Home Top News SMC Global Power points to ERC for looming rate hike

SMC Global Power points to ERC for looming rate hike

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THE decision of the Energy Regulatory Commission (ERC) to reject the temporary relief sought by SMC Global Power Holdings Corp. has exposed consumers to higher power rates, the company said on Monday.

In a statement, SMC Global Power said that the regulator was “made aware of the looming power rate hikes. It was also made aware of how it can ensure that the public gets the lowest possible rate while energy players continue to supply power viably amid rising geopolitical risks beyond anybody’s control.”

San Miguel Corp. (SMC), through its power arm SMC Global Power, filed a petition for certiorari with the Court of Appeals (CA), which issued a temporary restraining order (TRO) in favor of the company.

The TRO suspended the power supply deal between SMC Global Power unit South Premiere Power Corp. and Manila Electric Co. (Meralco), which the ERC said could lead to an increase in consumers’ monthly power bills.

In a Viber message on Monday, the ERC said that it would wait for the final decision of the CA for its next step.

Senator Sherwin T. Gatchalian said the Department of Energy, Meralco, ERC, and SMC must ensure a steady supply of power following the issuance of the TRO.

“Pending the final resolution of the case, [these entities] must see to it that a steady supply of electricity is maintained and that there are no significant power interruptions,” Mr. Gatchalian said.

In August, SMC Global Power said it had sought to recover the losses incurred by its units SPPC and San Miguel Energy Corp. (SMEC), the administrators of the natural gas-fired power plant in Ilijan, Batangas, and the coal power plant in Sual, Pangasinan, respectively.

It said the losses stemmed from a change in circumstance that resulted in losses for the group. It cited supply issues that were not factored in when they forged their power supply agreement (PSA).

The company placed the losses at P15 billion but said it was only seeking to recover P5 billion through a temporary relief — an increase in the PSA’s electricity rate.

However, the ERC denied the temporary relief jointly sought by SMC Global Power and Meralco, saying a rate increase is not based on a valid change of circumstance as called for under their PSA. — Ashley Erika O. Jose

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