Meralco franchise extension endorsed

It was a matter of necessity, not choice.

Brushing aside criticisms from one of their former colleagues, members of the Senate public services committee endorsed the renewal of the congressional franchise of the Manila Electric Co. (Meralco) for another 25 years.

In his sponsorship speech, committee chairman Sen. Joker Arroyo stressed that the endorsement was made since there was no other utility firm that could take over power distribution in Meralco’s service grid in case the company’s franchise would not be renewed.

"If the franchise would not be given, what’s the alternative? No company has the service (capability) and technology to fill the void (in case Meralco’s application is denied)," Arroyo told reporters.

Former Sen. Juan Ponce Enrile had urged Congress to reject Meralco’s bid to renew its franchise, claiming that the utility firm has been overcharging consumers through the controversial purchased power adjustment (PPA).

Enrile claimed there was P14-billion worth of "ghost power deliveries" to Meralco by First Gas Power (FGP), another company owned by the Lopez family, the cost of which was eventually passed on to consumers.

Meralco has flatly denied Enrile’s accusations.

Arroyo said nine of the committee members approved the report seeking Senate concurrence to House Bill 4451 extending Meralco’s franchise by 25 more years.

Apart from Arroyo, those who favored renewal of Meralco’s franchise were Senators Francis Pangilinan, Ralph Recto, Renato Cayetano, John Osmeña, Juan Flavier, Loren Legarda, Edgardo Angara and Vicente Sotto III.

Senators Sergio Osmeña III and Gregorio Honasan abstained, while Senators Teresa Aquino-Oreta and Roberto Jaworski did not sign the report.

Meralco’s service grid covers Metro Manila and the surrounding provinces of Bulacan, Cavite and Rizal, plus portions of Batangas, Laguna, Quezon and Pampanga provinces.

Although he acknowledged that Enrile’s allegations were valid, Arroyo clarified that his committee noted the testimonies of officials of the Energy Regulatory Commission and the National Power Corp. who upheld the legality of Meralco’s operations.

Arroyo pointed out that Meralco was applying for a "mega-franchise" because it involved a collection of various municipal franchises that Meralco has mustered through the years.

During public hearings conducted by Arroyo’s committee on the issue, Enrile batted for a government takeover of Meralco’s operations to put an end to the firm’s monopoly of the power distribution industry.

Arroyo argued, however, that a government takeover of the business would run counter to its privatization program under which key government-owned utilities were being sold to the private sector.

Enrile, in a statement issued by the Philippine Consumer Watch which he headed, insisted that cutting off Meralco’s alleged sweetheart deals with FGP "will reduced the monthly electric bills of consumers."

Pressing his attack on Meralco’s alleged overcharging and other malpractices, Enrile charged that stopping an overprice amounting to $246 million or P12.8 billion in transmission line charges over 25 years for the Sta. Rita transmission line in Batangas would be a good start.

He clarified that the $1.42 million transmission line charge per month "is a concrete example of how sweetheart deals can unconscionably bleed Meralco’s consumers to death."

"The bottom line is First Gas Power and Meralco are charging consumers $1.42 (million) per month for a transmission line that only cost $35 million to construct," Enrile said.