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Meralco seeking ERC nod for emergency capex

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MANILA Electric Co. has identified urgent projects to ensure reliable service to customers. — PHILSTAR/MICHAEL VARCAS

By Victor V. Saulon, Sub-Editor

MANILA Electric Co. (Meralco), the country’s largest power distribution utility, is seeking approval from the energy regulator for an emergency capital expenditure (capex) of up to P15.19 billion to cover its 2020 projects, nearly a third of which are to fund “very urgent major projects.”

In its filing with the Energy Regulatory Commission (ERC), the listed electricity seller listed 21 of these urgent projects, while 50 are what it called “residual” projects.

Meralco, which is seeking provisional authority to implement its capex program for next year, said the emergency filing is in view of the continuing delay in the approval of its fifth regulatory period, which spans July 1, 2019 to June 30, 2023.

Meralco said its “very urgent” capex program for next year “is geared towards providing reliable service to its customers by maintaining an adequate, safe, efficient, and viable distribution network, while providing the needed capacity to address the forecasted load growth within its franchise area.”

Of the expenditure items, the biggest project costs were for distribution transformers at about P1.79 billion; poles, towers and fixtures at P1.42 billion; and overhead conductors and devices at P1.28 billion.




The ERC set the hearing of Meralco’s application on Aug. 20, 2019 for determination of compliance with the jurisdictional requirements, expository presentation, pre-trial conference, and presentation of evidence.

Meralco said its capex application was driven by several factors, including renewal or refurbishment projects to ensure sustained network efficiency, reliability and power quality.

“Capital expenditures are required to maintain existing assets so as not to degrade its network performance and customer service performance in the current regulatory year,” the listed company said.

It said the budget is required to build adequate infrastructure to meet growth in peak demand and customer connections. It expects its customer base to expand to 7 million and peak demand to grow to 7,750 megawatts by 2020.

“This increase in peak demand and customer count will require [Meralco] to increase the capacity of the electric distribution system in order to continue accommodating customer connections, while maintaining the reliability and power quality of its distribution system,” the company said.

Meralco said it had lined up automation and technology projects to continue its advanced infrastructure metering (AMI) program.

It said the projects are also meant to comply with a number of “regulatory requirements and government prescriptions.”

The distribution utility said with the government’s “Build, Build, Build” programs and projects, it would need to relocate and replace existing facilities so as not to hamper the construction and development of critical infrastructure.

Separately, Meralco said a fault occurred on Thursday inside its Gardner substation in Muntinlupa that resulted in the interruption of four of its downstream substations in Taguig, Urdaneta, Kamagong, and Bonifacio Global City at around 10:53 a.m.

Some parts of Makati, Manila, Pasay, Pasig, Pateros, San Juan, and Taguig City experienced power interruption as a result of the incident.

“The root cause of the outage is yet to be determined. Rest assured, Meralco will further look into this matter as a part of our post-outage operations procedure,” Meralco Spokesperson Joe Zaldarriaga said in an online message.

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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