Meralco applies for 18-B capital expenditures next year

Power utility giant Manila Electric Company (Meralco) will go on a massive capital spending of roughly 18 billion by 2016 – not only to expand and reinforce its distribution system but also to pursue innovations and increasingly digitize its service networks.

The company has filed with th the Energy Regulatory Commission (ERC) for approval of its planned 20-percent ercent capital expenditures (capex) increasecrease next year from the 2015 programmed mmed capex of 15 billion.

As the deregulated power industry is now bent on treading a full competitive structure, a wellllentrenched player like Meralco has as also been upping the ante when it comes to service offers so it can an sustain customer patronage.

Fundamentally, this is the era when traditional players would have to prove their stronghold in the marketplace – no longer just with their scale ale but what can they actually bring to the e table in terms of quality and reliable service, ervice, but also on the innovative sphere off th theiri product offers.

In its bid for approval of its proposed capex, Meralco has emphasized that the allocation “is geared towards ensuring the safety, reliability, efficiency and performance of the distribution system while providing for the forecasted growth of future electricity demand within its franchise area,”

It explained that its distribution infrastructure “must be sufficient to serve Meralco’s current customers while provisioning to meet future needs.”

The utility firm has projected 3.8-percent demand growth next year – which will account for the first year of its 4th regulatory reset under the performancebased rate setting scheme.

“This increase in peak demand and the additional customer connections 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 its distribution system,” the company stressed.

Its capex filing had been anchored on several blueprinted projects – but primarily on: Renewal and refurbishment of facilities; automation, innovation and technology enhancements; as well as expansion of its networks.

Some of the listed big-ticket projects are: Meter conversion program for the retail competition and open access ( RCOA) regime in the restructured electr electricity sector. This project will amoun amount to 1.278 billion.

Oth Other major items requiring humung mungous capital spend are installation lations of overhead conductors and devic devices; as well as on poles, towers and fixtures.

D Distribution transformers will sim similarly command massive capital out outlay, along with those on meters, ins instruments and metering transfor formers.

The distribution firm will also be spen spending considerable amount for the relocationr of its facilities that will be traversedtrav by some government-initiated projects under the public-private partne partnership (PPP) arrangement.

Me Meralco has emphasized that “it is i imperative for (it) to undertake expansion and rehabilitation of its network facilities through acquisition of new assets in order to ensure continuous compliance with safety, performance and other statutory/regulatory requirements and to address the growing needs of its 5.6 million customers.”