ERC to pursue legal options after CA ruling in favor of San Miguel

THE ENERGY Regulatory Commission (ERC) will pursue all legal options following a Court of Appeals (CA) ruling favoring San Miguel Global Power Holdings Corp., the agency said on Thursday.

The Office of the Solicitor General (OSG) will submit a motion for reconsideration of the CA’s decision, ERC Chairperson Monalisa C. Dimalanta told a briefing.

On Wednesday, the 13th division of the Court of Appeals (CA) granted the motion for certiorari filed by San Miguel Energy Corp. (SMEC) and South Premiere Power Corp. (SPPC), which voided the decision of the ERC that denied their electricity rate hike petition.

“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 separate statement.

The OSG is currently drafting arguments, reiterating the previously raised points, according to Ms. Dimalanta.

“Only the Supreme Court can order a permanent injunction, how could the CA have issued that? That will affect everything in the industry. We want that to be clarified,” she added.

As per the ERC, the joint decision made by the 13th division of the CA granted the motions for price adjustment filed by SPPC and SMEC with the ERC. The decision stated that such approval of rate adjustment was “without prejudice to further requests for price adjustments for June 2022 onwards.”

SPPC manages the natural gas-fired power plant in Ilijan, Batangas, while SMEC is responsible for the coal power plant in Sual, Pangasinan. Both units are subsidiaries of San Miguel Global Power, the power arm of San Miguel Corp. (SMC).

“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 said.

In a separate statement, San Miguel Global Power said that the CA decision upholds the constitutional mandate of due process and guarantees the right to be “treated fairly” by quasi-judicial bodies like the ERC.

“We always believed that such a framework is key to fostering growth, innovation and sustainability in the country’s power industry,” San Miguel Global Power said.

The CA ruling represents the latest development in the case involving power supplier SPPC and electricity distributor Manila Electric Co. (Meralco), who jointly requested a higher approved rate from the ERC in May of the previous year.

SMEC and Meralco had also sought a similar rate increase in May, which was rejected by the ERC in September of the same year.

San Miguel Global Power said in August that its units, SPPC and SMEC, incurred a combined loss of P15 billion. The rate increase was intended to recover a portion, specifically P5 billion, of the units’ losses.

The company cited a “change in circumstance” when surging fuel costs exceeded the price range outlined in the contracts with Meralco. However, the ERC denied the petition, saying that it had no basis since the power supply agreement is a fixed-rate contract. — Ashley Erika O. Jose