ERC: TRO favoring SMC likely to affect consumers

Millions of Filipino consumers may take the brunt of the impending power rate hike following the Court of Appeals' issuance of a Temporary Restraining Order against the Energy Regulatory Commission and favoring San Miguel Corp.'s suspension of its Power Supply Agreement with Manila Electric Co.

ERC chairperson and CEO Atty. Monalisa Dimalanta on Friday expressed apprehension over the decision, which she said will have "an instantaneous effect."

"(It) will consequently expose approximately 7.5 million registered Meralco consumers in the National Capital Region and other areas in Regions III and IV to higher electricity prices without preparation usually observed in case of PSA termination," Dimalanta said.

"The fixed price PSA of Meralco with South Premier Power Corp. covers 670 megawatts of supply. This, along with the other fixed price PSAs, have been shielding Meralco consumers for the past several months from the volatility of prices from WESM and automatic fuel pass-through PSAs," she added.

Dimalanta reiterated that the immediate suspension of the PSAs will "bring us precisely to the situation which we at the ERC have sought to avoid with our ruling that required the proper observance of the terms of the PSA, including the contractually-agreed process of termination."

Citing the TRO copy dated 23 November, the ERC said the appellate court granted the suspension that will be effective for 60 days, and that the decision was based solely on the statements of the SMC power unit South Premiere Power Corp.

In the Petition for Certiorari filed by SPPC, the company claimed that the ERC "acted with grave abuse of discretion in denying its rate increase petition when it interpreted the rights of SPPC and MERALCO under the PSA."

The Petition ended with a prayer that the Court of Appeals grant the rate petition "without prejudice to any further requests for price adjustments for June 2022 onwards."

Nonetheless, the ERC chief said the Commission is "confident that the Fourteenth Division of the CA, consistent with existing jurisprudence, will accord great respect, if not finality, to the regulator's factual findings because of its special expertise over the energy sector."

The Daily Tribune reached out to SMC for comment. Meralco, for its part, said it will consult with its legal counsel to determine the next steps.

"We already received the official copy of the TRO on the PSA between Meralco and SPPC. We are reviewing the Resolution in consultation with our counsel to determine the next steps," Meralco said in a statement.

"We have also written the DOE to follow up on our previous letter requesting for CSP exemption of certain emergency PSAs that are ready to be implemented to shield our customers against volatile and potentially higher WESM prices," it added.

To recall, the ERC denied the petition since the regulatory body ruled that the agreed price in the PSA is fixed in nature, and the grounds for the increase cited by SPPC and Meralco were not among the exceptions that would allow for price adjustment.

The fixed price nature of these 10-year PSAs, according to the ERC chief, is precisely intended to act as a natural barrier protecting Meralco consumers from external threats such as market volatilities.

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