Meralco braces for lower profit

The Manila Electric Co. (Meralco) had a “good” first-half performance, but the picture in the second half may not be the same, mainly due to lower distribution tariffs, its top executive said.

“It’s likely that the second half numbers will be lower than the first,” company chair Manuel V. Pangilinan said, referring to profit.

Meralco is set to trim its distribution charges by about 10 percent in second half of 2015.

The impact of that reduction, which will only apply in the second half, may be cushioned by volume growth and Meralco’s growing customer base.

Pangilinan said Meralco’s customer growth rate for the full year is around 2 to 3 percent and volume growth is also around 2 to 3 percent for the year. The growth may still accelerate depending on how the economy performs.

“Presently we’re quite optimistic because we are approaching elections so there’s quite a bit of election spending,” Pangilinan said.

Asked whether the full-year profit may still be better than 2014, Pangilinan said, “I would like to think so. We just have to wait for the second half because we need approval for the implementation of the lower tariffs.”

Meralco earlier asked the Energy Regulatory Commission (ERC) to allow it to implement a temporary reduction in power distribution charges pending the regular reset of its rate.

The company submitted the application on June 11, 2015 for authority to implement an average 10.4-percent reduction in its current distribution, supply and metering charges.

This translates to the following reductions in the total monthly bill of residential customers at varying consumption levels: P52 for 200 kilowatt-hour (kWh) consumption; P89 for 300 kWh; P134 for 400 kWh; and P201 for 500 kWh.