Meralco allots P11B for ’13 capex

MANILA, Philippines—Manila Electric Co., the country’s biggest power distributor, has earmarked roughly around P11 billion for its capital expenditure program for 2013, according to company chairman Manuel V. Pangilinan.

On the sidelines of the Meralco Liwanag Park grand lighting ceremonies Tuesday night, Pangilinan said the proposed allocation would be used to further improve and upgrade the utility’s distribution services, and to roll out pilot tests for the planned smart grid network.

“A modest amount [will be allocated] for the smart grid network that we are experimenting already. We are launching [the prepaid electricity scheme] as a pilot test by the end of this year in Angono, Rizal, and next year in certain parts of Metro Manila. This will cover 40,000 homes initially and if that will be successful, maybe there will be additional expenditure [for the prepaid scheme] in the second half of the year,” Pangilinan explained.

Meralco president Oscar S. Reyes added that the capex for next year would serve the increasing electricity requirements of the company’s more than 5 million customers.

“We’re seeing the growth in demand so we want to stay ahead of the curve and put in place a more robust distribution network and, also, customer service infrastructure. So I think it’s really looking ahead and being able to ensure that we serve the growing requirements of our franchise area,” Reyes explained.

According to Reyes, the proposed P11-billion spending next year will be bigger than this year’s capex program of more than P9 billion.

A filing with the Philippine Stock Exchange, however, showed that the programmed capital spending for 2012 should be around P11.9 billion, of which the bulk, or around P8.9 billion, would be used for electric capital projects.

As of end-September 2012, Meralco said it has met, and expects that it will continue to meet, its capital expenditure requirements primarily from cash flow from operations and working capital.

The distribution utility has already spent P5.053 billion in the first nine months of the year, of which 93 percent represented the planned expenditures for the electric projects of the power distribution business.

This investment, it explained, was geared to support projects in areas with large concentration of core customers, give priority to correction of normal deficiencies in the system, stretch loading limits of Meralco facilities, and initiate practical and cost-effective projects to correct system deficiencies.

Pangilinan, meanwhile, noted that there was no need to raise the amount needed for the capital spending next year as this will be internally funded. The company is currently awash with cash, even more than PLDT as of the moment, he added.