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Manila Bulletin devider Business devider Trade & Industry devider ERC reviews Meralco's supply deal with Lopez-run Sta. Rita plant

ERC reviews Meralco's supply deal with Lopez-run Sta. Rita plant

Published Aug 25, 2025 09:39 am
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The Energy Regulatory Commission (ERC) is reviewing the proposed extension of the power deal between Manuel V. Pangilinan-led Manila Electric Co. (Meralco) and Lopez-led First Gas Power Corp. (FGPC) to ensure the contract terms remain fair and reasonable.
As ordered by the Commission last week, Meralco and FGPC are directed to explain how the contract extension would not result in excess capacity and to show how it could affect the generation charge.
“Furthermore, applicants are directed to explain how they intend to utilize or dispatch its existing contracting plants including Sta. Rita,” the ERC stated.
FGPC, a subsidiary of First Gen Corp. (FGen), has sought to extend its power supply agreement (PSA) with Meralco for its 1,000-megawatt (MW) Sta. Rita gas plant, arguing that the deal could be exempt from the competitive selection process (CSP).
The request was submitted to Meralco in April 2023, two years ahead of the contract’s expiration on Aug. 17, 2025.
Meanwhile, the ERC has approved a 15-year PSA between Meralco and Aboitiz-led GNPower Dinginin Co. Ltd. (GNPD) for a 100-MW coal capacity.
According to an ERC decision last week, Meralco and GNPD have been granted a relief to conduct their PSA starting Tuesday, Aug. 26, with a ₱2.3055 per kilowatt-hour (kWh) total base fee.
“Granting this interim relief enables vital power supply agreements to proceed, while we continue to exercise due diligence before issuing a final ruling,” said ERC Chairperson Francis Saturnino Juan.
This interim relief is subject to certain conditions, including that the capital recovery and fixed operations and maintenance (O&M) fees will remain unchanged for the entire duration of the PSA and will not be adjusted for inflation or any other index.
“GNPD shall have the obligation to provide replacement power at all times, even during the planned or forced outage of the plant, in accordance with Section 15 of the CSP guidelines,” the ERC stated.
Both parties are required to ensure that the contract capacity remains fixed, with any increase subject to prior regulatory approval to ensure Meralco supplies the least-cost electricity to its end-users. GNPD, meanwhile, is mandated to procure fuel in accordance with ERC procurement guidelines and to submit a monthly report to Meralco detailing its fuel blend consumption.
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