The Energy Regulation Commission (ERC) has denied the appeal of Manila Electric Company (Meralco) and San Miguel Corporation’s (SMC) Generation Companies to increase rates due to lack of merit.
“The denial is anchored on three to four major points… essentially the first point of the denial is that these two contracts are similar in the sense that they are financial contracts with a fixed price for 10 years,” lawyer Monalisa Dimalanta, chairman and CEO of ERC, wrote in her decision.
However, Dimalanta said the parties can still file a motion and refile their petition if needed.
Dimalanta also said Meralco has 60 days or six months from the issuance of a notice to terminate under a separate provision of its contract with SMC.
She said Meralco also has the obligation to provide the “least cost supply” under its franchise and under the EPIRA.
Earlier, ERC issued a 40-page ruling in which the ERC emphasized that the power supply agreements do not mandate that South Premiere Power Corporation (SPPC) obtain all of its energy from the Ilijan power plant and that it may instead purchase energy from other sources.
“The Commission is well aware of the fact that should this Joint motion for Price Adjustment be given favorable action, there will be subsequent filings by the parties for subsequent adjustments,” ERC said.
“To what extent and by how much such adjustments will be sought remains unclear. What is clear is that there is no basis for such relief under the [power supply agreement] for it is in the nature of a financial contract with a fixed price,” it added.
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