PSE Circular for Brokers No. 1871-98

August 11, 1998 PSE CIRCULAR FOR BROKERS NO. 1871-98 1. Date of this Report: August 11, 1998 2. SEC Identification Number: PW-102 3. BIR Tax Identification Code: 350-000-101-528 4. Name of Registrant as specified in its Charter: Manila Electric Company 5. Country of Incorporation: Philippines 6. Industry Classification: (SEC use only) 7. Address: Lopez Building, Ortigas Avenue, Pasig City 8. Telephone Numbers: 631-5571 and 631-5572 9. Former name or former address: Not applicable 10. Securities registered pursuant to Sections 4 and 8 of RSA: Number of Shares of Title of Each Class Common Stock Outstanding Class "A" 502,297,435 Class "B" 334,864,956 Total 837,162,391 ========= 11. Item Number reported: 9 (AUGUST 11, 1998 PRESS RELEASE ON NAPOCOR's ONE-DAY POWER SALES) MERALCO CLARIFIES NEWS ITEMS ON NAPOCOR's ONE-DAY POWER SALES MERALCO wishes to clarify the mis-impressions created by certain news articles which appeared in several newspapers on August 6, 1998 regarding the interest of "15 big customers" of MERALCO wanting to participate in NAPOCOR's One-Day Power Sales (ODPS). The provisional authority of the ERB dated 10 June 1998 (ERB Case No. 97-13) covering the ODPS states among others that "the ODPS will also be made available to customers of distribution utilities who are self-generating thru the electric distributors". The so-called 15 big customers are self-generators some of which are located outside the MERALCO franchise area and are, therefore, not part of MERALCO's customer base. The participation of these self-generating enterprises will not at all affect MERALCO's sales. The ODPS will, in fact, generate additional revenues for MERALCO through wheeling fees charged for the use of the company's distribution facilities in delivering the power purchases by these self-generators, if it is legally allowed. The intent of the ODPS is to dispose of "excess" capacity of NPC which is defined as the capacity beyond the required 32.8% reserve margin as per ERB Case No. 96-111 (Open Access Transmission Service). It is therefore critical that NPC is able to fully substantiate the maintenance of the required reserve margin. Otherwise, the system integrity of the grid is jeopardized to the detriment of the existing customers who share in the cost of maintaining the said reserve capacity. This is also tantamount to double selling of capacity. SIGNATURES Pursuant to the requirements of the Revised Securities Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MANILA ELECTRIC COMPANY Registrant (SGD.) ATILANO S. GUEVARRA, JR. Assistant Corporate Secretary