Meralco to use emergency capex for other projects

By Danessa Rivera (The Philippine Star) | Updated February 29, 2016 - 12:00am

http://www.philstar.com/business/2016/02/29/1557732/meralco-use-emergency-capex-other-projects

MANILA, Philippines – Pending regulatory clearance, Manila Electric Co. (Meralco) will utilize its emergency capital expenditure (capex) amounting to around P10 billion to fulfill necessary projects to meet rapid load and customer growth.

The power distribution giant will be prioritizing projects to be covered under the emergency capex, Meralco president Oscar Reyes said.

“I think that will be in the order of about close to P9-10 billion,” he said. “We will have to prioritize all of those that are needed to be able to meet the growth in energy demand.”

This is to ensure the distribution utility will meet the requirements of customers, Reyes said.

“In the meantime, we are allowed to spend on emergency capex and we’ve also identified those (projects) that are really required in order to maintain service and meet customer and load growth,” he added.

Among the projects that will have to be put in the back burner are the upgrades on facilities that need to be storm resilient.

 “Some of the capex that are intended for resiliency... weather and storm-hardening projects, will be put at risk. These are things we are making a case for with ERC,” Reyes said.

The power distributor giant filed its budget application with the ERC in February last year.

In its filing, it asked the power regulator to approve a capex of P17.7 billion for 27 major projects and 88 residual projects.

Major projects include retail competition and open access meter conversion program for customers, expansion of its prepaid retail electric service and construction and expansion of distribution facilities.

Residual projects, on the other hand, are mostly upgrades in distribution and non-network assets.

Earlier this month, ERC chairman Jose Vicente Salazar said hearings for Meralco’s capex application are still on going.

As soon as hearings are done, the application would be up for signing by the five-member commission, the ERC chief added.

As for Meralco, Reyes said they keep on making the case with ERC that these projects are necessary to meet its franchise requirements.

“We keep engaging them, making the point that these are needed to be able to beat the load growth, customer growth, network resiliency and other things the customers require. We are hopeful action will be forthcoming within the reasonble, short period of time,” Reyes said.