lawmakers have questioned why the discussions are being rushed, given that there are still a few years between now and the franchise expiration.