Manila Electric Company (Meralco) is actively pursuing collaborations with financially troubled electric cooperatives (ECs) to help them transition from non-stock to stock corporations, aiming to address persistent power reliability problems across various provinces.
Arnel Casanova, Senior Vice President and Head of Strategic Distribution Utility Partnerships at Meralco, shared in an interview on Thursday, August 20, that the power distribution leader intends to inject fresh capital into local ECs to effectively lower electricity rates.
“Because Meralco comes in, the double-digit system losses of these electric companies will drop to single digits. Meralco currently has one of the lowest system losses in the country at five percent,” Casanova said on Thursday, August 20.
He highlighted that numerous rural power utilities currently grapple with system losses ranging from 10% to as high as 25%.
“If you are able to lower that to even a single digit, that’s worth billions of pesos in savings for the consumers. You get reliable power, an efficient utility, and cheaper electricity,” he added.
According to Casanova, securing a stable power supply combined with enhanced operational efficiency will ultimately drive down generation costs for these cooperatives. He stressed that the plan is designed strictly as a collaborative arrangement centered on capital support rather than a buyout.
“Unlike other competitors who take over electric cooperatives by stripping their franchise, acquiring their assets, and terminating employees, our approach is different,” he added.
Through this strategy, Meralco plans to guide ECs in converting into stock entities, enabling the direct injection of capital and modern technology to boost service performance.
Casanova pointed out that this structural shift is explicitly allowed under the Electric Power Industry Reform Act (EPIRA), which empowers member-consumers to hold direct equity via shares in the public corporation.
Meralco is presently assessing potential ventures with Batangas I and II Electric Cooperatives (Batelec I and II) while advocating for a transparent public bidding process.
Businessman Enrique Razon’s Prime Electric Holdings has also expressed an interest in offering capital investments to regional cooperatives.