The Manila Electric Company (Meralco) has remained dedicated to pursuing long-term initiatives that drive progress and bring transformative change to its stakeholders.
The power distributor is continuously pouring in substantial investments to continuously meet the evolving requirements and further improve the service to Filipino consumers. Meralco’s capital-intensive projects are geared towards strengthening and making its distribution network and facilities more robust, resilient and intelligent, which are especially critical given the severe weather disturbances. These are also critical for Meralco to maintain a high level of service reliability to close to 8 million consumers across its franchise area.
To further its commitment to contribute to ensuring energy security in the country, Meralco also forayed into power generation through a subsidiary that partners with other private sector players. With a vision to build a diversified portfolio of renewable energy project and soon, take part in the largest liquefied natural gas (LNG) integrated facility in the country, the company is ready to take on a pivotal role to shape a sustainable energy future.
Ensuring delivery of stable, reliable, and cost-competitive power for its customers
As part of its mandate to deliver sufficient, reliable, and stable electricity service at the least possible cost to customers, Meralco has been proactively implementing strategic sourcing activities and distribution network upgrades.
Consistent with its approved Power Supply Procurement Plan, Meralco completed in the first quarter of the year Competitive Selection Process for 15-year Power Supply Agreements covering 3,000 MW baseload requirements, and a 400-MW baseload interim power supply agreement effective until February 2025.
Notices of Award have been issued to the winning bidders, and the resulting contracts have been submitted for review and approval of the regulator prior to implementation.
Beyond its sourcing initiatives, Meralco also continued investing in the expansion and upgrading of its distribution network facilities to improve service reliability and operational flexibility.
Amongst the projects completed in the first quarter of 2024 are the replacement of a 100 MVA Power Transformer in Taguig City; the installation of an 83 MVA Power Transformer at Abubot Substation in Dasmariñas City in Cavite; the uprating of the Pamplona-San Pedro 115 kV Line that runs from Las Piñas City to San Pedro City in Laguna; and reliability improvement of the Malinta 115 kV Substation in Valenzuela City.
In addition, a total of 299 poles were relocated for road widening projects of the Department of Public Works and Highways (DPWH) and various Local Government Units (LGUs), while a total of 64 poles were relocated for the government’s Build Better More infrastructure program, including PNR South Commuter, PNR North 1, NLEX-SLEX Connector Road, Metro Manila Subway Project (MMSP), C5 Southlink and Manila-Cavite Toll Expressway.
“In the month of April this year, we already reached record peak demand in the Meralco franchise area, which exceeded 9,000 MW. With Red and Yellow Alerts hoisted over the Luzon grid several times last April, we anticipate a challenging power supply situation throughout this dry season, coincidental with the El Niño phenomenon,” Meralco Executive Vice President and Chief Operating Officer Ronnie L. Aperocho said.
“Nonetheless, we remain vigilant as we work with energy industry players in implementing demand-side management programs to help lessen the strain on the power grid and continuously deliver stable and reliable service to consumers. We also continue to proactively encourage more participants to join the Interruptible Load Program (ILP), which embodies bayanihan among private sector players, as this proves to be valuable during this critical season,” Mr. Aperocho added.
The ILP is a voluntary and demand-side management program which calls on big power consumers like commercial and residential accounts to temporarily de-load from the grid and use their own generating units or reduce their operations when there is insufficient power supply. Currently the total capacity available for de-loading in Meralco’s area is more than 500 MW from more than 100 companies. The ILP has been implemented 27 times in the Meralco franchise area since 2014.
Beyond distribution of electricity
Core to Meralco’s value creation story is the thrust to pursue power generation projects through Meralco PowerGen Corporation (MGen) in a bid to contribute to the Philippines’ long-term energy security.
MGen currently has a diversified portfolio of power plants in different parts of the country, which include renewable energy projects in Ilocos Norte, Bulacan, and Rizal.
Through MGen Renewable Energy, Inc. (MGreen), MGen has also progressed its vision to become a leader in the renewable energy space through its investment in what would be one of the world’s largest single-site solar farm in the Philippines.
Following its acquisition of a majority stake in SPNEC in 2023, MGreen further raised its stake in the listed renewable energy company to 53.7% from 50.5% with the acquisition of additional 2.17 billion SPNEC shares last January. MGreen has so far invested Pesos 18.4 billion in SPNEC.
A cornerstone project under SPNEC is Terra Solar Philippines, Inc., which involves a 3.5-GWp solar power plant with a 4,500-MWhr battery energy storage system. The issuance of the Notice-to-Proceed for the construction of the initial 2.5-GWp of the project is targeted before the end of 2024.
To further grow its renewable energy portfolio, MGreen in the first quarter of this year started construction of two new solar plants: Greentech Solar Energy, Inc.’s 18.75 MWac solar plant in Bongabon, Nueva Ecija and Greenergy for Global, Inc.’s 49 MWac solar farm in Cordon, Isabela. Both are scheduled to start commercial operations in the first quarter of 2025.
Beyond renewables, MGen supports the government’s drive for a cleaner and more sustainable future through LNG investments. MGen is set to acquire an attributable 40.2% interest in the country’s first and most expansive integrated LNG facility in Batangas under the landmark agreement signed in March 2024.
The investment is being made in two (2) gas-fired power plants—the 1,278 MW Ilijan power plant and a new 1,320 MW combined cycle power facility which is expected to start operations by the end of 2024, as well as an LNG import and regasification terminal. The transaction is subject to the customary review and approval of the Philippine Competition Commission (PCC).
Sustainability leadership and support to communities
For Meralco, growth opportunities go beyond shareholder value as it pursues sustainable projects and programs that benefit more Filipinos.
In partnership with US-based Ultra Safe Nuclear Corporation (USNC), Meralco completed the pre-feasibility study within the Meralco franchise area for the possible deployment of Micro Modular Reactor (MMR) nuclear fuel technologies. Meralco and USNC plan to proceed with the full feasibility study that will cover site-specific assessment and detailed analysis of local and regulatory landscapes that are crucial to the deployment of nuclear technologies.
Meralco is also pursuing social amelioration programs to support Filipinos within and beyond its franchise area. Through the One for Trees environmental program spearheaded by the One Meralco Foundation (OMF), Meralco continued to bring the benefits of reforestation to more communities. In February, OMF led the planting of 125,000 mangroves in Del Carmen, Siargao to help protect and expand the Del Carmen Mangrove Forest Reserve. Continuing its mission of spreading the light to underserved communities within the Meralco franchise area and beyond, the Foundation energized 142 low-income households across Metro Manila, Cavite, Laguna, Batangas, and Quezon in the first quarter. Through its agriculture and livelihood electrification program, OMF also recently brought positive change to the lives of 150 indigenous coffee farmers in Bukidnon.
As a testament to its sustainability leadership, Meralco cemented the company’s commitment to sustainability through its Long-Term Sustainability Strategy (LTSS) that outlines key targets, initiatives, and investments for a just, orderly, and affordable transition to clean energy in line with the goal to be coal-free before 2050. Part of this LTSS is the adoption of next generation clean technologies including nuclear energy.
Moreover, Meralco maintained all-time best scores on global environmental, social, and governance (ESG) assessments.
In particular, Meralco sustained high scores in 2023 from CDP, which evaluates over 23,000 companies worldwide on environmental disclosure and performance. With a Climate Change Assessment rating of C, consistent with the previous year, the company excelled in emissions reporting, risk management, and governance. Similarly, Meralco’s Water Security Assessment rating remains at C, showcasing its robust water-related opportunities, water risk management, and governance practices.
Additionally, Meralco remains aligned with the Paris Agreement’s goal of keeping global mean temperature to below 2oC. This is evidenced by MSCI’s Implied Temperature Rise Rating of 1.7oC—a metric which shows the temperature alignment of companies with global temperature goals.
Meralco’s commitment to excellence in sustainability likewise earned international and local recognition from prestigious international and local award-giving bodies.
At the 9th Asia Sustainability Reporting Awards (ASRA), Meralco’s 2022 Combined Annual and Sustainability Report, “Sikat”, stood out by winning the Gold Award in the “Asia’s Best Workplace Reporting” category, making the company the lone Philippine gold winner among participants from 15 countries. ASRA praised Meralco for setting “a benchmark in transparently reporting the management of significant sustainability impacts, risks, and opportunities.”
At the 20th Philippine Quill Awards, Meralco excelled by clinching six awards for its sustainability campaigns, programs, and corporate reports, including the company’s communication campaign on its sustainability agenda called “Powering the Good Life”, diversity and inclusion program, and waste management initiatives, among others.
“Our growth prospects go beyond creating value for our shareholders. The opportunities we are pursuing are always anchored on the commitment to support economic development and contribute to uplifting the lives and welfare of more Filipinos,” Meralco Chairman and Chief Executive Officer Manuel V. Pangilinan said.
“As we continue to deliver stable and reliable service to our customers, we reiterate our pursuit to bring in projects of scale that will boost available generation capacity which we direly need to ensure not just the immediate, but the long-term energy security of the country. This year, along with our partner and in close coordination with the Government, we hope to proceed with the full feasibility study on the possible adoption of nuclear energy. Similarly, we will endeavor to implement more sustainable initiatives to cater to more underserved communities in the country,” Mr. Pangilinan concluded.