Meralco
Encyclopedia : M : ME : MER : Meralco
The Manila Electric Company (PSE: [MER] and [MERB]
MERALCO is the Metro Manila's only electric power distributor and holds the power distribution franchise for some 22 cities and 89 municipalities, including San Juan, Las Piñas, Quezon City, Malabon, Makati, Caloocan, Pasay, Mandaluyong, Parañaque, and Navotas.
Early History
After the defeat of the Spanish and the American occupation of the Philippines, all Spanish government-owned enterprises and rights were sold to Americans under the Treaty of Paris.
Manila at the the closing days of the Spanish Empire, was a city of 220,000 people. Public transportation was then operated by a tiny Spanish-owned firm, the Compañía de los Tranvías de Filipinas, which ran Manila's horse-drawn street railways.
The city of Manila already had electricity since 1892, provided by La Electricista, the Philippine's first electric company. The company built a central power plant on Calle San Sebastian in 1895, and along with street lighting, had close to 3,000 residential customers by the end of its franchise.
American Occupation and Pre-War History
On October 20, 1902, the Second Philippine Commission began accepting bids to operate Manila's electric tramway, and by extension, providing electricity to the city and its suburbs. Detroit entrepreneur Charles M. Swift won the bidding by default as he was the sole bidder and on March 24, 1903, was granted the original basic franchise of Meralco.
In 1904, Meralco acquired both the Compañía de los Tranvías de Filipinas and added La Electricista. Construction on the electric tramway began that same year. In addition to acquiring La Electricista's Calle San Sebastian power plant, Meralco built its own steam generating plant on Isla Provisora which powered the streetcar system and eventually also the electric service. By 1906, Meralco's yearly power output capacity was around eight million kWh.
Public Transportation
Meralco built up a strong public transportation business in the decades leading up to World War II, building a 170-strong fleet of streetcars into the 1920s, before switching over to buses later in that decade.
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 and in 1919, 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 or AEGCO (reorganized as General Public Utilities Corporation or GPU in 1946), 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 its Manila city center base.
By 1930 Meralco completed construction of the Philippine's first hydroelectric power plant, the 960-kilowatt 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 Metro Manila area.
Retail Enterprises
To drive demand for more power, Meralco also opened a retail store in order to sell electric home appliances.
The Greater East-Asia War
During Greater East-Asia War, the Japanese Occupation Forces forcibly tranferred all of Meralco's assets and holdings to the Japanese controlled Taiwan Electric Company (台湾電力公司). By the end of the war, most of the former Meralco operations had been destroyed, along with the rest of Manila.
Post War Reconstruction (Nationalist Era)
facilities. After WWII, Meralco's autobus franchise was sold to Halili Transport
In 1962, Don Eugenio López, Sr. acquired Meralco from his and finally became
Filipino-owned.
Don Eugenio established the first airline in Asia, became a media mogul feared
and respected by the corrupt, and acquired and ran Meralco, the country's
largest power utility. In buying Meralco in 1962, Don Eugenio demonstrated his
belief that Filipinos could manage businesses even better than Americans. During
1962-72, he increased Meralco's power generating capacity five times. At the
same time, Don Eugenio created a new corporate culture among Meralco's employees
that stressed customer service and integrity. He also became legendary for his
care and concern for his employees. He liked to say: "If you want to make money,
give it away."
Martial Law Period
In 1972 President Ferdinand Marcos both instituted martial law in the Philippines and issued Presidential Decree No. 40 which forcibly nationalized the country's electric generation and transmission.
Don Eugenio López, who owned Meralco at the time, had both his sons kidnapped by the government who were released To force Don Eugenio to hand over his business empire, the regime arrested his son Eugenio López, Jr. (better known as Geny) on trumped-up charges of conspiring to assassinate the president. With his son held hostage, Don Eugenio was forced to give up his holdings in a group of companies worth several hundred million dollars. But Geny was not released from prison; Don Eugenio had been double-crossed. He died of cancer in San Francisco in 1975. In 1977, Geny and his cellmate, Sergio Osmeña III escaped from prison in Fort Bonifacio. They made their way to the United States, where they were active in the anti-Marcos opposition.
By decree, the ownership of the company stripped away from the Lopez family and placed under a shell company called the Meralco Foundation, Inc., controlled by crony under the newly-created, government controlled Napocor,
By 1978 all of the Philippines' major power plants, including most notably those previously owned by Meralco, were owned and operated by Napocor. Control of the Meralco corporaton itself was seized by the Marcos Dictatorship, but was returned to its prior owners after the EDSA Revolution.
See also
External links
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