San Miguel Global Power: ERC knowingly exposed public to much higher power rates

San Miguel Global Power: ERC knowingly exposed public to much higher power rates

MANILA — Recently, the Energy Regulatory Commission (ERC) denied SMC Global Power Holdings Corp. (SMCGP), the energy arm of San Miguel Corporation (SMC), its request for a power rate hike after incurring P15B in losses amid high global oil prices and natural gas restrictions.

As such, SMCGP is asking the Court of Appeals (CA) to reverse ERC’s decision denying its rate hike plea on two of its power supply agreements with Manila Electric Co. (MERALCO).

SMC is also asking the CA to issue a temporary restraining order (TRO) on the ERC’s order and for CA to reverse the decision.

But the ERC did not budge, saying its decision of denying the motion was in line with its mandate “to protect consumer interest, guard against market abuse, and ensure transparent and reasonable prices of electricity under Republic Act 9136 or the Electric Power Industry Reform Act of 2001.”

However, the SMCGP sees it the other way.

Here is SMCGP’s unabridged press statement:

“Everyone — including Filipino enterprises — is entitled to a fair hearing by an independent, impartial tribunal. We believe the Energy Regulatory Commission (ERC) decision, which forces us to continue absorbing billions in losses in the face of the continuing war in Ukraine and escalating global fuel prices, is against its mandate.

The ERC, as an independent electric power industry regulator is tasked to equitably promote and protect the interests of both consumers and its stakeholders, to help improve quality of life and deliver sustained economic growth.

Going to the Court of Appeals is part of our right to due process among the legal remedies provided to us by the Constitution. We recognize and respect the independence of the judiciary as part of our system of checks and balances.

In our joint petition before the ERC, Meralco already provided the Commission with in-depth computations and projections showing that granting the temporary rate hike would have been the least costly option for power consumers. It would also be beneficial in the long term, as it would preserve the fixed-rate PSAs.

The projections were reviewed and validated by no less than the ERC’s own Regulatory Operations Service. And yet, the ERC Chair and two Commissioners denied the petition, forcing us to continue to absorb losses, and essentially preventing us from exercising our legal options, clearly laid out in the PSAs, to preserve our financial standing. This, despite, two other commissioners delivering strong dissenting opinions.

It is the ERC’s responsibility to ensure the least cost of power for consumers. It should have taken this into consideration when reviewing the merits of, and deciding on the petition. Again, it is mandated to uphold the rights of all stakeholders in the power sector. This includes all, and not just a few, power generation companies.

ERC was made aware of the looming power rate hikes. It was also made aware of how it can ensure that the public gets the lowest possible rate while energy players continue to supply power viably amid rising geopolitical risks beyond anybody’s control. Yet, it still chose to look the other way.

We believe that by exercising our constitutional right under the law, we can continue discussions on how to deliver the least cost to the consumers in an objective and impartial manner.”

(ai/mvn)

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