SAN MIGUEL Global Power Holdings Corp. (SMGP), through its subsidiaries, is seeking to recover approximately P34 billion in incremental fuel costs incurred from its terminated power supply contracts with Manila Electric Co. (Meralco).
“They (SMGP) have filed already two motions. They want us to execute the Supreme Court (SC) and Court of Appeals (CA) decision collecting P5 billion for that period of change in circumstance,” Energy Regulatory Commission (ERC) Chairperson and Chief Executive Officer Monalisa C. Dimalanta said on the sidelines of an event in Pasay City on Thursday.
Ms. Dimalanta said SMGP’s subsidiaries have also filed a separate motion to recover P29 billion.
The move follows the SC’s final ruling last year denying the ERC’s motion for reconsideration and upholding the price adjustments sought by SMGP’s subsidiaries.
The case originated from joint motions filed in 2022 by South Premiere Power Corp. (SPPC) and Sual Power, Inc. (SPI) (formerly San Miguel Energy Corp.) with Meralco, requesting temporary price adjustments under their 2019 power supply agreements (PSAs) to recover higher fuel costs due to “a change in circumstances.”
The ERC initially denied the petitions, citing the fixed-rate nature of the PSAs. SPPC and SPI subsequently elevated the matter to the CA, which reversed the ERC’s ruling on June 27, 2023, citing “grave abuse of discretion.”
Ms. Dimalanta said the ERC is currently reviewing the newly filed motions.
“If the increase is justified, allowed under the contract, and there’s really basis for the cost, the actual amounts claim, then we can allow for the increase and then we manage the impact by extending the period of collection. That’s how we’re able to manage,” she said.
“But fundamentally, we have to make sure first that the claim has basis under the PSA and that it is justified based on the supporting documents that were provided,” she added.
The ERC will assess the reasonableness of the proposed pass-through charges.
Ms. Dimalanta noted that while the SC upheld the CA’s decision, “I’m sure they do not expect us to just approve a blank check without supporting documents. So we need to make sure that all the requirements are met.”
San Miguel Corp., through its subsidiary SMGP, led as the largest power generation company in the Philippines by installed capacity and market share as of end-2024, based on ERC data.
SMGP operates a diverse portfolio of power generation assets, including facilities running on natural gas, coal, and renewable energy sources such as hydroelectric power. — Sheldeen Joy Talavera