By Kenneth Christiane L. Basilio, Reporter
THE HOUSE of Representatives on Wednesday approved on third and final reading a bill granting Manila Electric Co. (Meralco) a 25-year franchise extension.
In a 186-7-4 vote, congressmen agreed to extend Meralco’s franchise to construct, operate, and maintain its electric distribution systems in the greater Metro Manila area, including Bulacan, Cavite, Rizal, and parts of Batangas, Quezon, Laguna, and Pampanga.
House Bill No. 10926 outlines that Meralco must offer at least 30% of its outstanding capital stock to Filipinos. Failing to do so would result in its franchise revocation.
The power distributor is also mandated to provide an annual report of its operations, including the rollout, development, and expansion of its operations to Congress. Meralco would incur a P1 million fine per working day of noncompliance to this requirement.
Congressmen approved Meralco’s franchise to operate four years ahead of its initial concession’s expiry.
Its counterpart measure, Senate Bill No. 2824, filed by Senator Emmanuel Joel J. Villanueva on Sept. 12, is currently pending at the Senate rules committee.
In a statement, Albay Rep. Jose Ma. Clemente S. Salceda said he expects the franchise bill to breeze through the Senate, even floating the possibility of Congress no longer needing to convene in a bicameral conference committee to discuss the measure.
Bills seeking to provide a legislative franchise to companies first originate at the House, undergoing the same legislative process as regular bills, according to the Energy department.
Meralco is the main power distributor for the National Capital Region and nearby areas, covering 39 cities and 72 municipalities, delivering electricity to at least 7.6 million Filipinos. It provides power to a region responsible for half of the country’s gross domestic product output.
“A stable and affordable power sector is necessary for economic growth, and Meralco has the burden of providing electricity to the nation’s most important economic hub,” Terry L. Ridon, a public investment analyst and convenor of think-tank InfraWatch PH, said in a Viber message before the bill’s approval.
“Extending Meralco’s franchise would erase uncertainty of Meralco in investing for expansion and improvement of its infrastructure and facilities,” Calixto V. Chikiamco, Foundation for Economic Freedom president, said in a Viber message also before the bill’s approval.
Earlier this year, Meralco announced that it committed to course P100 billion in investments to “critical projects” seen improving its power distribution infrastructure as part of its long-term sustainability strategy.
Meralco and its unit SP New Energy Corp. entered into a strategic partnership with global investment firm Actis for the Terra Solar Project, a P200-billion solar power plant in Central Luzon that is expected to generate more than five billion kilowatt-hours of electricity yearly.
The granting of an extended franchise to Meralco could lead to cheaper electricity for consumers, said Antonio A. Ligon, a law and business professor at De La Salle University in Manila. “One advantage, of course, is that Meralco’s adjustment on electric bills will lean toward providing ease to consumers,” he said before Meralco’s legislative franchise approval.
The approval of Meralco’s franchise could also drive down the generation prices of its power supply agreements with electricity generation firms, said Mr. Ridon, citing their need to “offer the lowest price” to secure deals with the power distributor.
In October, Meralco sought the Energy Regulatory Commission’s approval for 600-megawatt power supply deals, seen to result in P11.75 billion in consumer savings.
The bill needed more time for thorough review, said Gerry C. Arances, convenor of the Power for People Coalition, in a Facebook Messenger chat before the bill’s approval.
Meralco’s majority owner, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.