LOPEZ-LED First NatGas Power Corp. has clinched a six-year contract to provide power supply to Manila Electric Co. (Meralco).
First Gen Corp. told the stock exchange on Monday that its subsidiary First NatGas had entered into a power supply agreement (PSA) with Meralco for the sale and purchase of about 414 megawatts (MW) of baseload capacity at P3.77 per kilowatt hour (kWh).
With the PSA, Meralco secures competitively priced baseload electricity, since San Gabriel’s all-in tariff at an 80 percent capacity factor is P3.77 per kWh, First Gen said.
Electricity will come from First NatGas’ 414-MW San Gabriel combined natural gas-fired power plant located within the First Gen Clean Energy Complex in Batangas City. The plant is a combined-cycle power generating facility fired on natural gas.
The deal, which expires on February 23, 2024, will be using gas from the Malampaya gas field in offshore Palawan, but, in the event that liquefied natural gas (LNG) becomes available, the agreement could be extended.
Meralco can already tap the electricity from the San Gabriel plant but the sale can only begin once the approval of the Energy Regulatory Commission (ERC) is secured.
Meralco in December had posted a price challenge invitation for First NatGas’ unsolicited proposal. In January, Solar Philippines submitted an offer to supply power to Meralco at P2.99 per kWh, proposing to use solar energy and battery storage.
However, under the terms of its competitive selection process (CSP), no other company qualified to challenge First NatGas’ proposal because of the CSP requirement that “the fuel for the generation of the Price Challenger must be the same as the Original Power Supplier, which is natural gas.”