MANILA – President Ferdinand R. Marcos Jr. said it was “unfortunate” that the Court of Appeals (CA) temporarily suspended the power supply agreement (PSA) between the Manila Electric Company (Meralco) and San Miguel Corp.’s subsidiary South Premier Power Corp. (SPPC).
In a press release from Malacañang, Marcos echoed concerns raised by the Energy Regulatory Commission (ERC) that the CA decision would mean higher electricity prices for Meralco consumers.
“The implementation of the PSA between Meralco and San Miguel, it is unfortunate that this has happened, it will cause further dislocations and possible price increase for power,” Marcos was quoted saying on Saturday.
He also expressed hope that the CA would “reconsider” its decision and include in its deliberations “the extremely deleterious effect this will have on power prices for ordinary Filipinos.”
On Nov. 24, the CA 14th Division issued a 60-day temporary restraining order on the ERC’s rejection of Meralco’s joint petition with SPPC for a rate increase under their 2019 PSA.
The SPPC filed a petition hoping the CA will grant the rate petition “without prejudice to any further requests for price adjustments for June 2022 onwards.”
The ERC said it denied the plea because the agreed price in the PSA is fixed in nature, and the grounds for the increase cited by Meralco and SPPC were not among the exceptions that would allow for price adjustment.
ERC chair Monalisa Dimalanta earlier expressed disappointment over the CA ruling, particularly the “instantaneous” effect of the temporary suspension on the implementation of the PSA.
“The fixed price PSA of Meralco with SPPC covers 670 megawatts of supply,” Dimalanta said, adding that it has shielded Meralco consumers from the volatility of prices from the Wholesale Electricity Spot Market and automatic fuel pass-through
“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,” she added.
The ERC also expressed confidence that the CA “will accord great respect, if not finality, to the regulator’s factual findings because of its special expertise over the energy sector.”
Meralco, meanwhile, said it is reviewing the resolution in consultation with its counsel to determine the next steps. (PNA)