Meralco mulls expansion outside franchise area

MANILA, Philippines - Manila Electric Co. (Meralco) will resume work on the potential expansion of its distribution network in other areas of the country next year as it plans to focus on the rehabilitation of a debt-ridden electric cooperative in Pampanga for the remaining months of the year.

Meralco president Oscar Reyes told The STAR that the country’s largest power distributor has recently started works to upgrade the power distribution system of Pampanga Electric Cooperative 2 (Pelco II) together with Angeles City-based partner ComsTech.

“We’re just starting to work on Pelco II. We have just came in so we have to do an assessment on the existing demand and what investments are needed,” he said.

Reyes said Meralco is still assessing the amount of capital expenditures required for Pelco II’s rehabilitation, but noted that the power utility may likely pour in a significantly huge investment.

Meralco earlier said it is pursuing opportunities on growing its electric distribution area in North Luzon and South Luzon through acquisitions of electric cooperatives and private distribution utilities in areas that may go as far as La Union, Batangas and Laguna.

Reyes, however, said talks with other cooperatives and distribution utilities for potential acquisitions would likely be resumed next year due to present work needed in Pelco II.

Meralco earlier signed a technical services agreement with ComsTech for the investment and management contract of Pelco II as authorized by the National Electrification Administration.

Pelco II, which distributes power to the city of Mabalacat and towns of Guagua, Bacolor, Sta. Rita, Lubao and Porac, reportedly has debts reaching over P1 billion.

“As the technical partner, we’re bringing the operating and maintenance experience and expertise of Meralco. We’re bringing our resources in terms of people and funding and then energy sourcing,” Reyes said.

Meralco’s franchise area to date already covers Metro Manila, Bulacan, Cavite and Rizal, as well as certain areas in Batangas, Laguna, Pampanga and Quezon.

As of end-June, Meralco’s total number of billed customers stood at 5.5 million. Its profits in the first six months of the year went up two percent to P9.6 billion from P9.44 billion the previous year due to higher electricity volume sold.