Meralco to service San Pablo and Tiaong
By Paul Anthony A. Isla
Reporter

THE largest power distributor, Manila Electric Co. (Meralco), has been granted a certificate of public convenience and necessity (CPCN) to provide electric service in San Pablo, Laguna, and in Tiaong, Quezon.
       In an order, the Energy Regulatory Commission (ERC) said Meralco has been given the authority to provide electric service to the two municipalities until June 28, 2028.
       On November 2004, Meralco petitioned the ERC for the issuance of CPCNs to provide electricity in San Pablo and Tiaong in Quezon and was, then, given provisional authority by the ERC to continue to operate its electric service in the said municipalities pending the commission’s final approval on its applications for the issuance of CPCN.  
       Meralco serves Tiaong, Quezon, through two 34.5-kilovolt and one 6.24-kilovolt primary distribution circuits sourced from its San Pablo 1 and San Pablo 2 substations.
       Meralco has lined up two major electric capital projects for a 10-year period for the development of Tiaong, Quezon, which include the unloading of Tiaong 11WE last year and the complete conversion of Tiaong 11WE to 34.5-kilovolt for 2010.
       Meralco, on the other hand, serves San Pablo, Laguna, through six 34.5-kilovolt and five 6.24-kilovolt primary distribution circuits sourced from its San Pablo 1 and San Pablo 2 substations.
       It also has lined up two electric capital projects for the next 10 years in San Pablo, which include the unloading of San Pablo 46WJ for next year, and the flexibility improvement of San Pablo 4.8-kilovolt system for 2009.
       The ERC, on the other hand, noted that Meralco’s audited statements for 2001, 2002 and 2003, saying that it earned a profit of P1.48 billion from its operations in 2001.
       ERC added that Meralco, however, incurred net loss of P28 billion in 2002, and then regained its profit earning in the amount of P1.47 billion in 2003.
       ERC said that Meralco’s liquidity went down significantly by 50 percent in 2002 and 2003 compared with 2001, adding that its current ratios of 0.54:1 ratio and 0.56:1 for 2002 and 2003, respectively, indicate its difficulty in settling its short-term obligations.
       Amid the net loss in 2002, the commission said Meralco still gained a net income of P9 million in 2003. It also posted a net income of P1.48 billion during the first half of 2004 from P66 million during the same period in 2003.
       ERC said it found that Meralco met all of its requirements for the issuance of a CPCN.
       Prior to the enactment of the Electric Power Industry Reform Act (Epira), Meralco had been granted a 25-year franchise to operate an electric, heat and power service in the Municipality of Tiaong and San Pablo City from December 8, 1979, to December 8, 2004.
       Upon the enactment of the Epira, the power to grant franchise to persons or entities engaged in the transmission and distribution was vested to Congress.
       On June 2003, Meralco was granted the franchise to construct, operate and maintain a distribution system for the conveyance of electric power to end-users in Manila, Bulacan, Cavite, Rizal and in certain municipalities in Batangas, Laguna, Quezon and Pampanga for a 25-year period effective June 28, 2003, to June 28, 2028.