Lopez-led First Gen Corp. (FGen) is asserting that the extension of its power purchase agreement (PPA) with Manila Electric Co. (Meralco) for the 1,100-megawatt Santa Rita power plant is valid and essential for energy security.

While the proposal still awaits approval from the Energy Regulatory Commission (ERC), FGen President Francis Giles Puno emphasized the importance of extending the contract, which includes three five-year extension provisions.

“Together with Meralco, we’ve already been to the DOE [Department of Energy] and explained that our existing agreement has extension provisions—three five-year provisions,” Puno told reporters.

To recall, the Lopez-led firm submitted its extension request to Meralco in April 2023, more than two years ahead of the contract’s expiration on Aug. 17, 2025, and has since sought the ERC’s approval.

According to FGen, the power supply deal’s extension may not require a Competitive Selection Process (CSP), which is an auction for supply agreements.

“The extension provision is valid. The ERC concurs with that,” Puno said. “The question is, will we be extended or not? My view is that it should be. Primarily because we need to make sure there is energy security. Otherwise, when another plant goes down, how can I assure that Santa Rita can just run automatically on a merchant basis?”

He added that it must make sense for the developer to generate a reasonable profit from the plant’s operation.

Last week, the ERC released a decision stating that First Gas Power Cor. (FGCP), FGen’s subsidiary, and Meralco must “pursue the appropriate remedy/follow the proper procedure when requesting for an extension of a PPA.”

In a previous press conference, former ERC Chairperson Monalisa Dimalanta clarified that a proper filing from both parties is required. “First Gen wrote to us, but we explained that since the letter involves something pertaining to a case, they should file the proper process. We cannot approve nor deny because it was just a letter,” she said.