3-Pronged Meralco Expansion Pushed

Manila Bulletin

By MYRNA M. VELASCO

August 21, 2012, 4:46pm

While it is considerably reaching the pinnacle on its financial performance, the investment expansion set out for Manila Electric Company (Meralco) is still at “ground level,” hence, management is laying down direction for more concrete projects reaching implementation phases.

In an exclusive interview, Meralco Chairman Manuel V. Pangilinan bared the three-pronged plan to widen the utility firm’s investment scale – generally what were already announced as the company’s plunge into power generation, expansion of franchise areas and scaling up subsidiaries, but the mandate now is identifying the specific projects and timelines.

 “We are still at ground level in terms of what we want to do with Meralco. But it is taking some time for us… it’s hard to predict how to implement very concrete projects because we are dealing with government for permits and approvals,” he stressed.

In the end, aside from reliably meeting the energy demand of customers and scouring for ways o reduce electricity costs, the aim of the utility firm would be to develop synergies with its affiliate ventures in the telecommunications sector, especially with the much-anticipated influx of smart grid technologies in the power industry.

In power generation, the immediate plan is reviving the planned 150-megawatt peaking plant which calls for technology deployment of gas turbines.

 “On account of prevailing economic growth, we have revived that project because it’s already needed, so our target is it should be on stream by next year,” he said.

Pangilinan though is not discounting possibilities that they may also acquire assets or just purchase supply from existing power generators to meet their peaking power needs. “But what we can say is, it might be better that we build it because we know that the facility is ours, although, we might just need to revisit the numbers,” he stressed.

The peaking facility could indeed be the take-off point for the planned 2,500-3,000 megawatts of generation portfolio of coal and liquefied natural gas-fired facilities which the company has been eyeing on stream over the medium term. The snags encountered in the 600-megawatt Subic plant’s construction, he said, may move commissioning date to 2016.

On franchise area expansion, the utility firm is integrating plans to even target the problematic electric cooperatives in various parts of the country, such as the Albay Electric Cooperative (ALECO) in the Bicol region.

 “We have looked at ALECO and we’ve had discussions with them, but there are some hurdles…we can also look at other problematic electric coops because we can be of help with our expertise and experience,” he said.

Previous announcements made by Pangilinan would be to expand their service area along adjacent domains in Luzon, but he qualified that they are not limiting themselves in these jurisdictions if there are other DUs wanting to partner or divest to them.

 “Like in the electric cooperatives, if they can’t deliver good service, more reliable service, I think that’s where Meralco can come in,” he said; although he acknowledged that the tricky part would be securing Congress’ approval on the transfer of the franchise of these power utilities.

In broadening the business scale of subsidiaries, Pangilinan has noted the potential of its Indra acquisition, which provides the information technology and systems support to Meralco’s business processes.     source