Meralco opposes court relief on power supply given to San Miguel unit

The country’s largest power distributor, Manila Electric Co. (Meralco) has formally asked the Court of Appeals (CA) to overturn a ruling on a power supply agreement that favored an entity under conglomerate San Miguel Corp.

Meralco filed a motion to lift the temporary restraining order (TRO) granted by the appellate court to South Premiere Power Corp. (SPPC) last month. It also asked the CA to deny SPPC’s request for a writ of preliminary injunction.

In its Dec. 19 motion, Meralco argued that the 60-day TRO disrupted the essential electricity services it was delivering to its 7.6 million customers.

In opposing the injunctive relief sought by SPPC, Meralco said it intended “to protect the public and in accordance with its obligation to provide its customers with the least cost of electricity.”

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

Burden on public

Meralco said the CA should lift the TRO to allow the parties involved to continuously implement their 10-year power supply agreement and spare the public “from the unnecessary burden of increased electricity costs.”

The firm emphasized that under Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001, SPPC’s rights and interests “must give way to serve a higher end for the interest of the public” since the business of supplying power was a “business affected by public interest.”

Meralco argued that issuing the TRO or writ of preliminary injunction in favor of SPPC would be a prejudgment of the main case and render it “moot and academic.”

“The TRO and WPI (writ of preliminary injunction) are improper remedies since these are inconsistent with the ultimate relief being sought by SPPC, which is the approval of the application for price adjustment it had filed with the ERC (Energy Regulatory Commission) for the period January to May 2022,” it said.

‘Measurable’ damage

It added, “SPPC failed to demonstrate that it will suffer grave and irreparable injury if the injunctive reliefs are not granted since the ‘damage’ claimed by SPPC, by its own admission, is clearly measurable or capable of arithmetic calculation for the period covered by the application for price adjustment or from January to May 2022.”

The TRO promulgated by the CA earlier led to the suspension of the 2019 power supply agreement between Meralco and SPPC covering 670 megawatts (MW) of electricity.

To make up for the lost supply, Meralco has sourced replacement power, albeit costlier, from the Wholesale Electricity Spot Market (WESM) and the emergency power supply agreement with GNPower Dinginin Ltd.

The interim supply deal with GNPower Dinginin, a joint venture between Aboitiz and Ayala groups and Power Partners Ltd. Co., partially covers the 670-MW supply contract with the San Miguel unit.

GNPower Dinginin’s offer of P5.96 per kilowatt-hour (kwh) is slightly higher than the San Miguel-Meralco contract price of P4.30 per kWh. Yet, it is much lower than the prevailing WESM price of P9.12 per kWh as of Dec. 12.