ERC allows Meralco to spend P15.5 billion of capex

by Lenie LecturaMay 19, 2016

from Business Mirror

THE Energy Regulatory Commission (ERC) has allowed Manila Electric Co. (Meralco) to spend P15.5 billion of its proposed P17.7-billion capital expenditure (capex) for the first year of the fourth regulatory period covering July 1, 2015, to June 30, 2016.

Of the approved amount, the ERC approved P4.14 billion worth of major capex projects and P11.42 billion worth of residual capex for the period.

“The application filed by Meralco for authority to implement the proposed capex is hereby approved with modification, subject to optimization based on its actual use and/or implementation during the reset process for the next regulatory period,” the ERC said in its decision.

When it applied for its capex in February 2015, Meralco said major renewal and refurbishment projects are lined up in regulatory year (RY) 2016 to ensure the distribution system will continue to provide secure, reliable and efficient electric service to its more than 5 million customers amid climate and calamity risks. This will include electric capital projects intended to harden and strengthen the network for resiliency to storm and other calamities.

 The following residual capex projects approved by the commission are the P2.6-billion connection and metering facilities to serve new customers; the P1.33-billion installation of connection and metering facilities to serve National Housing Authority (NHA) projects; and the P2.04-billion replacement of aging, damaged and defective distribution facilities;

The P747.27-million distribution line-reinforcement projects; the P184.48-million uprating of distribution transformers; P86.86- million installation of connection and metering facilities to serve socialized housing projects; P44.71-million new streetlights application; P30.54-million installation of connection facilities to serve e-vehicle charging stations; P9.03-million installation of connection and metering facilities to interconnect embedded generators; P482.5-million conversion to elevated metering center and rehabilitation of existing facilities;

The P456.29-million replacement of poles; the P366-million replacement of distribution transformer; the P278.07-million replacement of conductors; the P248.2-million replacement of remote-controlled line capacitor, line recloser and voltage regulator; the P158.1-million relocation of distribution facilities; the P244.34-million installation of line and equipment cover; the P14.62 million peak-off-peak program; the P476.51-million acquisition and replacement of information systems (IS) equipment; the P194.28-million acquisition and renewal of IS tools; the P135.03-million acquisition and replacement of communications equipment;

The P107.11-million replacement of desktop, laptop and other computer peripherals; the P475.78-million refurbishment project; the P151-million transportation equipment; the P185.78-million infrastructure to meet customer growth and requirements; the P103.63-million laboratory tools and test equipment; the P107.63-million tools and network equipment; P39.6-million replacement and upgrading of security systems; the P23.42-million office furniture and equipment; and P43.01-million innovative and technology solutions.

For its major capex projects, Meralco is allotting P435.79 million for the development of its Malacañang substation; P214.62 million for the expansion of its Masinag substation; P48.08 million for the installation of switchgear; P478.91 million for the development of its Lucena substation; P162.08 million for the expansion of its Tabang substation; P63.12 million for the installation of another switchgear at National Grid  Corp. of the Philippines-San Jose transformer; P580.4 million for the construction of San Jose delivery point transmission lines; P336.28 million for the construction of BF Parañaque Naia3-Malibay line;

P35.69 million for the rebuilding portion of LIIP-Balibago line; P55 million for customer outage portal; P97.39 million for energy sourcing and risk management; P63.1 million for the acquisition of next-generation firewall; P120.42 million for the replacement of call-center system; P207.6 million for the retail competition and open-access meter-conversion program; P781.27 million for the expansion of advanced metering infrastructure to support prepaid-metering service; P216.5 million for the advanced metering infrastructure project to support postpaid-metering service; and P150 million for the construction of Meralco Center for Excellence on Power and Energy training facility.

The ERC decided to defer the approval of nine major capex projects of the utility firm. It took the ERC one year and three months to decide on Meralco’s application. In the past, Meralco had warned of possible risks associated with weather- and storm-hardening projects for improved resiliency if its proposed RY 2016 capex involving 27 vital projects is not fully approved.

Meralco President Oscar Reyes had said if its application is not approved, the utility firm would have to “prioritize” its planned projects needed to meet growth in energy demand to ensure it meets the requirements of its customers.

Meanwhile, Meralco awaits ERC approval for its proposed capex program for RY 2017 amounting to over P15 billion.

The amount involves 23 major projects, worth P5.6 billion, and 82 residual projects, worth over P6 billion, aimed at servicing the projected 3.1-percent growth in its customer base for RY 2017. Its regulatory year covers the period July 1, 2016, to June 30, 2017.

“Major renewal and refurbishment projects are lined up in RY 2017 to ensure the distribution system will continue to provide safe, secure, reliable and efficient service to our millions of customers amid climate and calamity risks. This will include electric capital projects intended to harden and strengthen the network for resiliency to storm and other calamities,” Meralco said.

This application is still pending with the ERC.