CA nullify ERC ruling on MERALCO, SMC rate hike

ERC – Meralco – SMC

The Court of Appeals (CA) has nullified the Energy Regulatory Commission’s (ERC) decision to deny the rate hike filed by the San Miguel Corporation (SMC) units and the Manila Electric Co. (MERALCO). 

In a decision dated June 27, CA 13th division annulled the ERC order for “grave abuse of discretion amounting to lack or excess jurisdiction.” 

Earlier, MERALCO, together with SMC units South Premiere Power Corp. (SPPC), and San Miguel Energy Corp. (SMEC) for a rate hike of Php 0.30 per kilowatt-hour (kWh). 

MERALCO head of regulatory management Jose Ronald Valles said that the company will begin negotiations with supplies for an emergency power supply agreement (PSA) to cover the capacity they “might lose if SMEC terminates its PSA with MERALCO as a result of the CA decision.” 

Valles stressed that some issues need to be clarified with the decision, adding that MERALCO is currently consulting its lawyers for legal remedies, including an appeal to the Supreme Court. 

The CA also granted the joint motions for pierce adjustments of SPPC, dated June 2022 to January 25, 2023, and SMEC, dated June 2022 up to present date. 

“While the ERC views the CA’s decision as unfortunate and disconcerting, the Commission remains committed to the rule of law in protecting the consumers… The ERC hopes the CA will revisit the records of the case as well as the arguments of the Parties and uphold the Commission’s ruling,” The ERC said in a statement. 

ERC chairperson Monalisa Dimalanta said that they would most probably file a motion for reconsideration. 

Earlier, SMC’s power arm SMC Global Power Holdings Corporation (SMCGP), and MERALCO filed for a power rate hike in their power supply agreements (PSAs) after incurring a Php15 billion loss amid high global prices and natural gas supply restrictions. 

SMCGP has applied for a Php 0.80 per kilowatt hour (kWh) hike for the 670-MW contracted capacity of the Ilijan plant, going from Php 4.30/kwh to Php 5.10/kWh. It also applied for an average Php4/kWh increase for the 300 MW contracted capacity of the Sual plant, going from Php4.30/kWh to as much as Php8.30/kWh.