Even if it pushes through with a unilateral pullout from its power supply agreement, SMC Global Power is required under the contract to continue supplying electricity to Meralco until either the Energy Regulatory Commission or an arbitral court makes a ruling on the withdrawal.

A copy of the PSA obtained by Daily Tribune stated that "during the pendency of the ERC proceedings or arbitration under section 16.2, the power supplier (SMC Global Power) shall continue, "so long as payments are current, to perform its obligations hereunder to make available the Contract Capacity and deliver the Associated Energy, and Meralco shall continue to pay all amounts due hereunder in accordance with the provisions of this Agreement."

The particular provision, thus, will compel SMC Global Power not to cut 1 gigawatt of electricity which it has threatened to stop supplying on 3 October if the ERC does not favor its rate hike petitions.

"For the avoidance of doubt, in case Power Supplier fails or refuses to supply contract capacity and associated energy despite availability, the section 14.3.1 on 'event of default' applies."

A Meralco official told Daily Tribune that whatever happens on 3 October, supply of electricity should not stop since it would be electricity users suffering either brownouts or high cost of power.

"We can assail everybody here but at the end of the day, the welfare of consumers should prevail," the official said.

SMC Global Power, based on the provisions of the PSA, faces heavy penalties if it makes good its threat to pull out from the PSA.

The company will be liable for a whopping P255.5 billion penalty that has to be paid to power distributor Manila Electric Co.

Penalties also await SMC Global Power if it abruptly stops supplying electricity to Meralco.

"In case Power Supplier fails to deliver the Contract Capacity and Associated Energy to Meralco due to unavailability of supply from its plant, Wholesale Electricity Spot Market, and any other source, Power Supplier shall pay a fine equivalent to P908 multiplied by each megawatt-hour during a day, which will be used to reduce the generation charge to consumers," a provision in the PSA stated.