Move to split Meralco franchise hit
The Federation of Philippine Industries (FPI) expressed opposition to the recent call made in Congress to split the franchise area of the Manila Electric Co. (Meralco) over concerns of the power distributor’s alleged poor service and abuses.
In a statement, FPI chair Jesus Arranza called on parties to stop what he called as a very counterproductive act and the government leaders to step in to stop what it characterized as a brazen attack on a legitimate business enterprise which is sending shivers to the whole business community.
“The federation laments this vicious attack against one of its members. This is not only counterproductive but against the principles of what we stand for, stability in the business environment,” Arranza said.If there are issues against Meralco or any member of the energy industry, is it not the Department of Energy and the Energy Regulatory Commission (ERC) who should resolve this,” the FPI official said further.
Earlier in November, Sta. Rosa Rep. Dan Ramon Fernandez accused Meralco of using a weighted average cost of capital (WACC) that was too high and passing this on to customers.
The WACC determines the return a company should be getting, with a higher WACC requiring the company to earn more to ensure its operations.
Fernandez claimed that Meralco’s 14.97 percent WACC set in 2010 was no longer accurate and hence, should be cut down to 9.23 percent, thereby lowering the electric bills of consumers.
The lawmaker also alleged that Meralco and the ERC were conniving to make bigger profits.
Meralco has since responded to these allegations saying that their rates and service are monitored strictly by ERC and that their records show that they have always complied with or outperformed the service levels expected from them.
“As far as our rates are concerned, records will also show that at current levels Meralco’s charges are lower than many jurisdictions in the country, which is the reason why some areas are clamoring for Meralco’s service,” Meralco vice president and head of corporate communications Joe Zaldarriaga had said in a statement.On Meralco’s WACC, the FPI said the issue should be left to the power regulator to decide on the matter. INQ
