Meralco hikes ’16 capex to P18B to meet demand

by Riza T. Olchondra – 01:56 AM December 23rd, 2015

from Philippine Daily Inquirer

THE MANILA Electric Co. (Meralco) is increasing programmed spending for next year to keep up with higher electricity demand, officials said.

Meralco chair Manuel V. Pangilinan said in an interview that the programmed spending for 2016 was about P18 billion “including innovations.”

The spending will enable the power retailer meet growth in electricity demand with a more robust, efficient and automated network, he said.

For the country’s largest distribution utility serving Metro Manila (the country’s most economically active power distribution franchise area), the average growth in energy sales volume per year is 3 to 3.5 percent.

Growth is expected to increase to about 5 percent this year, 2015, officials said.

“The demand will continue to grow, basically demand will probably grow in Luzon by about 250 megawatts (MW) to 300 MW peak demand per year,” company president and CEO Oscar S. Reyes said.

Reyes earlier told reporters that the earlier estimate of P17 billion in capital expenditures (capex) would likely be around P18 billion instead.

He said it was part of a five-year capex plan where investments in power distribution alone would be P65 billion to P70 billion.

The five-year capex will finance investments in customer and load growth, climate change hardening, automation and technology, sustained reliability and quality in network and safety.

Previous reports placed Meralco’s capex at P86 billion, broken down into P65 billion for its distribution network and P21 billion for its electricity generation business, from 2015 to 2019.

The five-year capex was seen to cover costs related to the relocation of facilities affected by the government’s public-private partnership projects.

From 2010 to 2014, Meralco allotted P50 billion for its distribution business and P20 billion for its power generation business.

Meralco provides power to over 5.7 million customers in the entire Metro Manila, Bulacan, Cavite and Rizal, and certain municipalities and barangays in the provinces of Batangas, Laguna, Pampanga and Quezon.

It is estimated that about half of the Philippine gross domestic product or GDP is generated in the company’s franchise area.

Its market share is at 74 percent for Luzon and 55 percent for the entire Philippines.