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

The ERC noted that SPPC and SMEC could supply MERALCO's demand from other, possibly cheaper sources.

ERC chairperson Atty. Monalisa Dimalanta also noted that the fixed price nature of these 10-year PSAs is precisely intended to act as a natural barrier protecting Meralco consumers from external threats, such as market volatilities.

Dimalanta also said that the commission did not find a basis to approve the proposed recovery of billions of pesos due to SMC's admission that the "corresponding data thereof is yet to be generated/gathered as of date."

The ERC chief also noted that the rate hike forecast of SMCGP in its petition is P1.27 per kilowatt-hour higher than the commission's actual evaluation and computation based on historical data in the spot market.

Consumers might be forced to absorb the looming power price spike once the power units of diversified conglomerate San Miguel Corp. decide to terminate its power supply agreements with Manila Electric Co.

In a statement on Tuesday, Meralco said that it would comply with the ERC decision and vowed to "exert ALL available remedies to prevent termination of the PSAs" with South Premiere Power Corp. and San Miguel Energy Corp.

However, Meralco's head of regulatory management Atty. Jose Ronald V. Valles warned that if the SPPC and SMEC fail to deliver power to Meralco "for whatever reason," the power distributor will be "constrained" to source up to 1,000 megawatts from the spot market, which will be more expensive than the standard PSAs.

"We already sought offers and entered into emergency power supply agreements with other generation companies to ensure continuity of stable, reliable, and adequate supply to Meralco customers," Valles said.

"We are hoping for the swift action of the DOE in exempting the EPSAs from undergoing CSP. Without these EPSAs, our customers may become exposed to volatile prices," he added.