Meralco expects 2022 core earnings to surpass last year’s

MANILA Electric Co. (Meralco) expects to post higher profits this year on sustained growth in energy sales and higher earnings from its power generation businesses.

“The forecast expectation for the whole year is that we’ll be better than the core income last year where we reported P24.6 billion,” Meralco Chairman Manuel V. Pangilinan said during a virtual press briefing on Friday.

Meralco Chief Finance Officer Betty C. Siy-Yap said the electricity distributor posted an increase in its consolidated core net income for the nine months that ended on Sept. 30.

Meralco saw an 8.6% increase in its consolidated core net income to P19.61 billion for the January-September period from P18.06 billion in the same stretch last year.

Further, Meralco’s nine-month reported net income rose by 19.6% to P19.76 billion from P16.52 billion previously. Its consolidated revenues were recorded at P314.88 billion, a 35.9% increase from P231.72 billion in the same period last year.

As of September, Meralco said its consolidated capital expenditures (capex) stood at P20.8 billion, of which P13.5 billion went to spending for its network.

The power distributor company said network capex consisted of new connections, asset renewals, and load growth projects.

Mr. Pangilinan said that with strong recovery efforts, the power utility is expecting to exceed its consolidated net income last year.

“Despite the challenges the country is currently facing, including elevated food and energy prices, Meralco expects power demand to continue growing, which makes the energy sector maintain its critical role in supporting economic growth and progress,” Mr. Pangilinan said in a media release.

Meanwhile, Jose Ronald V. Valles, Meralco’s head of regulatory management, said during the virtual briefing that the company is seeking emergency power supply agreements (EPSAs) after the decision of the Energy Regulatory Commission (ERC) to deny its joint petition with San Miguel Corp. (SMC) for a rate increase.

“Yes, we filed with the DoE (Department of Energy) a request for a certificate of exemption for an equivalent capacity of 1,070 megawatts presumably to cover the 1,070 megawatts that will expire, assuming that the ERC will allow expiration of those contracts with San Miguel,” Mr. Valles said.

However, Mr. Valles said that Meralco asked the DoE to put on hold the evaluation of the request after SMC’s letter signifying its intent to supply power to Meralco. 

“But because they continue supplying power to Meralco continuously up to this time there is no need for EPSAs at the moment, but it is still with the DoE and it has not been withdrawn,” he said.

“If San Miguel will pursue termination of the two contracts, we have to await a notice of termination from them, then we will immediately manifest to the ERC our opposition and request guidance to resolve the matter,” Mr. Valles added.

Earlier this month, the ERC denied the rate increase petitions of SMC’s South Premiere Power Corp. (SPPC) and San Miguel Energy Corp. (SMEC) jointly filed with Meralco.

SPPC and SMEC, respectively, are the administrators of the coal power plant in Sual, Pangasinan and the natural gas-fired power plant in Ilijan, Batangas.

Before the ERC decision, SMC said that its units had sent a notice of termination to Meralco. It earlier said that their previously agreed power supply agreements were based on assumptions that were taken over by a change in circumstances that brought losses to the power generation firms.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose