The Taguig City Regional Trial Court (RTC) has extended the temporary restraining order (TRO) it issued against the two Manila Electric Company (Meralco) biddings totaling 1,000 megawatts of additional power supply to 20 days duration from 72 hours.
The TRO was in response to a petition for injunction filed by operators of the Malampaya gas project against the Meralco bidding which were to be done through competitive selection process (CSP) on August 2 and September 3.
The Taguig RTC, in its order issued August 2, the court said it extended the TRO duration to 20 days after evaluating affidavits and sworn testimony given by the petitioner who warned of the biddings’ disastrous impact on the Malampaya gas project and the future of the country’s energy security.
Meralco “presented no evidence to overturn the finding” of the court in granting the earlier TRO.
“Wherefore premises considered, this Court resolves as it hereby resolves to EXTEND the previously issued 72-HOUR TRO to 20-day TRO enjoining the Manila Electric Company, and all other persons, agents, individuals, employees and representatives acting under its instructions and authority from conducting its competitive bidding selection process (CSP), under its current Terms of Reference, including the receipt of bids, the awards and the implementation of any award arising therefrom,” the court ordered.
The TRO stemmed from a petition for injunction filed by members of the service contract 38 or the Malampaya consortium—Prime Energy Resources Development B.V., UC 38 LLC, Prime Oil and Gas Inc., and state-run Philippine National Oil Company-Exploration Corp. (PNOC-EC)—to halt Meralco’s CSPs for 400MW of mid-merit supply on August 2 and 600MW of baseload supply on September 3.
The Taguig RTC TRO, issued last July 31 and extended to 20 days in its decision on August 2, applied to both CSPs.
“The extension given is without prejudice to the resolution of the merits, of the Complaint which shall be threshed out inf a full-blown trial. Let further proceeding for the prayed Writ of Preliminary Injunction be set on August 28, 2024 at 2:00 in the afternoon,” the court said.
The SC38 Consortium said in an earlier statement it sought “clarity on its role in the energy market in the same way that generators and distribution utilities need clarity.”
“There are a number of conflicting policies relative to the prioritization of indigenous resources and its implementation as part of a Competitive Selection Process, among others,” the consortium said.
“Upon market rules being clear and established, we can all fulfill our respective roles to propel the market forward and ensure long term energy security beyond the next three years for a dependable, equitable, competitive and reliable power sector,” it said.
Prime Energy managing director and general Manager Donabel Kuizon-Cruz testified before the court on Friday the supposed disastrous impact of the CSPs on the exploration and development of indigenous natural gas.
Prime Energy is the lead company in the SC 38 consortium which operates the Malampaya gas field off the province of Palawan.
Kuizon-Cruz testified in court that support for the Malampaya project and the consortium operating it was crucial as the government has a substantial share in revenue generated by the gas field.
Cruz said unless the CSPs were permanently stopped by the court, power generating firms using imported LNG and coal would dominate the energy sector, defeating several government objectives—reduce pollution, lower power rates and promote local fuel industries.
Cruz also pointed out that support for the Malampaya project and the consortium operating it was crucial as the government has a substantial share in revenue generated by the gas field.
Emphasizing that the support for the Malampaya project and the consortium operating it is crucial, the Prime Energy executive cited that the national government earns 60 percent of net revenue from Malampaya sales and has so far received more than $13 billion since the gas field’s operation. The petition said Meralco’s terms of reference (TOR) should be blocked by the court since it violated state policy and the Electric Power Industry Reform Act (EPIRA) which mandate preference for indigenous gas as fuel in power generation.
“Worse, the Meralco TOR incorporated terms and conditions which practically deny the power suppliers using ING (indigenous natural gas) as a fuel source the opportunity to fairly participate,” the petition said. It said if the Meralco CSP was not stopped, it would put the Philippines “in a situation where a significant portion of our power supply is placed in the hands of imported coal and imported LNG.”
