THE Energy Regulatory Commission (ERC) must ensure competitive rates after the Court of Appeals (CA) denied the temporary restraining order (TRO) sought by a unit of SMC Global Power Holdings Corp. that would have put on hold a lower-priced power supply contract.
“The ultimate remedy on the current supply crunch is now with the ERC, to ensure competitive rates comparable to the price proposal of the original joint SMC-Meralco (Manila Electric Co.) petition,” Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said in a message on Sunday.
On Friday, SMC Global Power, the power arm of listed San Miguel Corp. (SMC), said it would exert all legal options after the CA denied the TRO sought by its unit San Miguel Energy Corp. (SMEC).
“We remain confident that our government, through the judiciary, is one with us in promoting an environment where both consumers and industries collaborate in delivering on our country’s energy goals and providing viable and shared solutions to address the ongoing power crisis,” SMC Global Power said in a statement.
The ERC, in a statement on Thursday, said that the CA in a resolution dated Jan. 13 denied the petition for a TRO or preliminary injunction filed by SMEC. It noted that SMEC failed to prove its right to a restraining order.
SMEC sought the TRO to suspend the ERC order in September last year that denied the company’s motion jointly filed with Meralco for a price increase in their power supply contract.
“The [CA] has ruled correctly on the SMC case. It gives us hope that consumers may yet win out in this latest chapter of SMC’s legal drama to escape its contractual responsibilities,” Gerry P. Arrances, convenor of the Power for People coalition, said in a media release on Saturday.
However, the CA granted SMEC’s petition for the case to be consolidated with that of another unit of SMC Global Power — South Premiere Power Corp. (SPPC) — pending before the CA’s 13th Division.
On Jan. 25, Meralco said that its 30-day emergency power supply agreement (EPSA) with Aboitiz Power Corp. ended, prompting the power distributor to source 670 megawatts (MW) of its power supply requirement from the Wholesale Electricity Spot Market (WESM),
The Meralco-AboitizPower EPSA, which covers 300-MW, was forged on Dec. 15, 2022 to partially replace Meralco’s 670-MW contracted supply from SPPC that was suspended last year when the CA granted a TRO on its implementation sought by SPPC.
“It is the regulator’s mandate to force the best prices from market players, particularly with the real, unwelcome prospect of the spot market providing a big chunk of supply,” Mr. Ridon said.
The EPSA was priced at P5.96 per kilowatt-hour (kWh) or higher than the P4.2455-per-kWh price under Meralco’s agreement with SPPC.
Last year, SMC Global Power sought a temporary rate increase, jointly filed with Meralco, citing that SPPC and SMEC incurred a combined loss of P15 billion. The rate increase was meant to recover P5 billion of the units’ losses.
The company cited a “change in circumstance” when surging fuel costs breached the price range contemplated during the execution of the contracts with Meralco. However, the ERC denied the petition, saying it had no basis as their PSA is a fixed-rate contract.
“Filipino consumers are now on the hook for even higher power rates now that Meralco has tapped WESM. We hope that the CA can redeem itself once its TRO lapses. They should rule in favor of consumers and have SMC reimburse the higher electricity bills of Meralco subscribers,” Mr. Arrances said. — Ashley Erika O. Jose
