Ranking Member Urges ERC to Withhold Action on Power Supply Deals
A ranking member of the Energy Committee of the House of Representatives has called on the Energy Regulatory Commission (ERC) to suspend its action on power supply deals between the Manila Electric Co. (Meralco) and two generating firms. The call comes as a case opposing the firms’ bid to raise power rates is pending final resolution.
Panel Vice Chairman, Sta. Rosa City Rep. Danilo Ramon Fernandez, emphasized that while the case is before the Supreme Court, the ERC should refrain from approving the deals awarded to South Premiere Power and San Miguel Energy, both subsidiaries of San Miguel Corp (SMC).
South Premiere Power Corp. operates the Ilijan gas-fired power plant, while San Miguel Energy runs the Sual coal-fired power plant.
Fernandez stated, “While the appeal of the Office of the Solicitor General (OSG) remains pending with the Supreme Court, I strongly urge the ERC to suspend and withhold approval of new power supply agreements (PSAs) between Meralco and the two SMC’s generating companies until the court reaches a final decision on the case against their bids to increase electricity rates.”
He further explained that the ERC should wait for the court to render judgment on the controversial case to avoid preempting or rendering moot its ruling on the matter.
Background on the Case
Fernandez’s statement follows his request to the OSG, which represents the ERC, to bring a decision made by the Court of Appeals (CA) to the Supreme Court. The CA ruling reversed an ERC decision that dismissed the petition for rate increases filed by Meralco and the two generating companies of SMC.
The CA’s 13th division ruling, issued on June 27 last year, nullified the ERC decision that denied the rate increase petitions, stating that the commission acted “with grave abuse of discretion amounting to lack or excess of jurisdiction.”
After the ERC rejected the rate increase petitions filed by Meralco and SMC, the companies appealed to the CA. On December 28, 2023, the same division affirmed its decision overturning the ERC’s denial of the rate increase petitions.
Fernandez emphasized the significance of elevating the case to the Supreme Court, as it involves the collection of higher power rates that would burden consumers who are already paying some of the world’s highest electricity bills.
Concerns over Higher Power Rates
In his letter to Solicitor General Menardo Guevara, Fernandez highlighted that the two power plants owned by SMC are seeking to supply emergency power to Meralco but at higher rates. He also pointed out that the power supply agreements (PSAs) between the two plants and Meralco were terminated following the ERC ruling last year that disallowed Meralco and the SMC plants’ petition for a fare increase.
Fernandez expressed his concern over the termination of the PSAs, as it allowed Ilijan to bid again for Meralco’s long-term power requirements. He stated, “This is of major concern to my constituents and all other Filipinos, as it seems that San Miguel has simply substituted a contract that paid it cheaply for electricity for exactly the same contract but this time with a much higher price.”
Source: The Manila Times