MANILA ELECTRIC CO. (Meralco) has asked the Energy Regulatory Commission (ERC) to approve a 20-year power supply agreement (PSA) with First Quezon Biogas Corp. (FQBC), which is projected to deliver P15.2 million in consumer savings, reports Business World.
The PSA covers 1.25 megawatts (MW) of baseload supply from FQBC’s 1.429-MW biogas plant in Candelaria, Quezon. The facility converts agricultural waste into electricity using advanced anaerobic digestion technology.
In their joint filing, Meralco and FQBC said the process not only generates clean power but also provides a sustainable way to dispose of farm waste and manure, cutting greenhouse gas emissions and supporting the Philippines’ climate goals.
The companies signed the long-term PSA on July 15, following FQBC’s unsolicited proposal to Meralco in March. Under a 2023 circular from the Department of Energy and ERC, distribution utilities are allowed to secure renewable energy supply below 10 MW without going through a competitive selection process.
The deal, they said, will help Meralco comply with Renewable Portfolio Standards (RPS) requirements, which mandate distribution utilities to source part of their supply from renewable energy.
The delivered rate under the PSA will be P6.50 per kilowatt-hour (kWh), excluding VAT. This is lower than the P7.8890 per kWh cost of sourcing equivalent capacity from the Wholesale Electricity Spot Market. By comparison, Meralco said the agreement would lower its average blended generation rate by P0.0004 per kWh, resulting in P15.2 million in savings for consumers.
The agreement forms part of Meralco’s long-term supply procurement plan for 2026–2046, which covers over 2,100 MW of capacity.
Meralco, the country’s largest private distribution utility, serves more than eight million customers in Metro Manila and nearby provinces. Its majority owner, Beacon Electric Asset Holdings Inc., is partly owned by PLDT Inc.
