PBBM asks CA to rethink TRO on government junking plea to raise power rates
President Ferdinand Marcos Jr. on Sunday described as “unfortunate” the recent Court of Appeals decision that would enable San Miguel Corp.’s power subsidiary to charge more for the electricity it supplies to the Manila Electric Co. (Meralco), a move that could mean higher power bills for millions of consumers.
In a statement, Mr. Marcos echoed concerns raised by the Energy Regulatory Commission (ERC) that the court’s decision to suspend the power supply agreement (PSA) between Meralco and SMC’s South Premier Power Corp. (SPPC) would mean high prices for Meralco customers.
“We hope that the CA will reconsider and include in their deliberations the extremely deleterious effect this will have on power prices for ordinary Filipinos,” he said in a statement from the Office of the Press Secretary.
On Nov. 24, the CA 14th Division issued a 60-day temporary restraining order (TRO) on the ERC’s rejection of Meralco’s joint petition with SPPC for a rate increase under their 2019 PSA.
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 a price increase.
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 tothe 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.
Last week, the Power for People Coalition (P4P) condemned the CA decision as “illogical and anti-consumer.”
The ERC in October denied a joint petition of SMC and Meralco to adjust power rates in its 2019 PSA due to the drying up of the Malampaya natural gas field and the high prices of gas in the world market, saying that the conditions cited by SMC do not constitute a change in circumstance, which was required by the terms of the PSA for any price adjustment.
The decision of the appellate court suspends the implementation of the PSA between SMC and Meralco and enables them to jack up prices.
“The TRO is absurd and rash. It suspended the PSA between SMC and Meralco, which governs how SMC can supply Meralco with electricity and how much SMC can charge. Now that it is gone, how should Meralco act to procure electricity? How much can they charge consumers? How should Meralco react given that the PSA suspension is temporary? This is a desperate move from SMC, and with the CA’s approval, consumers are left to foot the bill for SMC’s business decisions to use volatile coal and gas in its power contracts,” said Gerry Arances, P4P convener.
Luke Espiritu, labor lawyer and President of the Bukluran ng Manggagawang Pilipino (BMP), a member organization of the P4P, said the action taken by the CA should not have been in the form of a TRO.
“A TRO is supposed to preserve the status quo to protect the requesting party from the irreparable injury that will be inflicted upon it by another party. In this case, there is no such harm committed by another party upon SMC,” said Espiritu.
“In fact, the ERC simply ordered SMC to continue implementing the PSA, thus maintaining the status quo. Going by SMC’s convoluted logic, it is being harmed because of its own action – entering into a PSA in 2019 with Meralco,” he added.
“What SMC wants to happen, which was granted by the CA, is to undo a thing that SMC brought upon itself. It seeks to escape a contract, but this cannot be allowed by the mere expedient of a TRO. At the very least, a hearing is required and unilateral action by the court cannot suffice,” Espiritu said.
P4P called out SMC for backing out of its responsibility to supply power at the cost it pledged to in its power contracts.
“SMC must be very desperate for it to stop at nothing to get out of its contract with Meralco. We hope that given their efforts to escape their obligations, SMC will be banned from participating in future PSAs. We also hope that despite this setback, any further development on this case will be positive for consumers,” said Arances.