THE Energy Regulatory Commission (ERC) has authorized Manila Electric Co. (Meralco) to proceed sourcing power from the 1,200-megawatt (MW) Sta. Rita gas-fired power plant in Batangas for one more six months, with projected consumer savings of P4.2 billion from the usage of Malampaya gas and other rate-reduction measures.
Jose Ronald V. Valles, Meralco senior vice-president and head of regulatory management, said the ERC had granted a 3rd interim extension of the utility’s power purchase agreement with First Gas Power Corp. (FGPC), operator of the Sta. Rita plant.
“There’s a directive on the a part of the Department of Energy (DoE) for us to increase the Sta. Rita and to barter for the very best terms. And that’s what we now have done,” Mr. Valles said at a briefing on Wednesday.
“The speed that we’re charging today because of this of that negotiation and extension is what the ERC has approved,” he added.
The Sta. Rita plant is 60%-owned by Razon-led Prime Infrastructure Capital, Inc. The DoE has described it as “amongst essentially the most critically needed generation assets within the Luzon grid.”
In a 10-page order promulgated on June 24, the ERC authorized Meralco and FGPC to implement their agreement until Dec. 25, 2026, under “mutually agreed terms as are usually not less favorable to the general public interest,” as required by the DoE.
The businesses agreed on measures to scale back rates under the contract. These include FGPC assuming the total financial risk from any peso depreciation beyond P62 against the US dollar, shouldering line-rental costs above P0.15 per kilowatt-hour (kWh) as much as P25 million per billing period, and providing a monthly P50-million discount on nonfuel charges.
As a condition of the extension, FGPC can also be required to share its Malampaya gas allocation with the Ilijan power plant starting Sept. 1, 2026, to scale back fuel costs under Meralco’s existing power supply agreement with South Premiere Power Corp., a subsidiary of San Miguel Global Power Holdings Corp.
The provision of Malampaya gas to the Ilijan plant is anticipated to generate P3.8 billion in fuel savings.
Including the opposite rate-reduction measures, estimated savings are expected to succeed in P4.2 billion from September to December 2026, akin to a median reduction of P0.36 per kWh for Meralco customers.
Prime Infra said the usage of Malampaya gas at one in every of the country’s largest power-generation facilities would support reliable electricity generation, provide fuel-supply flexibility through the contract period, and contribute to a more resilient and diversified energy mix.
Prime Energy Resources Development B.V., a subsidiary of Prime Infra, operates the Malampaya deepwater gas-to-power project, which supplies a few fourth of Luzon’s electricity requirements.
“This demonstrates that indigenous Malampaya gas will help lower electricity costs for consumers while delivering reliable energy supply,” Prime Energy President and Chief Executive Officer Donnabel Kuizon Cruz said. — Sheldeen Joy Talavera