First Gen Corp. is seeking a further extension of its power supply agreement (PSA) with Manila Electric Co. (Meralco) for the 1,000-megawatt (MW) Santa Rita power plant in Batangas.
First Gen president Francis Giles Puno said negotiations are ongoing with Meralco and other stakeholders.
“The Sta. Rita PSA was extended up to January, but we’re hoping that will also be extended beyond. But that’s a working progress,” Puno said.
The Energy Regulatory Commission (ERC) earlier approved an interim extension of the PSA between Meralco and First Gas Power Corp. until Jan. 31, 2026, subject to certain conditions, to prevent potential power supply outages. The existing PSA expired on Aug. 28, 2025.
The regulator said that without the interim extension, First Gas would likely be forced to shut down the Santa Rita plant.
“Such a scenario could lead to widespread blackouts, with repercussions extending beyond potential increases in Meralco’s generation charge,” the ERC said.
“Ultimately, the resultant blackouts could severely impact the national economy,” it said.
The ERC noted the interim extension may cause an increase in Meralco’s blended generation charges during the period. Based on simulations, Meralco’s blended generation rates would increase by P0.4117 per kilowatt-hour (kWh) in September, P0.5235 per kWh in October and P0.5093 per kWh in November.
The commission also highlighted a greater risk: “Should this occur, the rate consequences would be significantly more severe than the estimated increase in the generation charges calculated by Meralco for the affected months,” it said.
This refers to the possibility that the Santa Rita plant, along with other Malampaya-supplied natural gas plants, may become technically unavailable, severely impacting the grid.
Market simulations showed spot market prices would rise as high as P6.23 per kWh if the Santa Rita plant operated as a merchant plant, compared with P3.08 per kWh with the PSA in place.
