Manila Electric Co (Meralco) signed a 20-year Power Supply Agreement (PSA) with Terra Solar Philippines for the supply of 850 megawatts (MW) of renewable energy to cover the power distributor’s mid-merit requirement starting 2026.
The PSA provides that a total of 600 MW of power supply will be available by Feb 26, 2026, while additional 250 MW will be delivered starting Feb 26, 2027 at a headline and levelized cost of electricity (LCOE) rate of P5.80 per kilowatt-hour, which was based on assumptions at the time when the competitive challenge for the unsolicited proposal was launched.
“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 the availability of adequate and cost-competitive power for our more than 7.5 million customers in the coming years,” said lawyer Jose Ronald V. Valles, Meralco FVP and head of regulatory management.
“In addition, this PSA forms part of our compliance to the Department of Energy’s (DOE) Renewable Portfolio Standards policy and at the same time cements our commitment to source up to 1,500 MW of our power requirements from renewable energy,” he concluded.
The PSA, which was based on the Terms of Reference earlier approved by the DOE, will be filed with the Energy Regulatory Commission and will be subject to regulatory proceedings and approval prior to implementation.
The signing of the PSA serves as the culmination of the competitive challenge for Terra Solar’s unsolicited proposal.
To recall, the Meralco Third Party Bids and Awards Committee (TPBAC) earlier this year administered two rounds of Competitive Selection Process (CSP) for the offer, both of which failed due to lack of challengers.
Since there were no outstanding disputes, the TPBAC advised Meralco that it may already enter into direct negotiation for the contract capacity requirement, pursuant to the Revised CSP Rules.