Meralco to pursue remaining capex

Manila Times.net
Written by : EUAN PAULO C. AÑONUEVO


MANILA Electric Co. will continue with its capital-spending program even after regulators approved a lower budget.

Oscar Reyes, Meralco chief operating officer, said the company will spend P4.5 billion to finance remaining projects for the year.

“The amount is for substations, transformers and other capital expenditures aimed at essentially further enhancing reliability and quality of service and also make our system more robust to provide 24/7 service,” he said.

For the full year, the country’s largest power distribution utility allocated an P8.5-billion budget.

The company, however, initially sought a P10.9-billion capital spending requirement but the Energy Regulatory Commission (ERC) slashed the amount.

Because of this, Meralco would have to prioritize capital projects “that will enhance the quality of service to our customers.”

Meralco’s capital budget is usually spent on electric capital projects such as construction of new distribution lines, replacement of defective power transformers, construction of substations, among others.

The ERC earlier reduced Meralco’s maximum average price from P1.65 per kilowatt-hour to P1.58 per kilowatt-hour, translating to different electricity rates for the latter’s customer classes within the second half of the year.

The reduction in Meralco’s distribution rate, or the line item in power bills that goes directly to the utility’s pockets, came about after the ERC disallowed certain projects in the company’s proposed capital expenditures.

Meralco applied for a slightly higher maximum average price of P1.60 per kilowatt-hour to take into account its performance last year, which it said surpassed indicators set by regulators for various operations and service areas.

Under the performance based regulation rate setting scheme prescribed by the ERC, Meralco is qualified for incentives should its performance surpass standards set by the regulator.

Meralco has around 4.9 million customers in its franchise area, which covers Metro Manila and its environs. The utility is controlled by the PLDT Group.