The Manila Electric Co. (Meralco) has formally issued a notice of claim against San Miguel Corp.’s (SMC) South Premiere Power Corp. (SPPC) to cover the additional costs it has been incurring as a result of the 60-day temporary restraining order (TRO) on their power supply agreement (PSA) that was issued by the Court of Appeals (CA) in favor of SPPC.
Meralco said since the cessation of supply last December 7, the distribution utility has been sourcing the 670 megawatts (MW) contract capacity from the Wholesale Electricity Spot Market (WESM).
In a letter dated Dec. 12, 2022, Ronald Valles, Meralco first vice president and head of regulatory management office, asked SPPC to pay the price difference between the contract price and the WESM price, to which Meralco would be exposed during the effectivity of the TRO.
Valles said this will be on top of all applicable fines, penalties and liquidated damages under the PSA in the event the CA eventually resolves the main case and denies the petition of SPPC.
Meralco said it is exhausting all ways to protect its customers from potentially higher generation costs while ensuring continuity of stable, reliable and least cost power under the current circumstances.
Last month, the CA issued a 60-day TRO in favor of SPPC, which made the appeal after the Energy Regulatory Commission ruled the agreed price in PSA is fixed in nature and the grounds for increase cited by SPPC and Meralco were not among the exceptions that would allow for price adjustment.
The TRO rooted from the ERC’s denial of the joint request of Meralco and SPPC for a temporary and partial cost recovery relief only for the losses incurred by SMC from January to May 2022, mainly due to the unprecedented spike in the cost of coal and natural gas — the types of fuel utilized by the company’s power plants to supply 1,000 MW worth of electricity to Meralco, including the capacity from SPPC. – J. Macapagal
