2010 Annual Report - Aboitiz Equity Ventures

In general terms,however, all thedistribution utilitiesregistered highgrowth, althoughthe EnerZones atSubic, Mactan andBalamban postedsomewhat higherfigures, indicatingthe resurgence of theexport sector.power distributionBENEFICIAL 2008 2009 2010% change('10 vs '09)Revenues (mn pesos) 15,685 17,812 21,767 22%EBITDA (mn pesos) 2,629 2,625 3,112 19%Income contribution (mn pesos) 1,479 1,569 1,933 23%Power sales (GWh) 3,142 3,322 3,606 9%Power sales by customer (GWh)Residential 877 935 988 6%Commercial and industrial 2,265 2,387 2,618 10%Customers (thousands) 637 658 685 4%Your company’s distribution business ended the year 2010 with 27,000 more customers thanthe year before, an increase of 4%. Power demand, on a group basis, reached a peak of 910MW for the year versus 857 MW in 2009, while power sales for the year were 3,606 GWh asagainst the 3,322 GWh of the prior year. Revenues, EBITDA and income contribution increasedby 22%, 19% and 23%, respectively in 2010.Distribution power sales is a reliable indicator of domestic economic health and, if anything,the robust sales growth we saw in 2010 shows that the economy really is on the rebound.The 8.6% growth would in fact have been 9.5% had it not been for the combined 30 GWh(40 GWh if actual, not beneficial) lost by Visayan Electric Company (VECO), Davao Light andCotabato Light due to power generation shortfalls in Visayas and Mindanao. In general terms,however, all the distribution utilities (DUs) registered high growth, although the EnerZonesat Subic, Mactan and Balamban posted somewhat higher figures, indicating the resurgenceof the export sector.Beneficial power sales and peak demand20072,7903,3223,1427757373,606857910Focus on innovationYour company’s DUs have always had a reputation for findinginnovative ways of handling some aspects of the business.One outstanding example of this is our Interruptible LoadProgram (ILP), which is in place and approved by theregulator at VECO and Davao Light. It is turning out to bea major factor in reducing the negative effects of supplydeficits; a win-win approach that benefits the consumer bytapping the spirit of volunteerism among the local businesscommunity while compensating them almost entirely forrunning their own generators. In areas without a WholesaleElectricity Spot Market (WESM), the ILP replicates theWESM. It is a program that the regulator would like to seereplicated in other areas throughout the country.200820092010VECO completed a 36-kilometer 138-kV interconnectionwith the CEDC plant, thereby reducing the cost of the powersourced from there for VECO customers.Power sales (GWh)Peak demand (MW)VECO and neighboring Cebu Electric Cooperative Iformed a consortium in 2010 to purchase an 82-km 69kvsubtransmission line traversing their franchise areas.14Aboitiz Power Corporation