A fruitful year

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Photo shows Meralco President and CEO Atty. Ray C. Espinosa (center) holding the four-arrow trophy for Meralco fromthe ASEAN Corporate Governance Scorecard Golden Arrow Recognition Ceremony. With him are Meralco Senior Vice-President and Head of Legal and Corporate Governance Office Atty. William S. Pamintuan (third from left), and the Meralco Corporate Governance team. — Meralco PR Arrow Award

Passion and Philosophy: Atty. Ray C. Espinosa

The year 2018 was an especially good year for the Philippines’ largest electric distribution company, the Manila Electric Company (Meralco). For the new president and chief executive officer of Meralco, Ray C. Espinosa, who took over recently, this presents both an opportunity to take the firm to greater heights and a challenge to keep the momentum going.

According to its 2018 annual report, despite slower macroeconomic growth, high prices of coal, gas and fuel, as well as high inflation and interest rates, Meralco posted revenues of P304.5 billion in 2018, an 8% increase from P282.6 billion in 2017. The company’s core net income likewise rose 11% from P20.2 billion to P22.4 billion.

Consolidated energy sales of the company went up by 5% from 42,102 gigawatt hours (GWh) to a record of 44,313 GWh. “Of the total, industrial energy sales had the highest growth at 7% to 13,156 GWh from 12,309 GWh with growth leaders from the electrical machinery, rubber and plastics, and food and beverage industries. Commercial energy sales followed with a 5% growth to 17,463 GWh from 16,597 GWh, attributed to real estate, retail trade, and hotels and restaurants.

Residential energy sales grew 4% to 13,555 GWh from 13,060 GWh, buoyed by net new customer accounts numbering 273,766. Streetlights volume accounted for the balance at 139 GWh,” the report said.

By the end of 2018, Meralco had 6.6 million customer accounts, up 5% from the 6.3 million at the close of 2017. 92% of its customers were residential customers and 8% were commercial customers. Industrial and streetlights customers accounted for less than 1% of the total.

The company managed to reduce its system average interruption frequency index, or the average number of power interruptions a Meralco customer experiences in a year, to an all-time low of 1.8 times last year. Its system loss rate also reached an all-time low of 5.67%.

“As a result of a lower system loss rate, total customer savings amounted to about P6.1 billion in 2018 or an average savings of P0.14 per (kilowatt hour) kWh, based on the 8.5% system loss cap from January to May 2018, and 7.5% indicative system loss cap from June to December 2018,” the report said.

It added that from 2008 to 2018, the cumulative savings for Meralco customers totaled P39.6 billion or P0.11 per kWh.

For its continuous system and expansion program in 2018, Meralco had capital expenditures of P13.7 billion, up 13% from 2017.

Last year, it completed the Lancaster substation in Cavite and four capacity expansion projects for Balibago, Sta. Maria, Carmelray Industrial Park II and Santolan substations.

With the construction, meanwhile, of the Biñan-ROHM-LIIP 115-kilovolt (kV) line and the New Cruz na Daan-Baliuag 69-kV line, the company’s subtransmission system was made stronger.

In 2018, the number of Meralco employees grew to 5,602 from 5,539 in 2017. The company also improved its GWh sales per employee ratio from 7.50 in 2017 to 7.82 in 2018, as well as its customer per employee ratio from 1,142 to 1,180.

“To sustain the performance, the company invested in people training programs,” the report said. Among these programs were the five-month-long Meralco Cadet Engineering Program for newly hired engineers and the two-day-long course called #LiDEr to enhance the leadership and management competencies of Meralco’s distribution engineers.