MANILA ELECTRIC Co. (Meralco) is proposing a capital expenditure of approximately P215.36 billion for its regulatory period spanning 2026–2029.
Meralco plans to invest P34.39 billion in 2026, P59.50 billion in 2027, P57.91 billion in 2028, and P64.56 billion in 2029, based on its filing with the Energy Regulatory Commission (ERC) published in a newspaper on Feb. 7.
The power distributor said it aims to augment the capacity of its network, relocate assets required for the implementation of government infrastructure and third party-initiated projects, purchase non-network assets necessary for the efficient operation of the electric distribution system, and deploy automation and technology projects.
Meralco is also proposing an annual revenue requirement (ARR) totaling P393.18 billion, with P81.85 billion for 2026 and rising to P114.62 billion by 2029. The ARR refers to the amount the company needs to generate per year to cover its operating and maintenance expenses.
Meralco said that its proposed ARR is partly based on a proposed weighted-average cost of capital of 14.6%, considering the recommendations of global economic consulting firm NERA Economic Consulting, Inc.
At the same time, the power distributor is seeking approval for an annual maximum average price of P1.6871 per kilowatt hour (kWh) for 2026, P1.6899 per kWh for 2027, P1.6894 per kWh for 2028, and P1.6872 per kWh for 2029.
In a stock exchange disclosure on Monday, Meralco confirmed its application filed with the ERC but clarified that the application has not yet been formally docketed and remains subject to approval.
Meralco’s proposal is part of its new application for its fifth regulatory period (5RP), covering the period 2026–2029, which was adjusted from July 1, 2025–June 30, 2029.
Under the Electric Power Industry Reform Act of 2001, or EPIRA, the ERC is mandated to establish and enforce a methodology for setting transmission and distribution wheeling rates for a distribution utility.
Regulated entities such as Meralco are subject to performance-based regulation, wherein they are required to undergo a rate reset process prior to the start of the next regulatory year.
The rate reset process is usually a forward-looking exercise that requires the regulated entity to submit forecasted expenditures and proposed projects for the ERC to review and adjust rates.
At present, Meralco is proposing a refund of around P19 billion in compliance with the order from the ERC last December that declared July 2022–June 2025 as a “lapsed period.”
The ERC has acknowledged that certain years within Meralco’s original 5RP have already lapsed, given the need to address “the complex legal challenges involved, along with prior actions of various stakeholders.”
The commission is targeting completion of Meralco’s 5RP reset within the first half of 2025.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. and Hastings Holdings, Inc. — a unit of the PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — which has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera
