Meralco
The Manila Electric Company (PSE: MER), also known as Meralco (/mɜːrɑːlkoʊ/, Tagalog: [mɛˈɾalkɔ], stylized in uppercase), is an electric power distribution company in the Philippines. It is Metro Manila's only electric power distributor and holds the power distribution franchise for 22 cities and 89 municipalities, including the whole of Metro Manila and the exurbs that form Mega Manila.
For the PBA team, see Meralco Bolts.Company type
Compañía Electricista de Manila
Compañía de Tranvías y Ferrocarriles de Filipinas
March 24, 1903
Manuel V. Pangilinan, Chairman and CEO
The name "Meralco" is an acronym for Manila Electric Railroad and Light Company, which was the company's official name until 1919.
History[edit]
La Electricista[edit]
Organized in 1891 and beginning operations in late 1900, La Electricista was the first electric company to provide electricity to Manila towards the close of the Spanish era. La Electricista had built a central power plant on Calle San Sebastian (now Hidalgo Street[1][2]) in Quiapo, Manila.[3] On January 17, 1895, its streetlights were turned on for the first time and by 1903, it had about 3,000 electric light customers.
Founding of the Manila "Electricity", "Railroad" and "Lighting" Company (MERaLCo)[edit]
On October 20, 1902, during the American Colonial Period, the Second Philippine Commission began accepting bids to operate Manila's electric company, and by extension, providing public lighting to the city and its suburbs. Detroit entrepreneur Charles M. Swift was the sole bidder and on March 24, 1903, was granted the original basic franchise of the Manila Electric Company.[4] March 24 thus is marked annually as the company's anniversary.
The Manila Electric Company acquired both La Electricista and the Compañía de los Tranvías de Filipinas, a firm that ran Manila's horse-drawn tramways which was founded in 1882.[5] Construction on the railed tramway began that same year. In addition to acquiring La Electricista's Calle San Sebastian power plant, the company built its own turbine rotated by water steam generating electricity plant on Isla Provisora (later becoming the Manila Thermal Power Plant), which lighted the railed tram system and eventually also provided the electric service. By 1906, the Manila Suburb Railway were founded and later merged with the Manila Electric Company. Forming the Manila Electric, Railway and Lighting Company. The name Manila Electricity, Lighting and Railroad Company (MELARCo) was also considered.
Manila Suburban Railways Company[edit]
Swift was awarded another franchise in 1906 to operate a 9.8 kilometres (6.1 mi) extension line from Paco to Fort McKinley and Pasig and founded the Manila Suburban Railway to operate this franchise.[4] In 1919 this company merged with the Manila Electric Company.[4] This extension was one of the most profitable of MERALCO's lines.[4]
By the 1920, MERALCO invested on transportation and owned a 170-strong fleet of streetcars, before switching over to buses later in that decade.
The company operated 52-miles of trams until World War II. The equipment and tracks of the system was severely damaged during the war and had to be removed.[6]
Controversies[edit]
2008 legislative investigation on high power rates[edit]
Meralco is facing a Philippine legislative inquiry/investigation for alleged excessive pricing.[25] The government has considered a plan to take over Meralco, to reduce electricity bills. Meralco and National Transmission Corporation (TransCo) blamed each other for the high power rates.[26] Meralco also blames high power generation costs, high transmission costs and government taxes imposed on the electricity sector from power generation to distribution. Government Service Insurance System (GSIS) President Winston García, however, blamed Meralco's inefficiency, its "bloated bureaucracy" and its sourcing of power from independent power producers (IPPs) also owned by the López Family, and the need to amend the Electric Power Industry Reform Act (EPIRA) of 2001. Oscar López said that if the GSIS would buy the Meralco shares, they must buy in whole cash, while many businessmen also said that taking over Meralco is not the way to reduce electrical price, which depends on the national government and the President. The issue was also seen as a purposeful diversion from the then-ongoing ZTE NBN scandal and other government issues.[27] A perceived lack of general understanding regarding the issue of system loss, inherent in the business of utilities prompted Meralco's former holding company, First Philippine Holdings, to issue advertisements explaining systems loss.
Syndicated estafa and bribery case[edit]
The Department of Justice (Philippines) filed syndicated (fraud) charges against Meralco in its August 22, 2008 31-page resolution, filed with the Pasig Regional Trial Court. The May 29 National Association of Electricity Consumers for Reform (Nasecore) complaint accused Meralco of "illegally declaring as income ₱889 million in consumers' money, which represents interest from meter and bill deposits consumers had been paying since 1995."[28] No bail was recommended for all the accused, 2006 officers of Meralco, to wit: Meralco chairman and CEO Manuel Lopez, executive vice president and chief financial officer Daniel Tagaza, first Vice-resident and treasurer Rafael Andrada, vice president and corporate auditor and compliance officer Helen De Guzman, vice president and assistant comptroller Antonio Valera, and senior assistant vice president and assistant treasurer Manolo Fernando; 2006 Meralco directors Arthur Defensor Jr., Gregory Domingo, Octavio Victor Espiritu, Christian Monsod, Federico Puno, Washington Sycip, Emilio Vicens, Francisco Viray and former Prime Minister Cesar Virata.
Nasecore's complaint accusing Meralco of "illegally declaring as income 889 million pesos in consumers' money, which represents interest from meter and bill deposits consumers had been paying since 1995," was immediately refuted by the accused company as the alleged ₱889 million only stemmed from a generally accepted accounting principle of reversing Meralco's earlier provision for meter deposit interests which, earlier set at 10% per annum was deemed too high and was set to the recommended 6%.[29] Meralco also questioned how a syndicated estafa case can arise when it has already announced and committed that it will be refunding to customers who paid meter deposit principals plus interest months ahead of the ERC prescribed schedule and has allocated enough funds for the said refund.
Meralco is also involved in the GSIS-Meralco bribery case.[30]
Dismissal of syndicated estafa case[edit]
On October 6, 2008, the Pasig Regional Trial Court Branch 71 dismissed the syndicated estafa case filed against the Meralco board of directors, for the prosecution failed to establish all the elements of syndicated estafa.
Presiding Judge Franco Falcon, pointed out in the ruling that the board is not the kind described by the law as being formed to perpetrate an illegal act for the board of directors were elected by stockholders. The court explained, "Therefore, the accused can never be charged of taking part in the commission of syndicated estafa not only because they are not part of a syndicate as contemplated by law in PD 1689, but more so, because there was absolutely no estafa committed."
According to Philippine law, to constitute syndicated estafa, the subject money or property must be received by the offenders. The money represents the accrued interests on the bill and meter deposits, which were paid by Meralco customers, not directly to the board, but to the various Meralco business centers where the customers transacted. Meralco expressed elation over the dismissal.[31]
Judiciary's decision on 1999 disconnection incident[edit]
A complaint was filed by Lucy Yu against Meralco which, on December 9, 1999, its representatives, forcibly entering her office at the New Supersonic Industrial Corp. in Valenzuela, shut off the electricity in the factory and Yu's residence.
The Court of Appeals later ruled that Meralco violated the law when it cut off the electric supply of a consumer without notice; the decision later upheld by the Supreme Court in late June 2023, with Yu being entitled to ₱150,000 in damages. The court said that a written notice must be given to the consumer at least 48 hours prior to Meralco's disconnection of its electric service on grounds cited under Section 4(a) of Republic Act No. 7832; in that case, a consumer's right to due process was violated.
Spokesperson Joe Zaldarriaga, in a statement, said that Meralco will respect and abide by the said decision; however, he said that the incident occurred when Meralco was already implementing a policy of serving prior disconnection notice.[32]
Allocation of the 2.4 GHz ISM band[edit]
The 2.4 GHz band is mostly used by Wi-Fi and Bluetooth. In 1993, the National Telecommunications Commission allocated the 2.4 GHz band for the exclusive use by Meralco in Metro Manila, Central Luzon, and Calabarzon for the operation of their Supervisory Control and Data Access (SCADA) system which controls and monitors Meralco’s substations.[33] This has made the use of the 2.4 GHz band in the Philippines illegal, in spite of the International Telecommunication Union declaring the 2.4 GHz band as an ISM unlicensed band.[34]
On September 12, 2003, the NTC issued Memorandum Circular No. 09-09-2003, which lifted the ban on the 2.4 GHz band.[35]