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Promoting Competition and Regulatory Reforms in Franchising Electricity Distribution

Author

Listed:
  • Dante B. Canlas

    (School of Economics, University of the Philippines Diliman)

  • Karl Robert L. Jandoc

    (School of Economics, University of the Philippines Diliman)

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.

Suggested Citation

  • Dante B. Canlas & Karl Robert L. Jandoc, 2025. "Promoting Competition and Regulatory Reforms in Franchising Electricity Distribution," UP School of Economics Discussion Papers 202502, University of the Philippines School of Economics.
  • Handle: RePEc:phs:dpaper:202502
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    File URL: https://econ.upd.edu.ph/dp/index.php/dp/article/view/1561
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    More about this item

    Keywords

    Electricity Distribution; Franchise Regulation; Competition Policy;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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