Meralco earmarks P11 billion for capex next year

MANILA, Philippines - Manila Electric Co. (Meralco) has earmarked P11 billion for its capital expenditures next year, most of which will go to fund system upgrade, particularly for their state-of-the-art smart grid.

In an interview with reporters Tuesday, Meralco chairman Manuel V. Pangilinan said they would be putting much focus on upgrading and modernizing the company’s distribution capacities next year.

“It’s around P11 billion for Meralco, mainly to improve the distribution system, upgrades, modest amount for the smart grid network,” he said.

He said there is no need to raise new funds to finance the operations of the power distribution firm in 2013 as the capex budget would be internally generated. He said Meralco has more cash now than Philippine Long Distance Co. Inc. (PLDT). Meralco and PLDT are both being managed by Pangilinan.

“We are experimenting and pilot testing by the end of this year in Angono and next year in certain parts of Metro Manila, starting an initial 40,000 homes, he said referring to the smart grid system.

Pangilinan said Meralco has partnered with General Electric for the pilot test of the smart grid system.

On the power generation side, he said they have yet to determine how much they would spend next year.

“There is still no significant expenditure next year, but there will be some especially if we’re able to start construction of the Subic Bay power plant. But we have partners for that, the Aboitiz Group and Taiwan Power. We can take care of our share,” he said.

Last month, Meralco and GE  signed a cooperation agreement for Meralco’s smart grid roadmap that includes prepaid electricity. Aside from GE, Orga Systems and Ecologic Analytics were also part of the agreement.

The Energy Regulatory Commission (ERC) had given Meralco a provisional authority to substitute its various approved projects, its prepaid electricity retail service project amounting to P253.2 million.

“An initial evaluation of the instant application discloses that the immediate implementation of the project would be beneficial to Meralco’s consumers particularly giving them the choice for energy management strategies, enhancing operational efficiencies and promoting demand side management,” the ERC said