The Market Monitor Minding the Nation's Business
By Riza Lozada
Manuel V. Pangilinan, chairman of the board of directors of the Manila Electric Co. (Meralco), has reminded the government that power interruptions remained a “cause for concern and visible indicators that much more needs to be done in the power supply chain.”
Pangilinan aired his concern during a recent meeting of the power distributor’s stockholders where he explained that the recent power-supply interruptions prompted the company to put into effect the Interruptible Load Program (ILP) to minimize the power outages.
He also explained that Meralco has not effectively addressed these power aberrations because until now, the government has not approved Meralco’s proposed capital expenditures (capex) of P15 billion until next year, which is crucial in its rehabilitation and expansion programs.
Commonwealth Act 146 requires public service firms to seek the prior approval of the government, in this case the Energy Regulatory Commission or ERC “before it can establish, construct, maintain and operate new facilities or make any extension of its existing facilities.” Capital spendings of utility firms are also indirectly tagged on the cost of their services.
The capex covers 23 major projects of Meralco, worth P5.6 billion, and 82 residual projects, worth over P6 billion, aimed at servicing the projected 3.1-percent growth in its customer base for 2017. Meralco’s regulatory year covers the period July 1, 2016 to June 30, 2017.
“Major renewal and refurbishment projects are lined up to ensure that the distribution system will continue to provide safe, secure, reliable and efficient service to our millions of customers amid climate and calamity risks. This will include electric capital projects intended to harden and strengthen the network for resiliency to storm and other calamities,” Meralco said.
Meralco’s major projects for next year, among others, are the expansion of the advanced metering infrastructure, worth P2.028 billion; development of the San Mateo 115-kilovolt (kV) to 34.5-kV substation, worth P475.80 million; and the P312.65-million installation of electric-power technologies for experiential training, research and development. For its planned residual projects, it has allocated P1.36 billion, for distribution transformers; P962.45 million, for overhead conductors and devices; and P582.43 million, for meters, instruments and metering transformers.