The Office of the Solicitor General (OSG), as a representing counsel for the Energy Regulatory Commission (ERC), is opposed the consolidation of the cases relating to the junked rate hike on the power supply agreements (PSAs) of the two corporate vehicles of SMC Global Power Holdings Corp (SMCGP) of the San Miguel group.

That was on account of the decision previously rendered by the 16th division of the Court of Appeals (CA), which partially granted the petition of SMC subsidiary San Miguel Energy Corporation (SMEC) to consolidate its case with the petition of affiliate South Premiere Power Corporation (SPPC), which is also pending with the 13th division of the appellate court.

In an interview with reporters on the sidelines of the two-day Powertrends forum Wednesday, Feb. 8, ERC Chairperson Monalisa C. Dimalanta indicated that “the OSG, as our counsel, filed a partial motion for reconsideration on the consolidation...in a way, (the OSG) opposed the consolidation.”

The two cases involving the SMC power firms are linked to the fixed price 10-year power supply deals that SMEC and SPPC had inked with Manila Electric Company (Meralco) in 2019.

For the SMEC power supply deal, the contract sets the delivery of 330 megawatts of capacity to Meralco from the Sual coal-fired power facility,

while the PSA with SPPC requires the supply of 670MW capacity from the Ilijan gas-fed power plant.

Dimalanta explained that OSG's opposition against the consolidation of the pending cases is anchored on a question of law, with it arguing that while the petition of the SMC firms had been rooted on change in circumstances (CIC) provision of the PSAs, the actual events affecting the two separate contracts have been assessed to be legally divergent in nature.

“There have been a lot of requirements for consolidation – one is: there is a common issue of law. So, the argument of the OSG is: the legal issues on the two cases are different, so they are not primed for consolidation,” the ERC chief stressed.

Under the PSAs, CIC is been defined as “any law coming into effect after the signing of (the) agreement, including the adoption or enactment, or any change or repeal with respect to the imposition of taxes, duties, levies, fees, charges or similar impositions, and the right to remit or convert currencies...”

Dimalanta noted that in the SPPC deal, the question raised was “a change in law because of the gas restriction notice on Malampaya,” as had been issued by the National Power Corporation (NPC) being the original state-run counterparty in the gas supply and purchase agreement (GSPA) for the Ilijan plant.

In the case of SMEC, she emphasized that it was linked to “change in economic conditions,” with her emphasizing that the reasons cited had been the surge in coal prices to the level of $440 per metric ton due to the Russia-Ukraine war.