PHILIPPINES, December 11 - Press Release
December 11, 2024

Sponsorship Speech - Meralco's Franchise Renewal
Senator Joel Villanueva

Mr. President and distinguished colleagues:

It is with great honor and an even greater sense of responsibility that we rise to sponsor House Bill No. 10926 under Committee Report No. 427, renewing for another twenty-five (25) years and strengthening the franchise granted to the Manila Electric Company (Meralco), one of the foremost powerhouses in providing electricity to our country and a household name to more than seven (7) million families^[1]. This renewal will mean the continuance of delivering service to end-users in the cities and municipalities of Metro Manila, Bulacan, Cavite, and Rizal, and certain cities, municipalities, and barangays in Batangas, Laguna, Quezon, and Pampanga.

We thank the Chairperson of the Committee on Public Services, Senator Raffy Tulfo, for including our bill, Senate Bill No. 2824, in the initial public hearing and entrusting to us the herculean task and duty of studying the technicalities surrounding the renewal of the franchise as the Subcommittee Chairperson of this important piece of legislation. The Committee Report also considered Senate Bill No. 2876 filed by the gentleman from Bukidnon, Senator Juan Miguel "Migz" Zubiri.

Ginoong Pangulo, ang isa sa ating pangunahing layunin sa pagsulong ng panukalang ito ay ang pagtiyak na ginagampanan ng Meralco ang kanilang mga obligasyon sa ilalim ng kanilang prangkisa, at tinutupad nila ang kanilang mga pangako sa taumbayan.

Higit sa simpleng pagpapatuloy ng prangkisa ang panukalang ito. Kinakatawan nito ang ating responsibilidad sa pagtataguyod ng tiwala ng publiko sa mga public utility tulad ng Meralco, nang masiguro nating mangingibabaw ang kapakanan ng sambayanan sa kanilang mga operasyon.

Mr. President, we recognize that public utilities like Meralco are given a unique privilege to operate their franchise. Ika nga - with great privilege comes great responsibility. With such privilege comes the obligation to deliver equitable and efficient service to the people.

In the case of Meralco, its franchise privilege comes with the responsibility to supply electricity to its captive market in the Least Cost Manner, as stated under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA).^[2] This obligation ensures that consumers are protected from unnecessarily high rates while maintaining the quality and reliability of power supply.

Layunin nating tiyaking sa susunod na dalawampu't limang taon, ang Meralco ay magdadala ng higit pang maaasahan, abot-kaya, at tuloy-tuloy na serbisyo sa bawat konsyumer.

This representation is aware of this august body's mandate to conduct a rigorous, truthful, and fact-based scrutiny of the franchise grantee to validate whether it has fully and faithfully fulfilled that responsibility.

Mr. President, upon assuming as the Subcommittee Chairperson at the technical working group level, we considered it our highest priority to ensure robust representation from various sectors, especially consumers, who are the end-users and ultimate beneficiaries of Meralco's services. For us, Mr. President, the perspectives of these groups are crucial in shaping a franchise that truly serves the public interest. We were very much dedicated to hearing from groups such as the United Filipino Consumers and Commuters (UFCC) and providing as many opportunities as possible for their meaningful participation to contribute to the refinement of this very important measure.

In our review of the submissions of the franchise grantee and after due consideration of position papers submitted by stakeholders, we find that Meralco has complied with its legal mandate to the best of its ability.

Mr. President, we must acknowledge Meralco's proactiveness in navigating uncertainties in the regulatory landscape--a testament to its commitment to serving consumers despite external challenges. For example, in 2015, even amid the absence of updated rules for rate setting, Meralco took the initiative to file an application for an Interim Average Rate (IAR) of ₱1.3939/kWh with the Energy Regulatory Commission (ERC),^[3] ensuring that its operations would remain financially viable without compromising consumer interests.

Meralco likewise faithfully adheres to the Department of Energy's (DOE) Competitive Selection Process for the procurement of its power supply agreements (PSAs). This transparent bidding mechanism encourages generation companies to submit their most competitive rates, ensuring consumers benefit from cost-efficient and reliable energy. As three of Meralco's four currently negotiated PSAs approach expiration by 2027--agreements established prior to the current management^[4]--this presents an exciting opportunity for Meralco to further demonstrate its commitment to transparency, innovation, and delivering the best value to its customers.

While we laud these efforts, we recognize that for many Filipinos served by Meralco, their electricity bills remain high. Samu't-sari ang dahilan nito, Ginoong Pangulo, kasama na ang mataas na convenience fees, mataas na bill deposit, at iba pang konsiderasyong nagpapabigat sa bulsa ng karaniwang Pilipino. Rest assured that this representation hears and empathizes with the plight of our countrymen.

It is with this understanding that we have introduced key safeguards in the bill to address these concerns and enhance consumer protection, such as:

• Mandating that only just and reasonable electricity rates are charged by Meralco to its consumers; and

• Requiring Meralco to establish an electronically or digitally accessible platform where consumers can address their concerns promptly and effectively.

Through these provisions, we aim to provide Filipino households with much-needed relief and empower them with greater transparency and accountability from their electricity provider. This is our way of ensuring that no Filipino is left in the dark--both literally and figuratively--when it comes to their electricity bills.

And speaking of the dark, Mr. President, we understand the importance of holding Meralco to the highest standards when it comes to reducing power interruptions or the dreaded brownout. Pinakita po ng Meralco na patuloy silang umaabot, at madalas ay lumalampas pa, sa mga pamantayang itinakda ng mga regulator.

In key metrics like systems loss,^[5] SAIFI (System Average Interruption Frequency Index), at SAIDI (System Average Interruption Duration Index) ratings,^[6] Meralco has consistently demonstrated its capability to deliver reliable service. With efforts to minimize power interruptions, Meralco has ensured that consumers can depend on a steady and efficient electricity supply - a lifeline for households and businesses alike.

During the technical working group meeting chaired by this representation, we were happy to hear about Meralco's plans to invest ?24 billion over the next five years (2025-2029) to improve service reliability by strengthening its power distribution system.^[7] This includes replacing over 45,000 aging poles, upgrading 2,800 km of power lines, weatherproofing infrastructure, and installing 6,000 remote-controlled devices to minimize outages and speed up power restoration.^[8] We join our countrymen in the hopes that these investments will make Meralco's power supply even more reliable.

Ginoong Pangulo, dahil milyon-milyong Pilipino ang umaasa sa Meralco, nasa interes din nating tiyakin ang mabuting pamamalakad ng kanilang korporasyon. To improve corporate governance and accountability, the bill introduces a requirement for Meralco to appoint independent directors to its Board of Directors, ensuring impartiality and aligning corporate strategies and policies with public and shareholder interests.

This representation also emphasizes the importance of ensuring that Meralco's various business pursuits and activities complement its primary responsibility of delivering reliable and affordable electricity under its core franchise operations.

To foster workforce development, the bill also requires Meralco to establish enterprise-based education and training programs, including apprenticeships, in accordance with Republic Act No. 12063, or the "Enterprise-Based Education and Training (EBET) Framework Act." To ensure accessible employment opportunities, Meralco will be required to regularly report job opportunities to the Public Employment Service Offices (PESOs).

During the process of developing this bill, it was this representation's priority to ensure that every concern is addressed and every stakeholder is heard. As we proceed to the period of interpellations and amendments, we reaffirm our unwavering commitment to maintaining an open, inclusive, and continuous dialogue with all stakeholders, recognizing that their insights are invaluable in shaping a franchise bill that truly reflects the needs and aspirations of the public whom the franchise grantee is entrusted to serve.

Sa pamamagitan nito, masisiguro nating ang panukala ay patas, epektibo, at higit sa lahat, nakaugat sa tiwala at pananagutan sa publiko.

Mr. President, Meralco has long been a partner in our nation's progress, but with that partnership comes accountability. This bill ensures that Meralco continues to meet the needs of our people while preparing for the challenges and opportunities of the future.

Thank you, and may God bless us all.

******

[1] MERALCO (2022). Sikat - Shining Brighter Than Ever - 2022 Combined Annual and Sustainability Report, p. 14. Available at https://meralcomain.s3.ap-southeast-1.amazonaws.com/2024-04/casr_full_apr_19-2024-reduced.pdf (last accessed December 10, 2024).

[2] Republic Act No. 9136, sec. 23(3).

[3] Inquirer (July 2024). The elephant in the room: The Meralco refund ruling. Available at https://business.inquirer.net/466964/the-elephant-in-the-room-the-meralco-refund-ruling (last accessed December 10, 2024).

[4] Rep. Salceda's presentation on HB 9793 (copy provided to OSJV by Meralco), slide 11.

[5] MERALCO's Distribution System Losses as reported to ERC were found by the ERC to be compliant with the 5.50% total feeder loss cap set by ERC for 2021 (see ERC Certification, Annex B, p. 1).

[6] MERALCO's SAIFI and SAIDI values were found by the ERC to be within the standards of 20 occurrences per year SAIFI and 2700 minutes per year SAIDI (see ERC Certification, Annex B, p. 3 - p. 72 of MERALCO's Submission to the Committee dated February 2, 2024).

[7] Meralco December 4, 2024 submission to OSJV entitled "MAIN ISSUES RE: MERALCO'S FRANCHISE", p. 8.

[8] Id.

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