Civic groups expect the Energy Regulatory Commission, in a likely ruling today, not to only reject the petition of San Miguel Corp. unit SMC Global Power for an adjustment in the power supply agreements that will raise power rates by P4.80 per kilowatt hour but also impose sanctions on the conglomerate.

SMC faces a hefty P255.5 billion fine under an "Event of Default" provision of the PSA which will apply if it makes good on its threat to unilaterally withdraw from the contracts with Meralco.

In its Joint Manifestation and Comment submitted to the ERC, the consumer groups said generation companies and distribution utilities alike should not be allowed to enter into PSAs, "placing a low bid only to later on move for a price adjustment."

SMC Global Power units South Premiere Power Corp, the operator of the Ilijan natural gas plant and San Miguel Energy Corp which runs the Sual coal pant have PSAs with Meralco but it sought adjustments with ERC after it declared P15 billion in losses due to the rising prices of coal and supply restrictions from the Malampaya natural gas project.

The energy firm threatened to unilaterally terminate the PSAs if ERC will not grant its sought price relief.

In its court submission, the Center for Energy, Environment, and Development Incorporated, Philippine Movement for Climate Justice and pro-poor oriented Sanlakas said it is ERC's mandate to not only decide on this Joint Motion to the best interest of consumers "but also to impose fines or penalties for any non-compliance with or breach of the EPIRA (Electricity Power Industry Reform Act), the Implementing Rules and Regulations of the EPIRA, and other rules and regulations which it promulgated or administers as well as other laws it is tasked to implement or enforce."

"Simply put, should applicant SMEC pushes through with its 4 October 2022 withdrawal from the PSA, it should be considered (at) default, for which applicant SMEC should be penalized accordingly. Such penalties should, in turn, be used to reduce generation charges to consumers," according to the document.

According to industry stakeholders, total liability of SMC Global Power would reach P255.5 billion covering the seven remaining years of the contract at P100,000 per megawatt a day.