2 more House members echo Fernandez’s rant vs Meralco

MANILA, Philippines — Two more lawmakers have echoed Santa Rosa City Rep. Dan Fernandez’s call for a review of the Manila Electric Company’s (Meralco) franchise amid high electricity rates.

Laguna First District Rep. Ann Matibag and ACT Teachers party-list Rep. France Castro both made manifestations after Fernandez’s privilege speech last Tuesday.

“We are all aware that our country has very high electricity rates and, in fact, one of the highest electricity rates not only in Asia but in the whole world. We are also aware that our country could not effectively attract foreign investors despite efforts of the government even by the president himself to encourage investors from other countries to come and put their businesses here,” Matibag said in her manifestation.

Castro agreed with Matibag and Fernandez regarding the cost of electricity, saying that even local investors have complained about the electricity rates.

Castro said it may be the right time to talk about splitting the Meralco franchise.

“If discussions are visceral and affect everyone like utilities or necessities in the household, that is more than very apt and timely for us Filipinos,” Castro said in Filipino.

“There is a need to review the (Meralco) franchise, there is also a need to hold the ERC accountable for its lapses for many years. I support the resolution of our colleague,” she added.

In his speech, Fernandez claimed that Meralco has a weighted average cost of capital (WACC) that is too high, which is eventually passed on to customers.

Fernandez was referring to the WACC, which determines the return that a company should be getting to ensure the viability of its investments.

A higher WACC means the company needs to make more profit to ensure its operations. A lower WACC indicates that the company need not make too high a profit to sustain its investments.

The lawmaker claimed that Meralco’s 14.97 percent WACC set in 2010 was no longer accurate, as it should be just at 9.23 percent — which would eventually lower the electric bills of consumers.

Meralco’s stand

Meralco spokesperson Joe Zaldarriaga, however, maintained that the power distributor had been giving service beyond the expectations of its customers.

He also disputed Fernandez’ claims that Meralco controls 70 percent of Luzon’s electricity, saying that there are several electric cooperatives providing services to households on the country’s biggest island.

“Records likewise show that Meralco is fully compliant with all government regulations and even outperformed the level of service required by the regulator. This is precisely the reason why some local government units are clamoring for Meralco to take over their service,” Zaldarriaga said.

“Further, while Meralco is the largest utility in the country, it has never committed and has no record of any anti-competitive behavior or abuse of market power.  On the contrary, we have always managed to supply electricity to our customers in the most transparent and least costly manner, and is the only distribution utility that has complied with an ERC directive to refund distribution charges by refunding more than 48 billion pesos in 2023,” he added.