MANILA, Philippines - A legislator has called on the House of Representatives to conduct an inquiry if power distributor Manila Electric Co. is complying with its legislative franchise.
Nueva Ecija Rep. Joseph Gilbert Violago said the inquiry by the House Committee on Legislative Franchise should particularly look into Meralco’s compliance with Section 4 of RA 9209, which stipulates the utility’s responsibility to the public.
Section 4 clearly states "The grantee (Meralco) shall supply electricity to its captive market in the least cost manner. In the interest of the public good and as far as feasible and whenever required by the ERC (Energy Regulatory Commission), the grantee shall modify, improve or change its facilities, poles, lines, systems and equipment for the purpose of providing efficient and reliable service and reduced electricity costs.
The grantee shall charge reasonable, just and competitive power rates for its services to all types of consumers within its franchised area in order that business and industries shall be able to compete," it adds.
Violago said Section 4 also mandates that "The grantee shall not engage in any activity that will constitute an abuse of market power such as but not limited to, unfair trade practices, monopolistic schemes and any other activities that will hinder competitiveness or business and industries."
He said public outcry in the past few months has been attributed to high cost of power purchased by Meralco coupled with allegations of anti-competitive behavior practiced in its transactions.
"If proven true that Meralco abused market power by dictating the high bid rate to one of its major suppliers to prevent the supply to be dispatched with the effect of high electricity rates disadvantageous to the consumers, such can be considered a direct violation of Section of its franchise," said Violago, a vice chairman of the House Committee on Appropriations.
He noted that Meralco is first and foremost a public utility, which should always uphold public interest as its primary purpose with a fair rate of return in the course of doing business.
"Given the circumstances, it is very urgent and necessary for Congress to exercise its oversight on the compliance of Meralco with the terms and conditions of its franchise especially pertaining to its responsibility to the public as stated in Section 4 of RA 9209," Violago said.
Republic Act 9209, which was enacted on June 9, 2003, granted Meralco its franchise for the exclusive distribution of electric power to Metro Manila, Bulacan, Cavite, Rizal and certain areas in Batangas, Laguna, Quezon and Pampanga.
Violago said the Section 9 of RA 9209 meanwhile provides that Meralco's franchise shall be for a term of 25 years unless sooner revoked or cancelled by Congress for any violation of the terms and provisions of the franchise.
Meralco has come under fire for its plan to hike power rates.
Last December, the Supreme Court issued a temporary restraining order, stopping Meralco from implementing a P4.15 per kilowatt-hour increase for 60 days.
On February 18, the high tribunal extended the TRO for another 60 days or until April 22 this year.
Meralco has also been scored by some sectors for including in the February billing the assailed rate increase, which has confused customers.