By Sheldeen Joy Talavera, Reporter
MANILA ELECTRIC CO. (Meralco) has proposed a capital expenditure (capex) program price about P272 billion and a complete revenue requirement of roughly P532.13 billion for the 2027-2030 regulatory period, as a part of its rate reset application with the Energy Regulatory Commission (ERC).
In its application before the ERC, Meralco proposed an annual revenue requirement (ARR) of P116.04 billion for 2027, P126.86 billion for 2028, P138.75 billion for 2029, and P150.47 billion for 2030.
This covers operating and maintenance expenditure; taxes, levies and other duties; regulatory depreciation, and return on capital.
Meralco said the ARR — or the quantity the utility seeks to get better to cover its costs and expenses — is partly based on a proposed weighted average cost of capital (WACC) of 14.6%.
Alongside the proposed revenue requirement, Meralco outlined a P272-billion capital spending plan for the four-year period covering various network and non-network programs.
Meralco has earmarked P50.80 billion for 2027, P59.87 billion for 2028, P59.67 billion for 2029, and P71.17 billion for 2030. The planned capex budget also includes greater than P30 billion in carry-over projects.
The facility distributor said the capex budget is allocated for programs that may support customer growth, improve system reliability and power quality, and address emerging network requirements.
For the four-year period, Meralco said a significant slice of the proposed capex will fund network expansion and related infrastructure. These include the development of 28 substations, in addition to the constructing and expansion of eight operating centers and 10 business centers.
The distribution utility also plans to pursue underground cabling projects in select parts of its franchise area.
Meralco has also proposed a big investment for the rollout of smart meters to greater than three million customers under its Advanced Metering Infrastructure program. Smart meters will allow each the distribution utility and customers to observe energy consumption in real time and help detect power outages.
Meralco recently partnered with US-based Aclara Meters Philippines, Inc. for the provision of greater than 72,000 smart meters to be deployed across its franchise area starting this yr.
The four-year investment plan also includes programs related to distributed energy resources, resembling rooftop solar solutions, which the corporate said could help manage demand and support the country’s clean energy transition.
The facility distributor also plans to deploy electric vehicle (EV) chargers in chosen facilities in keeping with targets under the Electric Vehicle Industry Development Act and the Comprehensive Roadmap for the Electric Vehicle Industry.
“These investments are critical to Meralco’s mandate to deliver top quality, reliable, and stable electricity service, enabling us to satisfy growing and evolving power requirements and support the country’s economic progress,” Meralco Senior Vice-President and Head of Regulatory Management Office Jose Ronald V. Valles said.
Aligned with the proposed revenue requirement and to assist fund its capex program, Meralco is applying for a mean distribution tariff of P2.34 per kilowatt-hour (kWh), higher than its current rate of P1.35 per kWh.
“Whilst we proceed our aggressive efforts to speculate in strengthening our distribution network and implementing significant customer support improvement initiatives over the past decade, our rates haven’t increased previously decade,” Mr. Valles said.
Since no rate reset was accomplished from 2015 to 2025 attributable to regulatory and legal delays within the ERC’s rate reset process, the distribution rate was adjusted to account for the lapsed regulatory period, the corporate said.
“This rate reset will enable Meralco to pour in massive investments for storm-hardening, upgrading, and expansion of our facilities, in addition to technological advancements which are needed for us to future-proof our distribution network. These go alongside our efforts to make sure fewer interruptions and faster service restoration, promote consumer empowerment and support government-mandated customer selection programs,” Mr. Valles said.
Meralco is among the many first group of utilities to undergo the transition to the primary regulatory period (1RP), marking the restart of the speed reset cycle under the ERC’s updated framework.
A rate reset process is a periodic regulatory review during which the ERC examines a utility’s costs, investments, and performance, and sets revenue limits intended to support reliable service while protecting consumers from excessive charges.
Meralco is the country’s largest private electric distribution utility, serving greater than 8.1 million customers in Metro Manila and nearby provinces, including Bulacan, Cavite, Rizal, and parts of Laguna, Batangas, Pampanga, and Quezon.
Meralco’s controlling shareholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Helpful Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.