The Court of Appeals on Thursday denied the petition for a temporary restraining order or preliminary injunction filed by San Miguel Energy Corp. (SMEC) that was meant to suspend an order issued by the Energy Regulatory Commission (ERC) last September on price adjustments with the former’s contract to supply electricity to the Manila Electric Co. (Meralco).
In a resolution dated January 13, a copy of which was received on Thursday by the Office of the Solicitor General, the CA’s 16th Division ruled that SMEC failed to prove its right to a restraining order, the ERC said.”The CA Resolution is a welcome relief for consumers of Meralco. This comes at the most opportune time as we enter the summer months, where prices usually increase due to higher demand,” ERC chairperson Monalisa Dimalanta said.
“The fixed price of supply under the SMEC PSA (power supply agreement) will continue to provide some protection for Meralco customers. Having said that, we at the ERC will continue to work with all stakeholders to explore more price mitigation measures,” Dimalanta said.
SMEC, the power arm of the San Miguel conglomerate, had yet to react to the decision as of press time
The 16th Division, on the other hand, granted SMEC’s motion that the subject case be consolidated with another case with similar facts filed by sister firm South Premiere Power Corp. (SPPC) pending before the CA’s 13th Division.
SPPC won a 60-day TRO against ERC for a similar case, which is expected to expire next week.
SPPC, the administrator of the 1,200 MW Ilijan power plant, stopped supplying Meralco 670 MW of supply starting Dec. 7 following the ruling from the 13th Division of the CA.
ERC cited the Jan. 13 decision of the appellate court that the regulator’s denial of SMEC’s motion for price adjustment already preserves the status quo – which is the contract price in SMEC and Meralco’s 2019 agreement.
The commission said the court ruled that the grant of SMEC’s TRO will “not serve its purpose, since it will have the effect, not of maintaining the Contract Price, but of setting aside the assailed Order itself, thereby rendering the main case, the petition for certiorari, moot.”
The energy regulator also said the appellate court emphasized that, if granted, “the writ of injunction will give SMEC the unrestricted power to terminate, at its own will, the power supply agreement to the detriment of public consumers.”
The 16th Division of the CA further stated that a TRO should not be issued since there is a need for an extensive determination of the merits of SMEC’s case.
It stemmed from ERC’s denial of SMEC and Meralco’s motion for price adjustment in their contract.
SMEC supplies 330 MW of Meralco’s baseload power requirement under a PSA executed following a competitive selection process.
SMEC is the administrator of the 1,200-MW Sual coal-fired power plant in Pangasinan.
The company filed a petition for certiorari against the ERC for which the subject TRO was also prayed for. ERC and Meralco opposed SMEC’s petition.