The proposed splitting of the Manila Electric Company's (Meralco) supposedly expansive franchise is in order, according to Laguna 1st district Rep. Ann Matibag and ACT Teachers Party-list Rep. France Castro. 

Santa Rosa lone district Rep. Dan Fernandez, chairman of the House Committee on Public Order and Franchises, made the pitch to review and then split Meralco's existing franchise in a scathing privilege speech last week. 

Matibag and Castro spoke on the plenary floor to concur with Fernandez, who blasted the power distribution giant for overcharging its 7.6 million customers for the past nine years.  

"Meralco is also a monopsony in the Philippine electricity market being the biggest distribution utility in the country having electricity demand that is more than half the demand of the entire country,” said Matibag.
 
“As a monopsony, Meralco could have been instrumental in reducing power rates of the country," she added. A monopsony is defined as a "market situation with only one buyer".
 
“FromP3 per kilowatt hour in 2000, we now have P12 per kilowatt hour. Why have our power rates increased instead of reduced?...Because Meralco has chosen not to use its market power as a monopsony to reduce power rates. Instead, it has chosen to profit as a supplier of electricity,” Matibag claimed.
 
According to her, Meralco is "tempted to choose between reducing power rates for captive customers and increasing its profits as a supplier". 

"we can help Meralco help our country reduce power rates to save our country. Let us remove the temptation from Meralco that prevents it from reducing power rates in power contracting to generation, the generators,” she said.
 
“We can either divide Meralco as what Congressman Fernandez proposed or Meralco must give up entirely its interest in the supply of electricity," she noted. 

Castro said she believes that the Philippines' high power rates are the reason the country is lagging behind economically . 

“What he (Fernandez) said about the Philippines having the most expensive electricity in all of Asia is true. That is probably why foreign investments and even local investors are complaining of the high electricity rates," said the Makabayan solon. 

Castro said it was not only the business sector that was reeling from high power rates, but consumers as well. As such, she also supports the call to split the Meralco "mega-franchise" into three.
 
“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," she said. 

Castro also said she was very open to having an inquiry by the House on the Energy Regulatory Commission's (ERC) failure to regulate Meralco and determine the source of lapses in power distribution.
 
“There is a need to review the franchise, there is also need to hold the ERC accountable for its lapses for many years. I support the resolution  of our colleague, Honorable Dan Fernandez,” she said. 

For his part, Meralco Vice President and Head of Corporate Communications Joe Zaldarriaga insisted that the contents of Fernandez's speech had many "factual errors". Contrary to what the House leader said, Zaldarriaga said Meralco does not control 70 percent of Luzon's electricity needs. 

He says that In the Meralco area, 90 percent of industrial consumption and one third of commercial consumption is supplied not by the distribution utility but by competitive retailers, e.g., Aboitiz, First Gen, etc.  

Meralco also does not serve "the whole of Calabarzon", contrary to Fernandez's claim.  "There are many other electric cooperatives (ECs) and distribution utilities (DUs) in Calabarzon, including FLECO (in the province of Laguna), BATELEC I, BATELEC II (biggest EC in the country), Ibaan Electric, First Bay, Quezelco I, Quezelco III, and others in Batangas and Quezon," said Zaldarriaga.  

He added: “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.”  

"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," the Meralco official said.