By Victor V. Saulon, Sub-Editor
MANILA Electric Co. (Meralco) expects its capital expenditure for the next four-year regulatory period spanning mid-2019 to mid-2023 to track around the same amount as the previous period — at about P18 billion a year, its president said.
“We’d like to think that it will track — for now, absent any indication — we’d like to more or less probably stick with that range of about P18 billion a year,” Meralco President and Chief Executive Officer Oscar S. Reyes told reporters after the company’s annual stockholders meeting on Tuesday.
Mr. Reyes said Meralco submitted for approval by the Energy Regulatory Commission (ERC) a capex of P35 billion for the two-year period extending up to June 30, 2019, or the tailend of its fourth regulatory period.
ERC regulates the power distribution utility within a so-called “reset period” consisting of four regulatory years. The company’s regulatory year begins on July 1 and ends on June 30 of the following year. Its fourth reset period began on July 1, 2015 and ends on June 30, 2019.
“It’s hard to extrapolate because the capex for networks [and] customer services have to be specific. There has to be specific infrastructure [projects],” Mr. Reyes said.
Betty C. Siy-Yap, Meralco senior vice-president and chief finance officer, said that for the fourth regulatory period Meralco was unable to obtain a “rate-setting” from the regulator.
For the years 2015 to 2019, she noted the corresponding capex applied for by Meralco was at P17.7 billion, P15.4 billion, P18.8 billion and P21 billion for a total of P72.9 billion. She said the last one was applied by the company only in April this year.
“If you had a rate-setting, [the capex] for 2015 to 2019 should have been approved in 2015, and you just implement. And because we didn’t have a rate-setting, we apply for approval on an annual basis,” she said.
The capex for Meralco’s fourth regulatory period is a big jump from that of the third period at a little less than P40 billion, Ms. Siy-Yap said.
“The original approval was P36 [billion] and then we got an emergency approval of around P2.9 billion, so almost P40 [billion],” she said.
Meralco’s fifth regulatory period comes at a time when it is looking at developing new energy businesses.
During the stockholders’ meeting, Mr. Reyes said Meralco was looking at six new business segments, including electric vehicles, microgrids and smart cities.
Meralco is waiting to see if the government would give franchises for the routes plied by electric vehicles. Mr. Reyes also said off-grid areas are being considered by the company for electrification, not as corporate social responsibility, but as a viable business venture.
Meralco’s capex for the coming years follows the steady growth of its customer base at a compounded annual growth rate of 4.2% from 2013 to 2017. The company ended last year with 6.327 million customers, up 4.8% from 6.038 million in 2016.
On Tuesday, shares in Meralco rose by 0.60% to close at P335.80 each.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls.

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