ERC weighs SMC's P34-B price hike petition

The Energy Regulatory Commission (ERC) is assessing the “reasonableness” of the request of Sual Power Inc. (SPI) and South Premiere Power Corp. (SPPC), affiliates of the Ramon S. Ang-led conglomerate San Miguel Corp., to recover a total of P34 billion through price adjustments under its Power Supply Agreements (PSAs) with Manila Electric Co. (Meralco).

In an interview at the sidelines of the Energy Efficiency Day forum on Thursday, ERC chairperson and CEO Monalisa Dimalanta confirmed that SMC’s energy subsidiaries filed two motions due to fuel cost spikes.

“They want us to execute the Supreme Court (SC) and Court of Appeals (CA) decision to collect P5 billion for a change in circumstance,” Dimalanta said.

“They have also filed a second motion for the subsequent period. I think the first period was from March to May. The subsequent period is June to December, and they are claiming P29 billion in collection,” she added.

Dimalanta noted that while rate increases are possible, they must be justified with proper documentation.

“If the increase is justified, allowed under the contract, and there’s really a basis for the cost, the actual amounts claimed, then we can allow for the increase and manage the impact by deferring the period of collection,” Dimalanta said. “We have to make sure first that the claim is based on the PSA and justified with supporting documents.”

The legal dispute stems from the ERC’s 2022 denial of a temporary price adjustment request by SPI and SPPC to recover fuel costs.

After the denial, the companies petitioned the CA in November 2022. The Court issued a temporary restraining order for SPPC and later consolidated SPI’s case.

In January 2023, the Court granted a preliminary injunction, upheld in April. In June 2023, the CA ruled in favor of SPI and SPPC, annulling the ERC’s denial and approving the price adjustment.