Terry Ridon (Facebook)

A former congressman has raised concern over the possible negative message that the proposed splitting of the Manila Electric Company (Meralco) franchise could impart to foreign investors. 

Terry Ridon, Infrawatch PH convenor and former Kabataan Party-list representative, insinuated that all the efforts of President Marcos and House Speaker Martin Romualdez to woo investors would all go for naught if the franchise subdivision pushes through. 

“While President Ferdinand Marcos Jr. and House Speaker Martin Romualdez have been tirelessly joining international conferences to stimulate foreign investments into the Philippines, some legislators are giving reasons why foreign investors should opt out of the country," Ridon said. 

"The proposal to split the Meralco franchise, which continues to subsist until 2028, sends a signal to investors that there is not regulatory certainty under this government, and that it will change its rules to suit various interests," he said. 

Meralco distributes power to the entire National Capital Region (NCR) or Metro Manila, plus nearby provinces. 

The call to split the power distributor's franchise was an offshoot of the non-recomputation of the its weighted average cost of capital (WACC). 

But Ridon says the failure to re-compute the WACC is a default by the Energy Regulatory Commission (ERC), which is tasked to undertake periodic WACC reviews. 

The former solon, who completed the General Management Program at Harvard Business School, said the proposed franchise subdivision has no relevancy to the failure of the ERC to recompute the WACC since 2015. 

“While we support periodic WACC recomputation, particularly if it ensures the least cost to consumers, this recomputation has no relevancy to the call to split the Meralco franchise. 

“Franchise revocation or subdivision is only relevant to the failure to re-compute the WACC if legislators can show that Meralco had purposely prevented the ERC from performing its function to undertake WACC review and re-computation. Absent this, there is absolutely no basis for Congress to even call for a splitting of the Meralco franchise," explained Ridon, a former House Committee on Energy member. 

He further said that the current size of Meralco was what has enabled it to provide the least cost of power to its consumers. 

“While Meralco is not without its faults, its massive customer base has been its greatest strength in negotiating cheaper power rates with power generators. In fact, its size has enabled it to provide the lowest power rates in the country," Ridon said.