The Manila Electric Company (MERALCO) has signed a 20-year power supply agreement (PSA) with Terra Solar Philippines for 850 megawatts (MW) of renewable energy supply to cover the distributor’s mid-merit requirement beginning 2026.
Under the PSA, 600 MW will be available by February 26, 2026, while the remaining 250 MW will be delivered by 2027 at a headline and levelized cost of electricity (LCOE rate of Php5.80 per kilowatt-hour (kWh).
“The rate for this renewable energy supply offer is very competitive and lower than fossil-powered generation plants, especially at this time when fuel prices are skyrocketing. This PSA between Meralco and Terra Solar is very strategic as we ensure availability of adequate and cost-competitive power for our more than 7.5 million customers in the coming years,” MERALCO first vice president and head of regulatory management Atty. Jose Ronald Valles said in a statement.
The PSA will be filed with the Energy Regulatory Commission and will be subject to regulatory proceedings and approval prior to its implementation.
“This PSA cements our commitment to source up to 1,500 MW of our power requirements from renewable energy,” Valles said.
It can be recalled that the first two rounds of the competitive selection process (CSP) of the 850 MW both failed. Since then, MERALCO and Terra Solar have entered into direct negotiations on the RE supply.
MERALCO said that its PSA forms part of the company’s compliance with the Department of Energy’s Renewable Portfolio Standards policy.
Terra Solar is a joint venture between Leandro Leviste’s Solar Philippines and Enrique Razon’s Prime Infrastructure Capital, Inc.