Utility giant Manila Electric Company (Meralco) will be in for a dramatic rebound with forecast income of P13 billion to P15 billion this year, a prospective financial feat that will re-position it again as the power industry’s ‘crown jewel’.

In a talk with reporters, Meralco board director Alan T. Ortiz, who represents equity holder San Miguel Corporation (SMC), bared that the projected income was presented during the company’s last board meeting.

“Meralco is poised to be again the ‘crown jewel’ of the energy industry. That’s our message,” he emphasized.

The income climb from P3.13 billion last year was premised primarily on additional revenue stream due to regulatory approval on the utility firm’s tariff as based on performance-based regulation (PBR); plus efficiency gains and the probability of wiping out some previous provisioning for probable losses.

“It (net income) will be a quantum leap from 2008. From where we see it, it was reported last year that Meralco’s net income was P3.14 billion. But this year, it will be somewhere between P13 billion to P15 billion,” Ortiz said.

He qualified though that the income projection shall be appreciated on the basis that this is coming from a buildup of revenues that have not been realized in the past three years because of the delay in the PBR approval by the Energy Regulatory Commission.

“Obviously the rate increase has been pending for three years, so the income that will be reported by yearend will be an accretion or accumulation of the last three years. It may look very large, but really, it should be divided by three years,” he stressed.

He added the income forecast has been thoroughly discussed as this may trigger some misinterpretations, “so we have to explain it, that it looks large, but it’s not that very large if you would divide it by three years. It stabilizes our finances, so it’s like P5 billion for every year of delay.”

After this prospective income leap, he noted that a plateau may be experienced in 2009 because the PBR impact will then be seen solely on revenue stream impact for one year.

The jump in Meralco’s earnings, he said “will translate to more efficient services and down the road, it will redound to lower rates. It will also wipe out our provision for debts.”

Simply, Ortiz said the income improvement will underpin the company’s cash needs for capital expenditures (capex), hence, helping propel into implementation the various synergies being explored by the new interest holders in the company – namely, the Lopez group, SMC and the Philippine Long Distance Telephone Co. of businessman Manuel V. Pangilinan.

As far as lowering of electricity rates is concerned, the utility firm sees big boost from the twin bills being pursued by Senate President Juan Ponce Enrile.

The measure promises to trim down power rates for big users by as much as P2.00 per kilowatt hour; while residential and commercial customers will also get their share of benefits of pared down electricity bills.