Meralco prods ERC on capex applications
THE Manila Electric Co. (Meralco) has formally informed regulators of a pressing need to approve its applications for emergency capital expenditures (capex) while its 2018 and 2019 capex applications are pending.
According to Meralco Chief Financial Officer Betty Siy-Yap, the utility firm has manifested an urgency to approve P4 billion in the first half of 2018 and another P4 billion in the second half of the same year.
“The total amount manifested is about P8 billion,” the Meralco official said in a text-message reply.
Meralco, which is required to seek approval from the Energy Regulatory Commission (ERC) before it can implement its planned capex, has been filing for emergency capex because its main application for capex has yet to be approved. Total of Meralco’s capex applications for two regulatory periods, which remain pending with the ERC
Even its applications for emergency capex have yet to be resolved by the ERC. As such, the utility firm has filed manifestations before the ERC.
“We manifested most of them because the projects are critically loaded,” she said, adding that the emergency capex are vital to finance Meralco’s network.
Meralco’s capex for the third regulatory year (RY) of its fourth regulatory period (RP) amounting to P18.8 billion still awaits approval of the ERC. The amount covers the period July 2017 to June 2018.
For its July 2018 to June 2019 capex, Meralco filed approval for P21.46 billion. This is also pending.
In all, Meralco’s P40.26-billion capex application for two regulatory periods remains pending with the ERC.
The proposed capex programs are 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 publicprivate 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 the electric distribution system in order to accommodate customer connections, while maintaining the reliability and power quality of the distribution system,” it said.
It also pointed out that capex projects are 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, Meralco said.
It stressed that 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, 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 6 million customers,” it said.