Meralco boosting capital expenditure to P21b in 2019
Power retailer Manila Electric Co. asked the Energy Regulatory Commission to approve a P21-billion capital expenditure for regulatory year 2019.
“I think we filed for something in the order of about P20 [billion] to P21 billion. The capex for regulatory year 2019 is in the order of about P21 billion,” Meralco president Oscar Reyes told reporters.
Meralco’s application for capex in the next regulatory year covering the months July 2018 to June 2019 would be higher than the annual average in the past two years. Meralco asked ERC to approve an P18-billion capex for 2018.
“We have to ensure that the capex is something to serve the customer load growth, resiliency, safety and robustness including hardening,” Reyes said.
Reyes said the bulk of the capex for 2019 would be used for network requirements for load and customer growth “because our number of customer base continues to increase and the demand continues to increase as well so we have to ensure that we have very resilient and hardened network.”
He said Meralco wanted the budget to ensure that the company’s distribution utility “will be able to meet the changes in climate.”
Meralco said it lined up projects to ensure the safety, reliability and efficiency of the distribution system, while providing for the forecasted load growth within its franchise area.
Meralco’s 2018 capex program was driven by several factors such as adequate infrastructure to meet growth in peak demand and customer connections; refurbishment projects to ensure sustained network efficiency, power quality and reliability; compliance to statutory and regulatory requirements and support for the public-private partnership projects.
Meralco said consolidated core income grew 3 percent in 2017 to P20.2 billion from P19.583 billion in 2016 on higher electricity sales amid increased demand.
Consolidated net income reached P20.384 billion last year, up 6 percent from P19.176 billion in 2016. Core income in the fourth quarter alone reached P4.843 billion in 2017, up 5 percent rom P4.617 billion in 2016 while reported net income went up 27 percent to P4.456 billion from P3.5 billion.
Sales volumes grew 5 percent in 2017 to 42,102 gigawatt-hours, on the back of a growing customer base, positive economic conditions, softening of the peso, stable power supply and low power plant outages.
Commercial sales volume accounted for 39 percent of total sales driven by real estate, hotels and restaurants and retail trade demand.
Residential volume accounted for 31 percent of total sales amid stronger consumer confidence and spending while industrial sales represented 29 percent of total sales with demand coming from semiconductor, food and beverage and basic metals industries.
Meralco’s sales volume is seen to grow 5.5 percent in the first quarter this year, driven by an average 5-percent sales growth in the first two months.
“Electricity growth continues to be a barometer of the economy’s expansion. In 2017, consumption on the demand side, and services on the supply side, remained to be the mainstay of the economy, contributing to the 6.7 percent GDP [gross domestic product] growth,” Meralco chairman Manuel Pangilinan said.
Gross revenues grew 10 percent last year to P282.6 billion from P257.2 billion in 2016 as a result of higher volume and pass-through generation charges resulting from rising fuel prices and depreciation of the peso.
Meralco ended 2017 with a total of 6.3 million customer accounts, up 5 percent from six million at end of 2016.
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