First Gen seeks longer deal for 1,000-MW gas plant
LOPEZ-LED First Gen Corp. is in talks for a further extension of the power purchase agreement (PPA) for its 1,000-megawatt (MW) Sta. Rita gas-fired power plant in Batangas, even after the Energy Regulatory Commission (ERC) approved its renewal until Jan. 31, 2026.
“While [the PPA] for Sta. Rita was already extended, we’re hoping that will also be extended beyond, and that’s currently in negotiation,” First Gen President and Chief Operating Officer Francis Giles B. Puno told reporters on Sept. 18.
In an order dated Aug. 27, the ERC approved the request of First Gas Power Corp. (FGPC), a subsidiary of First Gen, and Manila Electric Co. (Meralco), to extend its PPA until early 2026.
The Sta. Rita plant, which began full commercial operations on Aug. 17, 2000, supplies electricity to Meralco under a 25-year agreement that was originally set to expire at the end of August.
First Gen owns and operates four gas-fired power plants in Batangas with a combined capacity of 2,017 MW.
In its ruling, the ERC said the extension was warranted despite possible effects on Meralco’s generation charge, citing “equally compelling and urgent reasons” such as the rate impact if the Sta. Rita plant were to operate as a merchant facility.
Mr. Puno said long-term gas supply contracts for imported liquefied natural gas (LNG) are needed to ensure cost efficiency compared with short-term arrangements.
“The cheapest is for us to work with government on how we can contract gas supply long-term,” he said.
Meralco earlier estimated an increase of P0.32 per kilowatt-hour in its September generation charge following the ERC’s approval of its extended PPA with FGPC.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera
