Can’t be forgive and forget

Last January, the Energy Regulatory Commission (ERC) indicated that it would appeal before the Supreme Court (SC) a Court of Appeals (CA) decision overturning its ruling to junk petitions of San Miguel Global Power Corp. units for temporary rate increases.

The petitions were rejected as the ERC required the operators of the Ilijan and Sual coal plants to comply with the straight pricing provision of the contract that does not allow adjustments for fuel cost increases that will be passed on to consumers.

It has been four months since the Solicitor General, which represents ERC, said it was drafting an appeal to the SC.

The House energy panel provided a voice to the question of most electricity users who are suffering the consequences of the CA decision: “What happens now?”

The House committee suggested that ERC withhold actions on new power deals until the SC settles the issue.

In a letter to the OSG, Sta Rosa City Rep. Dan Fernandez, vice chairperson of the energy panel, asked the OSG to elevate the case to the Supreme Court as it involved public interest since higher power rates are burdens to consumers who are already paying one of the world’s highest electricity bills.

The legislator also urged the ERC to closely examine and withhold approval of new power supply agreements (PSAs) involving the SMGPH units.

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

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

In his letter, Fernandez said the two power plants have clinched emergency supply deals to fill up the deficiencies that resulted from abandoning its supply contracts through the intervention of the CA.

“The PSAs of the two plants were terminated but this resulted in the llijan natural gas plant bidding again for Meralco’s longterm power requirements,” Fernandez wrote Solicitor General Menardo Guevarra.

“It seems that San Miguel has simply substituted a contract that paid it cheaply for electricity for the same contract but this time with a much higher price,” Fernandez indicated.

ERC thus cannot just approve another PSA involving the SMPGH without filing an appeal of the CA’s 28 December 2023 ruling with the Supreme Court for final judgment, according to the legislator.

“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.

The CA’s 13th Division ruling indicated 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).

In October 2022, both SPPC and SMEC issued termination notices to Meralco to suspend the PSA, citing unexpected and unprecedented “change in circumstance,” such as a surge in fuel costs.

“We obviously cannot accept a situation where the CA decision becomes final simply because the ERC and OSG did not file its appeal or petition on time,” Fernandez said.