Solon reminds Meralco of gov’t takeover clause in operating franchise » Manila Bulletin News

Solon reminds Meralco of gov’t takeover clause in operating franchise » Manila Bulletin News

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By Ellson Quismorio

Aklan 2nd district Rep. Teodorico Haresco Jr. has reminded the Manila Electric Company (Meralco) of a provision in its operating franchise that allows for government takeover of the power distribution giant’s systems.

Haresco said this during Tuesday’s Good Government and Public Accountability Committee hearing which tackled House resolutions questioning the “sudden” increases in electricity bills during the Enhanced Community Quarantine period.

“How do we avoid this kind of eat bulaga (surprising increase), force majeure? Porke nawalan sila ng 30 percent, bigla na lang ang consumer, magsa-suffer? Buti na lang wala tayong mga riots katulad ng US (Just because you lost 30 percent in revenue, the consumers would suffer all of a sudden? It’s a good thing we don’t have riots here like in the United States),” he said in the virtual hearing.

Earlier in the proceedings, Meralco Senior Vice President and Head of Legal and Corporate Governance Office, Atty. William Pamintuan told the House committee that company profits fell during the two-month ECQ period. He said this is because power demand from the commercial sector during the ECQ “drastically went down by 30 percent.”

Pamintuan did reveal that consumption from its residential consumers went up by at least 10 percent, given the government’s instruction for Filipinos to stay home because of the COVID-19 pandemic. “In total, our revenue went down because of the reduction in demand,” he said.

But the so-called “electric bill shocks” or the resulting exorbitant bills during the public health emergency didn’t sit well with the Aklan congressman.

“We have a provision, Section 7, in the franchise we gave to Meralco,” Haresco said, referring to Republic Act (RA) 9209.

“The right of government, a special right, is hereby reserved to the President of the Philippines in times of war, rebellion, public peril, calamity, emergency, disaster, and disturbance of peace and order,” he said.

When read in full, the particular provision states the President’s right “in times of war, rebellion, public peril, calamity, emergency, disaster or disturbance of peace and order to take over and operate the distribution system of the grantee or to authorize the temporary use and operation thereof by any agency/department of the government upon due compensation to the grantee for the use of the said distribution system during the period when they shall be operated.”

Haresco also assailed Meralco’s offer of installment pay for its March to June bills, claiming that it’s “tubong-lugaw,”a colloquial term for gaining large returns on a small capital.

“Sinasabi nila, pwede niyo kaming bayaran after four months. Eh tubong lugaw naman yan eh. Babayaran naman talaga natin kasi itong kontrata ng gobyerno sa Meralco pero hindi naman dapat ganun (They’re saying, you can pay us after four months. But that’s tubong-lugaw. We will ultimately have to pay it because of the government’s contract with Meralco, but it shouldn’t be like that).”

He noted that generation cost,which is basically the cost in producing electricity, to be then distributed by Meralco to its customers, is expected to be low in the foreseeable future. The plunge in world oil prices due to the stoppage of industries from the pandemic was the main contributor to this.

“Biro mo ang oil ngayon ambaba-baba…mababa yung oil kasi the US is producing its own oil. (Oil prices are so cheap now. Oil prices are low because the US is producing its own oil). So we’re looking at.the generating cost would be low. We’re looking at the horizon where global interest rates would be very low,” the solon said.

Pamintuan told the panel that the lowered generation costs have already been reflected in the electric bills. He gave these average generation costs for the following months: May, P4.32 per kilowatt hour (kWh); April, P4.63 per kWh; March, P4.66 per kWh; February, P4.50 per kWh; and January, P4.90 per kWh.

Meralco’s operating franchise will expire in 2028, as per RA No.9209.


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