Meralco investing P45B to improve electricity service

To improve the reliability of its network, Manila Electric Co., the country’s biggest power distributor, plans to spend about P45 billion in capital expenditures (capex) from 2011 to 2015. “Our investment program over the next four years [will] average around P11 billion annually. We’re looking at close to P44 billion to P45 billion over the next four years in order to strengthen our distribution system," said Oscar Reyes, Meralco’s chief operating officer. He said the amount aims to reduce power fluctuations, noting that big industries like business process outsourcing (BPO) are “sensitive to voltage fluctuations." “We’re also seeing that the market is becoming more demanding in terms of quality, particularly in the glass, cement and BPO industries. They’re very sensitive even to voltage fluctuations. We’re trying to invest in the system to improve and provide some degree of redundancies for certain critical circuits," Reyes said. Meralco has 4.8 million customers nationwide. Reyes said the P45-billion expenditure program is part of its pending application with the Energy Regulatory Commission (ERC) under the performance-based rate setting methodology. “That’s what we indicated to the ERC, that the capex requirements we have in order to meet the growth of the franchise area and the requirements of customers for quality. It’s driven by growth in demand, and quality requirements of customers," he said. He said the capex requirements were driven by the need to better serve Meralco customers. “Our aspiration is that there will be no brownout in our distribution system or franchise area. Any brownout should be because of unavoidable circumstances. Our target is that there will be no brownouts other than externally driven factors or regular preventive maintenance," he said. Meralco is also planning to venture into power generation by forging a joint venture to put up power plants and help bring down electricity costs. It is also targeting to maintain system loss at below the 8.5-percent regulatory cap to ensure system reliability while passing on the savings to consumers. Meralco recorded 9.28-percent in system losses in 2008 and 8.61 percent in 2009. The company is now majority controlled by Philippine Long Distance Telephone Co. Other shareholders include San Miguel Corp. and First Philippine Holdings Corp. - KBK/VS, GMANews.TV