By Lenie Lectura - May 6, 2018
THE Manila Electric Co. (Meralco) is
seeking regulatory approval for its 2019 capital expenditures (capex) in the
amount of P21.46 billion.
In its eight-page application filed
before the Energy Regulatory Commission (ERC), the utility firm proposed a
capex of P8.7 billion for 27 major projects and P12.72 billion for 36 residual
projects.
Bulk of the proposed capex is
programmed for the expansion of the advanced metering infrastructure (AMI)
which costs P2.37 billion, followed by distribution transformers worth P1.78
billion listed under the residual projects.
“Meralco’s regulatory year 2019
capex program is geared toward providing reliable service to its customers by
creating an adequate, safe, efficient and viable distribution network, while
providing the needed capacity to address the forecasted load growth within its
franchise area,” it said in its application.
The proposed capex program, it
added, is necessary to meet growth in peak demand and customer
connections, to ensure sustained network efficiency, to enhance its
distribution network, to comply with regulatory requirements, and support
government’s public-private partnership programs.
Meralco forecasts a 4.5-percent
growth in peak demand and a 3.6-percent growth in customer base.
“The increase…will require Meralco
to increase the capacity of its electric distribution system in order to
accommodate customer connections, while maintaining the reliability and power
quality of the distribution system,” it said.
It also said the capex is required
to maintain existing assets, improve network performance and enhance
customer-service performance. Moreover, technology projects will allow it to
enhance its distribution network, enabling it to respond effectively to line
and network outages, which will reduce service interruptions of customers.
It said some of the capex projects
are intended to comply with the requirements of the rules to govern the
implementation of an AMI system. Also, some of the projects are meant to comply
with government prescriptions, such as distribution services, open access
rules, wholesale electricity spot market, metering requirements, and retail
competition and open access rules.
“In light of the resulting benefits
of Meralco’s regulatory year [RY] 2019 capex program in the overall service to
the electricity consumers, Meralco respectfully submits the building-block
components, particularly the return of capex and return on capital associated
therewith from the time the capex is put in service and considered used and
useful, should be considered as a deferred amount to be included in the
calculation of Meralco’s next reset rates,” Meralco said.
It said non-approval of its capex
projects will severely hamper its operations and affect its ability to deliver
electric service to its customers.
“It is imperative for Meralco to undertake
in a timely manner the expansion and rehabilitation of its network facilities
through acquisition of new assets in order to ensure continuous delivery of
reliable service, and comply with safety, performance and other regulatory
requirements, while addressing the growing needs of its more than six million
customers,” it said.
Pending approval of its application,
Meralco seeks a provisional authority to immediately implement its RY 2019
capex program.
Meralco’s capex for the third RY of
its fourth regulatory period amounting to P18.8 billion still awaits
approval of the ERC. The amount covers the period July 2017 to June 2018.
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