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Friday, March 29, 2024

Meralco seeking nod on P24.7-b capex

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Manila Electric Co., the biggest retailer of electricity, is seeking the approval of the Energy Regulatory Commission on capital expenditure projects worth P24.72-billion covering July 1 to June 30, 2022.

“Primarily, these capex projects for RY [regulatory year] 2022 are necessary to avert the foreseen emergency situations and ensure the reliable operation of its distribution network and continuous distribution service and connection to meet the growing needs of its more than seven million customers,” Meralco said in its application filed on June 22.

Meralco said its capex program was geared toward providing reliable service to customers by maintaining an adequate, safe, efficient and viable distribution network, while extending the needed capacity to address the forecasted load growth within its franchise area.

The company is undertaking the capex program to ensure adequate infrastructure to meet growth in peak demand and customer connections.

Meralco expects customer base to reach over 7.5 million customers and peak demand to grow to 8,003 MW by RY 2022.

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“This increase in peak demand and customer count will require Meralco to increase the capacity of the electric distribution system in order to continue accommodating customer connections, while maintaining the reliability and power quality of its distribution system,” it said.

Capital expenditure are also required to maintain Meralco’s existing assets so as not to degrade its network performance and customer performance in the current regulatory year.

Automation projects will further allow Meralco to enhance its distribution network, allowing it to respond more effectively to line and network outages which will reduce service interruptions to customers.

Meralco will also use part of the capex to support the government’s “Build, Build, Build” program such as relocation of existing facilities.

Meralco proposes to implement 32 major projects worth a combined capex of P7.952 billion and 78 residential projects worth P16.772 billion.

“It is emphasized that non-approval of the capex projecs for RY 2022 will severely hamper Meralco’s operations and severely affect its ability to deliver electric service to its customers,” Meralco said.

Meralco sought for a provisional authority or interim relief, pending final approval to allow it to immediately implement its capex projects.

Meanwhile, Meralco president Ray Espinosa said over the weekend the Department of Energy’s approval of its interim power supply agreement with Masinloc Power Partners Co. Ltd. could have shielded consumers from high power rates.

Espinosa said during the House committee on energy hearing on Friday the IPSA was filed as early as April before the onset of the summer months.

“And we were trying to avert high WESM [Wholesale Electricity Spot Market] prices, being a burden on our consumers,” Espinosa said.

He said the price for the IPSA was P5 per kilowatt-hour compared to the last two weeks of May when the peak hit P16 per kWh.

“So we could have averted basically the high WESM prices and actually brought the prices to our consumers to a much lower rate,” Espinosa said.

Espinosa also reacted to the statement of Energy Undersecretary Felix William Fuentebella, saying the IPSA with MPPCL was not intended to circumvent the CSP rules.

“We comply with DOE CSP rules. In fact, the current DOE Rules allow us to apply for an exemption for instances like this, where we foresee that there may be a looming emergency in terms of higher WESM prices,” Espinosa said.

Meralco sources a portion of its power supply from the WESM, the trading floor of electricity where prices go up when supply is tight.

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