Withhold action on power deals, ERC urged

Panel vice chairman Sta. Rosa City Rep. Danilo Ramon Fernandez. Photo from House of Representatives of the Philippines

A RANKING member of the Energy Committee of the House of Representatives called on the Energy Regulatory Commission (ERC) to withhold action on power supply deals between the Manila Electric Co. (Meralco) and two generating firms pending final resolution of a case opposing the firms’ bid to raise power rates.

Panel vice chairman Sta. Rosa City Rep. Danilo Ramon Fernandez said that while the case is pending before the Supreme Court, the ERC should suspend its action on deals that the utility earlier awarded to South Premiere Power and San Miguel Energy, both subsidiaries of San Miguel Corp (SMC).

South Premiere Power Corp. runs the Ilijan gas-fired power plant, while San Miguel Energy runs the Sual coal-fired power plant.

“While the appeal of the Office of the Solicitor General (OSG) remains pending with the Supreme Court, I strongly urge the ERC to suspend and withhold approval of new power supply agreements (PSAs) between Meralco and the two SMC’s generating companies until the Court reaches a final decision on the case against their bids to increase electricity rates,” Fernandez said.

He said that the ERC should first wait for the Court to render judgment on the controversial case in order not to preempt or render moot its ruling on the matter.

Fernandez made the statement after asking the OSG, which represents the ERC, to bring to the Supreme Court a decision made by the Court of Appeals (CA) hat reversed an ERC ruling that junked the petition for rate increases filed by Meralco and two generating companies of SMC.

The CA’s 13th division ruling, issued on June 27 last year, nullified the ERC decision that denied the rate increase petitions filed by Meralco and SMC, noting that the commission acted “with grave abuse of discretion amounting to lack or excess of jurisdiction.”

The companies brought the case to the CA after the two SMC companies and Meralco’s petition to approve a 30-centavo rate increase for the new PSA were junked by the ERC.

On Dec. 28, 2023, the same division affirmed with finality its decision overturning the ERC denial of the rate increase petitions by Meralco and the SMC subsidiaries.

Fernandez said that the elevation of the case to the high tribunal is important as it involves the collection of higher power rates that would burden consumers who are paying one of the world’s highest electricity bills.

In his letter to Solicitor General Menardo Guevara, Fernandez said that the two power plants owned by SMC are seeking to supply emergency power to Meralco but at higher rates.

He also said that the PSA that the two plants entered into with Meralco had been terminated following the ERC ruling last year that disallowed Meralco and the SMC plant’s petition for a fare increase.

Fernandez, however, lamented that the termination of the PSAs had allowed Ilijan to bid again for Meralco’s long-term power requirements.

“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 said.