Promoting Competition and Regulatory Reforms in Franchising Electricity Distribution

Dante Canlas and Karl Robert Jandoc
Additional contact information
Dante Canlas: School of Economics, University of the Philippines Diliman
Karl Robert Jandoc: School of Economics, University of the Philippines Diliman

No 202502, UP School of Economics Discussion Papers from University of the Philippines School of Economics

Abstract: This paper examines the implications of renewing Meralco’s electricity distribution franchise, which was recently extended for another 25 years. Several unresolved competition and regulatory issues challenge the alignment of this extension with the Electric Power Industry Reform Act (EPIRA) of 2001. Key concerns include Meralco’s dominant market position, cross-ownership with generation companies, potential franchise creep, and its influence in the retail market. The paper advocates for structural reforms such as competitive franchise auctions, stricter cross-ownership limitations, and the possible division of Meralco’s service areas to promote market efficiency and consumer welfare. It also proposes granting the Energy Regulatory Commission (ERC) the authority to oversee franchise bidding and to enforce more rigorous monitoring of market behavior. The findings emphasize that automatic renewal without reforms risks entrenching monopolistic practices and foregoing opportunities for improving transparency, competition, and efficiency in the electricity distribution sector.

Keywords: Electricity Distribution; Franchise Regulation; Competition Policy (search for similar items in EconPapers)
JEL-codes: L41 L51 L94 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2025-04
New Economics Papers: this item is included in nep-com, nep-ene, nep-reg and nep-sea
References: Add references at CitEc
Citations:

Published as UPSE Discussion Paper No. 2025-02, April 2025

Downloads: (external link)
https://econ.upd.edu.ph/dp/index.php/dp/article/view/1561 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:phs:dpaper:202502

Access Statistics for this paper

More papers in UP School of Economics Discussion Papers from University of the Philippines School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by RT Campos ().