Meralco may also lose franchise – Gatchalian | Inquirer News

Meralco may also lose franchise – Gatchalian

By: - Reporter / @MRamosINQ
/ 04:49 AM August 31, 2020

MANILA, Philippines — Manila Electric Co. (Meralco) could suffer the fate of ABS-CBN for its refusal to readily comply with the orders of the Energy Regulatory Commission (ERC), Sen. Sherwin Gatchalian said on Sunday.

The decadeslong dominance of ABS-CBN ended after the House committee on legislative franchises rejected in July its application for a new 25-year legislative franchise on the grounds that it violated the constitutional ban on foreign ownership of mass media, among other reasons.


The Lopez-owned media conglomerate had been hoping to get a new license to resume its business and continue paying its 11,000 employees. On May 5, a day after its franchise expired, it was forced to shut down its radio and TV operations.

Gatchalian, chair of the Senate energy committee, warned that Congress could exercise its oversight function to revoke Meralco’s franchise after it said it would appeal the P19-million fine that the ERC had imposed on the company for failing to clearly explain to customers the spike in their monthly bills.


Meralco, the country’s biggest power utility, had billed customers based on average consumption from December to February because meter reading could not be done in March and April due to the enhanced community quarantine in Luzon that was aimed at preventing the spread of the new coronavirus.

It, however, failed to clearly explain the surge in the charges for May, prompting many furious customers to file complaints with the ERC.

“[Meralco] should not appeal anymore because it’s impossible that the penalty is just P19 million. They have to look at it as a whole,” Gatchalian told the Inquirer on the phone.

Meralco spokesperson Joe Zaldarriaga said the company respected the senator’s statement.

“That’s why we are meticulously studying the ERC decision,” Zaldarriaga said, adding that in the next days Meralco would take steps for the good of its customers.

“In fact, we also have fully complied with the installment plan. In fact, we went beyond the period stipulated by the ERC which started March 16 only. We included bills falling due March 1 to 15 in the installment plan ordered by the ERC,” he said in a statement.

Actual penalty P300MGatchalian lauded the ERC decision last week to penalize the power distributor, saying it could actually cost Meralco about P300 million since the regulatory agency also mandated it to provide a discount for “lifeline” consumers, or those who use less than 100 kilowatt-hours a month.


He said the discount of P1.90 per kilowatt-hour would benefit some 2.7 million lifeline consumers.

As of March, Meralco had 6.4 million residential accounts, or 92 percent of the total in its franchise area in Metro Manila and neighboring provinces. Commercial customers accounted for 530,864 (8 percent) connections and industrial customers, 10,580 (0.2 percent).

“I’m pleased with the swift resolution (of the ERC) to impose a fine … But the penalty of P19 million, for me, is just a drop in the bucket for Meralco,” Gatchalian said.

“I think the almost P300 million in penalty is reasonable enough because their violation is nonconformity to the orders of the ERC,” the senator said.

“If they still resist, I will advise ERC to mete out heftier fines and find other ways to penalize (Meralco),” he said in a separate radio interview.

No breakdown of charges

Gatchalian assailed Meralco and other power distributors for their continued failure to clearly explain to their customers the breakdown of monthly charges, such as the collection of environmental fee and feed-in-tariff allowance and a universal tax on all electric consumers.

He said the recent decision of the House of Representatives to deny ABS-CBN’s application for a new franchise should be a lesson to all holders of legislative licenses.

In fact, he said, any legislator could seek a review of Meralco’s franchise as part of Congress’ oversight authority even before the power distributor could apply for an extension.

“Based on our experience with ABS-CBN, the sins of the past can come and haunt you. In other words, during the deliberations of its franchise, this type of violation can be a basis for the revocation or nonextension of (Meralco’s) franchise,” Gatchalian said.

“This could be a ‘bad record’ against (Meralco) … It could be a hindrance (for securing a new franchise),” he cautioned.

He added: “If lawmakers think there’s a grave violation, it’s their discretion to come up with the recommendation whether to extend, add more penalties or even revoke (the franchise) as severe punishment.”

During the House hearings on ABS-CBN’s franchise renewal, lawmakers allied with President Duterte revived allegations against the Lopez-owned broadcast company, including its supposed unlawful reacquisition of its assets following the downfall of the strongman Ferdinand Marcos after the 1986 Edsa People Power Revolution.

Critics, however, claimed that ABS-CBN’s failure to secure a new franchise was due to Mr. Duterte’s previous declaration that he would block its application for airing a television ad critical of him during the 2016 presidential campaign.

The President also claimed that the network did not air his paid ad on the final stretch of the election campaign.

ABS-CBN has laid off thousands of employees after it stopped its free-TV and radio broadcasts.

With a report from Ronnel V. Domingo

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TAGS: ERC, Joe Zaldarriaga, Lopez family, Meralco franchise, Sherwin Gatchalina
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