Lopez-led First Gen Corp. said its unit had entered into a power supply contract with distribution utility Manila Electric Co. (Meralco) for the sale and purchase of around 414-megawatts (MW) of baseload capacity.
First Gen told the stock exchange that with the power supply agreement (PSA), Meralco had secured “competitively priced” baseload electricity, or steady 24/7 power.
The power will be sourced from the listed generation company’s wholly owned subsidiary First NatGas Power Corp.’s “already constructed and currently operational” San Gabriel combined cycle natural gas-fired power plant within the First Gen Clean Energy Complex in Batangas City.
The term of the PSA is six years using gas from the Malampaya field, but, in the event that liquefied natural gas (LNG) becomes available, the term of the PSA could be extended upon mutual agreement with Meralco, First Gen said.
“The San Gabriel PSA offers a number of benefits that will enhance the quality of Meralco’s power generation portfolio by providing: (i) competitive dependable baseload capacity; (ii) an immediate source of replacement power during outages of other baseload plants; and (iii) the option for mid-merit supply matched with Meralco’s ramping requirement since San Gabriel has the ability to rapidly ramp up and down upon notice,” it said.
Under the terms of the PSA, power from San Gabriel is available for purchase by Meralco immediately.
However, the sale of electricity to the utility will only started upon its approval by the Energy Regulatory Commission. The PSA is set to expire on Feb. 23, 2024, unless extended by the parties.
Shares in First Gen were trading higher by 6.35% at P17.74 each, while those of Meralco were up 0.86% to P330 each at around noon on Monday. — Victor V. Saulon