House urged to carefully review Meralco franchise

SURIGAO del Sur Rep. Johnny Pimentel urged the House of Representatives to carefully review the franchise of the Manila Electric Co. (Meralco) before considering its renewal.

«It's only 2024. Four years more. Why apply for renewal of a franchise that is set to expire four years from now?» Pimentel, vice chairman of the Committee on Legislative Franchises, said during the panel's public hearing.

He echoed the call of Santa Rosa City Rep. Danilo Ramon Fernandez to carefully review the franchise before acting on it.

Pimentel said that the power utility should first answer the issues raised before the committee against the practices of the power utility, as well as its change of ownership from the Lopez group to Filipino businessman Manuel V. Pangilinan.

The ownership change happened in 2009, but Congress has not yet been formally informed of the process.

«Did you seek permission from Congress for change of ownership?» Pimentel asked the Meralco representatives during the hearing.

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Ray Espinosa, Meralco director, said there was «no change in controlling interests,» which meant no approval was needed from Congress.

But the lawmaker said that the failure of the utility to ask permission to Congress on the change of ownership was «illegal» and can be compared to the situation of Sonshine Media Network International, which failed to declare to Congress its change of ownership.

Between 2009 and 2012, the stake of the Lopez Group in Meralco had been diluted to 33.4 percent after it sold its shares to the First Pacific Group, further diluting it to 3.95 percent in 2012.

The First Pacific Group, through Beacon Electric Asset Holdings and Metro Pacific Investments Corp., holds 45.46 percent of Meralco shares.

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Pimentel warned the utility that the failure to declare and seek congressional approval of the ownership change is sufficient grounds to reject the renewal of the Meralco franchise.

«That issue is exactly what I raised — if Meralco did not violate the provision of their franchise that any change in ownership they should ask prior approval from Congress,» Pimentel said.

He later said in an interview that the utility could have the same predicament