LOPEZ-LED First Gen Corp. is seeking to extend its power purchase agreement (PPA) with Manila Electric Co. (Meralco) to continue supplying electricity from the 1,100-megawatt (MW) Sta. Rita gas plant in Batangas for up to 15 years.
First Gen President and Chief Operating Officer Francis Giles B. Puno said the contract for the Sta. Rita gas plant is due to expire by the end of the month.
“My view is that it should be extended, principally because we need to make sure that there is energy security,” Mr. Puno told reporters last week.
First Gas Power Corp. (FGPC), a subsidiary of First Gas Holdings Corp., started full commercial operations of the plant on Aug. 17, 2000. The gas plant generates electricity for Meralco under a 25-year PPA.
Adjacent to the Sta. Rita plant is the 420-MW San Gabriel natural gas-fired power plant operated by First NatGas Power Corp. (FNPC). Its power supply agreement with Meralco for the facility expired last year and it is now operating on a merchant basis.
As the San Gabriel plant sells power to the spot market, it only earns well during high-demand periods.
“If there’s no demand, [San Gabriel plant] won’t operate. But when there is demand, at least the price is higher, so it can save up for the times when it is not running,” Mr. Puno said.
If the contract for the Sta. Rita plant is not extended, he warned the company might need to consider ways to reduce operational costs, including “potentially temporary mothballing or shutting down the facility for a prolonged period.”
“Can the grid live without 1,100 MW of reliable, efficient gas-fired capacity in the future? My position is it cannot,” he said.
In its latest notice, the Energy Regulatory Commission (ERC) said it responded to the letters sent by the Lopez-led firm requesting confirmation of the term extension of its PPA with Meralco.
The ERC advised the company to follow the proper procedure when requesting an extension of the PPA, subject to comments and further deliberations by the members of the Commission.
“We cannot approve nor deny because that was only a letter. There should be a proper process,” said ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta.
In the renewable energy sector, First Gen’s subsidiary, Energy Development Corp. (EDC), plans to pursue around 70 MW of initial capacity for its Amacan geothermal development in Mindanao.
“Hopefully, by next year, we would be able to say we can develop a facility in Amacan, Mindanao,” said EDC President and Chief Operating Officer Jerome H. Cainglet.
Mr. Cainglet said the company hopes to expand capacity to up to 120 MW.
“If we are able to confirm by next year that it’s commercially feasible, then another two to three years to construct the 70-MW [capacity],” he said.
EDC has an installed capacity of 1,480.19 MW, representing around 20% of the country’s total installed renewable energy capacity. — Sheldeen Joy Talavera
