San Miguel Corp. said Wednesday that it has received a copy of a Court of Appeals decision allowing the price adjustments sought by its two power plants to recover a third of the losses incurred in recent years due to soaring fuel costs.
The diversified investment holding company, which also has interests in food and beverage, packaging, oil and infrastructure development, provided the Philippine Stock Exchange a copy of the court decision “annulling” the ruling of the Energy Regulatory Commission that prevented its power units and Manila Electric Co. to raise rates to allow the San Miguel subsidiaries to recoup a third of an estimated P15 billion in losses due to a surge in coal and natural gas prices soar beyond levels in its power supply contract.
The Court of Appeals ruling said the ERC decision to deny the rate adjustment on grounds the power rate agreed on by Meralco and San Miguel’s South Premiere Power Corp. and San Miguel Energy Corp. was “issued with grave abuse of discretion amounting to lack or excess of jurisdiction.”
South Premiere is the administrator of the 1,200-megawatt gas-fired power plant in Ilijan, Batangas while San Miguel Energy is the administrator of the 1,000 MW coal power plant in Sual, Pangasinan.
San Miguel made available to Meralco in December the full capacity of its Ilijan Natural Gas for a fraction of its capital cost to help keep electricity prices as low as possible for consumers, while ensuring steady supply of power in the coming months. The Ilijan plant accounts for around 10 percent of the Luzon Grid, which is now suffering from thin supply.
The court ruling has granted “the Joint Motions for Price Adiustment with Provisional Authority and/orInterim Relief” from the ERC decision against the price hike “without prejudice to any further requests for price adjustments” from June 2022 to January 25, 2023 for South Premiere and from June 2022 to the finality of the court ruling for San Miguel Energy.
Depending on the action of the Solicitor General, which acts as the lawyer for the ERC, the case could still be appealed to the Supreme Court.
