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Manila Bulletin devider Business devider Trade & Industry devider ERC extends Meralco-First Gas deal until mid-2026

ERC extends Meralco-First Gas deal until mid-2026

Published Feb 2, 2026 01:50 pm
The Energy Regulatory Commission (ERC) has authorized the second interim extension for the power supply agreement between Manila Electric Co. (Meralco) and First Gas Power Corp., ensuring continued operations at the 1,000-megawatt Sta. Rita natural gas plant until June 2026.
The extension allows Meralco, the country’s largest power distributor, to continue drawing baseload capacity from the Batangas-based facility as the Luzon grid prepares for the seasonal spike in electricity demand during the summer months.
The regulator’s decision, released Monday, Feb. 2, averted a potential supply gap following the expiration of a previous interim deal last week.
Under the terms of the agreement, Meralco's costs for payments to FGPC during this period will be treated as pass-through charges to consumers.
The ERC noted that the Sta. Rita plant’s ability to operate at full capacity provides critical buffer for the grid, helping to stabilize market prices and mitigate the risk of yellow or red alerts, which signal thin reserves or imminent rolling blackouts.
The commission noted the plant’s role in maintaining grid reliability, particularly its flexibility in adjusting output to meet fluctuating demand. This stability is viewed as essential for the Luzon region, where Meralco services more than 8 million customers across 39 cities and 72 municipalities, including the capital, Manila.
Meralco has earlier signaled that it expects energy sales to trend higher this year as its customer base expands.
The Sta. Rita facility is a cornerstone of the country's energy infrastructure, utilizing natural gas sourced from the Malampaya field.
The ERC emphasized the interdependency of these assets, noting that a cessation of operations at Sta. Rita could trigger a broader shutdown of the Malampaya gas facility and the associated liquefied natural gas terminal.
The approval follows a shift in the ownership landscape of the nation’s energy assets. Following a 2025 transaction, First Gen Corp. sold a 60 percent stake in its natural gas business to Prime Infrastructure Capital Inc., the investment firm led by billionaire Enrique Razon Jr.
The deal placed FGPC under the umbrella of Prime Infra as part of a broader consolidation of natural gas interests in the Philippines.
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