ERC asks SC to void decision halting power deal
THE Energy Regulatory Commission (ERC) has asked the High Court to void the decision of the appellate court that suspended a power supply deal at a price lower than prevailing rates.
The ERC, through the Office of the Solicitor General (OSG), said that it filed before the Supreme Court (SC) on Friday a petition for certiorari to “annul” the resolutions issued by the 13th Division of the Court of Appeals (CA) on April 3 and Jan. 25.
“It may be premature to say at this point how the SC will rule on the case. If the injunction is lifted or nullified by SC, then the PSA (power supply agreement) will no longer be suspended and the parties should resume performing their obligations,” ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said in a Viber message to BusinessWorld on Sunday.
“There are consequences as well under the PSA for any failure to perform or deliver supply,” she added.
The resolutions issued by the CA granted the injunctive relief sought by South Premiere Power Corp. (SPPC), a unit of San Miguel Global Power Holdings Corp. These indefinitely suspended SPPC’s power supply deal with Manila Electric Co. (Meralco) and stopped the ERC from enforcing its decision last September that denied the rate hike petition jointly filed by the companies. The denial led San Miguel Global Power to go to the appellate court.
The ERC said the petition filed by the OSG claims that the 13th division of the court has “committed grave abuse of discretion when it gave due course to SPPC’s case in spite of fatal procedural defects, such as the absence of the required motion for reconsideration in the ERC and the improper remedy of Petition for Certiorari when an appeal would have been the appropriate course of action.”
It said the OSG further noted that only the SC has the authority to issue injunctions on the implementation of Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001.
In a resolution promulgated on April 3, the CA upheld its decision to consolidate the cases filed by units of San Miguel Global Power, denying the motion for reconsideration filed by the ERC, which wanted the cases to be tried separately.
Meanwhile, in its January decision, the CA granted the writ of preliminary injunction sought by SPPC on its PSA with Meralco, thereby suspending its contract with the power distributor.
Meralco has yet to reply to a request for comment.
SPPC is the administrator of the gas-fired power plant in Ilijan, Batangas while San Miguel Global Power’s other unit San Miguel Energy Corp. is the administrator of the coal power plant in Sual, Pangasinan. The two sought a rate increase from the ERC last year, with their parent firm saying that both incurred a combined loss of P15 billion. The rate increase was meant to recover part or P5 billion of their losses.
The company cited a “change in circumstance” when surging fuel costs breached the price range contemplated during the execution of the contracts with Meralco. However, the ERC denied the petition, saying this had no basis as the PSA is a fixed-rate contract. — Ashley Erika O. Jose
