Meralco tells Senate efforts are being made to lower power rates

INQUIRER FILE PHOTO

MANILA, Philippines — Aside from improving its services, Manila Electric Co. (Meralco) has committed to bringing its power rates down, especially for the marginalized sector.

Meralco gave this promise after Senate Minority Leader Aquilino “Koko” Pimentel III questioned on Tuesday the higher power cost it charges to residential consumers.

According to Meralco, the average electricity rate for residential consumers is P11.74 per kilowatt hour (kwh), higher than the P10.5 per kwh for commercial clients.

And this is because it is supposedly “more expensive” to serve the residential consumers, according to the giant power distributor, as explained by Sen. Joel Villanueva on the Senate floor.

Villanueva is the sponsor of a bill that seeks to grant Meralco a fresh 25-year authority to operate.

“Pero hindi po ba logical sense na the effort should be to make the residential rate lower than the commercial [rate]?” Pimentel asked.

(But isn’t it logical that the effort should be to make the residential rate lower than the commercial rate?)

“Si commercial kasi, icha-charge nya to business expenses at saka nag-e-exist sya for profits. Si residential, nag e-exist for the family,” he explained.

(Because for commercial, they can charge it to business expenses and they exist to make a profit while the residential exists for the family.)

Villanueva pointed out that even the Energy Regulatory  Commission (ERC) “understands the intricacies” of how to serve residential and commercial consumers.

ERC is also aware that the cost of serving the residential consumers would be higher, he also said.

Meralco, nevertheless, said it exerts efforts to reduce the power rate for lifeline consumers.

“What they are doing right now, as I’m being told by our resource persons, (is) that they are into [a] lifeline for marginalized customers. Meaning, there are efforts to really bring the cost down for residential customers,” Villanueva said.

“So they are into it. And with this franchise that they are applying, they are aware that they also need to improve their services, including lowering the cost for the customers,” he added.

Villanueva also clarified that although Meralco still has until June 2028 to operate, its current franchise allows its renewal within the five-year window before its expiration.

Its franchise renewal is supported by many business and industry groups, including the Federation of Philippine Industries (FPI), the American Chamber of Commerce of the Philippines Inc. (AmCham), the British Chamber of Commerce of the Philippines (BCCP), and the Japanese Chamber of Commerce and Industry of the Philippines Inc. (JCCPI).

FPI and the JCCIPI, in a statement on Tuesday, believe that renewing Meralco’s franchise “will increase business confidence in the manufacturing sector, which, in turn, can positively impact the economy.”

“We see no reason to disrupt the continued operation of Meralco, and not renewing its franchise is not only extremely counterproductive but also a big disservice to Filipinos,” FPI Chairman Jesus Lim Arranza said, as quoted in the statement.

JCCIPI Vice President and Executive Director Nobuo Fujii, for his part, said the franchise renewal “is crucial for sustaining the positive trajectory of economic growth and development in the country.”

AmCham and BCCP, meanwhile, highlighted the role the distribution utility plays in the Philippine energy industry.

“The renewal of Meralco’s franchise is critical to maintaining the energy stability necessary for the continued growth and competitiveness of the industries we represent,” AmCham Executive Director Ebb Hinchliffe noted.

“The British Chamber strongly recommends its franchise renewal, emphasizing Meralco’s pivotal role in the local energy sector,” BCCP Executive Director Christopher James Nelson said.