Targets rise in fuel, power costs to dampen inflation up until Christmas
President Ferdinand Marcos Jr. said Tuesday that Malacañang is working to slow down the rise in fuel and power costs at least heading into Christmas, saying Filipinos have already suffered much from the spiraling prices of goods amid worldwide inflation.
In a press conference in Los Banos, Laguna, the President admitted he was worried by the temporary restraining order (TRO) issued by the Court of Appeals (CA) on the Power Supply Agreement (PSA) of San Miguel Corp. (SMC) and Manila Electric Co. (Meralco).
The TRO could lead to a hike in electricity rates for 7.5 million Meralco customers in Metro Manila and its suburbs.
“We are focusing our work on not raising the price of fuels, at least for this Christmas. If we could postpone and slow down the increase of prices, making the rise slower and keep the prices of fuel down, and if it rises at least gradually. It’s very difficult—the people have suffered much” Mr. Marcos said in Filipino.
Meanwhile, the Office of the Solicitor General is studying all factual and legal issues surrounding the deal between SMC’s South Premier Power Corp. (SPPC) and Meralco.
This follows the appeals court TRO stopping the Energy Regulatory Commission (ERC) from implementing its decision denying the plea of the two power companies to increase their generation charges.
“The OSG is the counsel of the state in all litigations concerning the government. It is presently studying the factual and legal issues involved in this case,” Solicitor General Menardo Guevarra said in a text message with reporters.
Energy Secretary Raphael Lotilla earlier said the OSG is working with the ERC on ways to get the Court of Appeals to lift its order suspending the Power Supply Agreement (PSA) of South Premier and Meralco.
“What worries me is what happened to this TRO given by the CA at the PSA of San Miguel and to Meralco, that worries me,” the President said in a press conference at the International Rice Research Institute.
Senator Win Gatchalian also called on the Department of Energy (DOE), ERC, Meralco and San Miguel to ensure a steady supply of electricity.
“This case will set a precedent for the energy sector as to whether or not power-generating companies along with distribution utilities could revise power supply contracts with fixed prices,” said Gatchalian.
“We hope that at the end of the day, consumer interest will be protected,” he said.
Mr. Marcos, in a Palace statement last week, asked the CA to reconsider its decision, noting that the TRO against the PSA would have an “extremely deleterious effect” on power rates in the country.
The TRO was issued by the CA 14th Division on November 24, following a petition filed by the San Miguel Corp. subsidiary.
The petition stemmed from the ERC’s decision on September 29 to reject the pleas of SPPC, San Miguel Energy Corp., and Meralco to increase their generation charges.
Meralco said it would be forced to hike power rates by 50 to 60 centavos per kilowatt hour if it is forced to buy power from the Wholesale Electricity Spot Market once San Miguel terminates its PSA with the power distributor, as it tries to recoup P5 billion in losses from skyrocketing fuel prices worldwide.
The appellate court issued a TRO in favor of San Miguel Corp. subsidiary SPPC suspending the implementation of its power supply agreement (PSA) with Meralco.
“In view of the circumstances and the interest of the general public, this court grants the TRO and hereby suspends the implementation of the PSA.
The TRO shall be effective for a period of 60 days from service on respondents,” the CA resolution stated.
SPPC sought the issuance of a TRO and a writ of preliminary injunction to enjoin ERC from executing its Sept. 29 decision. But the CA said it is constrained to resolve only the TRO, as the respondents have yet to file a comment.
The CA said that the SPPC, in its petition for certiorari, claimed that unless the implementation of the ERC order is immediately restrained, it would be forced to continue to supply energy to Meralco under the PSA at a loss, “resulting in great and irreparable injury before its application for a writ of preliminary injunction can be heard on notice.”
“This court emphasized with petitioner’s serious losses which are capable to render it insolvent due to unforeseeable cause,” the CA stressed.
SPPC claimed the ERC acted with grave abuse of discretion in denying its rate increase petition and when it interpreted the rights of the company and Meralco under the PSA.
The CA said the issuance of the TRO is conditioned upon posting of SPPC of a P50 million bond “which will answer for any and all damages which respondents may suffer or sustain by reason of the issuance of the same should this Court finally decide that petitioner is not entitled thereto, and shall remain in full force and effect until the petition for certiorari is finally decided.”
ERC chairperson Monalisa Dimalanta, in a statement, expressed grave concern on the instantaneous effect of the temporary suspension in executing the PSA based on the TRO.
She said this would consequently expose the 7.5 million Meralco consumers in the National Capital Region and Regions III and IV to higher electricity prices “without preparation usually observed in case of PSA termination.”
“The fixed price PSA of Meralco with SPPC covers 670 megawatts (MW) of supply. This, along with the other fixed price PSAs, have been shielding Meralco consumers for the past several months from the volatility of prices from WESM and automatic fuel pass-through PSAs,” Dimalanta said.
“If these PSAs are immediately suspended, this brings us precisely to the situation which we at the ERC have sought to avoid with our ruling that required the proper observance of the terms of the PSA, including the contractually-agreed process of termination,” she said.