Relocation of Meralco facilities gets nod

BY LENIE LECTURA – MAY 9, 2022
from Business Mirror

The Energy Regulatory Commission (ERC) has approved the relocation of the electrical facilities of the Manila Electric Co. (Meralco) that will be affected by the infrastructure projects of the government provided that the Department of Transportation (DoTr) will shoulder P9.9 billion of the relocation cost.

The total cost of the relocation is P14,210,689,366.38. Of the amount, Meralco will shoulder P4,239,341,579.13 while the remaining P9,971,347,787.25 will be paid by the DoTr.

Meralco said a total of 10,372 poles and 764.82 kilometers of conductors would be affected by the six infrastructure projects of the government under “Build, Build, Build” (BBB). However, it said, these projects need to be undertaken.

“The failure to implement any of the relocation projects would cause delay in the completion of the infrastructure projects, hence, a delay in the realization of the government’s plans and vision,” Meralco said.

The ERC, for its part, said it had to carefully assess the impact to the Meralco customers. “The Commission deemed that the funding for relocation project cost, as well as the expansion project cost, be scrutinized. After all, the costs that will be shouldered by the DoTr will likewise be settled through taxpayers’ contribution to the national coffers.”

The ERC said that while it recognizes the necessity of the DoTr projects, there are guidelines to be followed in the implementation of capital expenditure (capex) projects.

The capex guidelines provide that an application shall be filed within 60 days from the start of the implementation of such projects classified under the Contingency capex. However, Meralco already started the relocation of its facilities affected by the Philippine National Railways North 1 project on September 29, 2018, and that the filing of the application was only made on December 12, 2019.

“This is beyond the 60-day period under the CAPEX guidelines. It is worthy to note that the 60-day period of filing was provided for the purpose of giving distribution utilities the flexibility to immediately implement contingency capex projects under specific situations, without prior approval from the Commission to ensure that the service to the customers and the delivery of a safe, quality and reliable electricity is not delayed during such situations,” the ERC said.

The agency ruled that Meralco’s relocation project of its facilities in connection with the BBB projects of the DoTr should be approved, provided that the cost for the relocation, in the amount of P9,971,347,787.25 shall be shouldered by DoTr and that it shall be treated as Contribution in Aid of Construction, hence this will not be recovered under the account of Meralco.

Meanwhile, the ERC disapproved the expansion project of Meralco of its distribution system amounting to P4,239,341,579.13. It ordered the utility firm to re-file it within 30 days.