Meralco: Philippines' Largest Electricity Distributor - Overview & Market Status, Slides of Microeconomics

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MERALCO

PHILIPPINES

BACKGROUND

Overview and Timeline

TIMELINE Electricity came to Manila in 1892 with the founding of La Electricista In 1903 The Japanese occupation In 1962 Fall and Rise in the 1970s-80s When Marcos declared martial law

TIMELINE Then, in 1979 In 1903 1990 Meralco goes public on the Manila stock exchange 2003 Meralco is granted a new 25- year franchise One of Eugenio Lopez's sons, Manuel, took over as Meralco's president (and later became chairman and CEO) at this time.

PAST AND CURRENT OWNERS PAST OWNERS PAST OWNERS CURRENT OWNERS CURRENT OWNERS Oscar M. Lopez (CHAIRMAN EMERITUS AND CHIEF STRATEGIC OFFICER) Manuel M. Lopez (VICE CHAIRMAN). Michael V. Pangilinan (Chairman) James L. Go (Director) Federico R. Lopez (CHAIRMAN AND CHIEF EXECUTIVE OFFICER) Augusto Almeda-Lopez (DIRECTOR) Lance Y. Gokongwei (Vice Chairman) Frederick D. Go (Director) Francis Giles B. Puno (PRESIDENT AND CHIEF OPERATING OFFICER) Peter D. Garrucho, Jr. (DIRECTOR) Ray C. Espinosa (Director and President and CEO) Anabelle L. Chua (Director)

PAST AND CURRENT OWNERS PAST OWNERS PAST OWNERS CURRENT OWNERS CURRENT OWNERS Elpidio L. Ibanez (DIRECTOR) Anita B. Quitain (DIRECTOR) Jose Ma. K. Lim (Director) Artermio V. Pangilinan (Director) Miguel Ernesto L. Lopez (DIRECTOR) Chief Justice Artemio V. Panganiban (LEAD INDEPENDENT DIRECTOR) Victorico P. Vargas (Director) Pedro E. Roxas Ernesto B. Rufino, Jr. (DIRECTOR) Juan B. Santos (INDEPENDENT DIRECTOR) Elpidio L. Ibañez (Director)

Aboitiz Power

 Aboitiz Power Corporation (Aboitiz Power, AP) is the

holding company for the Aboitiz Group’s investments in

power generation, distribution, and retail electricity

services.

 Aboitiz Power is a publicly listed holding company that

subsidiaries and affiliates Philippine power industry and

has interest in a number of privately-owned generation

companies and distribution utilities.

 They currently owns 76.88% of the outstanding capital

stock of Aboitiz Power as of March 27, 2015. 10

Visayan Electric Company

 The encouragement of efficient energy usage is a priority

thrust for VECO, contrary to the positions traditionally

espoused by other electric utilities. We recognize that

energy efficiently used is like adding generation capacity

to the grid, only that it is cheaper, faster and friendlier to

the environment.

 In 2008 we partnered with Osram, world leader in lighting

technology, to promote usage of Compact Fluorescent

Lamps (CFLs) within our franchise area.

Energy Development Company

 Energy Development Corporation is a geothermal energy

industry pioneer and the recognized world leader in wet

steam field technology.

 EDC is the largest vertically integrated geothermal

company, delivering 1,475MW of clean and renewable

energy. They continue to diversify the renewable energy

portfolio through investments in hydropower, solar power

and wind energy projects in the Philippines.

 EDC has become the leading geothermal energy producer

in the Philippines through the successful development and

operation of numerous geothermal energy projects. 14

MARKET

STATUS

From a peak of only 5, megawatts (MW) in April, demand has risen to 6,428MW in May and 7,051 MW in June, both due to warmer weather and increased economic activity. However, this is still lower than the peak of 7,584MW registered in March, right before the imposition of the Enhanced Community Quarantine (ECQ). In July, Luzon peak demand shot up to 10,595MW then slightly declined to 10,422MW in August. . MARKET STATUS

MARKET STATUS

Meralco President Ray C. Espinosa, for his part, noted that consolidated energy sales volume from January to September had declined by 7.0-percent – and that hovered to 32, gigawatt hours in the first nine months, including volumes contributed by its subsidiary Clark Electric Distribution Corporation. The company, nevertheless, hinted that “with the gradual easing under the GCQ (gradual community quarantine Industrial and commercial sales volume show signs of recovery although residential sales volume continue to account for a larger share of total volumes.”

MARKET STATUS

“Initial data suggests slightly lower generation costs for December due to a decrease in demand,” said Meralco Spokesperson Joe Zaldarriaga. The company hinted at the possibility that the electricity rate for December may go down as generation charge makes up the bulk of the monthly power bill of consumers. Typhoons Quinta, Rolly, and Ulysses damaged transmission lines while several large plants went on forced outage. A cooler weather and the damaged power facilities led to a decrease in electricity demand.