Cagayan de Oro 2nd District Rep. Rufus Rodriguez FILE PHOTO
MANILA, Philippines — Instead of calling for the split of the Manila Electric Company (Meralco) franchise area, Cagayan de Oro 2nd District Rep. Rufus Rodriguez said on Thursday that the government and alleged consumer advocates should focus on finding ways to bring electric prices down.
In a statement, Rodriguez said that lawmakers should enlighten the public about different issues regarding power distribution and not cause confusion.
Rodriguez was referring to questions about Meralco’s weighted average cost of capital (WACC) or the percentage of return a company should be getting to ensure the viability of its investments. According to him, if WACC is the problem, then the solution should be to compute it and not split Meralco’s franchise area.
“As representatives of the Filipino people, it is our responsibility to enlighten the public about what is really happening and not cause confusion by bringing up proposals that have not been carefully studied,” he said.
“But if WACC is the problem, isn’t the logical solution (to) review the WACC and have the regulator complete the rate reset process,” Rodriguez questioned.
Rodriguez explained that he has no problems with questions about the WACC, but such problems can be resolved by having the Energy Regulatory Commission (ERC) complete the rate reset process.
The lawmaker did not mention who raised the concerns, but in a privilege speech last November 8, Santa Rosa City Rep. Dan Fernandez called out Meralco for having a high WACC rate of 14.97 percent.
Fernandez said that current computations indicate that it should be only 9.23 percent, but ERC has not reviewed the figure since 2015. In a hearing by the House committee on legislative franchises, ERC cited several problems as to why they failed to recompute Meralco’s WACC.
READ: Surigao del Sur rep suggests abolishing ERC due to Meralco WACC issue
Due to these issues, Fernandez suggested that the franchise area of Meralco — which he said has been a monopoly and monopsony — be split into three areas.
A higher WACC means the company needs to make more profit to ensure its operations, while a lower WACC indicates that the company need not make too high a profit to sustain its investments.
But Rodriguez challenged those who want to split Meralco’s franchise to identify who should take over “the huge responsibility of ensuring that there will always be sufficient supply to support not just households, but the country’s growing economy.”
“These calls happen even before Meralco’s franchise expires, so clearly there are interests playing around here. But the interest that we should be focusing on is that of the Filipino people,” Rodriguez said.
Meralco has denied accusations of monopolism, contradicting Fernandez’s claims that they do not have exclusive control of Calabarzon and Pampanga’s power supply.
Several groups also noted that such claims, which facts can easily dispute, are unproductive since they divert discussions on lowering power costs.