Meralco needs ₱18 B in 2020 for network upgrade, expansion

By Myrna M. Velasco – November 25, 2019, 10:00 PM
from Manila Bulletin

Power utility giant Manila Electric Company (Meralco) will be needing ₱18 billion next year for its load network upgrade and expansion to accommodate not just demand growth for customers but also to underpin the infrastructure development program of the government.

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According to Ronnie L. Aperocho, Meralco senior vice president and head of networks, the targeted capital spending will just be for the network improvement of the utility firm – including reinforcements to its smart grid journey.

“We need ₱18 billion just for networks… that will already include our requirements to support Build, Build, Build and the PPP (Public-Private Partnership) program of the government,” he said.

Bulk of the project funding, he expounded, shall be funneled to the pipelined smart substations of the company – and the relocation of poles and other distribution facilities that will be traversed by various infrastructure projects of the State.

He noted that next year’s programmed budget would entail massive jump from the company’s spending of ₱12 billion this 2019. So far, ₱11 billion of that allocation had already been expended as of third quarter this year.

Aperocho noted that stakeholders in various government-underpinned infrastructure projects are already demanding that relocation of facilities be carried out faster – but he said, the entire process must be done systematically and by phases.

In the actual Meralco application for 2020 capital expenditures (capex) with the Energy Regulatory Commission (ERC), it sought for ₱15.19 billion – of which ₱10.46 billion had been lined up for “very urgent” projects; and the balance of ₱4.73 billion for residual projects.

It has to be noted though that in recent years, Meralco has been undertaking its usual application for yearly capex with the regulator – then it still does supplementary filing for “emergency capex” and these were generally projects supporting State-backed BBB infrastructure ventures.

The network reinforcement and expansion of the company had been eyed to “facilitate the faster connection of our customers to the grid, and of course, to address load growth requirements of our customers and to renew our dilapidated or aging assets,” Aperocho said.

And part of the company’s target is to achieve “zero unconnected end-user” within its franchise area, hence, it is also accelerating undertakings in extending electricity service to all customers within its service domain.

That’s why we have this number of sites being identified to be energized – these sites used to be problematic sites in terms of extending our facilities because of many reasons like right-of-way, LGU (local government unit) problems and those areas that have sort of permitting issues,” the Meralco executive emphasized.