‘Meralco to help hasten PHL recovery via spending plan’

By Lenie Lectura November 2, 2020
https://businessmirror.com.ph/2020/11/02/meralco-to-help-hasten-phl-recovery-via-spending-plan/

The Manila Electric Co. (Meralco) is earmarking a capital expenditure (capex) of P50 billion to help the country get back on the road to recovery, according to its chairman, Manuel V. Pangilinan.

Pangilinan said the pandemic has brought about “unexpected and radical change in everyday life, giving rise to complex challenges as well as new opportunities.” Amid all the challenges, he assured that Meralco’s role would continue to be relevant in the lives of its 7.2 million customers.

“We reiterate our commitment to continue to provide the most reliable and resilient network to ensure that the entire franchise is enabled for the economic upturn.

Today, we estimate that we need to execute close to P50 billion of capital expenditures for our distribution business and generation investments. We look at this as an opportunity to create jobs, propel business activities and stimulate consumption.”

There is no period set for the capex mentioned by Pangilinan.

Since the amount includes generation investments, this would not have to follow Meralco’s regulatory year reckoning and will not need prior approval of the Energy Regulatory Commission (ERC), according to Meralco utility economics head Lawrence Fernandez, while adding that there is no timeframe as to the utilization of the P50-billion capex.

The P50-billion capex would be split between the core business, which is electric distribution, and its power generation unit. “Meralco’s share is P24 billion. MeralcoPowerGen and other subsidiaries account for the balance,” said Meralco chief finance officer Betty Siy-Yap in a viber message when sought for details.

Siy-Yap said Meralco’s regulatory year (RY) capex for 2021 was already filed with the ERC.

Meralco’s RY 2021 covers from July 1, 2021 to June 30, 2022.

A check with the ERC showed that Meralco filed its capex application last September. “The application was filed on September 28, 2020 for Meralco’s 2021 capex,” said ERC Commissioner Rexy Digal in a text message Monday.

The ERC has yet to upload Meralco’s application on its website. She said Meralco proposed a P15.2-billion capex for RY 2020 (July 1 to June 30, 2021) and P20.7 billion for RY 2021.

“The 2020 application is still being heard. The proceedings are still ongoing,” she said.

From January to September this year, Meralco’s capex amounted to P10.9 billion. The amount was utilized to support the surge in residential energy demand due to the continued work-from-home and online education arrangements. It also included network-related programs, such as distribution transformer installation, replacement and upgrade; completion of sub-transmission line backbones; installation of transformer banks; and energization of 48 Covid-19 facilities within the franchise area.

Despite the pandemic, a total of 600 poles have been relocated to support the requirements of the government’s “Build, Build, Build” projects in North Luzon Expressway-South Luzon Expressway Connector Road, Skyway Stage 3, LRT1 Cavite Extension, MRT-7, C5 Southlink, Cavite-Laguna Expressway C3-R10 Road, PNR North 1, Skyway Stage 2 Extension and SLEx Toll Road.

On top of this, Meralco has also relocated 579 poles for the road widening projects of the Department of Public Works and Highways.

Meralco is also targeting to achieve 100 percent electrification in its franchise area. Out of the total 559 sites for energization by June 2021, a total of 233 have been electrified, 143 sites with ongoing construction and 183 with ongoing right-of-way acquisitions.