Meralco seeks ERC nod for 20-year biogas supply deal
By Sheldeen Joy Talavera, Reporter
MANILA ELECTRIC CO. (Meralco) is seeking Energy Regulatory Commission (ERC) approval for a 20-year renewable energy (RE) supply deal with First Quezon Biogas Corp. (FQBC), which is expected to generate P15.2 million in consumer savings.
In a joint filing, the companies sought ERC approval for their power supply agreement (PSA) covering 1.25 megawatts (MW) of baseload supply from FQBC’s biogas plant.
In March, FQBC submitted an unsolicited proposal to Meralco for a long-term PSA, which was signed on July 15.
Citing a circular issued by the Department of Energy and the ERC in 2023, the companies said that a competitive selection process is not required as a distribution utility (DU) may procure RE supply below 10 MW.
The power distributor will source from FQBC’s 1.429-MW biogas plant in Candelaria, Quezon, a facility that converts locally sourced agricultural waste into electricity.
The plant will utilize “advanced anaerobic digestion technology to convert agricultural waste into clean, renewable energy,” the joint application said.
“This process not only generates electricity, but also yields significant environmental benefits by providing a sustainable disposal solution to agricultural waste and manure, thereby reducing greenhouse gas emissions and supporting the Philippines climate change mitigation goals,” they said.
The companies said the RE deal will help Meralco comply with its obligations under the Renewable Portfolio Standards (RPS), which require DUs to source a portion of their energy supply from eligible RE sources.
“This allows Meralco to meet its RPS obligations while taking advantage of an indigenous RE waste-to-energy facility offering baseload supply embedded in its franchise area,” the companies said.
They said the delivered rate would be P6.5 per kilowatt-hour (kWh), excluding value-added tax, citing a rate impact analysis.
This is lower by about P1.3890 per kWh than the effective cost of P7.8890 per kWh if the equivalent capacity under the PSA were to be sourced from the Wholesale Electricity Spot Market, the trading floor of electricity.
“In fact, by sourcing the capacity through the Meralco-FQBC PSA, Meralco’s average blended generation rate will be reduced by about P0.0004 per kWh… resulting in savings to consumers of about P15.2 million,” they said.
The RE deal forms part of Meralco’s long-term supply procurement plan covering 2026 to 2046, with a capacity totaling over 2,100 MW.
As the country’s largest private DU, Meralco serves over eight million customers across Metro Manila and nearby areas.
Meralco’s majority owner, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.
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