Today's briefing. I'm Dinbo Macaranas from the Meralco investor relations team, and I will be moderating today's conference call. Before we proceed any further, please be advised that this teleconference call is recorded. Kindly follow the ground rules which were sent to you beforehand. We will be presenting the financial and operating results of Meralco for the first nine months of 2023. A copy of the presentation may be downloaded from our website at www.meralco.com.ph under the investor relations section. We have members of Meralco's management team in this call, and led by our COO, Mr. Ronnie L. Aperocho. Our Chairman and CEO, Mr. Manuel V. Pangilinan, will be following later.
Other corporate officers who will be presenting are the following: Betty C. Siy-Yap, Senior Vice President and Chief Financial Officer. Mr. Ferdinand Geluz, Senior Vice President and Chief Revenue Officer. Mr. Froilan J. Savet, First Vice President and Head of Networks. Attorney Jose Ronald V. Valles, First Vice President and Head of Regulatory Affairs and EU Regulatory Management. Mr. Raymond B. Ravelo, First Vice President and Chief Sustainability Officer. And finally, we also have Mr. Dominador Camu, Chief Operating Officer of Meralco PowerGen Corporation. We will begin with the presentation of the financial highlights, followed by the operating results of Meralco's new business, and then highlights from Meralco PowerGen Corporation. After all the presentations are done, we will allot time for Q&A.
At this point, I would now like to introduce our CFO, Ms. Betty C. Siy-Yap, who will present the financial results.
Good afternoon, ladies and gentlemen. Thank you for joining us for the nine months results release. I will be presenting the results for the nine months ended September 30, 2023. A summary of our performance, the total energy volume handled by One Meralco was at 48,308 GWh , 7% higher versus 2022. In terms of our operating results, or CCNI, we saw a 53% increase as of September 2023, with higher contributions across all businesses. The distribution utility, power generation, and RES. On the distribution utility side, CCNI was higher with a 4% increase in sales volume year to date, mainly from higher volumes of residential and commercial customers and the higher distribution rate with the completion of the asset true-up refund. On the power generation side, this continues to be driven by PacificLight Power in Singapore and San Buenaventura.
Global Business Power also turned in positive numbers compared with the negative numbers last year. For RES, there's also positive contribution, given our RES unit's ability to manage the negative effects of FTRA through modified product offerings to our customers. S&P Global Ratings revised our outlook to positive on stable cash flows and strong financials, and reaffirmed the BBB- rating that was given to us. For the nine months ended, our consolidated core net income was at PHP 30.023 billion. While majority still continues to be contributions of the distribution utility at 58%, power generation delivered 34% with a balance from RES and other subsidiaries. For this slide, we actually drove it between regulated and unregulated business. For the unregulated business, we saw growth to 42% from 24% same period last year with improved operating results of power generation.
For the regulated business, which was at 58%, their share was at 58% from 76% a year ago. However, contribution of Meralco CCNI increased in terms of absolute amount. These are the summary numbers. Our consolidated core net income, reported net income, core EBITDA, all grew in the nine months of 2023 compared with the same period last year. CCNI reached PHP 30 billion. Reported net income was at PHP 28.4 billion, and core EBITDA was at PHP 50.8 billion. Results from our power generation business continued to grow during the nine-month period. The core distribution business grew also on account of the 4% volume and strong second and third quarter results. Our gross revenues consist of DU, RES and consolidated power generation results amounted to PHP 335.2 billion, or 6% higher. Total costs and expenses amounted to PHP 307.5 billion, the bulk of which, or 81%, was purchased power costs.
CapEx spend in the nine months was PHP 21.1 billion, and this consists of requirements of the distribution network, completion of telecoms and tower facilities build-out including the towers turned over by Globe to MIDC and development expenses related to the solar power generation project. Cash and cash equivalents amounted to PHP 73 billion, while our total debts stood at PHP 102.1 billion. In terms of the details of our revenues, our revenues grew 6% as contribution from the DU increased mainly due to higher volume, higher pass-through charges, and distribution rate with the completion of the ERC ordered refunds. For generation, total amount was at PHP 253.8 billion, 5% higher with the higher cost of replacement power delivered by Ilijan and Sual plants, which are the replacement powers for the terminated contracts, coupled by the peso depreciation versus the U.S. dollar.
I wish to highlight that on the distribution side, this was higher by 16% to PHP 51.6 billion, with the combined effect of the increase in volume and the effect of the completed refunds. On energy fees, 1% lower despite the higher generated energy due to lower fuel and coal components billed to customers, consistent with the decline in fuel and coal prices. For the non-electric revenue, this grew 7% with the recognition of power lease contracts of MIDC, increase in the number of circuits and accounts of Radius, and higher transactions or rate filed. Total costs and expenses grew by 3% with the higher cost of power under the approved emergency PSAs and higher OpEx. On the power purchase side, 5% increase due to the replacement power costs[audio distortion].
Higher OpEx coming mainly from contracted services for maintenance, disconnection, reconnection, collection, and relocation costs, higher salaries and wages, and project-related material costs for the projects of our construction subsidiaries. 19% decrease in coal and fuel plus power plant O&M due to lower coal and fuel price in 2023. Depreciation grew by 6% on account of completed capital expenditure of the distribution utility. The depreciation related to 1,149 towers acquired by MIDC and 526 kilometers of fiber optic cables added to the Radius network. On our capital expenditure, consolidated capital expenditure amounted to PHP 21.1 billion, 3% higher compared with last year. The DU capital expenditure accounted for 76% of the total, with completion of major network projects for new connections, asset renewal, and load growth.
Major network projects completed during the period include the development of Arca South in Taguig and the energization of 115 kV switching station, as well as relocation of some poles to support the government infrastructure project. Power generation CapEx accounted for 3%, largely with the development of phase one of PH Renewables' Baras Solar plant. Subsidiary CapEx represents 21%, majority of which would be PHP 3.7 billion as it relates to the additional 289 towers acquired from Globe and 37 build-to-suit towers for Globe and Smart. Our consolidated CCNI, our consolidated core net income grew 53% to PHP 30 billion in the nine months. Note that our nine-month figure actually surpassed the full year PHP 27.1 billion of 2022. Our reported net income reached PHP 28.4 billion, flat compared with the full year numbers of 2022.
When we compare it with like periods, our CCNI grew 53%, while our reported net income grew 44%. In Q1, CCNI grew 40% to PHP 9 billion. For this quarter, it was driven largely by power generation, led by PacificLight and San Buenaventura. Power generation more than offset the DU CCNI contribution, which was slightly lower year-on-year as growth in sales volume was softer in the first quarter. In the second quarter, it was the contribution of power generation, while the DU began its recovery with a 5% volume growth and higher distribution rate because some of the refunds were completed. The asset true-up was also completed sometime in May of 2022. Our RES contribution also improved as we offered modified supply offerings to the customers to offset the negative effect of FTRA.
In the third quarter of 2023, CCNI grew 66%. Power generation contributed 2.6x better than what it contributed last year. It was PHP 3.5 billion compared with PHP 1.3 billion last year. Bulk of which, again, came from PacificLight, and also added to that would be the contribution of San Buenaventura. GBP provided PHP 484 million in CCNI compared with a loss of PHP 743 million, same period last year. The DU contributed PHP 6.4 billion to Meralco's CCNI, up 41% compared with the same period last year, with a 6% increase in sales volume and the downward of. Also last year, there was the effect of the asset refund. RES contribution also improved as RES continued to recover from the negative effects of FTRA.
For our all other subsidiaries and affiliates, contribution declined with MIDC's continued build-out of its portfolio for SLB or sale and lease back and BTS or build to suit. Our reported and core EBITDA, our core and reported EBITDA for the nine months ended were at PHP 50.8 billion and PHP 48.2 billion, 36% and 32% up respectively. The numbers actually surpass the full year 2022 numbers. On power generation, MGEN 's contribution to Meralco CCNI grew to PHP 10.2 billion, coming from the different plants in Singapore and in the Philippines. Wholly owned power generation subsidiary, MGEN , contributed PHP 10.2 billion to Meralco CCNI as of the end of September, higher by nearly 3x . This is, as explained, coming from PacificLight and San Buenaventura.
Also the contribution of renewable energy plants, including the 135.5 MW AC, which came on stream, in 2023. MGEN has combined power generation capacity of over 2,000 MW in the Philippines and Singapore. For Singapore's PacificLight, the 100% CCNI is at SGD 332 million or PHP 13.4 billion, higher compared with the SGD 230 million last year and equivalent to PHP 9 billion. On account of higher blended margins, which average SGD 103.08/MWh , compared with SGD 74.24, same period last year. PacificLight's 771 MW LNG plant delivered a total of 4,337 GWh of energy in the nine months. San Buenaventura, a 455 MW supercritical coal-fired plant, booked CCNI of PHP 2.9 billion and delivered a total of 1,962 GWh of energy, with plant availability at 95%. The capacity of SBPL is fully contracted by Meralco under an ERC-approved PSA through 2039. GBP posted CCNI of PHP 1.3 billion, a complete reversal of last year's loss of PHP 1.9 billion, attributed to improved plant availability and contracting. They have actually terminated all of its fixed rate contracts and recontracted the same capacities.
GBP delivered a total of 4,618 GWh of energy from its portfolio of coal and oil plants with a net capacity of 823.6 GW, of which 676 were contracted under PSAs with captive and contestable customers. MGEN Renewable or MGreen is the renewable arm of the group. It closed the nine months with a total of PHP 72 million in CCNI contribution and delivered energy of 254 GWh from its solar plants, which are BulacanSol, Nuevo Solar, and the Baras Solar Plant. BulacanSol is a 55 MW solar plant in partnership with PowerSource. It achieved availability of 95% and delivered 84 GWh to Meralco under a 20-year ERC-approved PSA. Nuevo Solar, a 68 MW AC solar plant in partnership with Vena Energy, started delivering its entire output and power in March of 2023.
As of end September, Nuevo Solar delivered a total of 111 GWh of energy. The 75 MW AC Baras Solar Plant in Baras, Rizal, is owned and operated by PH Renewables, Inc. in a partnership with Mitsui Renewable Philippines. Commissioning test of phase one for the 67.1 MW AC project has been completed and commercial operations is expected before year-end. Phase II is due for COD by May of 2024. The Baras plant has delivered a total of 59 GWh of energy to MPower as of September. Our consolidated interest-bearing debts stood at PHP 102.1 billion, including debt of subsidiaries, which totaled PHP 52.3 billion. Maturities within one year include the put option on the 12-year fixed rate note, which Meralco issued back in 2013, totaling PHP 7 billion. Debt of our subsidiaries accounted for 51% or PHP 52.3 billion, of which 44.1 belonged to MGEN -GBP.
Cash and cash equivalents amounted to PHP 73 billion, while short-term investments totaled PHP 7.2 billion. Net debt at the end of the nine months of 2023 was at PHP 21.8 billion, while net debt to EBITDA stood at 0.34x . Our long-term investments and restricted cash totaled PHP 22.4 billion. Our core and reported EPS were at PHP 26.638 and PHP 25.197 per share, up 53% and 44% respectively. On October 31, 2023, S&P Global Ratings updated its credit rating on Meralco with a revised outlook to positive on stable cash flows and stronger financials. The BBB- rating was reaffirmed. The S&P report stated that the credit profile of Meralco will likely improve with support from improving profitability of the unregulated power generation business and stable cash flows from the distribution utility business.
Steady cash flow from the regulated power distribution business is anticipated despite the delay in tariff acceptance. This will support Meralco's financial strength. The positive outlook reflects S&P's expectation of Meralco's improving performance and clarity on regulatory tariffs could lead to stronger financial metrics over the next 12- 24 months. That ends my report.
Thank you, Ma'am Betty. We will now move to the operating results presentation to be led by our COO, Mr. Ronnie Aperocho. He will be followed by the heads of the different business segments who will provide further details.
Good afternoon, everyone. We are happy to report that our major business drivers and service KPIs are better or have improved during the first nine months of the year as compared to the same period last year. Energy sales grew by 4% at 38,164 GWh . Customer count also grew by 3%. The total customer accounts with Meralco right now is 7.771 million. Net system input also grew by 4% at 39,968 GWh , while Meralco peak demand stays at 8.44 GW, which was registered last May this year. For system loss, the 12-month moving average as of September was at 5.81%. This is 0.07 percentage point lower than the 5.88% in 2022. While total SAIFI, or the System Average Interruption Frequency Index, was lower by 5% at 1.0x , while the total system average interruption duration index also improved or was lower by 3% at 99.583 minutes.
This means that our customers have experienced lesser and shorter power outages during the first nine months of the year. Time to connect, this is the measure of how fast can we connect our customers who have applied for electric service. Time to connect has improved by 18% and is now at 1.36 days. Electricity rate, however, increased by 12% at PHP 10.51/kWh , versus the PHP 9.43 in the same period in 2022.
I am now turning it over to Ferdi for the customer relating report.
Okay. Good afternoon, everyone. As alluded by Ronnie, our consolidated distribution utilities volume grew 4.4% during the first nine months, mainly driven by the robust growth of residential and commercial segment sales. It reached 38,163 GWh for the first nine months, higher compared to the 36,553 GWh same period last year. Meralco volume rose 4.4%, while Clark Electric Distribution Corporation sales, gigawatt hours sales increased by 7%. The full transition to face-to-face classes in both public and private schools, the nationwide lifting of COVID-19 state of public health emergency at the start of Q3, as well as the shift to warmer weather patterns from La Niña to El Niño, this combined resulted to a good 6.3% sales growth for quarter three alone. To recall, in quarter one, we grew 2%, quarter two, we grew 4.7%, and now quarter three, we grew at 6.3%.
In terms of sales mix, the mix continues to shift towards pre-pandemic levels with commercial segment leading now accounting for 37% of total sales from 35% last year. Residential sales is up 35%, down a percentage point of 36% last year, while industrial segment contribution also decreased from 30% last year to 28% this year. Next slide, please. For the energy sales profile and drivers, residential sales volume further recovered and raised the year-to-date sales by 3.4% to 13,363 GWh . The above average mid temperatures recorded by PAGASA in the third quarter due to shift into ending of granted households to use cooling appliances more often to maintain comfort.
Of course, it was also noted that there's increased consumption and occupancy in condominiums and dormitories in the Metro due to the return of college university students for on-site classes, as well as the more physical nature of our work arrangements. Technically, all areas registered improvement in sales for the residential segment from the provinces to the Metro Manila. Commercial sales volume grew close to 10% to 14,122 for the first nine months compared to the same period last year. The nationwide lifting of COVID-19 state of public health emergency last July further pushed the impetus to transition to full in-person experience. Of course, the largest increase was noted in education, which increased 65% in terms of sales and restaurant, hotels, real estate also experienced double-digit increase compared to the first nine months of last year.
Industrial sector is gradually showing signs of rebound as the gap in sales volume narrowed down to - 1% or 1% decline compared to last year. Sales is up 10,570 GWh this year compared to 10,677 GWh last year. Industrial managed to have 1% increase as semiconductors continue to increase and electricity, gas, and water maintains its growing performance. Semiconductor, which is actually -4% year-to-date, actually showed signs of recovery the past two months. In fact, for the month of September, it showed a 4% increase for the first time as key accounts they diversify to automotive chips and resume full plant operations respectively. Cement likewise increase or reduce is gradually increasing but still a minus 6% year-to-date, but the last two months showed positive numbers. For the leveraged sectors and generation units from embedded generation still show growth.
However, demand in plastics still continues to be affected by high input costs and lower plant production. Next slide, please. For the last slide. We continue to grow our customer base as a result of continuous robust energization performance both for project covered application and ordinary service application. Our customer count grew to almost 200,000 new customers. It is now at 7.77 million customers compared to 7.57 million last year. Our energization both for project covered application and ordinary service application is maintained despite that we finished the catch-up of the pandemic backlogs in 2021 and 2022. We still maintain the robust energization count with project covered application running at between 700 to 800 project covered applications per month, much better than the pre-pandemic average of 450 to 500.
For ordinary service application, it is well within the 20,000 range, also much better than the 18,000 average during the pre-pandemic period. That is the customer report, and I now turn you over to Froilan for the networks report.
Good afternoon, everyone. To continue on networks report, the consolidated NSI for the third quarter of 2023 is 39,958 GWh , which is 4% higher compared to the same period last year. This is attributed to the increased economic activity, especially with increased social engagements, including in-person attendance in offices, school, and similar settings. As of September year-to-date, the energy mix was characterized by a lower share of both new and old PSAs, now at 21% and 35% respectively. This is mainly due to the termination of PEDC, SPPC, and SPI- PSAs. This led also to higher WESM purchases, resulting in the increase of present share to 13%.
For the fuel mix, this was also affected by the termination of the SPPC and SPI- PSAs, reducing the share of natural gas to 26%, while coal share increased to 32% when emergency PSA with coal plants, GNPD , TLI-Pagbilao, and so on, were signed to provide replacement power previously provided by SPPC and SPI. Meralco peak demand for the year is still at 8.44 GW recorded on May 9 and is a 4% increase versus 2022. On the other hand, a new Luzon peak demand was achieved on July 6, 2023, with 12.55 GW demand, 5% increase against 2022. The 12-month moving average system loss is now at 5.81%, which is a 0.07 percentage point improvement from last year. This is still well below the indicated 6.5% regulatory count.
Generally, for S factor and guaranteed service levels, we are still delivering well within the performance ceilings. Site A improved by 5% at 1.004x , while Site B improved by 3% at 99.583 minutes. However, MAIFI declined 3% higher than last year, largely due to transient faults and equipment failures. Meanwhile, the average time to process applications and the average time to connect customers continue to see significant improvements over last year and are now at 24% and 18% improvement, respectively. This is attributed to the streamlining of processes to prevent a pileup of changing applications. For call center performance, there was a slight decline of 0.3%, but we are more or less able to sustain the performance last year as we answered 96.75% of calls within 20 seconds. GSL performances are well below the annual average thresholds.
Next slide, please. For CapEx, we now stand at 70% utilization or PHP 14 billion worth of CapEx implemented as of September, with the majority of our spend on new connections, asset renewals, and load growth projects. We are also continuously supporting government projects both under the Build Better More and the pole relocation programs, the DPWH and MTUs. Last September 24, we successfully energized the Polomolok-Santa Cruz 115 kV switching station. This project will improve the reliability and flexibility of the existing Laguna Bel-Air, Santa Rosa 115 kV line as it caters to the high degree of service reliability and power quality required by ePLDT's bitter hyperscale data center in Santa Rosa, Laguna. Thank you.
Good afternoon, everyone. For the regulatory update, for the first nine months of 2023, the average retail rate is 12% higher than 2022, which is mainly due to the higher generation charge. The average generation charge for the first nine months registered a 14.3% increase from the first nine months of 2022 due to higher fuel costs, higher WESM prices, and updated faster depreciation. Following the increase in generation cost, average system loss charge also increased by 10.5%. The 18.6% decrease in average admission cost was mainly due to lower ancillary service charges. The average distribution rate with the distribution rate true-up for the first nine months of 2023 is PHP 1.2231/kWh .
When we normalize this by taking up the effect of the RTUA, the average rate decreased to PHP 1.4964/kWh the first nine months of 2023 from PHP 1.5314/ kWh for the same period last year. Such decrease is due to a decrease in sales share and effective rate of residential customers and effective rate of commercial customers. Subsidy taxes and universal charge increased by 14.3%, mainly due to higher effective taxes and higher universal charges approved by the ERC. The 100% decrease in FIT-All was due to suspended collection for the first nine months of 2023 following the ERC directive. We have an update on the Terra Solar PSA. Last August 10, the ERC issued a notice of resolution dated August 8, 2023, approving with final authority the Meralco-SPI PSA , the SPI- PSA, with the following modifications and conditions.
No details are yet allowed on one-time price adjustment. However, the ERC disallowed the ancillary cost recovery payment and the purchase of excess capacity and the renewal of extension of term. The SPI was also directed to submit several documents. The base rate is as shown on the table in your screen. The annual capacity either is subject to a one-time price adjustment. We have yet to receive the official copy of the actual ERC decision. Next slide. On the price adjustment for PEDC, you will recall that March 18, 2022, PEDC sent notice of fuel change in circumstances claiming that the Ukraine-Russia conflict and other geopolitical, economic factors caused adverse impact on its ability to supply under the PSA. It claimed losses of PHP 1.2 billion for the period April 2022 until December 2022.
Last April 13, PEDC filed with the ERC adjunct motion for contract price adjustment, and that motion was joined by Meralco. PEDC sent notice to terminate the PSA for breach of the threshold level 2, effective six months later, and PEDC supplied to Meralco last December 5, 2022. On August 29, 2023, Meralco received ERC's decision dated March 8. In the decision, the ERC, among other things, granted the price adjustment motion and allowed recovery of PEDC's actual fuel losses due to a change in circumstances for the period from April 2, 2022 to September 25, 2022, amounting to PHP 884 million, which is to be included in Meralco's true-up application.
It also granted the termination of the PSA effective upon the date of the actual termination, which is on December 5, 2022, because PEDC's unrecovered amount for April 2 to 25 already reached PHP 75 million, which is the above threshold level provided in the PSA for the CIC claims. It also adopted that it's provisionally approved last February 23, 2022 as the final rate. Last October 3, 2023, Meralco filed a motion for leave to file supplemental application to include the PEDC claim in its generation cost overrun and recovery in its true-up application under ERC case number 2023-046. Next slide is on the--
Please.
Yeah. On the withdrawal of the 5RP application. Last March 16, remember that we filed the 5RP application for approval of the annual revenue requirement and the performance incentive scheme for regulatory years 2023 to 2026. The total ARR for 5RP is PHP 320.4 billion, and the average price is PHP 1.57/kWh . Last September 16, 2022, that was the last hearing conducted in this case. While the pre-trial conference has been completed, the ERC has not issued the pre-trial order, and the ERC has not also set the case for hearing for presentation of evidence since then.
After more than a year of inaction, Meralco filed an omnibus motion to withdraw the 5RP application to allow Meralco to refile the 5RP application, this time to cover a new period from RY 2025 to RY 2028, and consider the RY 2023 and RY 2024 as lapse period with the rate of PHP 1.3522 per kilowatt hour as the final rate during this period. To refile the application no later than February 15, 2024, before the start of the RY 2025. The omnibus motion of Meralco is premised on the following grounds. Resolving the application would violate the express provision of the RDWR. It states that the ARR must be based on forward-looking analysis of forecast cash flow requirements and must represent the optimal forecast revenue requirement. Due to delays, resolution of the application is no longer based on forecast.
The first RY of the 5RP ended already on June 30, 2023, while the second RY, which is the RY 2024 of the 5RP, is almost at its midway. With the additional activities to be completed, it is likely that the final resolution of the case will not be completed even before the end of RY 2024. There were also supervening factors like the additional OpEx and CapEx due to new regulatory and legal impositions that need to be considered in the new 5RP application. It is to the best interest of the consumers that RY 2023 and 2024 be treated similar to the lapse period with the final rate of PHP 135.22, which is much lower than the average rate of PHP 157 originally applied for in Meralco's application.
The new 5RP forecasts are now being prepared in anticipation of ERC's approval of the proposed withdrawal and refiling of the application. Finally, as an update on the 1,800 MW CSP as well as the 1,200 MW brownfield CSP. Following the ERC approval of the termination of the Excellent Energy and MPPCL, PSAs last December 12, 2023, Meralco started the bidding process for the 1,800 MW net CSP. Last October 27, Meralco received the certificate of conformity for the procurement of 1,800 MW net base load power requirements from the Department of Energy. On the same date, Meralco furnished the ERC a copy of the COC and informed the DOE of the commencement of the CSP through the first publication on November 1, 2023, compliance with the requirements of the ERC CSP rules.
As mentioned last November when we published the invitation to bid for the 1,800 MW. On November 3, we posted the invitation to bid on the DOE CSPE portal and Meralco CSPs website. On the table, you will see the milestone events. We are targeting December 26, 2023 as the bid submission deadline. On the other hand, for the 1,200 MW brownfield net CSP, Meralco requested already the DOE for the issuance of the certificate of conformity for the invitation to bid and the terms of reference for the 1,200 MW brownfield CSP. We are awaiting the action of the DOE on this request. That's it for the regulatory update. Thank you very much.
Good afternoon, everyone. On the sustainability front, we are very pleased to report that last month, Meralco was recognized at the International Business Awards or the IBAs with a total of eight Stevie's. The Stevie's are among the world's premier business awards honoring achievements and positive contributions of companies globally. Four of the eight Stevie's we won were in the IBA's inaugural or first-ever sustainability awards category. In particular, Meralco was recognized with a Gold Stevie and the sustainability leader of the year covering Asia, Australia, and New Zealand. Meralco is actually the lone Gold Stevie awardee in this category and the first-ever winner also in this category. Our solar company, MSpectrum, was likewise recognized in the Video Awards category, sustainability and environment, for its video on the solar rooftop installation of MSpectrum.
This was a collaboration between our Meralco marketing team and MSpectrum, also a Gold Stevie and the first-ever winner in this category. Finally, on the sustainability front, our diversity and inclusion program, #Mbrace, was awarded a Bronze Stevie in the sustainability initiative of the year category, also covering Asia, Australia, and New Zealand. In addition, our One Meralco Foundation also reaped a number of Stevie's, across various categories. First of all, our One Meralco Foundation President, Jeffrey Tarayao, was hailed as a thought leader of the year government or nonprofit, and also was a Gold Stevie winner in that category. Two of our CSR programs, our household electrification program and our One PowerFeast program, were also awarded Bronze Stevie's in the CSR program of the year category in Asia, Australia, and New Zealand.
Finally, in the communications campaign front, our Powering Up Communities During the Pandemic, also by the OMF, won a Bronze Stevie. Thank you very much.
On top of these awards, Meralco's Chief Sustainability Officer, Raymond B. Ravelo, has been recognized both locally and internationally for his leadership towards sustainability. This gives credit to his role in establishing the overarching sustainability agenda, which is powering the light, drafting the long-term sustainability strategy from 2021 to 2050, and planning various sustainability programs. In particular, he received a Gold Stevie in the sustainability hero of the year category at the 2023 IBAs, where he is the lone gold winner, and the 2023 Asia Pacific Sustainability Thought Leader of the Year award by Environmental Health News. This recognition serve as testament to the commitment of the company and its leaders to building a sustainable One Meralco.
Thank you, sirs, for your respective presentations. Before we proceed, I'd like to recognize the presence of our Chairman.
Thank you.
Mr. Manuel V. Pangilinan, who has just joined us.
Thank you.
Good afternoon, sir.
Please.
The next part of the presentation will be the Meralco PowerGen h ighlights to be presented by Mr. Dominador Camu, MGEN Chief Operating Officer.
Good afternoon, everyone. Allow us to walk you through briefly on the nine months operations of the power generation group of Meralco. As you can see, the total generation as of September of this year is positive. It is actually 6% higher. On the GBP portfolio plants, there are about nine CFB units, 775 MW of net capacity. It actually generated higher than last year by about 10%. SBPL, which is our Pulverized Coal, 465 MW, slightly down, partly because of a 13-day outage on middle of this year, sometime in June, and also slightly lower dispatch, compared to last year. On the PacificLight front, that is actually our portfolio. It is a subsidiary in Singapore that is a combined cycle gas turbine, two units of 771 MW at net, which is actually up by 4%.
MGreen, although the capacity is slightly only about 200 MW AC, it actually registered a big jump primarily because we have two solar PV farms that actually came into operation early this year. That actually was the primary reason why we had a big jump in total energy delivery as of this report, so nine months report. In the second slide, that actually is a segue to those two PV plants that we have. One is somewhere up north of the major island in Luzon. It is actually in partnership with Vena Energy, Pasuguin Energy Holdings. It has actually reached full capacity at 68 MW AC sometime in February of this year. It has also availed the final authority to connect, and we are just waiting for the ERC's traditional authority to operate in the COC.
On the right-hand side, that's the MGreen 75 MW solar power project in Baras. We are also in partnership with Mitsui. The local unit is Mit-Renewables Philippine Corporation. The first phase, which is the big chunk of the 75 MW AC, is actually now in the commissioning phase and in the operation. We're just waiting again for the ERC's approval sometime at the end of this year. The second phase actually of the 67.5 will be operated by sometime on the middle of next year. The last one is a big investment by MGEN Renewable Energy Inc and in partnership with SP New Energy Corporation by about PHP 16 billion, PHP 15.9 billion to be exact, through the subscription of 15.7 million common shares and 19.4 billion with double voting shares with SPNEC.
SPNEC is a publicly listed integrated developer, owner, and operator of solar power projects. SPNEC is a majority owned by Solar Philippines Power Project Holdings, Inc., or SPH. At transaction close, MGreen common and preferred voting shares will account for the controlling stake in SPNEC. MGreen, with the agreement of SPH, will use SPNEC as the primary vehicle to develop the 3,500 MW PV solar panels and a 4,000 MWh battery energy storage system in Luzon. Thank you.
Thank you, sir. Before we proceed to the Q&A, I'd like to call on our Chairman and CEO, Mr. Manuel V. Pangilinan, for a few words.
Thank you, and good afternoon to everybody. As contained in our press statement, as it should be around lunchtime today, we're guiding the full year 2023 consolidated core income at PHP 37 billion. That's my new statement, and we're now open to your questions.
Thank you very much, sir.
Thank you.
We will now open the floor for questions to our analysts and investors. For those of you who would like to ask a question, you have two options to do so. First, you may raise your virtual hand, and please wait for me to recognize you before you speak. Secondly, you may also type your questions in the chat box, and I will be reading them for our executives. In both instances, kindly state your name and the company you represent before asking your question. Please also state the name of the executive you would like to ask the question to.
I can see that Jillian Gaza has raised her hand from CT Marubeni. Go ahead, Jillian.
Hello, can you hear me?
Yes, Jillian , go ahead.
Thank you, everyone. I have four questions, actually. The first set of questions is with regard to the generation segment of the company, I guess for Mr. Camu. Number one is on the PacificLight. What drove the higher tariffs or margins as of nine months despite the USEP in place in the Singapore spot market? Can you please comment on the sustainability of earnings going forward into 4Q 2024? That's the first one.
Yeah. This is Ochi Gloria from MGEN. On the PacificLight, the main driver there is really the continued high tariff or non-fuel margin, experienced by the company in the Singapore market. It continues to be high, both from a contracting and from importing margins. Actually, we're doing about $105 per, since this is in dollars now, $105/MWh , of non-fuel margin for the period. For the sustainability, I think that's the second part of the question, sustainability.
How sustainable is it? The earnings.
Oh, how sustainable. Now, moving forward, the way the people in Singapore are reading it, this is basically a high as far as single market is concerned. They are expecting that the market will correct starting next year and will further correct into 2025 and 2026 before it flattens further to about $45/MWh going forward. At least that's how they're seeing it at the moment.
Thank you, sir. Jillian, go ahead with your other questions.
Okay. Thank you for that. How about, with the visibility on the CSP options for the base load, how will this impact your Atimonan growth aspiration?
Sorry, what was the second question? The CSP.
How will the CSP impact the plans as far as Atimonan, sir?
Atimonan.
CSP.
I think on the CSP, there is a power supply plan that has been published, and this was actually published by Meralco and has already been. It is actually in the DOE website now. Looking at the trajectory of the base load, given that Atimonan One Energy is a base load non-renewable, the earliest I believe that the project, subject to obviously a lot of different factors, but if we just base it on the power supply plan.
We are actually looking at the earliest, sometime in 2028, I guess. That is probably the next opportunity for a size as big as the Atimonan plant, which is about 1,200 MW.
Okay, understand. Lastly for Ms. Betty, on the PEDC termination. I understand that the ERC has allowed you around PHP 884 million of recovery. Is this already final, and how will this impact your P&L, and when do you expect changes to be reflected? Thank you.
Hi, Jillian. Yes, the ERC did approve recovery. Although, that amount covers only through September. PEDC will be filing for the remainder of the period. Until we get the final approval, that is when we will recognize the total amount. The ERC would also indicate how the recovery will be in their final decision. As of this moment, we don't have visibility yet on how the recovery will be.
Okay, understand. For my last question, on the 5RP withdrawal, when do you expect to submit the revised application, and what are your expectation on the changes on the inputs, if any? Thank you.
Well, first of all, we need to have the approval first of the termination of, or withdrawal of the 5RP before we can refile the new 5RP application covering a new period. As soon as we are able to get that approval, we are working on the filing of that new application by February 15, latest. That will be in time for the start of the new reset, sometime in July 2024. Of course, we expect some changes in the values, like in the annual revenue requirements, because this will now cover a new set of four regulatory years, and considering the fact also that we will be adding additional CapEx and OpEx as a result of new regulations and requirements. Yeah. Forex. Thank you.
Thank you, sir.
Any other questions from our other analysts? There is a question here from Herman dela Paz for Abacus. Regarding the 3,500 MW project under SPNEC, is this separate from Terra Solar, or will it replace it? Will MGreen subscribe to additional SPNEC shares in the future?
It is the same.
Tied together.
Yeah. Herman, it's the same 3,500 of Terra Solar. To your question on whether MGreen will be subscribing to additional SPNEC shares. Well, there's a structure for the acquisition. It will involve both our primary and secondary shares. But the numbers are yet to be finalized.
I think it might be good to explain to you the current structure of how SPNEC and Terra Solar are related to each other. The contemplation was for Terra Solar to be the operating solar company, because that has the PSA with Meralco. For the moment, Terra Solar is owned 50/50, 50% each by SPNEC and 50% by Prime Infrastructure, which is the Razon Group. Where Meralco is invested, or which invest in, is at the SPNEC level. As you know, there's a shootout that happened between them, the Villar Group and Prime Infrastructure, where one would take the other out of their respective investment of 50% in Terra Solar. Right.
The deadline for the shootout is sometime in January 2024. So we will know on or before that time who will be the remaining shareholder of Terra Solar.
Thank you, sir. Any other questions from our analysts? We have another question from Ferlyn Tan of Tokio Marine Asset Management. May I ask what is driving the quarter-on-quarter growth in share of income from associates?
Hi, Ferlyn. Betty here. The one that's driving the share in income would be PacificLight. As you will see now and as we have discussed, the contribution of PacificLight has been increasing over the- Well, at least in the nine months, and it started last year. For the nine-month period, our share in the PLP income is PHP 7.9 billion. The other part of that would be our share in the income of San Buenaventura, which is PHP 1.5 billion.
Are there any other questions from our analysts and investors? Quick follow-up from Ferlyn again. I think I've missed what you shared earlier, but could you explain why was there a decrease in third quarter 2023 contribution from PacificLight when USEP in 3Q 2023 was lower than that of 2Q 2023?
The down [audio distortion].
That's right. Okay. Now, in the second quarter of 2023, okay, I think it happened in April until June, okay? One unit of PacificLight underwent rehabilitation, okay, to incorporate a mechanism to improve the efficiency of the plant. Okay? That basically attributed, okay, why the second quarter was down compared to 3Q, wherein the two units are fully available.
Thank you, sir. There's another question from Jillian Gaza. She asks, "Can you please discuss the dividend policy at the PacificLight level and how fast the repatriation is to MGEN's benefit?
Okay. Obviously, it is very typical. Whatever is the retained earnings, they basically give it out. Depending on the liquidity, meaning, taking into account working capital and other expenditures they need to allot for, they basically pre-give it out to all the shareholders or the principals of the company. How fast, again, this depends on the availability at that point in time, but they do actually remit it within probably two, three months time.
They can do it[audio distortion].
That is right. Obviously, there is also the condition with regards to the loan repayment. Because, one, they do have a ratio to comply with. Second, under the agreement with the bank, they have to, again, prior to the refinancing of their loan, is that they have to basically voluntarily pay a portion of the loan, and then a portion of the amount has to be given back to the shareholders at that point.
Okay. Thank you, sir. The next question comes from Angeline of Metrobank Trust. She has a couple of questions. What initiatives will the company undertake to continuously achieve growth in 2024? Her second question is, what is the CapEx guidance for 2024?
Could you answer the CapEx guidance for 2024?
The second question was CapEx guidance for 2024.
Well, I think we are doing the budget for 2024. It is probably a bit early to be quite firm about our CapEx numbers for next year. This year, our CapEx, Ronnie, for?
For DU alone, PHP 25 billion. That is for 2024. This year is PHP 21 billion.
Okay, the indicative now for 2024 is PHP 25 billion for the DU alone?
Yes.
This year, we will be spending PHP 21 billion . But to date, we have spent about?
PHP 21.1 billion for total, DU and the towers.
Oh, yeah. How much have we spent to date?
PHP 21.1 billion .
That is the whole year?
To date, sir. Nine months.
Nine months.
Nine months is what? PHP 21 billion ? Will be spending more than PHP 21 billion this year?
We have PHP 25 billion, sir.
Yes, that is the budget for next year, for CapEx for the DU.
For the DU, yes.
14 was my recollection for the DU.
For this year.
That is for the DU alone. There will be further investments we are making, what we have manifested for SPNEC for the solar and a few other renewables projects that Angeline has got, both solar and wind. I guess we can give you firmer numbers when we announce our full year results sometime early next year.
Thank you very much, sir. The next question comes from Eunice Velasquez of SB Equities. Any guidance on volumes for the rest of the year and next year? Also, aside from SPNEC, are you looking into other growth opportunities to further expand your generation business?
Okay. I think I'll take on the volume. Well, Just to recall, in Q1, we grew 2%. Q2, around 4.7%. Q3, we grew in terms of DU sales volume by around 6.3%. For Q4, we're done with October. October is at more than 5%. We're forecasting around in the vicinity of 5% for the whole of Q4, and that will bring us to around 4.7% year-end. That's 50,400 for the DU. Meralco plus CEDC, that'll be around 51,000 GWh . For next year, I think our forecast growth is between 4%-4.5% increase over this year.
Thank you, sir. The second part of your question relates to other growth opportunities apart from SPNEC on the generation side.
Actually, aside from SPNEC, as mentioned right here, there is a slew of projects in the pipeline that involves solar, wind, and other technologies as well. But as of now, we cannot divulge it at this point, because all of these are still under evaluation and for approval.
Thank you, sir. The next question comes from Peter Vernase of First Metro Sec. With MGreen's acquisition of SPNEC, is there any clear plan/discussion to lift SPNEC's suspension before December 2, 2023, as it remains non-compliant with the minimum public ownership rule? Can you share a timeline?
Well, as of now, Meralco, we have not closed on the SPNEC investment agreement. In many ways, we have no personality to influence the lifting of the suspension of SPNEC's shares. But once we do close, and we hope we could do that sometime in December, before year-end, then we would certainly petition PSE for the lifting of the suspension.
Thank you very much, sir. Herman dela Paz of Abacus has another question. In case that Prime Infra would end up to be the sole owner of Terra Solar by January 24, what would be the next step?
That will involve a discussion between ourselves and the Prime Infrastructure Group regarding our investment in Terra Solar itself.
Thank you very much, sir. I can see that Jillian Gaza has raised her hand. Go ahead, Jillian.
Thank you. Thank you, everyone. I just have a question on the dividend expectations. I know that you have a PHP 37 billion income guidance for 2023, and historically, you have been paying out around 70% in the last two years. How should we think about this going forward, given that you have a lineup of acquisition as well as CapEx expectations for the telco business? Thank you.
Well, the indicative numbers for the full year is that Meralco will realize a positive free cash flows for the full year 2023. The question really is, the free cash flows indicate that it is able to sustain its investments, particularly the investments required for the DU and whatever other modest investment might be required. The bigger tickets will come in the form of investments in power plants. In SPNEC, which will have an investment horizon starting 2024, all the way up to the early part of 2026, when the first plants are supposed to be energized under the PSA. I think we are scoping out the numbers in terms of the requirements for both SPNEC within that three or four-year timeframe and other renewable projects that are on the table, right?
There's some wind projects, there's some solar or solar projects that are being considered, either by itself or in partnership with other solar investors. I think we'd be a bit firmer on the numbers in terms of both the CapEx requirements and the investment requirements that will be asked for Meralco in the next three to four years. Mindful of the fact that we do pay a significant amount of our income in dividend terms. We would hope, our aim is to maintain that dividend payment in the coming years.
Thank you.
Any other questions from our analysts? If there will be no further questions, I would like to thank everyone for participating in today's call. Thank you very much again. As we end, I would like to inform everyone that you may listen to an audio recording of today's briefing from our website under the investor relations portion. Thank you very much again for attending, and have a good day. We wish to see you again when we release our full year 2023 results sometime early next year. Thank you very much.
Merry Christmas.
Merry Christmas as well.