SMC’s luck runs out
Meralco cited the disruption of basic and essential services through the PSA, contrary to the objective of the TRO.
Electricity distributor Manila Electric Co. appears to have taken the cudgels for consumers in its legal actions to check the excesses of a corporate giant.
It recently ran after SMC for it to pay the difference between the contract price and its exposure in the Wholesale Electricity Spot Market. It also petitioned the Court of Appeals to lift the temporary restraining order on the Energy Regulatory Commission decision denying an electricity price increase.
The utility giant wanted SMC to continue supplying electricity while the opposition to the ERC is being resolved in court. The Court of Appeals issued a TRO on the regulator from enforcing its ruling for 60 days.
In turn, SMC Global Power unit Southern Premiere Power Corp. used the TRO to suspend the power supply agreement with Meralco.
SPPC and another SMC subsidiary, San Miguel Energy Corp. petitioned the ERC for relief of a total of P4.80 per kilowatt hour to cover some P5 billion of what it claimed as P15 billion losses from rising prices of fuel and supply restrictions from the depleted Malampaya natural gas field.
ERC, through the Solicitor General, filed a petition to lift the TRO citing its implication on electricity users in the Meralco franchise.
It was Meralco's turn on 19 December to ask the CA to lift the TRO it issued in favor of SPPC and to deny the generation company's application for a writ of preliminary injunction.
The suspended PSA involved 670 megawatts of supply that SPPC committed to delivering under its PSA, which has a lower rate compared to the WESM and the Emergency PSA where Meralco currently sources the replacement power.
An injunction effectively grants SMC an indefinite suspension of the PSA since it is at the court's discretion when to lift it.
In the case of SPPC on its legal dispute with the state-owned Power Sector Assets and Liabilities Management over the amount of government share from the natural gas plant, the SMC unit obtained an injunction order from the Mandaluyong regional trial court that remained in force for five years after it was issued.