President Ferdinand R. Marcos Jr. hopes the Court of Appeals (CA) will reconsider its issuance of a Temporary Restraining Order (TRO) suspending the implementation of the South Premier Power Corp. (SPPC) Power Supply Agreement (PSA) with the Manila Electric Co. (Meralco).
“The implementation of the PSA between Meralco and San Miguel, it is unfortunate that this has happened, it will cause further dislocations and possible price increase for power,” President Marcos said over the weekend, noting the TRO is against the PSA.
“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, ” Marcos said.
The Fourteenth Division of the CA issued the TRO in favor of SPPC, a San Miguel subsidiary, with a 60-day effectivity from service on the respondents.
The SPPC filed a petition hoping the CA will grant the rate petition “without prejudice to any further requests for price adjustments for June 2022 onwards.”
The plea for price increase was denied by the Energy Regulatory Commission (ERC) since the regulatory body ruled that the agreed price in the PSA is fixed in nature, and the grounds for increase cited by SPPC and Meralco were not among the exceptions that would allow for price adjustment.
The ERC has expressed concern on the instantaneous effect of the temporary suspension on the implementation of the PSA, which it said, will consequently expose approximately 7.5 million registered Meralco consumers in the National Capital Region and other areas in Central Luzon and Calabarzon to higher electricity prices without preparation usually observed in case of PSA termination.
According to the regulatory body, the fixed price PSA of Meralco with SPPC covers 670MW of supply, which, along with the other fixed price PSAs, has shielded Meralco consumers for the past several months from the volatility of prices from the Wholesale Electricity Spot Market (WESM) and automatic fuel pass-through PSAs.
If the PSAs are immediately suspended, the required proper observance of the terms of the PSA, including the contractually-agreed process of termination, will be set aside, the ERC said.
