Power supply deals TRO extended — RTC

Power supply deals TRO extended — RTC | Daily Tribune

The Taguig City Regional Trial Court (RTC) has extended the temporary restraining order (TRO) against two Manila Electric Company (Meralco) auctions for the supply of 1,000 megawatts (MW) of electricity.

In a 2 August order, the court ruled that the TRO’s duration be extended to 20 days from the initial 72 hours due to the supposed “disastrous” impact of the power deals on Malampaya-fueled power plants.

“Wherefore premises considered, this Court resolves as it hereby resolves to extend the previously issued 72-hour to a 20-day TRO enjoining the Manila Electric Company, and all other persons, agents, individuals, employees, and representatives acting under its instructions and authority from conducting its competitive bidding selection process (CSP), under its current Terms of Reference, including the receipt of bids, the awards and the implementation of any award arising therefrom,” the court order stated.

“The extension given is without prejudice to the resolution of the merits, of the complaint which shall be threshed out in a full-blown trial. Let further proceeding for the prayed Writ of Preliminary Injunction be set on August 28, 2024, at 2:00 in the afternoon,” the court said.

Meralco virtually waived its right to reply when the giant distribution utility “presented no evidence to overturn the finding” of the court in granting the earlier TRO.

The TRO stemmed from a petition for injunction filed by operators of the Malampaya gas project against the Meralco bidding, which are originally scheduled on 2 and 9 August.

The members of the Malampaya consortium contended that the bid terms of the power deals contravene the preference accorded to indigenous natural gas by existing laws.

They sought “clarity on its role in the energy market in the same way that generators and distribution utilities need clarity.”

Last week, Prime Energy managing director and general manager Donabel Kuizon-Cruz testified before the court, emphasizing that the Malampaya natural gas project plays a crucial role in helping the country secure energy security.

Cruz said unless the CSPs are permanently halted, power-generating firms using imported LNG and coal would dominate the energy sector.

Service Contract 38, which governs the Malampaya operations and has been extended for 15 more years, provides the government with a 60 percent share of net proceeds from gas sales.

Last year, the government earned P374 billion in revenues from the Malampaya natural gas field.

In 2022, the government received at least P26 billion from the same source.

Dual deals

Meralco had split the 1,000MW CSP bids and set one for 400MW on 2 August and 600MW on 3 September. The Taguig RTC TRO, issued last 31 July and extended to 20 days in its decision on 2 August, applied to both CSPs.

“The extension given is without prejudice to the resolution of the merits, of the Complaint which shall be threshed out inf a full-blown trial. Let further proceeding for the prayed Writ of Preliminary Injunction be set on 28 August 2024 at 2:00 in the afternoon,” the court said.

In an earlier statement, the SC38 Consortium said it sought “clarity on its role in the energy market in the same way that generators and distribution utilities need clarity.”

“There are a number of conflicting policies relative to the prioritization of indigenous resources and its implementation as part of a Competitive Selection Process, among others,” the consortium said.

“Upon market rules being clear and established, we can all fulfill our respective roles to propel the market forward and ensure long term energy security beyond the next three years for a dependable, equitable, competitive and reliable power sector,” it added.

The petition said Meralco’s terms of reference (ToR) should be blocked by the court since it violated state policy and the Electric Power Industry Reform Act which mandate preference for indigenous gas as fuel in power generation.

“Worse, the Meralco ToR incorporated terms and conditions which practically deny the power suppliers using ING (indigenous natural gas) as a fuel source the opportunity to fairly participate,” the petition said.