Meralco power sales dampened by cool weather

ELECTRICITY sales in June eased because of cooler weather, tempering power sales growth for the first half to around 6.5%, Manila Electric Co. (Meralco) said.
“For the first five months year-to-date, (we had) growth of 7.5% per annum, but June is trending a little softer because, number one, the rains have started. It’s been cool during the last three months — April, May and June,” Oscar S. Reyes, Meralco president and chief executive officer, told reporters.
“So I think we will probably end June at roughly around 6%, 6.5%,” he added in a chance interview after the annual shareholder meeting of another company on Wednesday where he sits on the board.
He added that sales in the first half should be better year on year, without elaborating.
Based on Meralco’s previously released figures, consolidated sales volume in the first half of 2017 grew by 3% year on year to 20,338 GWh, despite the high base in the previous year.
Mr. Reyes said the sales improvement was “because I think to the country’s credit, industrial and commercial activities have been strong. Maybe, it’s the growth of the economy.”
“We’d like to see what happens after June because June was low,” he added. “Growth for the month of June is below 3%.”
Mr. Reyes declined to give Meralco’s profit projection for the year.
“We’ll probably see whether we can give some guidance by the third quarter,” he said.
In 2017, Meralco’s consolidated energy sales volume rose by 5% to 42,102 GWh despite the cooler temperatures during the first four months of last year. Excluding the power sales of its provincial units, the company breached the 41,000-mark at 41,528 GWh.
Mr. Reyes said electricity supply could be a problem in the coming years because of the delays encountered by some of its power plant projects in securing regulatory approval of their power supply agreements (PSAs).
Banks do not approve funding without an approved PSA as this ensures a steady revenue stream for the developers and improves the chances that loans will be repaid .
“Banks put more money [in a project] . . . They put up 60-70%, and banks will not put money if they don’t see that it will be profitable. People forget that,” Mr. Reyes said.
He said even if Meralco is able to acquire existing power plants, it would not be sufficient to meet future demand.
“It takes five years [to build a power plant],” he said, referring to the company’s pending projects.
“Once the existing capacity has been used up, there will be no supply to answer for load growth and plant outage,” he said.
“We remain hopeful that power supply agreements for new capacity [will be approved]… I think that’s the prudent thing to do,” he said. “It’s in the interest of everyone. It’s in no one’s interest not to build capacity.”
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