Nueva Ecija 3rd district Rep. Rosanna “Ria” Vergara and an executive of the Manila Electric Company (Meralco) on Tuesday, Sept. 20, disagreed on the effectiveness of the Electric Power Industry Reform Act of 2001 (EPIRA) in bringing down power prices in the country.
During the briefing on electric power distribution by the House Committee on Energy, the lady lawmaker and Meralco First Vice President and Head of Regulatory Affairs Jose Ronald Valles argued about energy cost, which the latter claimed had gone down since the implementation of EPIRA.
But while Vergara was appreciative of Valles’s response, she said that power rates in the country remain high.
“Whenever they talk about why our country (is) unable to increase the foreign direct investment (FDI) it is always—one of the reasons is the high power rates in our country and this is a fact,” she said.
“Meralco, being one of the largest distribution utilities, you say the opposite. And yet, the FDIs are not increasing. I’m not saying that it is Meralco’s fault. What I’m looking at is the cost of generation,” Vergara added.
The lawmaker shared that she ran a distribution utility (DU) before running as congresswoman.
“I’m sad to say that effective rates from 2001 to the present have not gone down; they have gone up,” she stressed, adding that this resulted from the privatization of generation companies and DUs.
“So, how it is possible that Meralco can say prices have been going down when now they are all profit centers whereas before, we had the government taking care of generations and transmission?” she asked.
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Vergara also questioned Meralco’s claim that the country’s power rates are “still very low” compared to other countries.
“Should we not look at our power rates vis-a-vis the cost of living in our country where an average family of five in the 4Ps program survives on P5,000 to P6,000 per month and almost 20 percent of that goes paying in electricity?”
For his part, Valles contended that since Meralco is a “big distribution utility,” it was able to source the “biggest chunk of the generation from generation companies through competitive supply, competitive selection process of the Department of Energy (DOE)".
He also said that the generation costs have “substantially gone down” since 2019 and that Meralco has not increased its distribution cost since 2015.
“These two factors mainly contributed to the reduction of the distribution rates of Meralco from the implementation of the EPIRA up to the present,” Valles added.
He further said that when Meralco’s transition supply contract with the National Power Corporation (NPC) expired in “2010 or 2011", it contracted power supply from generation companies.
“We were able to negotiate for much lower prices compared to the prices prevailing at that time. This has contributed to the reduction in the generation cost,” he stated.
Earlier, lawmakers also held a hearing on the possible abolition of EPIRA since it has not fulfilled its promise to reduce the cost of electricity in the country.