Tycoon Manuel V. Pangilinan hinted at the possibility of investing in electric cooperatives (ECs) to further boost the presence of the Manila Electric Co. (Meralco) in the power distribution sector.
“There is one last idea that I encourage Meralco to adopt which is broadening investments in electric cooperatives in the country,” Pangilinan said during the recent Giga Summit in Makati City.
“We might be efficient on the generation side of the business but Meralco’s distribution footprint is limited to our franchise area.”
Meralco’s franchise area covers Metro Manila and some parts of Bulacan, Cavite, Laguna, Batangas, Rizal, Quezon. Its franchise area of over 9,685 kilometers is just 3 percent of the total land area of the Philippines, but accounts for 55 percent of the country’s electricity output.
At the end of the first semester, Meralco’s customer base stood at 7.716 million, up 3 percent from 7.519 million a year ago, with the continuous energization of new customers.
“There are key areas in the country where electric cooperatives have got to level up to the kind of standards and efficiencies Meralco as a distribution company has achieved. There are many examples of that as there are from this side of the business,” Pangilinan said.
Meralco had said it was keen on expanding its presence outside of its franchise area by possibly acquiring distribution utilities or electric cooperatives in areas where Meralco can be of value because, according to a former Meralco chief, “we have the resources; we have the track record; and we have the experience, with the objective of being able to improve the service where we can and provide reliable and least cost of electricity.”
In the first semester, Meralco spent P14.1 billion for capital expenditures. Of which, P9.6 billion went to networks projects consisting of new connections, asset renewals, and load growth projects.
The company reported last month that its net income rose by 36 percent to P17.9 billion in the first half from P13.1 billion a year ago.
Core profit, meanwhile, stood at P19.2 billion. The figures are 47-percent higher than P13.1 billion realized in the same period last year, driven mainly by the 186-percent increase in the contribution of the power generation business.
Revenues at end-June this year went up by 13 percent to P224.8 billion from P199.6 billion last year, mainly because of higher fuel prices on pass-through charges of the distribution utilities and energy fee of the non-renewable power generation plants and the depreciation of the peso against the US dollar. The company also attributed the rise in revenues to the increase in spot prices and energy purchases from the Wholesale Electricity Spot Market and the combined impact of the 3-percent growth in volumes distributed and slightly higher average distribution rate.
Energy sales volumes in the first half rose by 3 percent to 24,792 gigawatt hours (GWh) from 23,968 GWh. Monthly sales volume breached the 4,000-GWh level since April and reached a high of 4,643 GWh in June.
Higher temperature and humidity during the dry season drove the increase in demand for electricity from the residential segment while the continuing recovery and growth in the economy were drivers of commercial segment sales.
