The Energy Regulatory Commission, in a 3-2 vote, denied the joint petition of San Miguel Corp. energy arm SMC Global Power Corp. for a P4.80 increase in the contracted prices of the Sual coal plant and Ilijan natural gas plant.

Granting the SMC energy arm's proposal would have resulted in a spike in power rates. SMC Global Power had sought a "temporary" relief amid what it claimed as a P15 billion loss from higher coal prices and the supply restrictions from the quickly depleting Malampaya field.

With the ERC denial, SMC's next move is awaited as it had threatened to unilaterally terminate its PSAs if ERC denies what it is seeking.

Consumer groups said SMC should be cited for economic sabotage if it backs out of its deals with Meralco which comprises a total of one gigawatt that will be removed from the electricity grid.

"We've had enough of this blackmail, and call onto the ERC and Department of Energy to hold SMC accountable for economic sabotage should it back out of its contractual obligations to provide power to consumers," Aaron Pedrosa, Secretary-General of Sanlakas, one of the oppositors, said.

"Historic victory! SMC-Meralco Rate Adjustment Denied 3-2! Tuloy ang laban para sa malinis at murang kuryente (Campaign for clean and reasonably priced electricity continues)," consumer group Power for People Coalition said in celebration.

P4P has spearheaded the battle against SMC's price increase petition and its threat to pull out from the PSAs.

Daily Tribune tried to get a reaction from SMC but had not received a reply at press time.

In a recent statement, SMC Global Power warned that power rates may increase by as much as 30 percent by this month in case the ERC failed to act on its petition for a temporary hike for its two PSAs.

Respect straight price PSA

SMC entered into a straight price, or fixed price PSA in 2019 for the supply of electricity from the Sual coal-fired power plant and the Ilijan LNG plant.

"SMC made the petition to escape the fixed price clause and make consumers foot the bill for their chosen fuel, alleging that they could not have foreseen the price spikes in the world market," P4P convenor Gerry Arances said.

"The ERC's recent history has made consumers pessimistic about the willingness of the agency to defend consumer rights. We are glad to have been proven wrong in this case. The vigilance and solidarity with which consumers resisted this threat of higher electricity rates bore fruit with this ERC decision, and we hope this is the start of more pro-consumer outcomes in years to come," Arances added.

P4P warned that further moves by power companies to subvert the decision will continue to be resisted by consumers.

"Even before the release of the decision, SMC has already issued threats of cutting off the power supply to consumers. In their scenario, it would force Meralco to buy from the Wholesale Electricity Spot Market, which will again push up prices for consumers," Arances pointed out.

Arances added that if SMC were to push through with its threat or appeal for reconsideration by the ERC, they will only reveal the unreliability of power and prices from fossil fuel sources and must brace for continued resistance from consumers.

"For so long, fossil fuel has been preferred by energy companies like SMC to profit off to the detriment of consumers. I hope this serves as a lesson for SMC that the tides have changed, that fossil fuel power will only continue to be costly to both themselves and consumers, and that gone are the days when they could treat Filipinos like a cushion to their generation costs. Consumers deserve affordable, reliable, and sustainable energy," Arances said.

"As the regulatory body of the power industry, the Commission finds it necessary that Applicants be reminded of their obligations under the PSA which they have entered into voluntarily. More importantly, the Commission emphasizes the responsibilities of Meralco under Republic Act 9136 and its franchise, as a distribution utility to provide electricity to its consumers in the least cost manner," a portion of the ruling stated.

"Wherefore, the foregoing premises considered, the Joint Motion for Price Adjustment dated 10 May 2022 filed by Applicants Manila Electric Co. and South Premiere Power Corp. is hereby denied," it added.

SPPC which runs the Ilijan natural gas plant sought an 80 centavos per kilowatt hour increase in its PSA rates.

ERC, in the same manner, denied the petition of SMEC which has a bigger P4 per kilowatt hour rate adjustment plea for its Sual coal plant.

DoE, ERC chiefs backed

The Philippine Independent Power Producers Association Inc., which groups stakeholders in the power industry said, meanwhile, that it looks forward to a balanced, responsive, and progressive Department of Energy and Energy Regulatory Commission under the leadership and guidance of their respective heads.

Energy Secretary Raphael Lotilla and ERC Chairperson Monalisa Dimalanta are recognized by many in the industry, business groups, and academe "that their experience and deep knowledge of the power industry can achieve our objective to build greater energy security, affordability, and sustainability for the Filipino people." Lotilla is no stranger to the industry having worked with several of our generator members for the past twenty years both privately and in service to the government, being the head of the DoE from 2005-2007 and the president and CEO of the Power Sector Assets and Liabilities Management Corporation from 2004 to 2005, an IEMOP statement read.

Dimalanta also carries a vast wealth of experience and wisdom in navigating the technical and complex world of the energy sector, it said.

"Aside from private practice, she answered the call to serve and chaired the National Renewable Energy Board from 2019-2021. During her chairmanship in the NREB she was able to push forth renewable energy policies for the betterment of the energy industry while cognizant of the balance of a technology-neutral mix needed to ensure that the country pushes forward to a truly developed nation," the statement added.