SMC acted in bad faith — consumers

The call to ban San Miguel Corp. amid its unit South Premiere Power Corp. from bidding for energy supply contracts and to impose penalties on both for the unilateral termination of a supply contract with Meralco has snowballed.

Consumer advocate Kuryente.Org said that SPPC must be held liable and penalized for abandoning a power supply agreement for 670 megawatts.

"SPPC and its mother corporation SMC Global Power should be penalized and banned from entering power supply contracts. Its unitary action is a clear case of bad faith and lack of social concern," the civic organization said.

It added that the TRO SPPC obtained from the Court of Appeals on the ruling of the Energy Regulatory Commission dismissing its rate increase petition "is not an excuse to abruptly terminate its PSA at the expense of the consuming public."

The group said it supports Meralco's move to demand payment from SPPC, a subsidiary of SMC energy arm SMC Global Power, to cover the difference in the PSA price and the Wholesale Electricity Spot Market which was incurred "due to SPPC's abrupt termination of its PSA with Meralco."

"The action of Meralco to claim payment is just and fair as the abrupt termination of SPPC's PSA has forced the distribution utility to source out the 670 megawatts power supply to the WESM," KO national coordinator Roland Vibal said.

SMC brings problems

Another group, Power for People Coalition said "it is very problematic that an emergency PSA became the next step for Meralco after the many tricks SMC pulled to get out of its contractual obligations."

Last Thursday, Meralco signed an emergency PSA with Aboitiz Power's GNPower Dinginin Ltd. for the supply of 300 megawatts of baseload capacity.

KO said Meralco's pursuing SMC's accountability for bolting a PSA is commendable and "pro-electricity consumer."

"The step taken by Meralco is again historic as it sided with the interest of its 7.6 million subscribers by seeking payment from SPPC rather than passing the added cost to consumers," Bival said.

In a letter addressed to SPPC general manager Elenita Go, Meralco head of regulatory management Jose Ronald Valles said the SMC reimbursement will offset the impending power price hike throughout the Meralco franchise area as a result of the effectiveness of the temporary restraining order granted by the Court of Appeals to the SPPC.

SMC employed the TRO in activating the suspension of the PSA.

"The claims will be on top of "all applicable fines, penalties and liquidated damages under the PSA (if) the Court of Appeals eventually resolves the main case denying the Petition for Certiorari and/or claim of SPPC," Valles said.

WESM prices ranging from P7 to P9 per kWh are substantially higher than the P4.30 per kWh price under Meralco and SPPC's contract.

The Energy Regulatory Commission on whose decision the TRO was applied also called out the suspension of the PSA, which it said will instantaneously expose approximately 7.5 million registered Meralco consumers in Metro Manila and Central Luzon, and Calabarzon to higher electricity prices.

The regulatory body said the fixed price PSA of Meralco with SPPC covers 670MW of supply, which, along with the other fixed price PSAs, has shielded Meralco consumers for the past several months from the volatility of costs from the Spot Market and automatic fuel pass-through PSAs.