ERC to hear Meralco’s regulatory proposals

BY LENIE LECTURA – APRIL 10, 2022
from Business Mirror

THE Energy Regulatory Commission (ERC) has set the hearing this month on the application of the Manila Electric Co. (Meralco) for the approval of its proposed Annual Revenue Requirement (ARR) and Performance Incentive Scheme (PIS) for the Fifth Regulatory Period (5RP).

“Finding the said application to be sufficient in form with the required fees having been paid, the Commission hereby sets the same for determination of compliance with the jurisdiction requirements, expository presentation, pre-trial conference and presentation of evidence,” on April 26 and 28, the agency said.

In its application, Meralco is seeking P149.66 billion for its capital expenditure (capex) program in the next four years until 2026.

Under the proposed Annual Revenue Requirement (ARR) and Performance Incentive Scheme (PIS) for the Fifth Regulatory Period (5RP) which starts July 1, 2021, and ends on June 30, 2026 Meralco has set a capex budget of P37.53 billion for 2023, P43.5 billion for 2024, P36.37 billion for 2025, and P32.25 billion for 2026.

Meralco said the proposed amount is necessary to comply with regulatory requirements to maintain the integrity, reliability and efficiency of the electric system and for the continuous improvement in service quality and performance measurement for the benefit of the consumers.

More importantly, the capex projects are necessary to augment the capacity of the network to meet demand growth or new customer requirements.

Among others, the capex will be utilized for the replacement and refurbishment of aging, and obsolete assets; relocation of assets needed for the implementation of government infrastructure and third-party initiated projects; purchase and construction of non-network assets required for the normal efficient operation of the electric distribution system; deployment of automation and technology projects, as well as innovative solutions for various electrification projects.

For the 5RP, Meralco is proposing the “implementation of its Advanced Metering Infrastructure (AMI) program for more than two million customers aligned with the objective of deploying a reliable, efficient, and intelligent distribution grid.”

For the past years, Meralco said it completed several major projects, including the construction and development of 16 new substations with additional total capacity of 1,546 MVA; expansion of 32 existing substations with a total additional capacity of 2,944 MVA; construction of 5-115 kilovolt (kV) and 2-69 kV subtransmission lines; replacement of nine power transformers; replacement of Call Center System (CTI, Voice Logger and Telephony Infrastructure); and acquisition of several systems including the Enterprise Geographic Information System–Phase 1.