House leader calls for review of Meralco franchise

Published November 13, 2021, 7:14 PM

by Manila Bulletin

House of Representatives Deputy Speaker and 1Sagip Party Rep. Rodante Marcoleta has called for a review of the legislative franchise of the Manila Electric Company (Meralco) in the wake of accusations that its profits nearly doubled than what had been authorized as consumers faced the coronavirus disease (COVID-19) pandemic last year.

Marcoleta also asked the Commission on Audit (COA) to inspect Meralco’s books to determine whether or not there were indeed “significant disparities in the energy generation supply purchases of Meralco as reported to the Energy Regulatory Commission (ERC).” “While these discrepancies may yield several conclusions, the bottom line suggests that the consumers are overcharged in billions of pesos annually based on our preliminary findings covering several years,” Marcoleta said in his recent privilege speech.

The House official noted that in ERC Case No. 2017-060, the government electric power industry regulator allowed “Meralco a cost/return to equity of 13.65.” “Yet, analyzing the financials obtained from Meralco’s own website, its return on equity was 28 percent in 2018 and 2019 and that even with the raging pandemic in 2020, its return to equity was still computed at a high 21 percent, or 54 percent more than the allowed cap,” Marcoleta added.

The partylist solon said these allegations should be enough to start a review of the legislative franchise granted by Congress which will actually run for another seven years.

The veteran lawmaker, in his speech, stressed that the House need not wait for 2028 to cancel the legislative franchise since a review of the operations of Meralco and the subsequent cancellation of its franchise is allowed under Republic Act 9209, the power distributor’s legislative franchise.

“When the country was hit by the pandemic last year and the people were placed under quarantine for almost five months, households were all shocked to receive the so-called adjusted billing statements that were not based on meter reading but on such a dubious algorithm,” Marcoleta noted.

“Unusual and arbitrary amounts were reflected on consumers’ billings that could trigger heart attacks and yet could not be contested because of the mandatory lockdown.” Marcoleta also revealed that Meralco has profited from ‘systems loss’ charging fees.

He said the electricity firm should waive the systems loss collection which is a drop in the bucket from its P21.4 billion annual profit.

Marcoleta said it is now time for Congress to review Republic Act 7832 or the Electric Power Industry Reform Act (EPIRA) which unfairly imposes on consumers the cost of systems loss.

The partylist lawmaker added that imposing system losses on consumers is both unjustified and illogical since it punishes them for power theft and other distribution losses which are not their fault. (Melvin Sarangay)