ERC approves Meralco capex of P15.466 billion

by Myrna Velasco – May 19, 2016

from Manila Bulletin

The Energy Regulatory Commission (ERC) has approved P15.466-billion capital expenditures (capex) for power utility giant Manila Electric Company (Meralco) for year 2016 – generally for the upgrade, expansion and digitization of facilities and networks.

The approved capex had been slashed from the more than P17 billion that was originally applied for by the utility firm.

In the ruling rendered by the industry regulator, it approved some projects that will underpin the undertakings of the Public-Private Partnership (PPP) Center; as well as the utility firm’s expanded prepaid metering service.

The ERC said the capital outlay was approved with modification “subject to optimization based on its actual use and/or implementation during the reset process.”

It has to be noted that cost allocations for at least nine projects had been deferred, including those on land acquisition for projects; transformer replacements and expansion of substation facilities, among others.

For prepaid metering, the amount approved had been for P781.262 million and conditions of budget utilization would be based on the provisions of the Rules on Distribution Wheeling Rates.

There is also an allocation for postpaid metering of P216.490 million, primarily to pilot commercially the rollout of advanced metering infrastructure or AMI.

For the PPP-underpinned projects, the regulatory body has approved the relocation of facilities, but the actual cost has been deferred with some conditions.

The ERC noted that “the approval of the inclusion of cost as capex shall be deferred until such time that Meralco could justify that the cost should not be shouldered by the DPWH (Department of Public Works and Highways).”

That had been in view of the fact that the DPWH already shouldered “the cost of such relocation project in the vicinity of the airport.”

Capex approval had also been set for the next phase of the industry on retail competition and open access (RCOA), but was still pegged at minimal level.

The ERC noted that Meralco’s filing had been approved with modification, and that the amount considered is only for the threshold of 750 kilowatts and above.