Meralco to pursue auction for additional power supply

By Lenie Lectura – August 3, 2020
from Business Mirror

The Manila Electric Co. (Meralco) made an assurance that its power supply is adequate to meet the current demand of its customers and that there is no need to alter its power requirements in the near future.

“So far, in terms of energy supply, we have enough to meet the current needs of our customers,” said Meralco President Ray Espinosa during a virtual press briefing held last week.

For its future power requirement, Meralco said it is still pushing through with its planned competitive auction for 1,800 megawatts (MW).

“In terms of capacity requirement for the future, we’re not changing that. I think our plans have not significantly changed resulting in reduction of capacity. The CSP (competitive selection process) of 1,800 MW that we had announced will push through. We need that supply in 2024 and 2025,” Espinosa said.

Meralco said it is closely tracking the next moves of the government as these could affect the country’s electricity demand and supply. The community quarantine, added Espinosa, has affected power consumption over the past months.

Emmanuel Genuino, Meralco vice president and head of corporate business group, said the utility firm ended June with electricity sales of 3,910 gigawatt hours (GWh). This includes unbilled residential sales from previous months, which pushed the number higher.

“We see July to be lower than this (June figure) since total energy sales will be net of unbilled. Also, cooler temperatures have tempered residential volume a bit,” Genuino said.

Based on Meralco’s first-half monthly energy sales for the year, electricity sales volume prior to the implementation of the lockdown hit 3,802GWh in February. This went down to 3,451GWh in March and plummeted in April to 2,977GWh and slowly recovered in May at 3,330GWh.

In all, Meralco sold 21,139GWh of electricity in the first six months of the year, 7 percent lower than in 2019.

“If you look at that the July numbers, build volumes for July based on NSI (net system input) is flattish to June. The industrial sector has recovered somewhat and probably will continue to recover moderately in the coming months,” said Meralco Chairman Manuel V. Pangilinan.

“But for commercial, malaki talaga ang binagal and matumal ang recovery.  For residential, I think, it’s up in July because we are seeing work-from-home arrangement.”

Meralco’s commercial customers include firms in the business process outsourcing sector, retail trade, real estate, hotels and restaurants, educational institutions, personal care establishments and food retail.

The community quarantine impacted heavily on Meralco’s sales mix as consumption shifted to higher loss-to-serve residential customers.  At end-June, Meralco’s customer base expanded to nearly 7 million, with residential, commercial and industrial segments growing at 3 percent, 2 percent, and 1 percent, respectively.

Espinosa said the resumption of full operations of the commercial and industrial sectors depends on the government’s next moves, including possible changes in the state of quarantine in various areas within the Meralco franchise.

“That much we know is a fundamental requirement for our demand and sales outlook. So, we are very closely tracking the developments, particularly in government’s decision making process.

It’s really difficult for us to foresee what’s in store for us next year and what state of community quarantine will be. Like most, if not all businesses, we’re looking at it on an ongoing basis. The quarantine method is being reviewed every two weeks, we’re just following the lead of government,” he said.

Pangilinan, meanwhile, commented that the country’s economic recovery would depend largely on how soon the Covid-19 vaccine becomes available.

While uncertainty remains as Covid-19 continues to affect the country, he said Meralco is “moving with caution”, but the company is still optimistic that a recovery will happen soon.