Meralco officially protests CA TRO

MANILA, Philippines — The Manila Electric Co. (Meralco) has filed a motion with the Court of Appeals (CA) to formally protest the issuance of a temporary restraining order (TRO) on its power supply deal with generation company South Premiere Power Corp. (SPPC).

Meralco, in a statement yesterday, said it has asked the CA to lift the TRO it issued in favor of SPPC, as well as deny the generation company’s application for a writ of preliminary injunction.

The power distributor cited in its motion 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 company.

“With due respect, the grant of the TRO was not in furtherance of the interest of the general public,” Meralco said.

Meralco said the TRO led to the cessation of 670 megawatts (MW) of supply that SPPC was obligated to deliver under its power supply agreement (PSA).

The PSA has a lower rate compared to the replacement power currently being sourced by Meralco from the Wholesale Electricity Spot Market (WESM) and the emergency power supply agreement (EPSA) it has entered into.

“The Honorable Court should lift the TRO and direct for the parties 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,” Meralco said.

Citing Republic Act 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA), which expressly states that supply sector is a business affected by public interest, Meralco said SPPC’s rights and interests “must give way to serve a higher end for the interest of the public.”

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

Meralco said its motion is   based on various grounds, among which is that the grant of the TRO or a writ of preliminary injunction would render the main case moot and academic contrary to established jurisprudence, and would likewise result in a pre-judgment of the main case which is prohibited by Supreme Court decisions.

Meralco also argued that a TRO and 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 for the period January to May 2022.

According to Meralco, the grant of the TRO or writ of preliminary injunction will cause prejudice to the consumers contrary to EPIRA and the intention of the CA as expressed in its decision on the issuance of the TRO.

Meralco also pointed out that SPPC has no clear legal right to the grant of the TRO and issuance of the writ of preliminary injunction since its right to the price adjustment is in contention and the principal issue of the main case.

It said SPPC failed to demonstrate that it would suffer grave and irreparable injury if the injunctive reliefs are not granted since the damage claimed by the company is clearly measurable or capable of arithmetic calculation for the period covered by the application for price adjustment.

SPPC, a unit of San Miguel Global Power, was able to secure a favorable ruling from the CA 14th Division in its petition filed against the Energy Regulatory Commission (ERC)’s decision promulgated on Sept. 29, which denied its joint petition with Meralco for a temporary adjustment in the prices of their PSAs signed in 2019 to recover fuel costs amid the unprecedented spike in fuel prices.

The CA issued a TRO effective for 60 days in favor of SPPC, suspending the implementation of its PSA with Meralco.

SPPC officially ceased supplying Meralco under its PSA last Dec. 7, forcing Meralco to start sourcing additional 670 MW from the WESM.

Last Dec. 15, Meralco was able to secure an EPSA with GNPower Dinginin Ltd. for the supply of 300-MW baseload capacity to lessen its exposure to volatile and potentially higher spot market prices.

The supply deal will last until Jan. 25, 2023.

The EPSA, which has a rate of P5.96 per kilowatt-hour kWh, however, is still higher than the fixed price under the suspended Meralco supply contract with SPPC.

The SPPC-Meralco 670-MW PSA accounted for 13.4 percent of Meralco supply and was priced at around P4.30 per kWh.

It has also issued a notice of claim against SPPC to cover the additional costs it has been incurring as a result of the 60-day TRO on their power supply deal.

It had asked SPPC to pay the price difference between the contract price and the spot market price, to which Meralco would be exposed during the effectivity of the TRO.

The claims will be on top of all applicable fines, penalties, and liquidated damages under the PSA in the event that the CA eventually resolves the main case and denies SPPC’s petition.

Meralco has assured all its stakeholders that the company is exhausting all measures to continue delivering sufficient, reliable and least cost power to its 7.6 million customers.