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Meralco asks court to lift TRO on power supply deal

MANILA Electric Co. (Meralco) said on Monday that it had asked the Court of Appeals (CA) to lift the temporary restraining order (TRO) suspending the implementation of the power supply deal between the electricity distributor and a unit of SMC Global Power Holdings Corp.

In a statement, Meralco also said that it had asked the CA to junk an application of SMC Global Power unit South Premiere Power Corp. (SPPC) for a writ of preliminary injunction.

Meralco said its motion dated Dec. 19, “cited the disruption of basic and essential services being rendered by SPPC, contrary to the objective of the TRO, and to the detriment of millions of Filipinos served by the power distributor.”

“With due respect, the grant of the TRO was not in furtherance of the ‘interest of the general public’,” it added.

The company also reiterated that it intends “to protect the public and in accordance with its obligation to provide its customers with the least cost of electricity.”

In November, the CA granted a TRO in favor of SMC Global Power, which eventually led to the cessation of the power supply agreement (PSA) between SPPC and Meralco. The supply deal covers 670 megawatts (MW) of capacity for 10 years.

SPPC, the administrator of the natural gas-fired power plant in Ilijan, Batangas, stopped supplying power to Meralco starting Dec. 7 after the issuance of the TRO, which came after the Energy Regulatory Commission (ERC) denied its petition for a temporary rate increase.

Meralco has been sourcing power from the Wholesale Electricity Spot Market (WESM), which typically costs more and is volatile. It has then asked SPPC to pay the added cost incurred for sourcing power from WESM.

The power distributor said that the CA should lift the TRO and should order SPPC “to continuously implement the PSA in order to bring back the scenario that would serve and protect the public from the unnecessary burden of increased electricity costs.”

It also noted that Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA) states that the supply sector is a business affected by public interest and that SPPC must “give way to serve a higher end for the interest of the public.”

In a statement on Dec. 15, Meralco said that it had secured a 300-MW emergency PSA with Aboitiz Power Corp. but only until Jan. 25.

SMC Global Power sought a temporary rate increase, jointly filed with Meralco, saying that SPPC and another unit — San Miguel Energy Corp. (SMEC), the administrator of the coal power plant in Sual, Pangasinan — incurred a combined loss of P15 billion.

SMC Global Power said it seeks to recover part or P5 billion of the combined losses of its units.

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 it had no basis as their PSA is a fixed-rate contract.

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. — Ashley Erika O. Jose

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