ERC pushes ‘serious level of scrutiny’ on Meralco group
Now is a good time for a “serious level of scrutiny” amid advances made by Manila Electric Co. (Meralco) outside its core power distribution business, according to the chief of the Energy Regulatory Commission (ERC).
However, an analyst warned that an “excessive government intervention” can dampen investments in the sector.
ERC chair Monalisa Dimalanta said on Friday that reviewing potential competition risks posed by Meralco is just “timely.”
In particular, Dimalanta referred to the electricity distribution giant’s power supply agreements (PSAs) with its allied firms.
“I wouldn’t say long overdue because it is only in recent years that Meralco grew its generation and retail supply business, but it has grown fast,” she told Inquirer.
“The magnitude of the capacities of these natural gas plants contracted with Meralco — on top of other Meralco-affiliated plants also with PSAs with the parent [distribution unit], such as TerraSolar — as well as the pivotal role these gas plants play in the system as a whole merit such serious level of scrutiny,” the official added.
Dimalanta said that no fixed capacity could trigger a probe. But the law states that power sourced from associated firms should not be more than half of the utility’s demand.
She said penalties could include the imposition of price controls, the return of ill-gotten profits, among others.
Dimalanta said these in response to questions related to Energy Secretary Raphael Lotilla’s recent remarks.
Lotilla stressed the need to work closely with the ERC and the Philippine Competition Commission, given Meralco’s “complex organization.”
