THE energy regulator and Manila Electric Co. (Meralco) separately asked the appellate court to deny a halt order and writ of preliminary injunction sought by San Miguel Energy Corp. (SMEC) in relation to its power supply deal with the electricity distributor.
“We filed a motion yesterday (Wednesday) through OSG (Office of the Solicitor General), separately with Meralco, in opposition to the issuance of a TRO (temporary restraining order) and opposition to the consolidation of the case,” Energy Regulatory Commission (ERC) Chairperson and Chief Executive Officer Monalisa C. Dimalanta told reporters on Thursday.
She made the statement on the sidelines of a press briefing facilitated by consumer group Kuryente.Org.
Ms. Dimalanta said SMC Global Power Holdings Corp. sought to consolidate the case of its unit SMEC weeks after it sought and secured a TRO from the Court of Appeals (CA) against another power supply agreement (PSA) forged by Meralco — with South Premiere Power Corp. (SPPC).
SPPC, the administrator of the natural gas-fired power plant in Ilijan, Batangas, is also a unit of SMC Global Power, the power arm of San Miguel Corp. (SMC).
“They asked the division of CA to consolidate the case — the TRO issued in favor of SPPC. We are preventing that from happening,” Ms. Dimalanta said.
“Basically, if the CA approves [the consolidated case] … the TRO will also cover SMEC,” she said.
Separately, Meralco said in a statement on Thursday that it had formally asked the appellate court to deny the TRO and writ of preliminary injunction filed by SMEC.
The power distributor said in its motion dated Dec. 21 that the issuance of an injunction will result in the termination of SMEC’s power supply deal with Meralco, which covers 330 megawatts (MW) of baseload supply.
“With due respect, the possible grant of the TRO or writ of preliminary injunction will lead to Petitioner SMEC’s cessation in supplying electricity to Meralco, which it is obligated to do pursuant to the terms and conditions of the PSA,” Meralco said.
Meralco said Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA) states that the power supply sector, which includes SMEC, is a business affected by public interest.
It said that allowing the property rights in favor of SMEC over the public welfare is a disservice to the public and would be a “travesty of the policies enshrined under EPIRA.”
In its motion, Meralco said the grant of a TRO and writ of preliminary injunction would reverse the status quo instead of preserving it. It added that the grant of injunctive relief would only make the case “moot and academic.”
Meralco also said that the issuances sought by SMEC are improper remedies for the case, and granting these will only cause “prejudice to consumers.”
The Meralco-SMEC supply deal covers a period of 10 years at P4.53 per kWh per kilowatt-hour (kWh). SMEC is the administrator of the coal power plant in Sual, Pangasinan.
On Monday, Meralco also asked the CA to lift the TRO issued in favor of SPPC.
In November, the CA granted a TRO in favor of SMC Global Power, which eventually led to the cessation of the PSA between SPPC and Meralco. The supply deal covers 670 MW of capacity for 10 years.
SPPC stopped supplying power to Meralco starting on Dec. 7 after the issuance of the TRO, which came after the ERC junked its petition for a temporary rate increase.
Meralco has been sourcing power from the Wholesale Electricity Spot Market (WESM), which typically costs more and is volatile. It has then asked SPPC to pay the added cost incurred for sourcing power from WESM.
In a statement on Dec. 15, Meralco said that it had secured a 300-MW emergency PSA with Aboitiz Power Corp. but only until Jan. 25.
SMC Global Power sought a temporary rate increase, jointly filed with Meralco, saying that SPPC and SMEC incurred a combined loss of P15 billion. The rate increase was meant to recover part or P5 billion of the units’ losses.
The company cited a “change in circumstance” when surging fuel costs breached the price range contemplated during the execution of the contracts with Meralco. However, the ERC denied the petition, saying it had no basis as their PSA is a fixed-rate contract.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose