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Saturday, June 22, 2024

Solon wants CA ruling on power rates reversed

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A House leader on Sunday urged the Office of the Solicitor General (OSG) to contest a Court of Appeals (CA) decision reversing an Energy Regulatory Commission (ERC) ruling that stopped a major power generating firm from imposing higher rates.

Sta. Rosa City Rep. Dan Fernandez, vice chairman of the House Committee on Energy, asked the OSG to elevate the case to the Supreme Court as it involved the collection of higher power rates that would further weigh down on consumers “who are already paying one of the world’s highest electricity bills.”

Fernandez also urged the ERC to closely examine and withhold approval of new power supply agreements (PSAs) between Meralco and the power generation companies involved in the CA case.

“While demand for power supply is acute at this time, we also have the responsibility to protect consumers against price gouging,” Fernandez said.

“There are ways to meet the demand that will not unduly and unreasonably raise power rates,” he said.

In his letter to the OSG, Fernandez said two power plants owned by San Miguel Corp.—Ilijan (gas) and Sual (coal)—“are seeking to supply emergency power to Meralco.”

The PSA that the two plants entered with Meralco have been terminated following the ERC ruling last year that disallowed Meralco’s and the SMC plants’ petition for a rate increase.

“The termination of the PSAs has apparently allowed llijan to bid again for Meralco’s long-term power requirements,” said Fernandez in his letter to Solicitor General Menardo Guevara.

“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,” Fernandez’s letter read.

He said it was reported in January this year that the ERC would bring the case it lost in the CA to the Supreme Court.

“However, it is now May 2024—more than four months from the CA decision—and I have not heard whether the ERC or the Office of the Solicitor General (OSG) has filed the needed appeal or petition,” Fernandez said.

Fernandez said he believed that the ERC cannot just approve another PSA between SMC and Meralco without filing an appeal of the CA’s December 28, 2023 ruling with the Supreme Court for final judgment.

“I strongly urge the ERC to withhold approval of the new PSA between Meralco and SMC until after the Supreme Court resolves with finality on the controversial power supply deals earlier decided by the appellate court’s 13th Division,” the lawmaker stressed.

In a ruling on June 27 last year, the CA nullified an ERC decision denying rate increase petitions filed by Meralco and SMC. The two electricity giants cited losses as justification for the rate increase petitions.

The CA’s 13th Division said the ERC acted “with grave abuse of discretion amounting to lack or excess of jurisdiction” when it denied the petition of Meralco and SMC subsidiaries South Premiere Power Corp. (SPPC) and San Miguel Energy Corp. (SMEC) to raise power rates by 30 centavos per kilowatt hour (Kwh).

SPPC and SMEC had entered into a 10-year agreement with Meralco in 2019 to supply 1,000 megawatts (MW) of capacity from the Ilijan gas-fired plant and the Sual coal-fired plant.

The headline rate of Meralco’s PSA with SMEC was P4.6314 per kWh, while its deal with SPPC pegged the rate at P4.2455 per kWh. In 2019, spot market prices averaged P8.47 per kWh.

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