Due to ERC’s ‘unfair’ decision
BY MYRNA M. VELASCO – Jul 13, 2023 05:45 PM
from Manila Bulletin
San Miguel Global Power Holdings (SMGP), the electricity generating subsidiary of conglomerate San Miguel Corporation (SMC), has bewailed the higher electricity rates that consumers are now paying after the Energy Regulatory Commission (ERC) denied its tariff adjustment application last year.
“It is regrettable that the ERC’s unfair decision early on to reject our joint petition with Meralco (Manila Electric Company) for a temporary rate hike — despite proving to be the least cost option at that time for power consumers — resulted in consumers shouldering the burden of much higher electricity rates,” SMGP stated.
To recall, the two subsidiaries of SMGP – South Premiere Power Corporation (SPPC) for contracted capacity from the Ilijan plant and San Miguel Energy Corporation (SMEC) for capacity from the Sual plant, applied for aggregate rate hike of P0.30 per kilowatt hour (kWh) for a six-month period last year to recoup losses due to the surge in fuel prices in the world market, primarily coal which soared to as high as $400 per metric ton as an offshoot of the Russia-Ukraine war.
SPPC, in particular, similarly raised “gas restriction” from the Malampaya gas field as another factor which triggered “change in circumstance” which would have warranted the upward adjustment in the Ilijan plant’s capacity delivered to Meralco under their power supply agreement.
However, that was denied by the ERC, and that precipitated the filing of cases which eventually led to the stoppage of supply to Meralco, specifically the capacity from the Ilijan plant.
Essentially, the tariffs of the power plants which plugged the capacity gap voided by the Ilijan capacity ended up to be way higher compared to the original rate that the San Miguel plant originally had in its PSA with Meralco.
In the recent ruling of the Court of Appeals, it partly rendered that SPPC and SMEC will be allowed to adjust rates.
In view of that recent judicial verdict, SMC opined that “the decision of the CA upholds the constitutional mandate of due process that guarantees the right to be treated fairly and effectively by quasi-judicial bodies like the ERC.”
It added that in the process, the court’s ruling assures “a fair and balanced regulatory environment that equally protects the rights and interests of all stakeholders involved.”
Given pending cases in the court, SMGP stressed “we assure the public that we will continue to find ways to help ease the impact of the current power crisis we are facing along with other nations globally, while ensuring we sustain operations and meet our country’s evolving power needs.”
In a briefing with reporters, ERC Chairperson Monalisa C. Dimalanta stated that the Commission is already “preparing motion for reconsideration for the case,” adding that they will be collaborating with the Office of the Solicitor General (OSG) on the arguments that they will be presenting to the court.
“We haven’t discussed with the OSG. They are putting together a draft motion – reiterating the arguments raised before” she conveyed, adding that the main points will delve on the ‘change in circumstance’ contention raised by SMGP, as well as those on rate adjustment.
