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Marcos ‘hopes’ CA will reconsider TRO on SMC-Meralco deal

Linesmen fix electric posts in Tondo, Manila. — PHILIPPINE STAR/ RUSSELL PALMA

PRESIDENT Ferdinand R. Marcos, Jr. is hoping the Court of Appeals (CA) will reconsider its decision temporarily suspending the implementation of an SMC Global Power Holdings Corp. subsidiary’s power supply agreement (PSA) with Manila Electric Co. (Meralco), warning this may result in higher electricity rates.

At the same time, Meralco said it is exploring options after the CA granted a temporary restraining order (TRO) sought by SMC Global Power to halt the implementation of unit South Premiere Power Corp.’s (SPPC) PSA with Meralco. The TRO will be effective for 60 days.

Mr. Marcos on Sunday described the CA’s decision as “unfortunate.”

“(The decision) will cause further dislocations and possible price increase for power. We hope that the CA will reconsider. And include in their deliberations the extremely deleterious effect this will have on power prices for ordinary Filipinos,” he said in a statement released by the Office of the Press Secretary.

Meralco Chairman Manuel V. Pangilinan said that the power distributor will now seek guidance from the Energy Regulatory Commission (ERC) regarding its next step.

“I believe they (Meralco) have to talk to the ERC and get guidance from them. We have not heard, as far as I know, from San Miguel on what their next steps are going to be. I think the best is to consult the government,” Mr. Pangilinan said in a chance interview on Friday.

To recall, SMC Global Power’s petition stemmed from the ERC’s denial of its joint petition with Meralco, the buyer and distributor of its electricity, for a temporary rate hike.

In August, SMC Global Power announced that it sought temporary relief from the ERC to recover part of P15 billion in losses suffered by its units SPPC and San Miguel Energy Corp. (SMEC), the administrators of the natural gas-fired power plant in Ilijan, Batangas, and the coal power plant in Sual, Pangasinan, respectively.

However, the ERC rejected the petition, saying there was no basis and that the PSA is a fixed-rate contract.

Jose Ronald V. Valles, Meralco’s first vice-president and head of its regulatory management, said the company is following up its request with the Department of Energy (DoE) for an exemption from competitive selection process (CSP) of some emergency PSAs.

In a Viber message, Mr. Valles said the emergency PSAs are “ready to be implemented to shield our customers against volatile and potentially higher WESM (Wholesale Electricity Spot Market) prices.”

ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said on Friday that the CA decision could lead to an increase in the monthly power bills of Meralco customers as the PSAs “have been shielding Meralco consumers for the past several months from the volatility of prices from WESM and automatic fuel pass-through PSAs.”

She expressed “grave concern on the instantaneous effect” of the TRO on the supply agreements, warning that it may expose about 7.5 million Meralco customers in Metro Manila and nearby provinces to higher electricity prices as the fixed rates in the current PSAs are no longer implemented.

Terry L. Ridon, convenor of think tank InfraWatch PH, said in an e-mail on Friday that the TRO will pave way for discussions on “fair and reasonable rates” in Meralco’s franchise area.

“This provides a way forward towards a determination on whether the price proposal in the joint petition constitutes as the least cost to consumers in comparison to other prospective proposals extraneous to the current power supply agreement, such as prices through emergency procurement or the spot market,” Mr. Ridon said.

Meanwhile, Maria Ela L. Atienza, a political science professor at the University of the Philippines, said Mr. Marcos should refrain from making statements that may influence the Judiciary.

“If he respects the separation of powers principle and the independence of the Judiciary, he should not make these kinds of statements. He can just consult his legal adviser or the Solicitor General if there are allowable actions within the legal processes that the Executive branch can do regarding the issue,” Ms. Atienza said via Viber.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Kyle Aristophere T. Atienza and Ashley Erika O. Jose

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