Meralco, ERC ask CA to deny SMC request for TRO

MANILA, Philippines — Manila Electric Co. (Meralco) and the Energy Regulatory Commission (ERC) have asked the Court of Appeals (CA) to deny the temporary restraining order (TRO) and writ of preliminary injunction (WPI) being sought by another unit of San Miguel Global Power (SMGP) to prevent further increase in electricity prices.

Meralco, in its motion dated Dec. 21, said the issuance of an injunction would lead to the termination of its power supply agreement (PSA) with San Miguel Energy Corp. (SMEC), which will then disrupt the supply of electricity and expose its customers to potentially higher power rates.

Energy Regulatory Commission (ERC) chairperson Monalisa Dimalanta said yesterday that the agency also filed a motion with the CA, similar to the one filed by Meralco.

“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.

SMEC currently supplies 330 megawatts (MW) of Meralco’s baseload power requirement under a PSA executed following a competitive selection process in 2019.

SMEC and South Premier Power Corp. (SPPC), another SMGP subsidiary, filed their respective petitions for certiorari before the CA last November as they appealed the rejection by the ERC of their joint motion with Meralco for price adjustment.

The ERC in an order promulgated last Sept. 29 denied a joint rate hike petition of SPPC, SMEC and Meralco for a temporary adjustment in the prices of their 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.

SPPC had already secured a favorable ruling from the CA 14th Division with the CA issuing a TRO effective for 60 days which suspended the implementation of its PSA with Meralco.

SMEC’s petition for certiorari filed with the 17th Division of the CA is still pending.

In its motion, Meralco said the Court should deny SMEC’s application and “direct the parties to continuously implement the PSA to serve and protect the public from the unnecessary burden of increased electricity costs.”

Citing Republic Act 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA), Meralco said that the supply sector, where SMEC belongs, is a business affected by public interest.

The power distributor argued that allowing the property rights of a generation company to take precedence over public welfare “would be travesty of the policies enshrined under EPIRA and a disservice to the public.”

Meralco said its motion was filed based on several grounds, among which is that the grant of a TRO or a writ of preliminary injunction will reverse the status quo instead of preserving it, as well as result in a pre-judgment of the main case which is prohibited based on Supreme Court decisions.

Meralco said the grant would likewise cause prejudice to consumers.

It said  SMEC has no clear legal right for the grant of injunctive relief as the company failed to demonstrate that it would  suffer grave and irreparable injury if the injunctive relief prayed for will not be granted since the damage it claims is measurable.

Meralco earlier this week also filed a motion to lift the TRO already issued by the CA in favor of SPPC and to deny the generation company’s application for writ of preliminary injunction.

SPPC officially ceased supplying Meralco under its PSA last Dec. 7, forcing Meralco to start sourcing additional 670 MW from the Wholesale Electricity Spot Market.

Meralco last Dec. 15 was able to secure an emergency powers supply agreement or EPSA with GNPower Dinginin Ltd. until January 25, 2023 for the supply of 300-MW baseload capacity to lessen its exposure to volatile and potentially higher spot market prices.

The EPSA, which has a rate of P5.96 per kilowatt-hour kWh, however, is still higher than the fixed-price of around P4.30 per kWh under the suspended Meralco supply contract with SPPC.

Amid these developments, Meralco assured all its stakeholders that it is exhausting all measures to continue delivering sufficient, reliable and least cost power to its 7.6 million customers.