The Energy Regulatory Commission (ERC) said it is studying a petition filed by San Miguel Corp. (SMC) through its subsidiaries to collect P34 billion from Manila Electric Co. (Meralco) customers to recover fuel costs.
ERC chair Monalisa Dimalanta told reporters on Thursday that SMC’s move came after it secured a final decision from the Supreme Court (SC) last year allowing its subsidiaries, Sual Power Inc. and South Premiere Power Corp. (SPPC) to revoke power supply agreements (PSAs) with Meralco due to changes in circumstances (CIC).
Dimalanta said despite the SC decision, the ERC will still study how the collection will be pursued and evaluate if it is really warranted and reasonable.
The ERC chief said SMC has two motions, one is collecting P5 billion for the period covering March to May 2022 and the other claiming P29 billion for May to December 2022 for the company to recover incremental fuel costs.
“That’s still under evaluation. They just filed, I’m not sure when they filed those motions but it’s still under evaluation,” Dimalanta said at the sidelines of the Energy Efficiency Day 2025 forum in Pasay City.
“We need to evaluate the basis, the supporting documents because even if the Court of Appeals and the Supreme Court affirming the Court of Appeals gave a go signal… I’m sure they do not expect us to just approve a blank check without supporting documents so we need to make sure that all the requirements are met,” Dimalanta explained.
SMC legal victory
In September last year, SMC won its case in the SC, which set aside the objections of ERC and effectively ruled that CICs are a valid reason to terminate PSAs.
In December 2022, SMC subsidiaries, Sual Power Inc. which was then known as San Miguel Energy Corp. (SMEC), together with SPPC, decided to terminate PSAs with Meralco due to CICs.
SPPC identified a change in law while SMEC used a change in economic conditions as reasons for their filings.
Prior to the termination of the PSAs, the ERC denied the parties’ request for a temporary rate hike in the contracts.
SMC at the time pointed out that due to the Russia-Ukraine war, the cost of fuel in the world market had jumped extraordinarily compared to prices when the PSAs were first signed. It said the temporary rate hike was needed for the company to remain sustainable in supplying electricity.
The ERC’s denial of the temporary rate hike prompted SMC and Meralco to revoke the PSAs instead.
In 2019, Meralco conducted a competitive selection process with SMEC securing a deal to supply the distributor with 330 megawatts (MW) worth of electricity at all-in headline rate of P4.6314 per kilowatt hour (kWh) while SPPC joined for 670 MW at an all-in headline rate of P4.6314 per kWh.
