Lopez-owned First Gen Corporation is pushing for a 15-year extension of its power purchase agreement (PPA) with Manila Electric Company (Meralco) for the 1,000-megawatt Santa Rita natural gas plant in Batangas, with the contract set to expire this month.

The facility, run by subsidiary First Gas Power Corporation, has been supplying stable baseload capacity to Luzon since 2000. Under its original 25-year deal, Meralco buys a minimum volume of power from the plant, which sources fuel mainly from the Malampaya gas field.

During a media interview at the 3rd Renewable Energy Conference on August 8 at City of Dreams Manila, First Gen President and COO Francis Giles B. Puno warned that without a contract extension for the Santa Rita Power Plant, the company may explore cost-cutting measures, such as “temporarily mothballing or shutting down the facility for an extended period.”  He added keeping the plant operational is crucial to ensuring stable power supply in the country.

The expiration of the power supply deal for the Santa Rita plant follows the earlier expiration of the San Gabriel plant’s contract with Meralco last year. The 420 MW San Gabriel facility, operated by First NatGas Power Corporation, now sells its output in the spot market. 

Puno warned that without renewal, Santa Rita could operate as a merchant plant, similar to the company’s San Gabriel facility, which now faces earnings volatility from spot market price swings and WESM price caps.

First Gen formally sought the extension from Meralco in April 2023, more than two years before expiry. The request invokes contract provisions allowing three 5-year renewals or a full 15-year extension, terms previously cleared by regulators.

The company also wrote to the Energy Regulatory Commission (ERC) on May 22 and July 1, 2025, asking for confirmation that the renewal is valid and exempt from the Competitive Selection Process (CSP) normally required for new supply deals. 

The ERC has told First Gas and Meralco to follow proper procedures, saying it cannot approve or reject the request based solely on letters. Former ERC Chairperson Monalisa Dimalanta reiterated that a formal process is required before any ruling can be made.

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