Power retailer Manila Electric Co. (Meralco) is looking at a capital expenditure filing of around P26 billion to P30 billion for 2026, or up to P150 billion over a five-year period.
This request will be part of the First Regulatory Period filing with the Energy Regulatory Commission (ERC) in January.
Meralco chief operating officer Ronnie Aperocho said these are initial minimum annual estimates and will still be presented to the Meralco board before submission to the regulator.
“We can’t confirm final amounts yet, because there are still valuations to be done. We are not done with the budgeting yet,” he said.
Aperocho said the budget will be spent on customer requirements, substation rollout, replacement of aging facilities, a pilot underground cabling system and the Advanced Metering Infrastructure (AMI).
“Our budget for AMI is around P8 billion for the first RP,” he said.
The First Regulatory Period for this group covers July 1, 2026, to June 30, 2030. Meralco’s application follows the ERC’s recent decision on the rate reset process for all private distribution utilities (PDUs) after approving the Rationalized Rules for Setting Distribution Wheeling Rates (RRDWR).
The approval of the RRDWR marks a departure from previous regulatory periods, which were often not adhered to due to suspensions or delays in the rate reset process. The RRDWR provides the methodology and process for setting the maximum allowable distribution, supply and metering (DSM) rates of private DUs.
The RRDWR defines procedures for determining revenue requirements, capital and operating expenditures, performance incentive mechanisms and annual rate adjustments, all within a streamlined and time-bound regulatory reset process. Under the RRDWR, the ERC employs a price-cap regulation methodology, setting a maximum allowable rate based on efficient costs, service quality targets and measurable performance indicators. This approach encourages distribution utilities to improve efficiency and reliability while maintaining affordability for consumers.
The RRDWR also addresses past delays in resetting distribution rates for PDUs and serves as the framework for the upcoming Regulatory Reset for the First Regulatory Period (1st RP) of the First Entry Group. This group includes Meralco, Dagupan Electric Corporation (DECORP), Cagayan Electric Power and Light Company (CEPALCO), and Cotabato Light and Power Company (CLPC).
The ERC said this decisive step demonstrates its resolve to fulfill its legal mandate as the rate regulator for the power industry. It also underscores its commitment to a fair, transparent and accountable regulatory process that ensures reasonable electricity rates, promotes operational efficiency and supports the ongoing modernization of the country’s power distribution sector.
