Meralco sees demand for power up 5% this year

By Lenie Lectura – November 26, 2018
from Business Mirror

MANILA Electric Co. (Meralco) is expecting electricity demand this year to grow by 4.5 to 5 percent from 2017.

“We’ll probably end this year at about 4.5 percent to 5 percent. I think we have to see what the final November and December figures are, but call it a 4.5-percent  to 5-percent growth from last year,” Meralco President Oscar Reyes said.

This year’s energy sales growth could be attributed to increased consumption from all consumer segments, he said.

In 2017 energy sales volumes  grew by 5 percent to 42,102 gigawatt hours brought about by a growing customer base, positive economic conditions, stable power supply and low power-plant outages during the year.

This was underpinned by customer retail and network initiatives to accelerate new customer acquisitions and energization, and to minimize distribution-system interruption, Meralco said.

Without providing figures, Reyes said Meralco earnings this year will improve from last year.

“Compared to 2017, I think because of this volume growth, we expect a slightly better bottom line,” he said.

The utility firm posted a net income of P20.4 billion last year, up 6 percent from the previous year mainly due to higher electricity sales.

Core income also improved by 3 percent to P20.2 billion at end-2017, from 2016’s P19.6 billion.

Last year’s revenue was 10 percent higher at P282.55 billion, from P257.18 billion in 2016. Electricity revenues amounted to P275.2 billion, while the remaining P59.6 billion accounted for distribution revenue.

Reyes said sales growth is against a high base last year.

“We have to recognize that 2017 and 2018 are high base years so you cannot continue to grow at a same rate if your preceding year is a high base,” he explained.

The Meralco official noted developments in the sector that could slow down electricity consumption. These include coolertemperature, higher inflation, interest rates, weaker peso and increasing adoption of rooftop solar, battery and energy storage, which adversely affected consumer spending.

“These are headwinds that potentially mean that growth in electricity may decelerate. These will impact not only demand for electricity but also demand for products and services,” Reyes noted.

Inflation has been rising since the beginning of the year, with the highest level for the year at 6.7 percent registered in September this year, the highest since February 2009. Reel-feel temperature for the first nine months of the year was lower by 0.05 degrees Centigrade, compared with the same period in 2017 while the average temperature for the period was lower by 0.39 °C.

Meralco, at end-September this year, recorded 6.5 million customers.