The Energy Regulatory Commission told Manila Electric Co. and San Miguel Corp.’s power subsidiaries to refrain from terminating their 2021 power supply contracts until the regulator acted on the appropriate pleading filed by the applicants.
San Miguel Global Power Holdings Corp., SMC’s power arm, decided to terminate its power supply agreements with Meralco totaling 1,800 megawatts, effective April 1, 2023. The supply was supposed to be delivered starting 2024 and 2025.
SMCGP issued the notice of termination to Meralco of the PSA of subsidiaries Excellent Energy Energy Resources Inc. (1,200 MW) and Masinloc Power Partners Co. Ltd. (600 MW).
“Considering that the PSA is a contract imbued with public interest, the applicants are reminded taht any termination thereof cannot take effect without prior approval of the Commission,” the ERC said.
The ERC said Meralco, after having received the said notice, did not provide any information in the instant urgent manifestation on whether it had accepted or disputed the said notice, any extensions or requests for extension of the long stop date which occurred in September 2021, and any event or action that occurred prompting the two companies to issue the notice, and any other actions or measures of due diligence Meralco conducted upon receiving the notice.
It asked Meralco to provide within 15 days from receipt the said information.
“The commission must emphasize that the instant urgent manifestation did not contain any prayer for relief from the commission. Should the applicants seek any specific relief from the commission, they may file a joint motion pursuant to pertinent provisions of the Revised Rules of Practice and Procedure of the Commission, including Section 1, Rule 121 and Section 5, Rule 72 thereof. Otherwise, the commission shall proceed with its evaluation of the instant joint application in due course,” the ERC said.
San Miguel Global decided to terminate its PSA due to the non-issuance by ERC of the final approval of the PSAs within the respective long stop dates on Sept. 17, 2021 and Sept. 23, 2021.
ERC chairperson Monalisa Dimalanta earlier said the commission would review the motions of the said parties when filed, after the determination of compliance with law and legal processes.
“We note that no supply is currently being served yet to Meralco from these PSAs,” she said.
EERI and MPPCL offered the best bids for Meralco’s 20-year 1,800 MW supply contract in February 2019 of the six qualified offers it received.