Meralco
The Manila Electric Company, also known as Meralco, 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 39 cities and 72 municipalities, including the whole of Metro Manila and the exurbs that form Mega Manila.
The name "Meralco" is an acronym for Manila Electric Railroad and Light Company, which was the company's official name until 1919.
History
La Electricista
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 Sebastián in Quiapo, Manila. 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)
On October 20, 1902, under the American Insular Government, 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. 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. Construction on the railed tramway began that same year. In addition to acquiring La Electricista's Calle San Sebastián power plant, the company built its own turbine rotated by water steam generating electricity plant on Isla de Provisor, which fuelled the railed tram system and eventually also provided the electric service. By 1906, the Manila Suburb Railway was 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 was also considered.
Manila Suburban Railways Company
Swift was awarded another franchise in 1906 to operate a extension line from Paco to Fort McKinley and Pasig and founded the Manila Suburban Railway to operate this franchise. In 1919 this company merged with the Manila Electric Company. This extension was one of the most profitable of MERALCO's lines.By the 1920, MERALCO had invested in 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 were severely damaged during the war and had to be removed.
Power generation and distribution
By 1915, electricity generation and distribution became the main MERALCO's main income generator, overtaking its public transportation operations in terms of revenue. In 1919, it changed its official name to Manila Electric Company. By 1920, the company's power capacity had grown to 45 million kWh.In 1925, MERALCO was acquired by the utility holding company Associated Gas and Electric, which had begun a massive expansion throughout the United States and Canada. With AGECO's financial backing, MERALCO began acquiring a number of existing utility companies in the Philippines, enabling the company to expand beyond Manila.
By 1930, MERALCO had completed construction of the Philippine's first hydroelectric power plant, the 23MW Botocan Hydro Station. At the time, this plant was one of the largest engineering projects in Asia and constituted the largest single private capital investment in the Philippines. The additional capacity allowed the company to begin hooking up customers throughout the metropolitan area.
To drive demand for more power, MERALCO also opened a retail store in order to sell electric home appliances.
World War II
During the Second World War, the Japanese occupying forces forcibly transferred all of MERALCO's assets and holdings to the Japanese-controlled Taiwan Power Company.Postwar
By the war's end, most of the former Meralco facilities had been destroyed. AGECO was reorganized as General Public Utilities Corporation or GPU in 1946. MERALCO's autobus franchise was sold to Halili Transport.Acquisition by the López group
In 1962, Eugenio López, Sr. of the influential López family of Iloilo put together Meralco Securities Corporation, which acquired MERALCO, making it wholly Filipino-owned. During 1962-72, he increased MERALCO's power generating capacity by five times with the building of additional power stations in the Manila area with two more planned in Rizal Province.The Meralco Building, designed by National Artist of the Philippines for Architecture José María Zaragoza, was built during this period. The Meralco Theater within it was inaugurated shortly thereafter, in March 1969.
Martial law and Romualdez takeover
In September 1972, President Ferdinand Marcos, who had begun feuding with the Lópezes, declared Martial Law, acquiring and consolidating power and effectively extending his powers beyond the constitutional term limit which would have forced him to step down in 1973. A few weeks later in November 1972, he issued Presidential Decree № 40, which nationalized the country's electric generation and transmission. A few more weeks after that, Marcos had López' son and namesake, Eugenio "Geny" López, Jr. arrested without formal charges, claiming that the younger López had been involved in an alleged assassination attempt against him.Geny's arrest became a bargaining chip which eventually compelled the Lopezes to sell their controlling share of Meralco Securities Corporation to Marcos' associates late in 1973. Ownership of Meralco Securities Corporation was placed under a newly created shell company called the Meralco Foundation, Inc., controlled by Marcos' brother-in-law Benjamin Romuáldez, which made a down payment of about $1,500 for a "very minimal" total sale price of about $28 million. Installment payments were supposed to be due starting two years later.
The Meralco Foundation takeover was immediately followed by a 100% increase in electric rates, with continuous increases throughout Romuáldez's management. A rate adjustment clause, which allowed MERALCO to adjust its rates depending on crude oil increases or higher dollar exchange rates, was also introduced.
In 1977, MSC was renamed First Philippine Holdings Corporation.
By 1978, all of the Philippines' major power plants were owned and operated by Napocor, including the Metro Manila plants that MERALCO had built beforehand in the 1960s. By the end of the Martial Law period in 1981, MERALCO expanded even further into Cavite and western parts of Laguna, Rizal and Quezon provinces, as well as parts of southern Bulacan.
Meralco Foundation's control of MERALCO lasted until the People Power Revolution in February 1986 when it defaulted on its payments under the terms of the original turnover of shares in 1973, although it took a five-year period before the shares were eventually reverted to the Lópezes in 1991.
After martial law
President Corazon Aquino reverted company ownership to the López Group. She also enacted an executive order that allowed the company to directly compete with Napocor.On March 18, 1989, MERALCO unveiled its new and current corporate logo.
In 1990, MERALCO acquired the electric facilities and other assets of the Communications and Electric Development Authority, one of two companies that distributed power in Cavite Province for much of the 1970s and 80s.
Entry of First Pacific and JG Summit groups
Between 2009 and 2012, the López Group would reduce its 33.4% holdings in MERALCO by selling most of its shares to the First Pacific Group. By 2012, the López Group's holdings in MERALCO would be reduced to 3.95%.The First Pacific Group, through Metro Pacific Investments Corporation, currently holds the majority share in MERALCO, followed by the Gokongwei Family's JG Summit Group.