The Power for People Coalition (P4P) has supported the move by the Energy Regulatory Commission (ERC) to appeal before the Supreme Court (SC) the decision of the Court of Appeals (CA) that allowed two power generating firms to walk out on power supply deals with Meralco.
In a statement, P4P convenor Gerry Arances said the ERC’s decision to appeal is part of its mandate of upholding its duty of protecting consumers who would suffer the burden of shelling out more money to cover the rising price of coal and gas through increase in power rates.
Earlier, the ERC denied the petition of the San Miguel Corporation (SMC) to raise prices from its Ilijan gas and Sual coal power plants to recoup losses due to rising fuel prices.
Arances backed the argument raised by the ERC in denying the petition to raise the prices for Ilijan and Sual coal power plants, saying the agency only followed what was stipulated in the contract that prohibits changes in rates.
But the SMC appealed the decision before the Court of Appeals which reversed the ERC ruling.
Arances said the CA ruling came despite the fact that the two plants are covered by fixed-rate power supply agreements (PSAs).
“Those PSAs protected consumers in the Meralco franchise area from the ludicrous spike in electricity prices which plagued customers of other distribution utilities in the country at that time,” Arances said.
The CA decision, according to Arances, would expose consumers to higher electricity prices even when protected by a contract.
The CA decision prompted the ERC to elevate the case to the Supreme Court.
“We hope the Supreme Court will see reason and rule that SMC must abide by its contract and cannot raise prices on electricity,” Arances said.
Currently, the watchdog group said that the Ilijan gas plant is now trying to get a new PSA with Meralco approved by the ERC.
“If SMC is able to secure a new PSA for Ilijan, it will signal that generation companies can jack up prices with impunity and render power supply agreements moot,” said Arances.
“With temperatures rising, consumers will be at the mercy of the power company, a situation that the SC must recognize and prevent by supporting the position of the ERC,” he added.