ERC: TRO on power rate issue based on ‘misrepresentations’
SMC dwelled extensively on the ‘in-depth computations and projections’ that it said ‘were reviewed and validated by no less than the ERC’s own ROS’
Daily TribuneSMC dwelled extensively on the ‘in-depth computations and projections’ that it said ‘were reviewed and validated by no less than the ERC’s own ROS’
The legal clash between San Miguel Corp. and the Energy Regulatory Commission regarding the Court of Appeal's temporary restraining order would be on assumptions used for the court order that the regulator described as "misrepresentations."
The TRO froze the effectivity of ERC's dismissal of the petition of SMC unit South Premiere Power Corp. for an increase in the charges of the Ilijan natural gas plant despite a fixed-price contract with Meralco.
In effect, SMC will get a free hand in disposing of the 10-year contract it holds with Meralco, a legal expert said.
In a statement it issued yesterday, SMC dwelled extensively on the "in-depth computations and projections" that it said "were reviewed and validated by no less than the ERC's own ROS."
SMC released the statement a day after President Ferdinand "Bongbong" Marcos urged the Court of Appeals to reconsider the TRO that favored SMC in its tussle with the ERC.
"The implementation of the PSA between Meralco and San Miguel, it is unfortunate that this has happened, it will cause further dislocations and a possible price increase for power," Marcos lamented.
The ERC said the TRO relied solely on the statements of SPPC in their petition, citing the price simulations "which were independently corroborated by the regulator's Regulatory Operations Service or ROS."
In issuing the TRO, the CA said the computations were "reasonably true and valid."
Comment ready
The ERC said this "misinterpretation of the simulations of ERC's ROS will be clarified when ERC submits its comments to the Court."
ERC Chairperson Monalisa Dimalanta said the regulator will just wait for the CA order for it to comment on the TRO.
In a letter sent to opposing consumer groups, ERC said the basis used was aligned with the historical data derived by the commission.
The regulator earlier explained that "while the findings of our ROS team were factored in the deliberations of the Commission, the determination which option is aligned with law, consistent with the contract, and ultimately best serves the interest of the consumer rests on the shoulders of the Commissioners, not our staff."
Moreover, ERC said the price simulation used a number of assumptions that are not explained, supported or justified.
"ROS, on the other hand, used data based on the submissions of Meralco as part of its monthly Uniform Reportorial Requirement compliance for the period January to May 2022," according to ERC.
ERC also noted inconsistencies in the application of assumptions across the scenarios, "and this was observed to have unduly affected the rate impact simulations."
The scenario presented by Meralco on the procurement of power from WESM used an average WESM price forecast of P8.9404/kWh, the basis for such.
SMC justifies petition
SMC's statement claimed that in the simulations, granting "the temporary rate hike would have been the least costly option for power consumers."
"It would also be beneficial in the long term, as it would preserve the fixed-rate PSAs," SMC explained.
"And yet, the ERC Chair and two Commissioners denied the petition, forcing us (SMC) to continue to absorb losses, and essentially preventing us from exercising our legal options, clearly laid out in the PSAs, to preserve our financial standing. This, despite two other commissioners delivering strong dissenting opinions," it added.
ERC provided tables showing computations and data, which showed the evaluation of the ROS "is conclusive with respect to the price impacts presented in data that SPPC used" but "are not aligned in many ways."
Dimalanta expressed grave concern about the effect of the temporary suspension in the implementation of the PSA.
"This will consequently expose approximately 7.5 million consumers in the National Capital Region and other areas in Region III and IV to higher electricity prices without preparation usually observed in case of PSA termination," she warned.
"The fixed price PSA of Meralco with SPPC covers 670 megawatts of supply," Dimalanta said.
"This, along with the other fixed-price PSAs, have been shielding Meralco consumers for the past several months from the volatility of prices from Wholesale Electricity Spot Market and automatic fuel pass-through PSAs," he added.
Dimalanta maintained that if the PSAs are immediately suspended, "this brings 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."