Meralco sees electricity demand to pick up in H2

Weather Spikes Demand Pressure on Power Utilities

Surging electricity sales driven by the El Nino weather phenomenon put immediate operational pressure on grid reliability and supply dispatch. For Manila Electric Co., turning higher demand forecasts into steady operational gains in the second half of 2026 requires securing sufficient generation capacity and keeping distribution networks running smoothly through peak heat loads.

The execution risk shifts directly to power procurement and reserve margins. Extreme weather spikes frequently force utilities to rely on expensive short-term spot purchases if underlying supply contracts fall short, threatening pass-through cost friction or margin compression. Success depends on how efficiently generation sources perform under sustained climate stress without triggering widespread forced outages.

For investment committees, the core implication is to look beyond volume growth and assess whether utility operators have structured their power purchase agreements tightly enough to capture weather-driven demand without taking on unhedged market exposure.