February 4, 2023

Filipino Guardian

Sentinels of Filipino Free Press

The court demanded that the deny-stop order for the electricity supply contract be refused


THE Energy Regulatory Authority and Manila Electric Co. (Meralco) have separately petitioned the Circuit Court of Appeals to have San Miguel Energy Corp. (SMEC) to deny the cease-and-desist order and injunction sought in connection with its electric utility contract with the electric utility.

“We separately filed a motion yesterday (Wednesday) with Meralco through the OSG (Office of the Attorney General) against the issuance of a TRO (preliminary restraining order) and against the consolidation of the case,” said Energy Regulatory Commission (ERC) Chair and Chief Executive Officer Monalisa C. Dimalanta told reporters Thursday.

She made the statement on the sidelines of a press conference moderated by consumer group Kuryente.Org.

Ms. Dimalanta said SMC Global Power Holdings Corp. tried to consolidate its unit SMEC’s ​​case weeks after it filed for and received a TRO in the Court of Appeals (CA) against another power supply agreement (PSA) forged by Meralco — with South Premiere Power Corp. (SPPC).

SPPC, the manager of the natural gas power plant in Ilidan, Batangas, is also a unit of SMC Global Power, the power arm of San Miguel Corp. (SMC).

“They asked CA’s department to consolidate the case – the TRO was issued in favor of SPPC. We prevent that from happening,” Ms. Dimalanta said.

“Basically, if the CA agrees [the consolidated case] … the TRO will also cover SMEC,” she said.

Separately, Meralco said in a statement Thursday that it formally asked the Court of Appeals to dismiss the TRO and the injunction filed by SMEC.

The utility said in its Dec. 21 filing that the issuance of an injunction will result in the termination of SMEC’s ​​power supply contract with Meralco, which covers 330 megawatts (MW) of base-load power.

“With all due respect, the possible issuance of the TRO or the issuance of an injunction will result in the petitioner SMEC ceasing to supply power to Meralco, as required under the terms of the PSA,” Meralco said.

Meralco said Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001 (EPIRA), states that the electric power sector, which includes SMEC, is a public interest business.

It said that granting property rights to SMEC over the public good was a disservice to the public and a “mockery of the policies enshrined under EPIRA.”

In its motion, Meralco said granting a TRO and an injunction would reverse, rather than preserve, the status quo. It added that granting injunctive relief would only make the case “contentious and academic”.

Meralco also said that the issuances requested by SMEC were inappropriate remedies for the case and granting them would only lead to “consumer prejudice”.

The supply contract between Meralco and SMEC covers a period of 10 years at a price of 4.53 pesetas per kWh per kilowatt hour (kWh). SMEC is the manager of coal power plant in Sual, Pangasinan.

On Monday, Meralco also requested the competent authority to revoke the TRO issued in favor of SPPC.

In November, the competent authority granted a TRO in favor of SMC Global Power, which eventually led to the termination of the PSA between SPPC and Meralco. The supply contract covers a capacity of 670 MW for 10 years.

SPPC suspended power supply to Meralco from December 7 following the issuance of the TRO, which came after the ERC rejected its request for a temporary tariff increase.

Meralco sources electricity from the Wholesale Electricity Spot Market (WESM), which typically costs more and is volatile. It then asked SPPC to cover the additional costs involved in procuring electricity from WESM.

In a statement Dec. 15, Meralco said it is working with Aboitiz Power Corp. secured a 300 MW emergency PSA, but only until January 25.

SMC Global Power joined Meralco in requesting a temporary rate hike, saying the SPPC and SMEC suffered a combined loss of 15 billion pesos. The rate hike should offset part or P5 billion of the units’ losses.

The company cited a “change of circumstances” when rising fuel costs exceeded the price range considered during execution of the contracts with Meralco. However, the ERC rejected the petition, saying it had no basis as her PSA was a fixed rate contract.

Meralco’s controlling shareholder, Beacon Electric Asset Holdings, Inc., is partially owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group . who controls it. — Ashley Erika O. Jose