Meralco to spend P4.5 B on transformers, substations

By Ted P. Torres (The Philippine Star) Updated August 31, 2011 12:00 AM


MANILA, Philippines - The Manila Electric Co. (Meralco) will spend P4.5 billion for the purchase of transformers and construction of substations as part of the company’s projects for the year.


For the whole of 2011, Meralco allocated P8.5 billion for capital expenditures with some P4 billion already utilized.


According to Meralco chief operating officer Oscar Reyes, the proposed budget is for substations, transformers and other expenditures to enhance reliability and quality of services.


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


It was prepared to spend up to P10.9 billion but the Energy Regulatory Commission (ERC) approved a lower capex figure.


Reyes said despite the lower capex, Meralco would continue to provide reliable and uninterrupted service to its customers.


“We will prioritize capital projects that are for distribution service, that will enhance the quality of service to our customers,” he added.


Meralco expects core net income for the full year to reach P14 billion, or 15 percent higher than the previous year. Its first half core net income went up 35 percent to P7.8 billion from P5.8 billion in the same period last year.


Meralco president and chief executive officer Manuel V. Pangilinan had earlier said that electricity sales in the second half will be broadly similar to that realized in the first half.


“And reflecting slightly lower distribution tariffs for this period as a consequence of the third Regulatory Period, we are guiding our core net income for the full year 2011 at P14 billion,” Pangilinan said.


Consolidated revenues, of which electricity accounted for 97 percent, declined two percent to P124.8 billion in 2011 relative to the same period in 2010.


Meralco, now controlled by PLDT Group, San Miguel Corp., and First Philippine Holdings Corp., has around 4.9 million customers in its franchise area.