Meralco profit up 3% in 2017 hike

Danessa Rivera (The Philippine Star) - February 28, 2018 - 12:00am

https://www.philstar.com/business/2018/02/28/1791959/meralco-profit-3-2017-hike

MANILA, Philippines — Manila Electric Co. (Meralco) turned in higher profit in 2017 after it recorded new highs in sales volume and customer count.

In a briefing, Meralco chief finance officer Betty Siy-Yap said core net income rose three percent from P19.6 billion in 2016 to P20.2 billion last year. Reported net income, meanwhile, rose six percent from P19.2 billion to P20.4 billion.

The latest numbers were ahead of the 2016 core profit of P19.58 billion and reported net income of P19.18 billion.

Consolidated revenues increased 10 percent from P257.2 billion to P282.6 billion as a result of higher volume and pass-through generation charges arising from higher fuel prices and peso depreciation.

In the same briefing, Meralco president Oscar Reyes said 2017 proved to be another strong year for the company in the commercial, operating and financial fronts despite the cooler temperature during the period.

The power distributor’s consolidated energy sales volume expanded by five percent to 42,102 gigawatt-hours, translating to a five-year compounded annual growth rate of five percent.

“Our sales performance benefited from strong electricity demand as a result of positive economic conditions. Second, relatively stable power supply. We had fewer weather disturbances in 2017. At the same time, there was an insignificant number of power outages and yellow alerts,” Reyes said.

In terms of energy sales, Reyes said 2017 was the first time in Meralco’s 115-year history that sales for each month exceeded 3,000 gwh.

“That’s something that helped us generate record sales during 2017, the highest being in June at  3,835 gwh where growth is about 5.5 percent and the lowest was in March last year when volume was at 3,039 gwh,” he said.

Moreover, the power distributor closed the year with 6.33 million customer accounts, an addition of 288,000 customers from end-2016.

For this year, Meralco will continue its position toward technology and digital transformation to disrupt its legacy distribution business to serve customers, its chairman Manuel V. Pangilinan said.

“In electricity distribution, this means smart meters, smart grid, smart cities, e-vehicle and charging infrastructure. We aim to increasingly serve customers digitally, on-demand and at a touch of the finger,” he said.

“In power generation, this means increasing renewable energy (solar, wind, run-of-river, hydro, biomass and battery storage as this continues to mature), and the latest highly efficient and environmentally-responsive baseload and mid-merit coal and gas-fired plants,” he added.

Meralco firming up more supply contracts with gas, RE plants

Published February 27, 2018, 10:01 PM By Myrna M. Velasco

https://business.mb.com.ph/2018/02/27/meralco-firming-up-more-supply-contracts-with-gas-re-plants/

Power utility giant Manila Electric Company (Meralco) is bulking up its power supply portfolio with new power supply agreements (PSAs) that it is currently advancing with gas-fired and renewable energy (RE) generating facilities.

Meralco President Oscar S. Reyes indicated they will likely finalize a PSA for the 414-megawatt San Gabriel gas power facility of the First Gen Group by the end of this month.

He noted that San Gabriel’s offer of P3.70 plus per kilowatt hour (kWh) is now under ‘second price challenge’ under the Competitive Selection Process (CSP) policy of the industry.

“The first challenge failed because no one offered, the second challenge is ongoing,” Reyes said. On record, the San Gabriel facility tender is being matched with a P2.99 per kWh solar capacity by Leviste-led firm Solar Philippines.

Meralco indicated that the contract for the San Gabriel could cover its entire capacity of 414MW and it will be for a duration of six years – effective upon the approval of the Energy Regulatory Commission.

“What we need why we signed up with San Gabriel is a capacity that we can ramp up and ramp down, so it’s a mid-merit service…we need 24/7 supply for 365 days, and the plant would be able to do that,” Reyes said.

A mid-merit facility, which is also called the ‘load following plant’ is an asset that can adjust its generation output depending on demand fluctuations throughout the day.

In addition, Reyes indicated that they are eyeing several new PSAs with solar and wind power generation firms.

For solar, the offer is from Pilipinas Newton Energy Corporation for a 50MW capacity, with the lowest price offer so far of P2.98 per kWh, according to Meralco Vice President Lawrence S. Fernadez.

For wind, he emphasized that the aggregate capacity set for contracting would be 150MW, comprising of two projects at 80MW and 70MW capacities.

On the solar capacity procurement, Fernandez noted that this is currently under CSP process; while for the wind facilities, competitive bidding has yet to be undertaken.

“There are already talks but formal offers have yet to be made…when that is finalized, it will also undergo CSP so we will need to see the final form when announced,” Fernandez explained.

On the overall supply contracting strategy of the utility firm, the Meralco executive averred “we’re open to all technologies as long as it is competitive and it will be for more efficient and more reliable system.”

Meralco gets 50-MW supply offer from Pilipinas Newton

By Lenie Lectura -  February 27, 2018

https://businessmirror.com.ph/meralco-gets-50-mw-supply-offer-from-pilipinas-newton/

THE Manila Electric Co. (Meralco) has received an offer from Pilipinas Newton Energy Corp. to supply 50 megawatts (MW) to the country’s largest distribution firm at a cost cheaper than previous offers.

This was confirmed by Meralco President Oscar Reyes.

When sought for details, Meralco Vice President and head of utility economics Lawrence Fernandez said Pilipinas Newton offered to sell its solar-power output at P2.98 per kilowatt hour (kWh).

Pilipinas Newton is constructing a P4.15-billion solar project in San Manuel, Pangasinan. It will use fixed photovoltaics modules for the generation of electricity with a peak capacity of up to 68.7 MW.

“The offer is now undergoing CSP [competitive selection process], which is being administered by the Bids and Awards Committee [BAC]. By end of this month, we would know from BAC if there are any challengers,” Fernandez said.

Under a CSP regime, another interested bidder could challenge the original offer. After the CSP has been successfully concluded, both parties must seek approval from the Energy Regulatory Commission (ERC) before their power-supply agreement (PSA) is implemented.

“While there is an initial agreement with Newton on price and terms, finalization of PSA will have to wait for completion of the price-challenge process,” Fernandez added. “This would be the fourth solar PSA after the three that have been filed with the ERC.”

Meralco recently entered into long-term PSAs with Solar Philippines and PowerSource First Bulacan Solar Inc.

Solar Philippines will supply 50 MW at a base price of P5.39 per kWh. Another PSA states that Solar Philippines could further supply Meralco with 75 to 85 MW for five years and another 85MW from the sixth up to the 20th year for P2.9999 per kWh,  which is significantly lower than the prevailing solar feed-in-tariff rates and a welcome development for consumers.

PowerSource First Bulacan, meanwhile, wants to supply Meralco 50 MW for P4.69 per kWh

These solar PSAs are all pending with the ERC.

Meralco said it foresees high demand, thus there is an urgent need for the final approval of the PSAs considering a significant peaking capacity deficit, as well as possible occurrences of scheduled maintenance shutdowns and forced outage of power plants.

Based on the utility firm’s distribution-development plan for 2015-2020, Meralco’s aggregate capacity requirement is forecasted to grow by a compounded average growth rate of 3.7 percent.