ERC to take San Miguel rate hike plea to Supreme Court
By Sheldeen Joy Talavera, Reporter
THE Energy Regulatory Commission (ERC) will go to Supreme Court to challenge a Court of Appeals (CA) decision favoring San Miguel Corp.’s power arm in a rate hike plea, the commission’s chair said on Wednesday.
“We received [the copy of CA’s decision].We will bring the matter up to the Supreme Court,” ERC Chairperson Monalisa C. Dimalanta said in a Viber message to BusinessWorld.
“I think we have until end of the month to file the petition before the SC,” she added.
In its decision dated Dec. 28, the CA said that it “finds no merit in the arguments set forth in their respective motions for reconsideration.”
“Accordingly, there is no cogent reason to reverse the Court’s decision dated June 27, 2023,” it added.
The ruling of the ERC, promulgated on Sept. 29, 2022, denies the rate hike petition jointly filed by the Manila Electric Co. (Meralco) and San Miguel Global Power Holdings Corp. (SMC GP).
But in a resolution promulgated on June 27, 2023, the CA granted the motion for certiorari filed by San Miguel Energy Corp. (SMEC), now Sual Power, Inc., and South Premiere Power Corp. (SPPC) annulling and setting aside the ERC’s decision for “grave abuse of discretion amounting to lack or excess jurisdiction.”
The CA ruling issued in June 2023 was the latest development in the case involving both units of SMC GP — SPPC and SMEC — and Meralco.
In 2022, the parties jointly filed a rate hike petition with the ERC. However, the regulator denied the petition, stating it had no basis as the power supply agreement is a fixed-rate contract.
Meanwhile, credit research provider CreditSights has maintained its “Underperform” recommendation on SMC but acknowledged its perpetual bonds (perps) from April 2024 to May 2025 due to “relatively lower refinancing risks, backed by funding options.”
The fundraising options cited include revenues generated by the capacity added from its 600-megawatt (MW) Mariveles coal plant and the 300-megawatt-hour Masinloc battery energy storage system.
CreditSights also observed that SMC GP is expected to remain dependent on its parent conglomerate for funding support.
“While we believe SMC GP can roll over or refinance most of its bank loan debt given its strong backing by parent SMC that enjoys solid banking relationships, the situation is much trickier for the refinancing of its $ perps,” the Fitch unit said.
