Meralco trims capex to P15.5 B in 2016

MANILA, Philippines - The Energy Regulatory Commission (ERC) has approved lower capital spending for Manila Electric Co. (Meralco) in 2016 amounting to a total P15.47 billion.

ERC chairman Jose Vicente Salazar said they decided to cut and defer some of the applied spending per project, resulting in a slightly lower budget than what Meralco applied for.

Originally, the power distributor applied for P17.5 billion to P18.5 billion in capex for regulatory year 2016, which covers the period from July 1, 2015 to June 30, 2016.

The requested amount is at least 20 percent higher compared with the programmed P15 billion capex in 2015.

Meralco president Oscar Reyes earlier said the higher capital spending will address the growing requirements of its customers and further digitize its networks.

The ERC has approved spending as proposed on 15 major projects out of 18 in total.

Among the major projects with reduced budget include the Retail Competition and Open Access Meter Conversion Program and the expansion of the Advanced Metering Infrastructure to Support Prepaid Retail Electric Service.

On the other hand, the power regulator green-lit the relocation of facilities affected by the C-6 extension-flood control dike expressway, which is a public-private partnership project but deferred the approval of the cost.

“…Approval of the inclusion of cost as capex shall be deferred until such time that Meralco could justify that the cost should not be shouldered by DPWH (Department of Public Works and Highways). It is worthy to note the DPWH shouldered the cost of such relocation project in the vicinity of the airport,” the ERC resolution read.

Meanwhile, the ERC has deferred the capex approval for nine major projects for RY 2016.

As opposed to major projects, the power regulator approved all the capex sought by Meralco for 29 residual projects.