The Energy Regulatory Commission (ERC) has called on the Manila Electric Company (Meralco) to refrain from engaging in anti-competitive practices, particularly in the competitive selection process (CSP) for its 1,800-megawatt (MW) baseload capacity. In a recent hearing of the House Committee on Legislative Franchises, lawmakers emphasized the importance of ensuring a fair and open bidding process.
ERC Chairman Monalisa Dimalanta assured the lawmakers that the commission had already raised concerns with Meralco regarding the limited number of potential participants in the CSP. The ERC’s mandate is to promote competition, encourage market development, ensure customer choice, and penalize any abuse of market power in the energy industry.
During the hearing, Sta. Rosa City Lone District Rep. Danilo Ramon Fernandez expressed his disappointment with the terms of reference for the CSP, stating that they seemed to favor certain firms. He pointed out that the terms excluded many power plants that should have been eligible to participate in the bidding process. Fernandez urged the ERC to halt Meralco’s bidding until a thorough review and study of the terms of reference could be completed.
Furthermore, Fernandez proposed dividing Meralco’s “mega franchise” into three sectors, with separate entities for the National Capital Region, South Luzon, and Pampanga and Bulacan. This division would aim to promote competition and prevent any potential monopolistic practices.
In response to the concerns raised, Meralco spokesman Agapito “Joe” Zaldarriaga emphasized that the utility has consistently complied with all government regulations and has even exceeded the level of service required by the regulator.
It is crucial for the ERC to ensure that the bidding process for Meralco’s baseload capacity is fair and transparent. By promoting competition and preventing anti-competitive practices, the ERC can help create a level playing field for all potential bidders. This will not only benefit the energy industry but also ensure that customers have access to reliable and affordable electricity.
Competition in the energy sector is essential for market development and innovation. By encouraging more players to participate in the bidding process, the ERC can foster healthy competition and drive down electricity prices for consumers. It is vital for the commission to carefully review the terms of reference for the CSP to ensure that they do not unduly restrict the number of potential bidders.
Moreover, it is crucial to consider the long-term impact of the baseload capacity bidding on the energy market. The terms of reference should be designed to attract a diverse range of participants, including power plants that are not yet in commercial operation but will be operational within the specified timeframe. This will help ensure a reliable and sustainable energy supply for the future.
International audiences may find it helpful to understand that the ERC’s role in promoting fair competition and preventing anti-competitive practices aligns with similar regulatory bodies in their respective countries. Laws and regulations vary across jurisdictions, but the principles of promoting competition and protecting consumers’ interests are universal.
In conclusion, the ERC’s call for Meralco to ensure fair competition in the bidding process for its baseload capacity is a step in the right direction. By addressing concerns raised by lawmakers and reviewing the terms of reference, the commission can help create a competitive and dynamic energy market. This will ultimately benefit consumers by ensuring affordable and reliable electricity supply in the years to come.
Source: The Manila Times
