Following an advisory from the Manila Electric Company (Meralco) regarding a higher electric bill this month due to higher generation rate of ₱0.44 per kilowatt hour in July, a consumer's rights advocate called on the Senate to amend key provisions in the proposed law to renew Meralco's franchise to better protect consumers from further power rate hikes.

In a letter addressed to Senate President Francis 'Chiz' Escudero and his colleagues in the Upper Chamber, consumer rights advocate Romeo Junia opined that the Meralco franchise renewal bill, if not amended, "will simply continue Meralco's ability to abuse its dominant position as the largest distribution utility and energy player in the country."

"The Philippines will not only maintain its dubious record of having the highest electricity costs in Southeast Asia; power costs will likely increase even further if nothing is done to curtail Meralco's apparent abuse of market power. The franchise renewal represents a very rare occasion where Congress can put limits on Meralco's power," Junia cited.

House Bill 10926 that has already been approved reportedly seeks to renew the 25-year franchise of Meralco, allowing it to maintain its electric distribution systems in Metro Manila and nearby provinces. Despite this, the counterpart bill is still pending in the Senate.

Junia asserted the need for reforms and improvements in the energy sector through laws and pending legislation, such as the Electric Power Industry Reform Act of 2001 (Epira), the Renewable Energy Act of 2008, and the proposed Philippine Natural Gas Industry Development Act.

He pointed out that while Meralco plays a critical role in achieving the objectives of such laws, the distribution utility is simply "disincentivized" to implement them effectively.

"It will seek to increase its power in the energy industry by leveraging on its monopoly status, giving more business to favored power plants at the expense of competitors," he mentioned in his letter.

The consumer rights crusader urged senators to include specific provisions in the proposed franchise renewal "to unequivocally show the intent of Congress to draw the clear lines that Meralco cannot cross, even with and especially from its dominant position in the industry."

"Amendments must be introduced to the proposed Meralco franchise law to end further delays in enforcing the Retail Competition and Open Access provision of the Epira; halt the further delay of the net metering provision of the Renewable Energy law; prevent the awarding of power supply deals or the increased use of supply from Meralco-affiliated companies; and require Meralco to comply with laws against market power abuse, cross-ownership and anti-competitive behavior," he stressed.

Cross-ownership refers to generation companies associated with Meralco through common parent companies.
In ending,Junia argued that while safeguards were included in the House-approved bill, these need to be reiterated through penalties, including possible cancellation of Meralco's franchise.

"At this point, when various stakeholders have already come forward with their concerns and views over the ongoing effort to renew the franchise that expires in 2028, we hope the Senate will find time to resolve all the issues, address all our concerns and incorporate into the final franchise law the safeguards that will protect consumers," he concluded.