Despite its insistence, San Miguel Corporation's energy arm SMC Global Power's effort to obtain rate hike increases may prove futile.

SMC Global Power's unit South Premiere Power Corporation which is the operator of the Ilijan natural gas plant and the San Miguel Energy Corporation which runs the Sual coal plant have petitioned the Energy Regulatory Commission for an adjustment in the contracted price in the power supply agreement with Manila Electric Co.

The company has petitioned ERC for a rate increase from January to May of 80 centavos per kilowatt hour kWh (from P4.3 to P5.1/kWh) for its 670 MW of contracted baseload capacity from the Ilijan Plant and an average of P4 per kWh (from P4.30 to P8.30/kWh) for the 330 MW contracted baseload capacity from the Sual Plant.

Overall, the company is looking to recover P5.2 billion in losses through adjustments in its PSA tariff.

SMC Global Power Corp. threatened to rescind its PSAs with Meralco on 3 October if it fails to secure ERC approval for its rate hike petitions.

Power for People coalition which includes the Philippine Movement for Climate Justice, Sanlakas, and the sustainability think-tank Center for Energy, Ecology, and Development opposed the SMC Global Power's filings with ERC.

The PSAs of SPPC and SMEC provided that the contracted rates can only be changed by so-called "change in circumstances."

SMC Global Power contends that the depletion of the Malampaya gas field and higher coal prices are among the valid reasons to invoke change in circumstances in the PSAs.

A review of the PSA between Meralco and the conglomerate's energy arm, obtained by Daily Tribune, indicated that the cited factors are not part of what can trigger a tariff amendment.

The PSA's definition of terms clearly indicated that "for the avoidance of doubt, changes or variations over time of the costs of operation of the power supplier or Meralco, or variations over time of the market prices or the values of electricity shall not in themselves constitute a change in circumstances."