The Manila Electric Co. (Meralco) aims to empower electric cooperatives (ECs) via capital infusion which will enhance their power distribution services.
‘We’re looking at all the other electric cooperatives in general. So, because basically this is a nation-building effort of Meralco…Most of the electric cooperatives are non-profit entities and they cannot attract investment because of that structure.
Under Section 57 of Epira [Electric Power Industry Reform Act], they are allowed to convert into stock corporations to encourage infusion of private capital,’ said Meralco Senior Vice President Arnel Casanova said.
Meralco said it is keen on helping Batangas II Electric Cooperative Inc. (Batelec II), South Cotabato Electric Cooperative II (Socoteco II), and Albay Electric Cooperative (Aleco).
For Batelec II, Meralco has submitted a joint venture proposal instead of a takeover, vowing to invest to upgrade aging facilities and modernize power infrastructure.
The company said ‘it makes sense’ for Meralco to offer its services to Batelec II since the company already serves the cities and municipalities of Sto. Tomas, Batangas City, and San Pascual.
‘I think it’s very fast for us to improve the reliability of power because we have 13 substations surrounding the entire province. We could just connect them to the Meralco existing management. This will make the power more reliable and lessen and reduce the system losses, making it much more efficient.
Definitely, the objective is really to eliminate or reduce brownouts and power interruptions,’ said Casanova.
The Batelec II board of directors earlier approved a competitive selection process (CSP) to help choose its private partner.
‘Based on the news, they are finalizing the terms of reference. We are waiting for that. We’ll wait for that and then we will see. We will definitely participate in the bidding,’ said Casanova.
A CSP is a government-mandated bidding procedure that distribution utilities like Meralco must conduct to secure power supply agreements (PSAs). It is primarily designed to ensure transparency, promote market competition, and find the lowest-cost electricity available for consumers.
By forcing generation companies to bid against each other, the CSP helps keep electricity rates down and protects customers from the volatile pricing of the Wholesale Electricity Spot Market.
Meralco has also submitted its formal intent to do the same with Socoteco II. ‘We’re also looking at the Socoteco 2 in General Santos. Hopefully, they bid it out similarly to what BATELEC has done, because it actually ensures more transparency and it’s for the best interest of the member consumers.’
He said they haven’t heard from Socoteco II after Meralco’s letter of intent was submitted. ‘We actually encourage them to bid it out because we know that there’s also other parties that are interested.
So, to ensure that the process will be more transparent, we encourage them to actually bid it out. Well, I don’t know if they have a decision yet.’
Meralco has also set its sights on Aleco to be able to have a better service. ‘We are studying that and hopefully, Aleco will be welcoming enough to provide us with the necessary information so we could make a better proposal,’ Casanova said.