Meralco still batting for P49-B capex approval

By Myrna M. Velasco – March 20, 2019, 10:00 PM
from Manila Bulletin

With its rolling capital expenditures (capex) just securing partial regulatory approval for P24.2 billion, power utility giant Manila Electric Company (Meralco) said it will continually hope for go-signal on the P48.4 billion balance of the capital spending it applied for.

Meralco said it sought total capex of P73 billion on its regulatory period which will wind up June this year – yet only P24.2 billion had been approved so far.

Last year, documents from the utility firm had shown that its capital outlay reached P13.7 billion, higher by 13-percent from the previous year’s P11.9 billion.

Further, the utility firm manifested its need for emergency capex of P10 billion “for projects that need immediate implementation” – that as an interim arrangement while awaiting the approval of the Energy Regulatory Commission.

The company similarly sought capex requirements for its Clark Electric Distribution Corporation (CEDC) in the amount of P1.7 billion – capital spending that is still part of that utility firm’s third regulatory reset under performance based-rate setting of the deregulated power sector. CEDC is 65-percent owned subsidiary of Meralco.

For CEDC, it also pleaded to the ERC for its emergency capex requirement of P198.5 million – of which P164.7 million of that programmed spending had already been completed.

Meralco explained its need for increased capex was driven by continuing expansion on customer count and load growth – a hike in demand propelled also by the “Build, Build, Build” development platform of the Duterte administration.

On load growth, Meralco indicated that its “south sector” is expected as the next growth area – underpinned generally by brisk tourism activities.

“With airlines offering affordable travel rates, the year also saw growth in the hotel industry brought about by the steady inflow of tourists from the United States, China and South Korea,” the distribution firm said.

Meralco added “growth is also notable from domestic tourism ‘staycations’ which have become popular with locals for extended weekends or holidays.” The utility firm likewise noted that “new township developments and technology for online services contributed to the growth of retail trade – with the ramp up of existing mixed use malls catering particularly to millennials who want to live, work and be entertained in the same location.”