Projected revenues for 5RP to reach P393B–Meralco
By Lenie Lectura – February 10, 2025
from Business Mirror
The Manila Electric Co. (Meralco) filed before the Energy Regulatory Commission (ERC) its proposed annual revenue requirement (ARR) for the 5th regulatory period (5RP) amounting to over P393 billion, equivalent to an average of price of P1.688 per kilowatt hour (kWh).
The company filed last week an application with the ERC for the approval of its proposed ARR and Performance Incentive Scheme (PIS) for the 5RP, which will start on July 1, 2025 and end on June 30, 2029. Its application is in accordance with the ERC’s revised rules for setting distribution wheeling rates for private distribution utilities operating under Performance-Based Regulation (PBR).
For the 2026 regulatory year (RY), Meralco’s total revenue requirement is P81,847,798,626. The projected ARR increases to P92,798,084,569 in RY 2027, P103,914,116,861 in RY 2028, and P114,618,979,078 in RY 2029.
The numbers correspond to the estimated annual maximum average prices (MAP) of P1.6871 per kWh in RY 2026, P1.6899 per kWh in RY 2027, P1.6894 per kWh in RY 2028, and P1.6872 per kWh in RY 2029.
These figures are subject to regulatory approval.
Meralco also stated in its application the projected capital expenditure (capex) budget for the period. On a per year basis, it will allot P34,386,654,560 for RY 2026 ; P58,500,566,560 for RY 2027, P57,911,849,596 for RY 2028; and P64,567,857,658 for RY 2029.
The company said the proposed capex projects are necessary to augment the capacity of the network to meet demand growth or new customer requirements; to replace and refurbish aging, and obsolete assets; to relocate assets needed for the implementation of government infrastructure and third-party initiated projects and to purchase and construct non-network assets required for the normal efficient operation of the electric distribution system.
It will be used to deploy automation and technology projects, including the Advanced Metering Infrastructure (AMI) program to more than three million customers, as well as innovative solutions for various electrification projects; and to comply with regulatory requirements.
Meanwhile, Meralco’s proposed operating and maintenance expenditure (opex) are as follows: P31,303,262,800 for RY 2026, P33,848,691,523 for RY 2027,n P36,207,050,573 for RY 2028, and P39,302,373,330 for RY 2029.
The company said the proposed opex are necessary to maintain the safety, efficiency and reliability of the distribution network; support the growing asset base; allow the company to deliver services to its customers and support its business operations including the use of automation and digital technologies; meet the requirements of government programs; and meet the performance targets under the Performance Incentive Scheme.
Energy consumption is also projected to hit 55,012,937 megawatt hours (MWh) in RY 2026; 56,654,727 MWh in RY 2027; 58,578,864 MWh in RY 2028; and 60,603,819 MWh in RY 2029. The estimated energy sales are based on its projected annual peak demand of 9,576MW in 2026; 9,910 MW in 2027; 10,284MW in 2028; and 10,671MW in 2029.
Earlier, the ERC redefined Meralco’s 5RP replacing the initial coverage of RYs 2022 to 2026 because certain years within Meralco’s original 5RP have already lapsed. The regulatory delays in dealing with Meralco’s application were brought about by “complex legal challenges, along with prior actions of various stakeholders.”
The original 5RP application stated an ARR of P320.5 billion and an average price of P1.5702 per kWh.
