Business Highlights

Financial and Operational Highlights
GRI 203-1

• Total aggregated revenues increased 16% to P318.5 billion, P63.4 billion of which pertains to Consolidated Distribution Revenues which grew 5%
• Total energy sales grew 6% to 46,073 GWh
  • Residential volumes grew 3% despite cooler temperatures with continued work-from-home and remote learning 
 set-ups amid granular lockdowns. This accounted for 37% of total energy sales
  • Commercial energy sales volume showed 3% growth resulting from the ramp-up of vaccination activities and 
 ease in restrictions, as well as higher foot traffic and relaxed rules for minors that drove demand in the retail, 
 restaurants, public transport, and hospitality sectors
  • Industrial sales volumes returned to near pre-pandemic level with its 13% growth owing to the strong 
 performance of the semiconductor industry with the high demand for microchips, electronic parts, and devices, 
 as well as higher operational output in the construction-related (cement and steel), food and beverage, and 
 plastics industries
• Core Net Income increased 13% to P24.6 billion
• Reported Net Income grew 44% in comparison with 2020 when earnings were affected by the P2.7 billion 
reduction in the carrying value of Meralco’s investment in Pacific Light Power in Singapore
• Capital expenditure amounted to P27.5 billion, 32% higher than in 2020. Major projects completed during the year included uprating of distribution lines, expansion and installation of transformers, and upgrading and development of substations aimed at improving capacity and ensuring system reliability across the franchise area

Other Updates
In March, MPIC completed the transfer of its ownership stake in Global Business Power Corporation (GBP) to Meralco PowerGen Corp. and recognized a net gain of P4.6 billion from this transaction while still retaining an indirect economic interest in GBP via its investment in Meralco

How MERALCO Creates and Delivers Value

Creating value through power distribution 

GRI 102-8, 203-1, 302-1, 401-1, IF-EU-240A.4

Meralco’s business portfolio involves a wide range of activities in the energy value chain, such as power distribution, power generation, electric transport, digital payment services, industrial engineering, and other related services. These activities are performed amid the intensified global clamor for net zero by 2050, mandatory increased use of renewable energy by 2030, and a looming energy supply crisis. All these drive Meralco to introduce innovations and integrated strategies as it endeavors to become a more sustainable enterprise.

In 2021, Meralco distributed 46,073 GWh of electricity to millions of residential, commercial, and industrial customers, 7.2% higher than 43,572 GWh in 2020 as businesses bounced back with the easing of quarantine restrictions and due to increased volume from new customers. It managed to achieve 99.98% electrification of its franchise area through the Meralco Electrification Program, bringing Meralco’s consolidated customer count to 7.4 million, up by 4% from 7.1 million in 2020. As distribution volume went up, Meralco’s revenue from electricity sales increased by 15% to P309.2 billion from P267.9 billion in 2020.

To realize this value of providing affordable, accessible, reliable, and clean energy, Meralco requires various forms of capital to superbly and sustainably carry out its business operation. These include financial capital for power purchases, capital expenditures, and operational costs; a complex distribution infrastructure consisting of substations and distribution cables, among others, that connect customers to the grid; technologies to monitor power interruptions, system loss, and other indices to manage and ensure system reliability and optimal performance; human capital that are directly and indirectly involved in power distribution; and beneficial working relationships with independent power producers and other suppliers in the electricity market, as well as the Energy Regulatory Commission, Department of Energy, and other state agencies involved in regulating the Philippine energy industry.

Meralco spent P224.9 billion in power purchases in 2021 to meet the new energy demand, up by 10% from P204.4 billion in 2020. Operating costs increased to P31.7 billion from P25.8 billion in 2020 as Meralco continued to invest in customer experience improvements and upgrading its workforce.

Capital expenditures went up to P27.5 billion from P20.8 billion in 2020, mostly spent on new connections, asset renewal, and load growth. Meralco continuously invests in developing an infrastructure that delivers high performance at consistent levels and enabling a more resilient distribution network capable of withstanding typhoons and other climate threats. This includes the installation of additional connection lines, transformers, and poles.

The rest of capital expenditures was spent supporting the government’s Build, Build, Build projects, relocating or clearing existing infrastructure to give way to new developments and making electricity immediately available to project sites. Electric poles in Pasig were relocated as part of the BGC-Ortigas Center Road Link and hundreds more were retired due to road widening projects by the Department of Public Works and Highways.

As part of its digital transformation, Meralco invested in control room technologies and real-time monitoring systems to strengthen service reliability and improve performance. In 2021, it introduced Customer Centricity and Digital Transformation Program (CCTP+D) to enhance service delivery and customer experience, in addition to developing mobile apps in 2020 to respond to the pandemic.

Meralco continues to consider the Philippine government as an essential partner in combating poverty and spurring economic growth by providing high-quality energy at fair rates as prescribed by the Energy Regulatory Commission. It worked with power suppliers identified through a Competitive Selection Process, awarding Power Supply Agreements based on capacity to meet demand at low generation costs.

Building capacity for power generation 

GRI 102-8, 203-1, 302-1, 401-1, IF-EU-110a.3, IF-EU-240a.4

Meralco further creates value by addressing the country’s growing energy demand through investments in a diversified power generation portfolio with 2,446 MW total combined capacity. Through its subsidiary, Meralco PowerGen Corporation (MGen), it seeks to build large-scale energy sources using the most advanced high-efficiency, low-emission (HELE) technologies at competitive prices.

At the end of 2021, MGen generated 13,262.5 GWh of energy, supplying its own distribution requirement in Luzon, as well as those of distribution utilities, electric cooperatives, and other business partners in the Visayas and Mindanao. These were sourced from the HELE San Buenaventura coal-fired power plant in Mauban, Quezon, and from the coal and diesel plants in the Visayas of Global Business Corporation (GBP), a wholly owned subsidiary of MGen.

Meralco, through MGen, also aims to invest in utility-scale renewable energy, such as solar, wind, and hydro, with a target installed capacity of up to 1,500 MW by 2027. Market demand for renewable energy is increasing. The Philippine government recently mandated utility companies to scale up the use of renewable energy every year starting 2020 through the Renewable Portfolio Standards. The government also declared a moratorium on greenfield coal-fired power plants in 2021.

MGen’s 55 MWac solar power plant in San Miguel, Bulacan, began commercial operations in May. It is the country’s largest single operating solar plant providing clean energy to the Luzon grid. GBP began the construction of another solar plant in Baras, Rizal, which is expected to start commercial operations in in the next few years.