THE Energy Regulatory Commission (ERC) has given final approval to the power supply agreement between First NatGas Power Corp. and Manila Electric Co. (Meralco).
Lopez-led First Gen Corp. said in a press release on Monday that the decision is for the joint application for final authority to supply Meralco’s energy requirement, which was filed in March 2018.
The company said that along with the approval, the ERC also affirmed the applicable rates under the provisional authority granted in its June 2018 order, subject to modifications and conditions.
In the application filed by both parties, it was said that the power supply agreement aims to ensure continuous and reliable electricity for Meralco’s customers.
The target commercial sale date was on Jan. 26, 2018 and the target end of the contract is on Feb. 23, 2024 as may be extended.
The offered price was P3.7742 per kilowatt-hour with a two-part tariff structure consisting of fixed and variable costs.
The contract has an approximately 414-megawatt (MW) capacity, with natural gas as the power generation source.
As stated in the application, if the ERC final approval “is issued but not in a form and substance satisfactory to the seller,” any time within 12 months from the date the ERC application is filed, the seller may immediately terminate the agreement.
The application also stated that the seller must give a commercial sale date notice within 10 business days after the receipt of ERC’s final approval.
First Gen said that its subsidiary First NatGas is evaluating the ERC decision.
First NatGas is the owner of the 414-MW San Gabriel combined-cycle natural gas-fired power plant in Santa Rita, Batangas.
First Gen is a subsidiary of First Philippine Holdings Corp. and is the Lopez group‘s power generation arm. It primarily uses clean and indigenous fuels such as natural gas, geothermal energy from steam, hydroelectric, wind, and solar power.
The company earlier said that it has 3,495 MW of installed capacity in its portfolio, which accounts for 19% of the country’s gross generation.
Its shares ended higher on Monday by 4.45% or 70 centavos to P16.42 apiece. — Justine Irish DP. Tabile