Manila Electric Co., the country’s largest power distributor, is looking to expand the area it serves and eventually boost earnings by forming joint ventures with electric cooperatives operating near its franchise area.
Arnel Paciano Casanova, Meralco senior vice president and chief external and government affairs officer, told Context.ph the power distributor is already exploring possible partnerships with five electric cooperatives in Luzon that are “high growth areas where you need to provide reliable and affordable power.”
He said discussions for a possible joint venture is at the most advanced stage with Batangas II Electric Cooperative Inc., an electricity distributor whose service area hosts large commercial establishments and industrial estates adjacent to Meralco’s franchise area.
According to published data from the National Electrification Administration, the government agency that oversees operations of electric cooperatives, Batelec II ended 2022 with total assets of P7.9 billion, electricity sales of P12.92 billion, and total customers of 272,787. Batelec II also recorded that year a systems loss of 8.92 percent and a 98.41 percent collection customers.
Casanova, a city builder and former country chief executive officer of infrastructure consulting firm AECOM, said Meralco seeks a majority stake in the joint ventures because the listed power distributor will primarily bankroll the massive capital expenditures needed to upgrade and update systems of those electric cooperatives.
A former president and CEO of the government’s Bases Conversion and Development Authority, Casanova knows that having reliable power supply is a key consideration for businessmen investing in certain locations.
“We need to provide opportunities for industries to grow outside Metro Manila and that requires a lot of investments,” said Casanova, who notes that a major factory would require several megaWatts and even more if investments are for data centers.
Casanova said local officials have approached Meralco for help in resolving their problematic power supply situation holding back potential investments in towns and cities. Aside from reliable power supply, he said Meralco’s scale allows it to drive down the cost of power that benefit consumers and investors.
The Meralco franchise area accounts for over half of the country’s local output measured as the gross domestic product.
