We also welcome our guest analysts and investors who are joining us in person, as well as those participating online through MS Teams conference facility. Before we proceed, please be advised that this session is being recorded. Kindly adhere to the ground rules, which we have sent to you prior to this meeting. Today, we will present the financial operating results of Meralco for the first quarter of 2025, ended March 31, 2025. A copy of the presentation may be downloaded from our website at www.meralco.com.ph under the investor relations section.
We are joined by members of Meralco's management team, Mr. Ronnie Aperocho, Executive Vice President and Chief Operating Officer, Ms. Betty Siy-Yap, SVP and Chief Finance Officer, Mr. Emmanuel Rubio, President and CEO of Meralco PowerGen, Mr. Ferdinand Geluz, Senior Vice President, Chief Revenue Officer, and OIC Subsidiary Business, Attorney William Pamintuan, SVP, Chief Legal Counsel and Head of Legal and Corporate Governance Office, Ms. Charina Padua, First Vice President and Head of Customer Retail Services, Mr. Froilan Savet, First Vice President and Head of Networks, Attorney Jose Ronald Valles, SVP, Head of Regulatory Affairs and Head of DU Regulatory Management, Mr. Raymond Ravelo, EVP and Chief Sustainability Officer.
Today's agenda, we will begin with the financial highlights, followed by the operating results of Meralco's distribution utility business, updates from MGEN, and updates on our sustainability initiatives. We will open the floor for Q&A session before concluding the presentation with remarks from our chairman. At this point, I would like to introduce our Chief Finance Officer, Ms. Betty Siy-Yap, who will present the financial results.
Good afternoon, ladies and gentlemen. I will be presenting the results for the first quarter ended March 31, 2025. On your screen is a summary highlights of the first quarter. Our first quarter results reflect strong start in 2025 across the business portfolio. In the first three months of 2025, the DU business accounted for the largest share of CC&I at 60%, or an equivalent PHP 6.7 billion, up from 58% same period last year. The power generation share grew to 31% with PHP 3.4 billion contribution, also higher versus the 27% share last year. The RES and the non-electricity businesses brought a combined 9%, or PHP 1.1 billion.
MGEN achieved new milestones for Terra Solar Philippines as it secured PHP 150 billion project financing and a PHP 10 billion equity infusion from Actis Rubyred (Singapore) Pte. Ltd., or Actis, as part of the $600 million investment deal for Actis acquisition of 40% in Terra Solar. Through Chromite Gas Holdings, MGEN completed the acquisition of a 40.2% effective interest in two gas-fired power plants, the 1,200 MW facility of South Premier Power Corporation, or Ilijan, and the 1,275 MW facility of Excellent Energy Resources Inc., or EERI, along with an LNG import regasification terminal. As a result, beginning February this year, we recognized in our books our share in CCNI. The additional contribution from Chromite Gas was PHP 663 million. Dividends from unconsolidated investees totaled PHP 2.1 billion, with PacificLight contributing PHP 1.2 billion, and San Buenaventura Power about PHP 850 million.
The highest Meralco share closing price was at PHP 550 a share on March 31, 2025, with it at PHP 574.5 on April 22, 2025. This slide shows the financial summary. CCNI for the first quarter increased by 11% to PHP 11.2 billion from PHP 10.2 billion in 2024. The CCNI contribution of our regulated or distribution business grew 2% in terms of consolidated energy sales volume, which is volumes from Meralco, Clark Electric Distribution Corporation., and Shin Clark Power Corporation for a total 12,493 GWh compared with 12,307 GWh same period last year.
For our unregulated business, the higher CCNI came from strong performance of MGEN's power generation units, which ended the quarter with a 25% increase in CCNI from a year ago, owing largely to the stable plant availability across all the portfolio, sustained revenue generation from reserve market, and contribution of Chromite Gas beginning February this year.
Combined volumes of our power generation units, including those whose results we consolidate in our books as well as those that we account for at equity, increased by 64% to 5,294 GWh . The combined RES volume increased or grew by 7% to 1,671 GWh . Our consolidated reported net income increased by 9% to PHP 10.4 billion from PHP 9.6 billion last year. The gap between CCNI and reported net income largely represents the accretion of day one gain that we recognized last year and foreign exchange gain. Similar to our net income, the core EBITDA rose 8% to PHP 19.2 billion from PHP 17.8 billion. Consolidated revenues rose by 10% to PHP 114.5 billion from PHP 104.5 billion in 2024, mainly as a result of higher volume increase in pass-through charges, both for generation and transmission, as well as higher revenues from the reserve market.
Cost and expenses increased by 10% to PHP 103.1 billion, the bulk of which is still purchase power costs, which accounted for 84% of total cost and expenses. Capital expenditures totaled PHP 25.4 billion with the development of solar power plant and distribution network projects. Cash and cash equivalent amounted to PHP 103.1 billion, while consolidated debt was at PHP 188.1 billion. With respect to our revenues, electric revenues was at PHP 111.8 billion, which represents 98% of consolidated revenues of PHP 114.5 billion. Generation, transmission, and other pass-through charges were 11% higher at PHP 88.6 billion versus PHP 79.6 billion in 2024, as a result of higher cost of natural gas with the increase in Malampaya gas price from $9.94 per gigajoule. It rose to $11.61 per gigajoule and higher LNG terminal fees of the Santa Rita and San Lorenzo plants.
The peso also depreciated or weakened to an average of PHP 57.96 to the dollar in the first quarter of 2025, compared with PHP 55.964 in the same period last year. Transmission charge also went up with the higher ancillary service charges, with additional capacity sourced by the National Grid Corporation of the Philippines and new ASPA in the reserve market charges. Distribution revenue increased by 1%, slightly lower than the sales volume growth due to the PHP 0.0023 per kilowatt hour reduction pertaining to the regulatory reset expert cost, which the ERC ordered Meralco not to collect as part of its distribution billing charge starting February. The regulatory reset refund actually applies to all distribution utilities.
Energy fee, which totaled PHP 6.3 billion, increased by 21% from PHP 5.2 billion to PHP 6.3 billion as GBP's volume grew by 5% to 1,237 GWh , with the higher plant availability of Cebu Energy and Panay. In 2024, Unit Three of Cebu Energy, Unit Three of PEDC, and Units One and Two of PEDC had outages of 48 days, 25 days, and 20 days respectively, versus only 32 days of CEDC or Cebu Energy in 2025. The revenue was helped a lot by the higher revenues from the reserve market, which generated a total of PHP 1.7 billion in 2025, compared with only about PHP 150 million in 2024. These were partially offset by lower WESM sales as average WESM price in Panay decreased to PHP 4.10 compared with PHP 7.10 same period last year.
Non-electric revenues was lower due to the deconsolidation of our tower subsidiary, or MIDC, at the end of September 2024. With respect to cost and expenses, this totaled PHP 103.1 billion. Purchase power cost accounted for 84%, OpEx represented 10%, and depreciation 4%. Combined coal and fuel power plant O&M accounted for 2% of the total. Purchase power cost increased by 13% to PHP 86.4 billion from PHP 76.5 billion, consistent with the movement in pass-through revenues, which increased due to higher generation and transmission charges. The DU sourced more than half of its requirement or 51% of its power supply requirements from natural gas plants, with 25% coming from WESM, 23% from coal, and the remaining portion from solar and hydroelectric power sources. OpEx increased by 5% to PHP 10.3 billion, primarily accounted for from manpower, contracted services, and related expenses.
Additionally, there was an increased spend for IS/IT related costs and critical IT infrastructure. These operational investments are essential for maintaining an efficient, reliable, and resilient electricity distribution system. Depreciation and amortization was lower by 12%, with the deconsolidation of MIDC at the end of September 2024. Combined coal and fuel and power plant O&M amounted to PHP 2.6 billion, 22% lower with a decrease in maintenance cost and fuel as well as coal prices.
With respect to our capital expenditure, consolidated CapEx was at PHP 25.4 billion. Bulk of which or PHP 18.3 billion was utilized for the development of the Terra Solar project in Nueva Ecija. The balance was used for Meralco's distribution network projects. That included new connections, accounting for about PHP 2 billion, asset renewal of about PHP 1.4 billion, and load growth projects close to PHP 2 billion. We now go to power generation results of operations.
Continuing to deliver strong performance while reaching significant milestones, MGEN's power generation units ended the quarter with a 25% growth in CC&I from a year ago, mainly because of the stable plant availability across its portfolio, sustained strong revenues, again from the reserve market and the contribution of Chromite Gas Holdings, Inc. With a net sellable capacity of 4,953.1 MW across its portfolio in the Philippines and Singapore.
As of the end of March, MGEN delivered a total of 5,294 GWh of energy, which was 64% higher than same period last year. Global Business Power Corporation delivered 1,237 GWh of energy, and its core net income grew to PHP 1.1 billion from only PHP 270 million last year. Meanwhile, San Buenaventura Power delivered 844 GWh , 50% higher than last year, and booked a core net income of PHP 1.2 billion, driven again by higher capacity fees with 100% availability.
Just to recall, they went on major maintenance at the end of 2023 until January of 2024. MGEN Renewable Energy, Inc. or MGreen, total CC&I was at PHP 203 million during the first quarter of the year as it delivered 174 GWh of clean energy on the back of steady plant availability across all its solar plants, which averaged more than 93% during the year. The renewable energy unit continued its expansion track in the first quarter with the completion of 52.8 MW AC Cordon plant in Isabela. The project, along with two other solar plants, the 19.8 MW AC Bongabon plant in Nueva Ecija and 80.1 MW AC Baras plant in Rizal, were all inaugurated in the first quarter of this year, although they started to deliver towards the end of last year.
Starting February this year, we've begun to recognize our 40.2% share in income from the two gas plants now, which are Ilijan and Excellent Energy Resources Inc. Additional CC&I contribution was at PHP 663 million. Units one and two of EERI. have successfully completed their testing and commissioning and have been issued FCATC or the final certificate of approval to connect. With a combined generating capacity of 850 MW , these units are already fully operational and ready to deliver power to the grid.
Overseas, Singapore-based PacificLight reported core net income of SGD 70.8 million or an equivalent PHP 3.1 billion, up 31% due to higher plant availability, resulting in higher blended non-fuel margin at SGD 82.4 per megawatt hour, compared with only SGD 75.8 per megawatt hour last year. Total energy delivered was at 1,403 GWh at the end of March, 6% higher than a year ago.
Our consolidated interest-bearing debt stood at PHP 188.1 billion, which includes PHP 72.6 billion of debt of our subsidiaries. In January this year, Meralco drew a PHP 75 billion debt from major banks to finance the investment in Chromite Gas Holdings, Inc. Separately, Terra Solar Philippines, Inc. in March secured a project financing equivalent to PHP 25.2 billion with PHP 18 billion used to repay the bridge loan. Debt maturities are spread through 2039. As of the end of March, net debt stood at PHP 76 billion with net debt to EBITDA of 1.06x . All of our consolidated debt are in Philippine peso. Cash and cash equivalents amounted to PHP 103.1 billion with short-term investments at PHP 9 billion. Our core earnings per share is at PHP 9.912, up 11% versus 2024, while reported EPS is at PHP 9.270 a share. Thank you.
Thank you, Ms. Betty. We will now move on to the operating results presentation to be led by our Executive Vice President and Chief Operating Officer, Mr. Ronnie Aperocho, followed by the heads of our different business segments.
Thank you, PJ. Good afternoon to everyone. We are pleased to present Meralco's first quarter operations report, highlighting a period of generally remarkable performance across all key areas. Of course, starting with energy sales, our sales for the first quarter stood at 12,493 GWh , which grew by 1.5% from the previous year. This is despite the high base. It was a La Niña period last year and also this one day difference versus 2024, which was a leap year. Normalizing the energy sales will result in a year-to-date growth of 4.75%. The DU net system input, or NSI, was 12,937 GWh , slightly higher by 1.7% compared with the same period in 2024. While Meralco's year-to-date peak demand reached 8.34 GW. This was recorded last March 6, 2025, 8.2% higher than last year's 7.71 GW.
Our customer count is growing also by 2.6% to reach 8.083 million customers by end of March. On the service performance of the DU, the 12-month moving average system loss for March is 6.04%, a 0.14 percentage point increase over the same period last year, but a 0.06 percentage point improvement from February. This is still way below the prevailing system loss cap of 6.5%. Nonetheless, we are intensifying our system loss reduction efforts, and we are still on track in meeting our year-end target of 5.95% or below 6%. On SAIFI, which is a System Average Interruption Frequency Index, our reliability performance continues to improve. Our total SAIFI dropped by 11.1% at 0.185 times, reflecting fewer power interruptions. SAIDI, which is the System Average Interruption Duration Index, likewise improved by 6.2% at 20.943 minutes, showing reduced power interruption duration.
Our year-to-date average time to connect customers also improved by 14.7% at 1.39 days over 1.63 days last year, translating to better customer experience, especially for our new customers. On electricity rates, our average electricity retail rate for the first quarter of 2025 was PHP 11.06 per kilowatt hour, higher by 2.6% compared with the same period last year, primarily due to the following. First, due to higher generation charges from higher Malampaya natural gas prices with the implementation of new GSPAs of first gas plants, recovery of previously deferred charges for first gas plants and peso depreciation. Next was due to the increased transmission charges from higher ancillary services, and the third one was due to the resumption of FIT-All collection in February 2025. Turning you over to Mr. Froilan Savet for the report on the CapEx projects that were completed by networks. Thank you.
Right. For networks project updates in the first quarter of the year, we energized three major CapEx projects. Two substation expansion projects, specifically expansion of BGC-2 and the Malintas Substation. The last one is the substation development project, which is the new 115 kV, 34.5 kV Mesaland Substation. With these three projects, we are effectively providing additional capacity for load growth, further enhance service reliability in the areas being served by this substation. Expansion of FBGC-2 substation serving Fort Bonifacio Global City-2 and parts of Makati will benefit vital customers, including the Department of Energy, St. Luke's Medical Center, Philippine National Oil Company. Malintas substation, on the other hand, caters to the cities of Valenzuela and Malabon. In the same manner, its expansion also provides the same benefits to large customers such as Manhattan Rubber & Plastic Manufacturing Corporation, S.C. Johnson & Son, Inc., and Glass Metal Production Manufacturing.
Finally, the new Mesaland substation delivers power to certain areas in the provinces of Laguna and Cavite and is improving the service of commercial and residential customers such as Ayala Malls Nuvali, Tiendesitas, Georgia Club, Vista Land, Mesa Homes, Adventist University of the Philippines, The Medical City South Luzon, to name a few. I am now turning over to Sir. Ferdi Geluz for the customer report.
Yeah. For the first quarter sales, I think Ronnie already mentioned the modest growth of 1.5% to 12,493 GWh . It is close to 200 GWh better than last year. Last year was a very high base because for last year first quarter, we grew around 9% on El Niño, an additional year on the leap year day. Normalized on a daily consumption basis, I think this will lead to 3% growth if you account for the additional day last year. But of course, residential led the segments in terms of percentage growth. It still grew close to 3% to 4,257 GWh on the first quarter. Modest compared to last year's close to 12% growth, but still growth despite the very high base.
Of course, this is driven by newly energized customers as we energized more than 200,000 new residential customers, the incremental growth compared to last year. We see an uptick in the Lake Hub on consumption of residential as heat index started to increase with the onset of summer months. The trend for residential was in January, around flattish, February 3% growth, and in March it grew 5% on the month. Commercial segment is still the highest sales contributor for quarter one, at 4,744 GWh , albeit a tempered growth of 1.3% or around close to 65 GWh on the quarter. As gains from business expansion in retail trade, restaurants, as well as hotel, were offset by the decline in real estate due to vacancies from the POGO exit.
We expect to slowly normalize over the next month to next year with the repurposing of this space as vacancies created by POGO exit, as rental rates decline due to oversupply, and as government offices expand, slowly take up the space vacancies as well as the other businesses. We also expect data center ramp up of the large data centers we energized late last year, as well as first quarter this year, to slowly aid commercial sales and slowly in Q2 and most of them are ramping up in the second half of the year. Industrial ended flat on the quarter at 3,455 GWh , only growing marginally at 0.2%, as challenges in food and beverages, steel and electric, gas and water offset modest growth in cement, plastics, and semicon.
Food and beverage registered a 2% decline due to the transfer of our Pepsi operations in Muntinlupa to outside the franchise because of certain local government regulations limiting the water consumption of the factory. Cement grew 4% and benefited from the strong performance of continuous infra build as government released a PHP 1 trillion budget for infrastructure this year. For April, we are seeing a sales of around 2.7%- 3%. We expect quarter two to be slightly better than quarter one in terms of percentage growth. That ends the customer report. I now turn you over to Ronald for the regulatory report.
Good afternoon. First on the regulatory update is the ERC order on Meralco's AWAT applications. You will recall last January 28, Meralco's new AWAT application was filed for a true-up, or with some maximum average price of PHP 1.35 per kilowatt hour, versus the AWAT covering the period declared as lapsed, which is July 1, 2022, to June 30, 2025. The difference in AWAT versus MAP yields an over-recovery of PHP 19.9 billion, which was what we filed. Meralco proposed recovery of PHP 862 million, that was over-refunded in the implementation of distribution rate [inaudible] one, two, three and four, resulting in a proposed net refund of PHP 19.1 billion. After hearings, the ERC issued a PA order on March 5 with the following conditions: Meralco was directed to refund PHP 19.9 billion at an average rate of PHP 0.1189 per kilowatt hour within 36 months or until fully refunded.
The ERC also did not allow the offsetting of the PHP 862 million DRTU over-refund, as this amount is still subject to the review of the commission. Next is the ERC's notice of resolution for the approval of the additional 290 MW contract capacity with South Premier Power Corporation or SPPC. Last May 9, 2024, the ERC already gave us a provisional authority to implement the PSA with SPPC, covering 910 MW only out of the 1,200 MW. Subsequently, Meralco and SPPC filed a joint motion for reconsideration of that order, requesting that the parties be allowed to fully implement the 1,200 MW contract capacity.
Last March 28, 2025, the ERC issued a notice of resolution approving the joint motion and resolved to add the 290 MW to the originally approved capacity under the same terms and conditions and under the same rate as the original 910 MW earlier approved by the ERC. Next slide. Last April 16, Meralco posted its 2025 power supply procurement plan that was recently approved by the Department of Energy in its letter dated April 11, 2025. Shown on your screen is the table, listing down all the capacities that are up for CSP. We have the 200 MW RE base load and 600 MW base load that are due for publication this coming May 2025. We also have 900 MW that is due on September 2025 for publication. Finally, 450 MW mid- merit, also this May 2025.
We recently received an unsolicited proposal from First Quezon Biogas Corporation for 1.4 MW capacity. Under Section 2.3 of the Department of Energy Circular DC2023-06-0021, it allows exemption from CSP of any supply from any generating plant embedded in the DU's franchise area, utilizing RE resources wherein the contracted capacity of the generation plant does not exceed 10 MW per distribution utility. We received the USP from First Quezon Biogas for its 1.426 MW biogas power plant located in Candelaria, Quezon with the following key advantages. The plant uses biogas as a renewable energy source generated from locally sourced agricultural waste and primarily chicken manure, rice straw, corn stover from nearby towns, which mitigates environmental concerns on waste disposal methods and provides sustainable manure management solution, reduces emission of greenhouse gases, and provides reliable base load power and contributes to local economic development through creation of jobs.
The plant is expected to achieve commissioning for the 1.426 MW capacity within one year after ERC approval. The rate for this is PHP 6.50 per kilowatt hour. Update on the new five-year RP application that we filed last February 7, 2025. Meralco already concluded all the hearings. There were 10 hearings scheduled by the ERC, and Meralco has already presented 12 witnesses to justify the application. We are awaiting ERC's further action on this case.
Finally, with respect to the franchise of Meralco, last April 11, President Ferdinand Marcos already signed Republic Act 12146, renewing the franchise granted to Meralco for another 25 years from the expiration of the current franchise granted under RA 9209. It was published in the Official Gazette and the Manila Bulletin last April 16 and 17, respectively. The law will take effect 15 days after publication in the Official Gazette or on May 1, 2025. That's it for the regulatory update. Turning you over now to Mr. Manny Rubio. Thank you.
Thanks, Ronald. I will begin with the report on our top priority across all sites, safety. In Q1 2025, we maintained a safe and injury-free work environment with an achievement of over 46 million man-safe hours, both for employees and contractors. Also happy to report that the first quarter ended with zero lost time accident, zero first aid case, zero fatality, and zero recordable case. We are expecting these safe man-hours to significantly increase once we are in full swing in the construction and installation of panels in Nueva Ecija for the Terra Solar project. Global Business Power, what we brand now as MGEN Thermal, delivered 1,237 GWh of energy at end March 2025.
I am happy to note that GBP's CCNI contribution surged to PHP 1.1 billion from PHP 273 million last year due to higher plant availability for both Cebu and Panay sites, and as well as participation in the reserve market that continued to drive operational and financial performance. Just for context, in the last three months, we have been operating 52 MW of reserve capacity, both for contingency and regulating reserves. But two weeks ago, we had got another certification for PEDC Unit Three for another 30 MW of regulating reserves. This Unit Three of PEDC is scheduled to get tested for 13 MW of contingency reserve in the coming days. Meanwhile, San Buenaventura Power, or SBPL, generated 844 GWh , 50% higher than previous year, driven by a higher capacity factor and 100% availability, versus 72% a year ago.
We are now beginning to report on our investments in Chromite Gas Holdings, where we have a 40.2% stake in SPPC, Excellent Energy Resources Inc., and the gas terminal and regas facility starting February this year. Excellent Energy and SPPC have delivered 1,636 GWh of energy for February and March this year, and we expect this to increase with the entry of the third unit of Excellent Energy by the end of May. Our Singapore-based subsidiary, PacificLight, recorded a 6% increase from a year ago in delivered energy with 1,400 GWh . This is driven by higher plant availability this quarter, resulting to a higher blended non-fuel margin.
Lastly, MGEN Renewable Energy or MGreen, the renewable energy unit of MGEN, delivered 174 GWh of clean energy on back of a steady plant availability across all its solar plants, which averaged at more than 93% during this period, but we expect this to even improve in the coming quarters. Overall, MGEN delivered a total of 5,294 GWh of energy in Q1 2025, which is a 64% increase compared to the same period last year. However, this growth does not yet reflect the full potential of MGEN, as we have units in the pipeline to be operational, specifically in PacificLight Power Pte Ltd, the 100 MW fast start plant, and LNGPH, the third unit of Excellent Energy, and we will continue our active participation in the reserve market and rest through the rest of MGEN GSC.
This quarter's performance reflects our strategic planning, operational stability, active participation in the optimized market, and the commitment of our team to deliver our results this year. The development of MTerra Solar project, as one of the world's largest integrated 3,500 MW peak solar plant with 4,500 MWh of battery energy storage, is ongoing with overall project completion rates stood at 35% as of March 2025. This is continuously improving quite well, with ongoing construction works on the substation, transmission towers, and assembling structures of solar panels. For phase one, land acquisition is already complete, with phase two halfway through. Additionally, 85% of the required tower sites of the transmission lines have already been secured. Actually, the commercial agreement for these remaining tower sites have already been finalized as well.
In February 2025, MGEN affiliate, Terra Solar Philippines, signed a PHP 150 billion Omnibus Loan and Security Agreement, or OLSA, from six of the biggest local banks in the Philippines, namely BDO, BPI, Metrobank, Security Bank, PNB, and China Banking Corporation, to fund its ongoing development and construction of MTerra Solar. This is the largest financial deal in the history of the Philippines to date, which is a sign of confidence on the Terra Solar project on MGEN, on Meralco, and in the country. Further supporting this landmark project, Actis has finalized its acquisition for a 40% stake in MTerra Solar under a $600 million investment deal that was closed last March. This investment by Actis is the largest greenfield investment in infrastructure in the history of the Philippines, and shows the growing interest of investors in the growth of renewable energy in the Philippines.
The renewable energy unit continues its expansion track in the first quarter with the completion of the 52.8 MW peak Cordon plant in Isabela. This project, along with two solar projects, the 19.8 MW Bongabon plant in Nueva Ecija, and the 80.1 MW peak Baras plant in Rizal, were inaugurated in the first quarter. These plants collectively supply clean energy to over 154,000 households, reflecting MGEN's commitment to lead the country's energy transition. These three solar projects have increased our renewable energy capacity to almost 400 MW. With MTerra Solar in the horizon, we are expected to breach a commitment to build 1,500 MW renewable energy already by 2027, three years ahead of schedule. These three new plants will be supplying GEAP starting July.
As we integrate more renewables into the grid, LNG emerges as an essential transition fuel that can address our base load requirements while reducing greenhouse gas emissions. This year, we expect LNG to overtake coal as our main source of our base load, boosting our base load power with a lower carbon energy source. MGEN, together with its partners, completed the financial close of a $ 3.3 billion deal for the country's first and most expansive integrated LNG facility in Batangas, with MGEN now holding 40.2% attributable interest in the two gas-fired power plants, the 1,200 MW SPPC, or what we know as Ilijan, and the 1,275 MW facility of Excellent Energy Resources. Along, of course, with an LNG import and regasification terminal.
As an update on EERI, Units One and Two of EERI have successfully completed testing and commissioning and have been issued the Final Certificate of Approval to Connect or FCATC. With a combined generating capacity of 850 MW, these units are already fully operational and ready to deliver power to the grid. EERI's Unit Three, with a capacity of 425 MW, has also undergone testing and commissioning and is awaiting issuance of the Final Certificate of Approval to Connect from NGCP and, of course, the issuance of a provisional authority to operate from ERC. While we aim to expand the LNG to power business in the Philippines, we have been steadily growing our LNG capacity outside of the country. On the international front, our subsidiary, PacificLight Power Pte Ltd, continued its expansion of the CCGT facility with a capacity of 600 MW on Jurong Island.
The EPC contractor for this project has been. The OEM has been awarded to Mitsubishi Power for a 670 MW H-class CCGT, and Jurong Engineering Limited as the EPC contractor. Scheduled for commercial operations in January 2029, the new plant will include a large-scale energy storage system, the first ever of its kind in Singapore, to balance, of course, the variability of what Energy Market Authority of Singapore is planning by importing at least 4,500 MW of renewable energy from neighboring islands. PacificLight is also committed to expand its existing 830 MW CCGT facility with a 100 MW fast start capacity or what is actually a dispatchable reserve plant in the Philippines, and this is in Singapore, due to begin operations the second quarter of 2025. This is paid capacity fee with a fuel pass-through once dispatched by Energy Market Authority.
All of this strengthen our LNG portfolio with LNG bridging our transition toward a low carbon energy future. These landmark LNG projects exemplify MGEN's steadfast commitment to innovation, sustainability, and excellence, setting new standards for integrating efficiency and operational and environmental responsibility in power generation. MGEN continues to uphold our commitment to powering the good life by championing initiatives that pave the way for a more sustainable future. Together with our subsidiaries, we have also been pursuing community programs to drive inclusive and sustainable growth. For our host communities in Nueva Ecija, MTerra Solar, in the first quarter, installed solar powered streetlights across seven barangays in Gapan, Peñaranda, and General Tinio to enhance road safety and visibility.
It also conducted job readiness trainings for 630 scholars in Gapan to give them opportunity to be hired for the project construction, and we have set up temporary community marketplaces within the project site to provide market services for about at least 10,000 workers that will be employed in construction of Terra Solar Philippines, Inc. This gives locals a space to market their products and services. For the scholars, we have already graduated 60 of them certified for electrical installations.
On a final note, MGEN's overall performance in the first quarter of the year has been marked by strong operational efficiency across our portfolio, enabling us to deliver solid results. MGEN is well positioned to sustain momentum and continue delivering value across our portfolio. Backed by dedication of our people and strength of our partnerships, we remain confident in MGEN's ability to navigate the changing landscape and pursue inclusive and sustainable growth. Good afternoon.
Good afternoon, Chairman, MVP. Good afternoon, everyone. I will be providing some brief updates on the sustainability front, particularly on Meralco's latest ESG assessments or ESG ratings, as well as on recognitions we received during the first quarter of 2025. I will begin with our MSCI ESG rating. I am happy to report that we have maintained our triple B rating, which places us in a strong position among over 8,500 companies assessed by MSCI globally. This rating highlights our transparency in disclosing our greenhouse gas emissions, as well as the strength of our governance policies, especially around business ethics and tax transparency. Next, the CDP. I am pleased to share that we have sustained our scores for both the climate change assessment and the water security assessment.
For climate change, we continue to perform in line within the global average score of C, with strong performance noted by CDP on our climate related risk disclosures, governance structures, and risk and opportunity management. For water security, we likewise received positive feedback for our comprehensive disclosures on water related risks. Next, our efforts were also recently recognized at the Asia Sustainability Reporting Awards, where our 2023 combined annual and sustainability report entitled Pangako, received the silver award or second place in the Asia's Best Sustainability Report category. ASRA, which assesses entries from leading companies across 13 countries, commended our commitment to transparent stakeholder communications, as well as our alignment with global reporting standards.
Finally, we also received a recognition at the International Tax and Investment Conference 2025, where we were honored for excellence in sustainable cities. In particular, this recognition spotlighted our initiatives through MGreen, our long-term sustainability strategy, and other related investments, which collectively underscore the positive impact of our ESG commitments. Thank you very much.
Thank you for that. At this point, we would like to acknowledge presence of our Chairman, Mr. Manuel V. Pangilinan.
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We will now open the floor for questions from our analysts and investors. You may raise your questions in two ways: raise your virtual hand and wait to be recognized before speaking. Alternatively, you may type your questions in the chat box and I will read them on your behalf. In either case, kindly state your name and the company you represent before asking your question, and please mention the executive you would like to address the question.
Hi, good afternoon. Jelline Gaza from JP Morgan. My first question is for Attorney Valles. Can you please give us more idea on the timing for the 5RP? The next RP should start by July this year. There has been 10 public hearings. Do you think that it would be completed in a timely manner, before it is supposed to start?
Well, the schedule for the start of the 5RP is supposed to be July 1 this year. Insofar as Meralco is concerned, we have filed based on the timeline given to us by the ERC. We completed all the processes and the hearings. Unfortunately, I think there is a pending incident at the ERC that they are trying to resolve. I saw in a publication or posting, one of the posts of the ERC that they have not awarded a consultant.
The contract consultant that is supposed to handle the 5RP of Meralco. That might result in further delay in the 5RP proceedings. Honestly, I am not so sure if ERC can still meet the target of July 1, based on the original schedule that they have provided in the rules of the 5RP. So far as the reasonable timeline may be thereafter, may be about two, three months after July 1.
Still within the year. On the components of the 5RP, can you guide us through how you will be able to increase the CapEx spending from the usual PHP 15 billion-PHP 20 billion for the DU business only to the proposal of around PHP 40 billion-PHP 50 billion a year?
Based on the application of Meralco, actually the biggest component insofar as the CapEx is concerned is the AMI. If the ERC will approve the CapEx, the AMI implementation, that will increase the CapEx spending of Meralco beginning in the first year.
Thank you. Thank you, sir. Also, my second question is still relating to the regulatory changes that we have seen in last week. How will the Atimonan One decision change by the Department of Energy impact the viability of the project itself? I noticed that the procurement plan will already include the baseload capacities for auction by May.
Just for the record, the letter stated, recall through for further review. I have yet to discuss with Department of Energy to understand what aspects of the project need to be reviewed. Atimonan is actually not really designed to participate in any of the PSPPs of Meralco, but we are aiming to participate in the baseload auction that Department of Energy is actually looking at implementing by the end of the year, as announced by Usec. [inaudible] in Cagayan de Oro. If we can actually, because if you look at the Meralco schedule, it is only for 900 MW. We are 1,300, so maybe first come first served. Whatever is left, then we can participate.
We are even looking at RES or recesses to underwrite remaining capacities for whatever will not be contracted in any of these auctions, whether it is through baseload auction or to the CSP. We are still hoping that we can clarify and resolve all of these concerns. I think we all agree that the grid needs capacity and we have declared publicly that we are confident that Atimonan would be one of the lowest cost baseload plant options that still can be constructed.
Thank you, sir. Lastly, on the Chromite profit contribution, it is about PHP 663 million on the share of Meralco. Can I confirm that this is before the interest cost for the acquisition? How should we think about the PHP 560 million expected contribution for the full year? Are we on track, all considering the interest?
Okay. The answer is yes. The PHP 663 million is just the operations. That is only a month. Practically a little bit over a month. Okay. Now with respect to interest, until we complete the PF at the operating company level, then that is just pure operations. We really intend to push down a portion of the debt at the operating company level. Net, if I look at overall Meralco, it should not be different from what we had projected on a consolidated basis because it just moves the debt to the operating company level. That push down would actually be for all of us partners. So ratable share.
Thank you.
Thanks for that, Jelline. In line with that question, Ms. Betty, there is another related question here. Could you give guidance on the full-year revenue and income contribution from Chromite Gas Holdings, Inc.?
If my recollection is right, the full-year Chromite is about PHP 5 billion or PHP 6 billion. Yeah.
Thank you. We have several questions here related to regulatory. May I know what is your take on the seemingly heightened scrutiny of regulators on Meralco in the past weeks? How should we interpret these developments?
Can you repeat?
May I know what is your take on the seemingly heightened scrutiny of regulators on Meralco in the past weeks? How should we interpret these developments?
Difficult to comment, right? Well, they've issued their press release, as you know. When was that? April something, 14 or something?
Yeah.
The Department of Energy also held a press conference after which they issued their press statement. Meralco, in turn, has issued its own official statement in response to their own press release. I think we'd like to leave it at that. We have reached out to the Department of Energy to find out their concerns, specifically with respect to Meralco. That's in process. I think beyond that, it will be probably not appropriate to comment further, you know.
Thank you for that. There's another regulatory concern here. Are there any significant changes to Meralco's DU concession following the franchise renewal?
I'm not aware of any significant concession following the franchise renewal.
Let's go back to the floor. We have questions on site.
Meralco does not operate under a concession agreement. We operate under a franchise, which as you know has been extended by another 25 years from 2028, right? So that is enshrined in law. Unless there is legislative action to amend the franchise that is either current or the new one, then it stays where it is.
In terms of operations, does Meralco maintain its guidance of 4.5% DU volume growth for full year 2025, even with the sluggish, but I assume in line with seasonality growth in first quarter?
Yes, we still maintain the 4.5% growth or around volume 56,800. Yes, we see sluggish first quarter, but picking up starting quarter two, and most of the catch up might happen on the second half as we forecast. Of course, barring any unforeseen macroeconomic things. Of course, there are macroeconomic factors affecting our growth, like the forecast downgrade. But yes, of course, challenge is last year is really a very high first half. We grew 9%, so it's hard to top 9%. But the second half, we grew around 4%.
So we're banking on seasonality as well as the constant energization that we're doing. Also expectation of the ramp-up of the large data centers that we did some sort of energize late last year as well as first quarter. Up to April this year now, where we energized the largest one,[inaudible] Global STT. Of course, last year the largest was VITRO. These are fairly large data centers compared to the normal data centers that we had before.
Thanks, Ferdi. On financials, what drove the higher blended margins for PacificLight during first quarter? What drove the higher blended margins for PacificLight?
Well, the main drivers for PacificLight's income for the first quarter are fuel and higher availability, in contrast to the merchant market.
We go back on site. We have questions on end.
Good afternoon. I'm Jared from AB Capital. I have a question on the planned CSPs. I do not see any new thermal baseload CSPs for PSA starting in 2026 or 2027. Is this because we see the new renewable energy capacity as being enough to satisfy the growing demand?
We have a 600 MW baseload. That is upcoming May 2025. And we also have a 900 MW of baseload coming September 2025.
I believe these are PSA starting 2028 onwards.
Yeah. And 2030.
Yes. There's no new base load for 2026 and 2027 other than the renewable energy base load.
The PSA will start. The COD of this is expected to be February 2028 for the 600 MW. For the 900 MW, that's February 2030. If you're asking for 2026 start? Are you asking for 2026 start?
There's no new.
Yeah. We have the 200 MW base load, which includes the RE. It's a base load conventional in RE because the requirement is for us to comply with the renewable portfolio standards. I think, yes, that's it. Because the 450 mid-merit is for February 2029.
Can I add?
Yeah.
I'll also add that by February 2026, there's a mid-merit supply for 600 MW that is now going to be serviced by Terra Solar. We've been saying that the Terra Solar project has now proven that a combination of renewable energy coupled with the best can be as competitive as an option. For your typical supply of mid-merit used to be fossil fuel, right? This one's actually going to replace that.
Got it.
Thank you. Just a follow-up question for Sir Manny. Just on EERI, when do we expect to start recognizing depreciation on the plant after it's completed its commissioning?
We've started on the ones that have started delivery, Unit One, and I think we've also factored in some on Unit Two, depending on the recognition of the commercial operations. For Unit One and Unit Two, we've started.
Clear. Thank you.
Thanks, Jared. Online, we have a question on CapEx guidance for full year 2025 and earnings guidance for this year. CapEx guidance and earnings guidance for 2025.
For CapEx, wait, just give me. For the DU side, we're looking at over PHP 25 billion. Another CapEx component would be coming from power generation. Let me just get the number. One second. I'll revert on the power generation, but the power generation number is largely Terra Solar Philippines, Inc. for CapEx. I'll get it. One second. The total, the bulk of which is really, the DU is about PHP 29 billion, and the total consolidated is PHP 120 billion. That is largely Terra Solar Philippines, Inc. for the difference. Because remember, by February of 2026, phase one should be operational already. Okay. That's 2,500 MW. The CapEx there would include the balance of plant and also the land acquisition.
Thank you for that. For MGEN, how many projects are still awaiting to be operational for this year?
For this year, of course, the balance of EERI, Unit Three. After that, none. But we will be starting Solar Philippines Tarlac Corp. for another 35. That is an expansion. The next one would be already in February of 2026, which is the phase one delivery of Terra Solar.
Thank you. We have two related questions on Chromite. Does the depreciation amortization for Chromite gas plants already starting to be recognized this year?
I have answered that already.
Can you clarify if the PHP 5 billion-PHP 6 billion income target for Chromite, is that under the operating company or already the income share of Meralco from the investment?
Okay, so the whole amount. Wait. That's our share already. The total is PHP 6 billion from operations. If there are opportunities to sell in the reserve market, it's not included.
Thank you, Ms. Betty. If we go onsite for any questions online?
Hi, this is Terry from CLSA. Do we stick with the PHP 50 billion earnings guidance?
The earnings guidance for this year?
Well, in terms of income growth, we are looking at being able to maintain. You've seen the growth in the first quarter, so 10.8%. We're looking to maintain double-digit growth in profit terms, core profit for Meralco for 2025. It's probably within a range of probably land during the year at low double-digit growth, so between 10%-12% for the year. Yes, it will be around PHP 50 billion or maybe hopefully more, right?
Jelline, yes. There in the middle.
Sir, since you're here, I just wanted to get your thoughts on the balance sheet of Meralco and the dividend paying capacity or requirement. We haven't seen the balance sheet transition to a net debt for many years, so it's been already a net debt.
Well, net debt is about 1.06x.
Which is totally okay, but I just wanted to get a sense how you're thinking about paying out dividend on this capital structure mix.
Well, the consolidated debt has grown because of the contracted debt to finance the investment in Chromite. But the plan, and I think it's been agreed with the two other shareholders, is to push the relevant acquisition debt that we have contracted, except for, of course, for San Miguel, down to the operating company level. We will deleverage the balance sheet as of March 31st by anywhere between PHP 70 billion- PHP 75 billion.
That net debt to equity or gross debt to equity, sorry, net debt to EBITDA and gross debt to EBITDA should drop hopefully by the middle of the year, the third quarter. Yeah. On that basis, we would anticipate to be able to maintain at least 50% dividend payout of core and look back to be able to pay an additional 10% on core. Core is about 50, so you're looking at PHP 25 billion to PHP 30 billion of cash dividends. Is that okay? What? You want more, right?
Investors-
Thanks for that, Jelline. We don't have any more questions on hand. But checking again on site if we have any more questions.
Hi. Alvin from MBG Capital. I just wanted to ask, Meralco's been in the news trying to start or do the nuclear power plants, what's the vision for nuclear energy?
Meralco is really positioning itself as a major player in the nuclear energy space. But of course, this will basically be triggered by the bill, which is pending now in the Senate, the PhilATOM bill. But while waiting for the passage of that law, we're doing already, I would say, preparatory work, especially on the talent development. Maybe you have heard already that Meralco has already sent five scholars abroad, and we will be sending seven more scholars. The first five scholars, two of them are in the U.S. and three of them are in China. And we'll be sending seven scholars to be sent in France, in Canada, in Korea, and Tsinghua University in China. And of course, we have signed also an MoU with EDF of France. We know that France is the leader in terms of nuclear energy adoption.
Around 75% of their energy requirement is supplied by nuclear power. We are partnering on them in terms of doing the feasibility study, especially on the site selection. We are just waiting for the passage of that law. We are keen into the adoption of small modular reactor or SMR, and the first of a kind SMR is now being constructed in Romania, and hopefully it will be up and running in 2030. We are looking into the outcome of that first of a kind small modular reactor. Thank you.
Can you share the economics of nuclear, what you are saying?
That is part of the MoU we signed with EDF to understand the economics. Too early to say the price of the LCOE of nuclear. It is going to be expensive, especially for the first unit to be built in the Philippines. We are looking at economies of scale.
It is an enigma for us because the indications we are getting is that we do not know about smaller micro modular reactors. It is looking like if we are to build nuclear plants, we probably have to turn to conventional nuclear plants. The feedback we are getting from both EDF of France and from Korea and the U.S. is that the cost to build a conventional plant is $8 million per megawatt. If you build, the minimum size is at least 600 MW. You are looking at $5 billion.
The cost of fuel will be rather low. It is like buying an electric vehicle at this stage. The capital cost is higher than fossil fuel. Your OpEx is much lower. How it balances out in terms of actual power rates, we still do not know. We have to learn. We have signed an MoU with EDF to learn more about how the nuclear industry works in France. We were told as well that smart meters in France are about 40 million meters. How many French people are there? I think we are more numerous than the French. That is quite a lot. We have a lot to learn from the French in terms of the nuclear industry and how they adopted the smart meters in a very, very big way.
When we invested in Chromite, that is about 2,500 MW for about $3.5 billion. This is 600 MW of atomic energy or $5 billion. That fuel must be damn cheap to justify an investment of $8 billion. It is not a slam dunk proposition. You have to ask yourself, what is the price of energy independence for this country? I would like to think that Meralco is the thought leader in nuclear energy as it is in many other areas in distribution and generation, and probably is in the best position to pivot to nuclear, right? In many ways, because of that, we are getting a lot of comments from all quarters. I would stop it there, right?
Thank you for the answer. We do not have any more online questions, so we will just do one more round on-site. With that, I would like to turn the floor to our Chairman, MVP, for his final remarks.
Well, thank you for joining us for this first quarter results. We will probably give you a better idea of outlook for the full year 2025 when we announce our first half results. But it is probably going to land somewhere in the number that I mentioned earlier. I think just to be totally transparent on Chromite, it is likely the profit at their level would be around PHP 25 billion this year. We will not get all of that because we started accounting for the profitability sometime in February, and one unit only. The full impact of Chromite you have not seen for the first quarter, but I think starting the second quarter, you will see more and more of the benefits of the Chromite investment. I think their bottom line will also get affected when we push down the debts at their level.
But it is a more tax-efficient situation because that is where both the profits and the cash are derived. I think our optimism for Meralco's prospects remain tempered for the year. Our sense is that it is a slow start for the economy for the first quarter. We do hope that in the course of the last three quarters of this year, that the economy will improve, especially with the pickup in election spending. We have not seen that really in a very tangible way. As you know, certain of the supranational institutions like ADB and the World Bank have reduced GDP forecast to sub 6%, right? That is why our optimism is tempered. But if you could achieve double-digit growth for this year, I think it would be a good achievement for the company. Chromite has expansion plans, right? We have bought the turbines, right?
That are 35 MW, and we will expand the capacity because we have already bought it from San Miguel, which they bought before. So it is relatively inexpensive. There are further plans to expand the solar investments. After we complete the phase one and energy is already being produced by phase one, I think we are optimistic that we can expand Terra Solar to a higher capacity level in the course of next year. Okay. Thank you. See you in September, as the song says.
Thank you, sir MVP. Before we officially close, please be informed that an audio recording of today's briefing will be available on our website under the investor sections. Thank you once again for attending today's briefing. We look forward to seeing you in the second quarter briefing. Thank you.