ERC chair dismayed over CA’s TRO on power supply agreement

November 26, 2022, 7:00 pm

<p>Energy Regulatory Commission chair Monalisa Dimalanta <em>(PNA file photo)</em></p>

Energy Regulatory Commission chair Monalisa Dimalanta (PNA file photo)

MANILA – Energy Regulatory Commission chair Monalisa Dimalanta on Friday expressed disappointment over the Court of Appeals order suspending the implementation of the Power Supply Agreement (PSA) between the Manila Electric Company and San Miguel Corp.’s subsidiary South Premier Power Corp. (SPPC).

Dimalanta, in a statement, expressed grave concern over the instantaneous effect of the temporary suspension in the implementation of the PSA based on a temporary restraining order (TRO) issued by the CA this week.

This, she said, will consequently expose approximately 7.5 million registered Meralco consumers in the National Capital Region and other areas in Central Luzon and Calabarzon to higher electricity prices without the preparation usually observed in case of PSA termination.

“If these PSAs are immediately suspended, this brings us precisely to the situation which we at the ERC have sought to avoid with our ruling that required the proper observance of the terms of the PSA, including the contractually-agreed process of termination,” Dimalanta said.

The CA’s 14th Division said it is suspending the implementation of the agreement for 60 days.

“(I)n view of the circumstances and the interest of the general public, this Court grants the TRO and hereby suspends the implementation of the PSA. The TRO shall be effective for a period of 60 days from service on Respondents,” the court said.

The TRO stemmed from a petition filed by Meralco, SPPC, and San Miguel Energy Corp. (SMEC) with the ERC for a temporary adjustment in their PSAs signed in 2019 to recover fuel costs, citing the continued spike in fuel prices.

In a September 29 order, the ERC denied the joint rate hike petition of SMC power units and Meralco.

The plea for a price increase was denied by ERC as the regulatory body ruled that the agreed price in the PSA is fixed in nature, and the grounds for the increase cited by SPPC and Meralco were not among the exceptions that would allow for price adjustment.

The SPPC then sought relief from CA and filed a Petition for Certiorari, which eventually led the CA to rule in favor of the SPPC. (PNA)