SMC prevails; Higher bills loom
A scrutiny of the motions for reconsideration reveals that the grounds cited were already thoroughly considered and passed upon in the decision being sought to be reconsidered
Daily TribuneA scrutiny of the motions for reconsideration reveals that the grounds cited were already thoroughly considered and passed upon in the decision being sought to be reconsidered
Meralco head office. | Meralco official website
Consumers will have to pay higher electricity bills to compensate P15 billion in business losses of Asian conglomerate San Miguel Corp. after the Court of Appeals, or CA, threw out a motion for reconsideration of the Energy Regulatory Commission, or ERC.
The CA has nullified the ERC decision to deny the petitions of SMC Global Power for a temporary rate adjustment to recoup the losses as a result of high coal prices and natural gas supply restrictions.
In a June 27 decision, the CA 13th Division ruled that the majority of the ERC acted "with grave abuse of discretion amounting to lack or excess of jurisdiction."
The ERC ruled that the petition for a rate increase is not provided under the straight-price provision of the power supply agreements that SMC obtained from Meralco.
The CA's Thirteenth Division in a decision dated 28 December 2023, did not give merit to the motion filed by ERC seeking the reversal of the decision penned by Associate Justice Charlene Hernandez-Azura.
It said respondent ERC failed to present new arguments that would warrant the reversal of its decision.
"A scrutiny of the motions for reconsideration reveals that the grounds cited were already thoroughly considered and passed upon in the decision being sought to be reconsidered; and that contrary to the claims of the public respondent, the Court has provided its basis in making its rulings," the CA said.
"Accordingly, our decision dated 27 June 2023 stands," the CA said.
SMC's energy unit sought the price adjustments to serve as temporary relief covering a combined P5.2-billion losses incurred from January to May 2022 due to the unprecedented spike in fuel prices.
SPPC, SMEC get windfall
In the PSAs, SMC unit South Premiere Power Corp. is required to supply power to Meralco with 670 megawatts, or MW, net baseload capacity, from the output of the 1,200 MW of Ilijan Power Plant, the Wholesale Electricity Spot Market or any other source, while San Miguel Energy Corp. is required to supply power to Meralco with 330 MW net baseload capacity, from the output of the 1200 MW of Sual Power Plant, the WESM, or any other source.
Both PSAs cover a supply period of 10 years from 26 December 2019 to 25 December 2029.
In denying ERC and NASECOR's appeal, the CA declared: "Thus, the Court finds no merit in the arguments outlined in their respective motions for reconsideration. Accordingly, there is no cogent reason to reverse the Court's Decision dated 27 June 2023."
