Meralco ready for summer, sets close to P40B capex

The Manila Electric Co. (Meralco) on Monday said it is gearing up for the summer season, as the company said it has enough reserves to cater to the expected demand amid the ongoing El Niño season.

According to Meralco chief operating officer and executive vice president Ronnie Aperocho, there will be enough headspace as a subsidiary of San Miguel Corp. won a bid to supply 1,200 megawatts (MW) to cater to the growing demand.

“It’s good to know that based on our supply and demand outlook for the coming summer months, we have enough reserved,” he told reporters in a briefing at the company’s headquarters in Pasig City.

“This has been validated by a joint Department of Energy (DOE) and National Grid Corporation of the Philippines. (NGCP) forecast, so we don’t see any occurrence of a yellow or red alert in the coming months,” he said.

Meralco first vice president and regulatory management head Jose Ronald Valles said the company is conducting two competitive selection processes (CSPs) in preparation for the summer.

The first is a 260-megawatt bidding under an emergency power supply procurement, with bids scheduled to be opened on Monday, February 26, but were declared a failed bidding after the two bidders withdrew their expressions of interest.

Meralco is set to ask for another round of bidding from the Energy Regulatory Commission (ERC), with the second CSP — for 400 MW — scheduled to be bid out on Tuesday, February 27.

P40B capex

The Pangilinan-led company has allocated close to P40 billion for its capital expenditure (capex) this year which includes P24 billion for distribution utilities, P4 billion for power generation, with parts going to other systems.

This is higher than the P30 billion capex the firm earmarked in 2023, which covered its distribution network improvement projects, renewable energy investments, and towers and telecommunications businesses.

Asked if Meralco would look into borrowing for the capex, Meralco chief finance officer Betty Siy-Yap said it continues to look into internally generated funds.

“For the distribution utilities, the tariff should take care of it, although of course, there’s a time between build and when we’re able to collect from our customers but yes, especially for new projects, this will all be under project finance agreements,” she said.

Over the weekend Meralco announced a P100-billion investment for its sustainability initiatives in the next years until 2030, under its long-term sustainability strategy.

Meralco saw a 37% increase in its 2023 bottom line to P37.1 billion, with the power distribution business accounting for 64% or P23.7 billion, and the power generation business contributing P9.7 billion or 26%. Consolidated reported net income climbed 34% to P38.0 billion.

“I daresay that Meralco’s 2023 performance has exceeded expectations,” Meralco chairman and chief executive officer Manuel Pangilinan said.

“This year, we expect to move forward with our long-term goal of achieving sustainable energy security through our investments in utility scale power generation projects, including exploring the possible adoption of nuclear energy in the country,” he added.

Meralco constructs, operates, and maintains electric distribution systems in the cities and municipalities of Bulacan, Cavite, Metro Manila, and Rizal, as well as certain areas in the provinces of Batangas, Laguna, Pampanga, and Quezon.

The firm counts as subsidiaries and associates Vantage Energy Solutions and Management Inc. and MeridianX Inc., acting as retail electricity suppliers in Luzon and the Visayas. —LDF, GMA Integrated News