Lawmakers on Tuesday said the House of Representatives should investigate the Manila Electric Co. (Meralco) to find out if the utility did not violate its franchise when it imposed the record P4.15 per kilowatt-hour increase last year.
Reps. Joseph Violago of Nueva Ecija and Terry Ridon of Kabataan party-list noted that a congressional inquiry will enable Congress to determine if Meralco is complying with the terms and conditions of its franchise.
Under Republic Act 9209 which granted the franchise to Meralco, the power distribution utility is mandated to supply electricity to its captive market in the least-cost manner, modify, improve or change its facilities, poles, lines, systems and equipment for efficient and reliable service and reduced electricity costs. Meralco is also required to charge reasonable, just and competitive power rates.
The power company has been accused of manipulating the price of electricity at the Wholesale Electricity Spot Market (WESM) when the Malampaya plant was shut down late last year by instructing power supplier Therma Mobile to sell power at P62 per kilowatt-hour.
“If we can unearth proof that Meralco abused market power by dictating the high bid rate to one of its major suppliers to prevent the supply to be dispatched resulting in high electricity rates disadvantageous to the consumers, such can be considered a direct violation of its franchise,” Violago, vice chairman of the House Committee on Appropriations, pointed out.
Meralco’s franchise also prohibits it from engaging in any activity that will constitute an abuse of market power such as but not limited to unfair trade practices, monopolistic schemes and any other activities that will hinder competitiveness or business and industries.
“Given the circumstances, it is very urgent and necessary for Congress to exercise its oversight on the compliance of Meralco with the terms and conditions of its franchise,” Violago said.
Ridon noted that Meralco’s order to Therma Mobile to purchase power for P62 per kilowatt-hour is contrary to public interest.
“A virtual monopoly of power distribution is certainly not in the interest of the public as they can enter into sweetheart concessions with favored power generators. With the proposed P4.15 per kilowatt-hour power rate hike still looming, a franchise review is due,” the lawmaker-lawyer added.
Republic Act 9209 granted Meralco its franchise for the exclusive distribution of electric power to Metro Manila, Bulacan, Cavite, Rizal and certain areas in Batangas, Laguna, Quezon and Pampanga.
The Meralco franchise is good for 25 years, unless Congress revokes it for any violation of the terms or provisions.