As people stay indoors, power demand drops during lockdown —Meralco
MANILA, Philippines — Demand for power sagged in service areas of the Manila Electric Co. (Meralco) in March and April after the Luzon-wide community quarantine shuttered businesses and keep people inside their homes.
In a disclosure to the local bourse on Tuesday, Meralco said peak demand for power— select hours in a day when energy consumption is typically at their highs— was “reduced by almost 40%” to 4,516 megawatts in March, and further down to 4,289 MW so far in April.
As a result of lower power demand, average daily net system input, which gauges the total amount of electricity entering the grid, dropped 26% during the quarantine days beginning March 17 versus pre-lockdown average.
Meralco is the country’s largest power distributor, with nationwide customers reaching 6.9 million in the first quarter, up 4% on annual basis. It provides electricity to 36 cities and 72 municipalities on its franchise area, including Metro Manila.
The decline in power usage is expected to deal a blow on Meralco’s bottomline, which in the first quarter of the year already plummeted by 54% year-on-year to P2.62 billion due to investment losses from its Singapore investment.
Revenues declined 7% annually to P75.38 billion in the first three months, while expenses dipped a slower 2% to P68.52 billion during the same period, financial statements showed.
As demand for power dwindled with most establishments closed in Luzon, Meralco said it invoked force majeure clauses on its contracts with power producers to save some costs from its contracted power.
As a result, power suppliers suspended higher rates charged during mid-merit and peak hours of the day which happen when electric consumption hits its peak. The suspension translates to savings of P129.4 million in generation charges for both Meralco and its customers shouldering part of the fees.
“Our business continuity and resiliency plans and the dedication of our employees and personnel have allowed us to continue delivering reliable and affordable power and to swiftly respond to service outages,” Meralco President and Chief Executive Ray Espinosa was quoted as saying in the statement.
In the first quarter, Meralco shelled out P4.2 billion in capital expenditures, down 4% year-on-year as its crews get entangled in long power restoration activities after the Taal Volcano eruption in January resulted into power interruptions.
Apart from that, deployment of workforce also started to get limited after Luzon was placed under tight movement restrictions so much so that even meter readings were suspended in the island.
“The full tragedy of COVID-19 has yet to unfold. That said, we remain optimistic that we will see a recovery in the overall business environment starting the second half of 2020,” Meralco Chairman Manuel V. Pangilinan said. — Prinz Magtulis
Editor's Note: Manuel V. Pangilinan is the CEO of PLDT. A unit under PLDT's media conglomerate has a majority stake in Philstar Global Corp., which runs Philstar.com. This article was independently produced following editorial guidelines.
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