Asian conglomerate San Miguel Corp. pulled the plug on its fixed-price power supply agreement yesterday but distributor Meralco guaranteed that it will look for ways to find the least cost of electricity to augment the lost supply.

"There is no expected electric rate hike yet as Meralco looks for options either through an emergency supply agreement or the Wholesale Electricity Spot Market where prices are bound to soften in the cool month of December," Joe Zaldarriaga, Meralco spokesperson and head of corporate communications, assured consumers.

Zaldarriaga belies SMC and its allies' pronouncements of an immediate increase in monthly electricity bills as a result of the suspended PSA.

The Energy Regulatory Commission said SMC can't avoid its obligations even with a Court of Appeals temporary restraining order in effect.

It will force distributor Meralco to secure 670 megawatts of electricity from the spot market but which Meralco said will not automatically result to higher prices as the industry is betting on prices to trend lower this month.

Zaldarriaga said since electricity use tapers off during the cool months, the December spot market prices may be softer.

He added Meralco now sources power covered by the PSA from the WESM, but it is negotiating with other generation companies to look for alternative suppliers "to secure the 670 MW supply and shield our customers against volatile and potentially higher WESM prices."

ERC chairperson and CEO Monalisa Dimalanta reiterated that the cessation of supply from a bilateral contract or PSA does not excuse the parties in the contract from their obligations under Section 23 of Republic Act 9136 or EPIRA "to supply the electricity in the least cost manner to its captive market."

SMC has kept the regulator in the dark about the details of its unilateral termination of the power supply agreement with Meralco but the Energy Regulatory Commission said SMC can't escape its PSA obligations.

SMC notified Meralco on Tuesday that it will stop supplying electricity out of its Ilijan natural gas plant, starting yesterday.