MANILA, Philippines- The Energy Regulatory Commission (ERC) tied the power rate hike petitions filed by the Manila Electric Company (Meralco) and the San Miguel Group.
The ERC said it dismissed the joint motions of Meralco, South Premiere Power Corp. (SPPC), and San Miguel Energy Corp. (SMEC) on September 29, 2022, with three votes.
According to the parties, the global increases in the price of fuel and coal prices are the reason for the losses of SPPC and SMEC in operating their power stations, which is the basis for the proposed rate hikes.
Meralco and San Miguel earlier cited the higher prices of coal and natural gas materials used to produce electricity, in their petition.
“While it may be true that the costs of operating the power plants have increased, SPPC and SMEC can supply Meralco’s demand from other, possibly cheaper sources,” giit ng ERC.
“More importantly, the fixed price nature of these 10-year PSAs is precisely intended to act as a natural barrier protecting Meralco consumers from external threats, such as market volatilities,” patuloy nito.
The ERC further asserted that the grounds of the parties in the petitions are not suitable as “Change in Circumstances”.
Under the agreement, “Change in Circumstances” is determined in the implementation of the law that has a serious and significant impact on the financial condition of the parties.
The agency added that there are “available remedies” for Meralco to ensure adequate supply of electricity at the lowest cost to the public.
“As we protect consumer interests, our rulings cannot be oppressive to business,” pahayag ni ERC chairperson Monalisa Dimalanta.
“We tried, as we ruled on these Joint Motions, to decide on the basis of the clear terms of the PSAs that the parties signed up for, and on the basis of law,” patuloy niya.
Meanwhile, the Department of Energy (DOE) said it respects the independence of the ERC under the Electric Power Industry Reform Act (EPIRA).
“The Department is highly confident that as responsible corporate citizens and business entities imbued with public interest, San Miguel Power and Meralco will be guided accordingly by the ERC Order and insure uninterrupted power supply to our people and the country, notwithstanding the denial of their joint petition,” anito.
Meralco and San Miguel Corp. currently have no comment. about it. RNT/SA
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