Steady power supply urged

November 28, 2022 Camille P. Balagtas 97 views

SENATOR Sherwin Gatchalian has called on the Department of Energy (DOE), Energy Regulatory Commission (ERC), Meralco and San Miguel Corp. (SMC) to ensure a steady supply of electricity amid a temporary restraining order issued by the Court of Appeals (CA) versus a recent ERC decision denying a joint petition of Meralco and SMC-owned South Premiere Power Corp. (SPPC) and San Miguel Energy Corp. (SMEC) for temporary relief from high levels of fuel prices.

“Pending the final resolution of the case, DOE, ERC, Meralco, and SMC must see to it that a steady supply of electricity is maintained and that there are no significant power interruptions,” Gatchalian stressed.

According to Gatchalian, he will be closely monitoring the resolution of the case given that it will determine whether fixed price contracts of power supply agreements (PSA) can be changed or not.

“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. We hope that at the end of the day, consumer interest will be protected,” he said.

The ERC’s decision stemmed from a contract entered into in 2019 by SMC’s electricity arm SMC Global Power Holdings Corporation and its subsidiaries for two fixed-price agreements to supply energy to Meralco consumers–one with its Sual coal-fired power plant in Pangasinan and the other with Ilijan natural gas plant in Batangas.

At the time the deal was made, coal prices were around $65 per metric ton which have since risen to over $400/MT. Also, thinning supply from the Malampaya natural gas field resulted in San Miguel buying power from the spot market.