Prime Energy will begin supplying indigenous Malampaya natural gas to the 1,200-megawatt Ilijan Power Plant in September, a move expected to lower electricity costs by reducing the plant’s dependence on more expensive imported fuel.
Under an Interim Natural Gas Supply Arrangement with South Premiere Power Corp. (SPPC), Malampaya gas will power the Batangas facility from Sept. 1, 2026 to Feb. 25, 2027, expanding the use of locally produced fuel across the Luzon grid while helping moderate electricity prices.
The shift to indigenous gas is expected to reduce fuel costs by an average of P0.36 per kilowatt-hour, with the savings passed on to consumers through lower power bills.
Meralco earlier said its generation charge will decline by about P0.36 per kWh beginning Sept. 1, highlighting the immediate impact of replacing imported fuel with Malampaya gas.
Beyond lowering electricity prices, the agreement enables one of the country’s largest power plants to tap a domestic energy source, strengthening fuel supply flexibility and supporting a more reliable and diversified power system.
“This demonstrates that indigenous Malampaya gas can help lower electricity costs for consumers while delivering reliable energy supply,” said Prime Energy President and Chief Executive Officer Donnabel Kuizon Cruz.
She said the agreement allows the SC 38 Consortium and SPPC to reduce fuel costs, maximize existing infrastructure and strengthen the country’s energy security.
Cruz added that every unit of indigenous gas replacing imported fuel makes electricity more affordable for households and businesses while reducing the country’s exposure to volatile global energy prices.
The agreement also reinforces Malampaya’s long-standing contribution to public finances. Under the fiscal terms of Service Contract No. 38, about 40 percent to 60 percent of the project’s net proceeds accrue to the Philippine government.
Over the past two decades, Malampaya has generated more than USD14 billion in government revenues while providing a cleaner and more reliable fuel source for Luzon’s gas-fired power plants, making it one of the country’s most important energy assets.
