MANILA ELECTRIC CO. (Meralco) is urging electric cooperatives in Batangas and General Santos (GenSan) City to conduct public bidding to find out their power distribution partners, because it seeks to advance proposals to upgrade facilities and address persistent electricity issues in these areas.
“Our request is admittedly to hasten it since it has been there for a very long time; now we have been pending,” Arnel P. Casanova, senior vice-president and head of strategic distribution utility partnerships of Meralco, told reporters on Tuesday.
Meralco, the country’s largest private electric distribution utility, serves greater than 8.2 million customers in Metro Manila and nearby provinces.
The corporate already supplies electricity to large economic and industrial parks in Batangas but is in search of to expand its service to cover all the province.
Several years ago, Meralco submitted proposals to Batangas I Electric Cooperative, Inc. (Batelec I), Batangas II Electric Cooperative, Inc. (Batelec II), and South Cotabato II Electric Cooperative, Inc. (Socoteco II) to assist upgrade facilities and improve electricity services. These proposals remain pending.
Power consumers in Batangas have reported frequent and prolonged outages that disrupt livelihoods, particularly in a town heavily depending on tourism, in response to a recent survey by Capstone Intel, a research firm.
“I feel, for the most effective interest of the member-consumers, that bidding be conducted immediately so that we’ll know who can best serve the consumers either in Batelec I or GenSan,” Mr. Casanova said.
He added that a public bidding process would allow consumers and the general public to guage proposals “that may serve the most effective interest of the member consumers.”
Mr. Casanova said Meralco doesn’t intend to take over any electric cooperative but goals to offer capital for facility upgrades and development.
“All other proposals that we see on the market require the takeover of franchise by a brand new corporation. So mainly, the electrical cooperative loses the business itself since it’s transferred to a brand new corporation, and the asset will probably be transferred to a brand new corporation,” he said.
“So what happens in the opposite proposals is that they lose the franchise, they lose the assets, they usually lose the business. So for Meralco, we retain all of them,” he added.
Electric cooperatives are owned and managed by member-consumers, unlike distribution utilities resembling Meralco, that are owned by shareholders.
Under the Electric Power Industry Reform Act (EPIRA), electric cooperatives may convert into either stock cooperatives or stock corporations.
“Our approach and our model is to persuade the electrical cooperatives to convert into stock corporations, which might result in the members being real stockholders,” Mr. Casanova said, adding that electric cooperatives may receive dividends.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Helpful Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera