The Supreme Court (SC) has rejected the Energy Regulatory Commission’s (ERC) appeal to prevent the termination of a power supply contract involving major energy firms Manila Electric Company (MERALCO) and San Miguel Corporation units.
In a disclosure to the Philippine Stock Exchange, San Miguel Corporation said that its legal team had received a copy of the SC 1st Division’s resolution, which upheld the court’s previous decision from August 3, permitting the cancellation of the 10-year power supply agreement (PSA).
The Energy Regulatory Commission (ERC) previously attempted to nullify a Court of Appeals (CA) injunction order that impacted the Power Supply Agreement (PSA) between MERALCO and two San Miguel subsidiaries: South Premiere Power Corporation (SPPC) and San Miguel Energy Corporation, now operating as Sual Power Inc.
In its ruling, the Supreme Court stated that since no significant argument was presented to justify altering the court’s resolution, the request for reconsideration was denied.
Additionally, the SC denied a request from the Office of the Solicitor General (OSG) for a temporary restraining order (TRO) due to lack of merit.
ERC Chairperson and CEO Monalisa Dimalanta commented that they are in consultation with the OSG, as they have not yet received their copy of the SC resolution.
The conflict began in May 2022 when SMC subsidiaries and MERALCO jointly filed a motion for rate adjustments, seeking a temporary increase in contract prices under their PSAs to offset rising fuel costs, which they attributed to a “change in circumstances.”
In response, the ERC denied these joint motions four months later, leading SPPC to request the CA to issue a TRO and to annul, reverse, and set aside the ERC’s order. In January 2023, the CA 13th Division granted SPPC’s application for a writ of preliminary injunction.
The OSG had previously argued that the CA overstepped its authority by instructing SPPC and MERALCO to renegotiate their PSA terms.
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