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Manila Bulletin devider Business devider Trade & Industry devider Meralco inks deal extension to trim electricity costs by ₱5 billion

Meralco inks deal extension to trim electricity costs by ₱5 billion

Published Jul 30, 2026 02:31 pm
Manila Electric Co. (Meralco) customers are set to save nearly ₱5 billion through the end of the year after the country’s largest power distributor secured lower rates under an extended supply contract with the First Gas Sta. Rita plant.
Jose Ronald Valles, Meralco head of regulatory affairs, said the six-month extension, running from July through December 2026, is expected to yield approximately ₱4.25 billion in consumer savings.
The savings package includes ₱300 million in non-fuel discounts, ₱150 million from capped line rental fees, and about ₱3.8 billion in reduced fuel costs linked to Malampaya natural gas supplied to the Ilijan plant.
Under the terms negotiated with First Gas Power Corp. — a joint venture between Enrique Razon’s Prime Infrastructure Capital Inc. and the Lopez family’s First Gen Corp. — Meralco secured a ₱50 million monthly discount on fixed plant charges and capped line rental costs at ₱25 million per billing period.
Consumers will cover any line fees exceeding that cap, but First Gas will absorb any full financial impact from exchange rate shifts on non-fuel charges beyond the agreed threshold, Valles said.
The agreement follows the Department of Energy (DOE) directive instructing the power distributor to extend its procurement from the natural gas-fired facility to mitigate grid constraints.
The Energy Regulatory Commission has approved the temporary rates under the extended pact, which was originally scheduled to expire on June 25.
Starting Sept. 1, Malampaya gas deliveries to the Ilijan plant are projected to lower fuel rates by about ₱0.36 per kilowatt-hour through Feb. 25, 2027, according to operator Prime Energy.
The cost reductions arrive as the broader power sector faces pressure to stabilize electricity prices following President Ferdinand Marcos Jr.’s call during his State of the Nation Address to amend the Electric Power Industry Reform Act (EPIRA) and eliminate system loss charges.

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MERALCO gas field Prime Energy Resources Development Malampaya
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