In a recent public hearing by the House Committee on Legislative Franchises, Philippine Rural Electric Cooperative Association (Philreca) Party-list Rep. Presley de Jesus raised concerns about the power rates offered by Manila Electric Co. (Meralco) to residential consumers. De Jesus questioned why Meralco has not followed the example of small electric cooperatives in the provinces and lowered its rates.
De Jesus highlighted the significant difference in rates between Meralco and these cooperatives. He mentioned cooperatives such as Pampanga 2, Camarines Sur 1, Bataan Peninsula, Surigao del Sur 1, and Nueva Ecija 1 Electric Cooperatives, which offer residential rates ranging from P6.50 to P8 per kilowatt hour. In comparison, Meralco charges P12 per kilowatt hour for residential customers.
The lawmaker emphasized that Meralco, being a much larger company with a mega franchise and the largest captive market, should be able to offer more competitive rates. He pointed out that with a wider customer base, economies of scale should lead to lower costs and, subsequently, lower rates for consumers. De Jesus called for the Energy Regulatory Commission to investigate Meralco’s rates, which he deemed unusual.
Another concern raised by De Jesus was the potential expansion of Meralco’s franchise area, encroaching on localities served by smaller utilities. He cited information from Laguna Rep. Dan Fernandez, who accused Meralco of monopolistic practices. De Jesus urged the House to review Meralco’s franchise and consider the possibility of dividing it into three entities to improve service and lower rates.
The issue at hand raises important questions about the fairness and competitiveness of Meralco’s rates. While small electric cooperatives in the provinces are able to offer significantly lower rates to residential consumers, Meralco’s rates remain comparatively high. This discrepancy is particularly concerning given Meralco’s larger customer base and the potential advantages of economies of scale.
The call for a review of Meralco’s franchise and the possibility of dividing it into smaller entities is a proactive step towards ensuring better service and more affordable rates for consumers. By examining the grant of Meralco’s franchise and considering subdivision, the House can address concerns of monopolistic practices and promote a more competitive and consumer-friendly electricity market.
It is imperative that the Energy Regulatory Commission thoroughly investigates Meralco’s rates to determine whether they are justifiable and in line with industry standards. This investigation will help shed light on any potential discrepancies and ensure that consumers are not being unfairly burdened with high electricity costs.
Furthermore, the international audience may find it helpful to understand the context of the Philippine electricity market. In the Philippines, there is a mix of large power distribution companies like Meralco and smaller electric cooperatives that operate in different regions. These cooperatives often have lower rates due to their smaller scale and localized operations. However, Meralco, being the largest power distribution company with a significant market share, is expected to leverage economies of scale to provide more affordable rates to its customers.
In conclusion, the concerns raised by Rep. Presley de Jesus regarding Meralco’s rates and franchise expansion warrant serious attention. The House should review Meralco’s franchise and consider the possibility of dividing it into smaller entities to promote fair competition and ensure better service and lower rates for consumers. The Energy Regulatory Commission should also conduct a thorough investigation into Meralco’s rates to address any potential discrepancies. By taking these steps, the government can work towards creating a more competitive and consumer-friendly electricity market in the Philippines.
Source: The Manila Times
