SMC power unit appeals ERC decision to CA

MANILA, Philippines — SMC Global Power has asked the Court of Appeals (CA) to reverse an Energy Regulatory Commission (ERC) decision denying its request for temporary relief from skyrocketing global fuel prices.

ERC chairperson Monalisa Dimalanta said the commission received a copy of the SMC petition last Monday.

“They filed with the Court of Appeals a petition for certiorari. That means they are appealing to the CA,” Dimalanta said.

“They are asking CA to issue a TRO (temporary restraining order) so the (ERC) order will not be implemented and they are also asking the CA to reverse the decision,” she said.

The ERC in an order promulgated last Sept. 29 denied a joint rate hike petition of SMC power units and Manila Electric Co. (Meralco).

Meralco, South Premiere Power Corp. (SPPC) and San Miguel Energy Corp. (SMEC) had jointly filed an application with the ERC for a temporary adjustment in the prices of their power supply agreements (PSAs) signed in 2019 to recover fuel costs amid the unprecedented spike in fuel prices.

The price adjustments were supposed to serve as temporary relief covering a combined P5.2 billion losses incurred by SPPC and SMEC from January to May 2022 as a result of soaring fuel prices.

The ERC said its decision to deny the joint motion was in line with its mandate to protect consumer interests, guard against market abuse, and ensure transparent and reasonable prices of electricity, as provided under the EPIRA.

SMC president and CEO Ramon Ang in a statement last month said the company continues to evaluate legal remedies to strengthen its claim for cost recovery, or possibly reverse the unfavorable ERC ruling.

He said a termination of its power supply agreement (PSA) with Meralco also “remains a recourse for the company, as affirmed even by the ERC in its decision and as provided for in its PSAs with Meralco.”

Last Oct. 5, SPPC and SMEC sent notices to Meralco stating that they would continue to supply at the rates provided under the PSAs executed in 2019, albeit under protest.

As ordered by the ERC, termination of the PSAs could only take place after 60 days from the receipt of the ERC orders and Meralco should exhaust all remedies under the contracts to preserve them and ensure the least-cost supply for its customers.

Dimalanta said that based on latest information from Meralco, the power distributor has yet to receive a notice of termination from SMC Global Power.

“Meralco will be the one to inform us. As far as we know, there is none yet,” she said.

Meralco earlier said it would oppose termination of its power supply deals with SMC Global Power should the SMC power subsidiary decide to do so.

“If San Miguel will pursue termination of the two contracts, then we have to await a notice of termination from them and once we receive that notice of tdetermination from San Miguel, we will immediately manifest to the ERC our opposition to the termination and request guidance from the ERC to resolve the matter,” Meralco head of regulatory management Jose Ronald Valles said last month.