Meralco to Court of Appeals: Junk SMC’s TRO
Last 25 November, the CA granted a TRO on the Energy Regulatory Commission’s decision to dismiss SMC Global Power unit South Premiere Power Corp.’s petition for a temporary price increase
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Daily TribuneLast 25 November, the CA granted a TRO on the Energy Regulatory Commission’s decision to dismiss SMC Global Power unit South Premiere Power Corp.’s petition for a temporary price increase
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(Photo by Al Padilla)
Utility giant Manila Electric Co. has petitioned the Court of Appeals to deny a second temporary restraining order and writ of preliminary injunction petition by a San Miguel Corp. unit that, if granted, is expected to result in higher electricity bills.
Meralco took the side of the consumers anew in the drawn-out dispute that started with SMC energy arm SMC Global Power's application with the Energy Regulatory Board for a P4.80 per kilowatt-hour temporary increase in its power rates.
Consumer groups objected to the petition saying that the two PSAs between the SMC generation companies and Meralco uses the straight pricing scheme which means that the PSAs do not pass through charges.
Last 25 November, the CA granted a TRO on the Energy Regulatory Commission's decision to dismiss SMC Global Power unit South Premiere Power Corp.'s petition for a temporary price increase.
SPPC then used the TRO that also freezes its power supply agreement with Meralco to stop supplying electricity which resulted in a 670-megawatt shortfall that Meralco now obtains from an emergency PSA and the Wholesale Electricity Spot Market.
330MW PSA
SMEC has a 330-megawatt PSA with Meralco through the Sual power plant following a competitive selection process in 2019. The contracted volume of electricity will be lost from the grid if SMC suspends the PSA.
Such will further drive up the cost of power since the pullout of SPPC's Ilijan natural gas plant drove electricity costs higher.
Meralco is now demanding that SMC spends on the difference between SPPC's contracted price and the higher cost of electricity at the WESM.
SMC has yet to reply on the Meralco position but the power distributor recently petitioned the CA's lifting of the TRO.
In a motion dated 21 December, Meralco pointed out that the appellate court's issuance of an injunction will allow SMEC's termination of the PSA with Meralco.
The power distributor said such a decision disrupts the supply of electricity and exposes customers to potentially higher power rates.
"With due respect, the possible grant of the TRO or writ of the preliminary injunction will lead to petitioner SMEC's cessation in supplying electricity to Meralco, which it is obligated to do pursuant to the terms and conditions of the PSA," Meralco said.
Honor PSA
The company added that the court should deny SMEC's application and "direct the parties to continuously implement the PSA that would serve and protect the public from the unnecessary burden of increased electricity costs."
Meralco reiterated that the grant of a TRO or WPI reverses the status quo instead of preserving it and prejudices consumers.
It added that SMEC has failed to demonstrate that it will suffer grave and irreparable injury if the injunctive relief prayed for will not be granted since the "damage" it claims is measurable. Thus, it has no clear legal right to grant injunctive relief.
Meralco assured all its stakeholders that it is exhausting all measures to continue delivering the least-cost power to its 7.6 million customers.
