CA issues TRO in favor of SMC,
advocates slam decision

November 27, 2022

The Power for People Coalition (P4P) on Friday revealed that the Court of Appeals (CA) has already issued a temporary restraining order (TRO) against the Energy Regulatory Commission (ERC) on Wednesday, 23 November, a decision the group condemns as illogical and anti-consumer.

The ERC in October denied a joint petition of SMC and Meralco to adjust power rates in its 2019 PSA due to the drying up of Malampaya and the high prices of gas in the world market, saying that the conditions cited by SMC do not constitute a change in circumstance, which was required by the terms of the PSA for any price adjustment. The decision of the appellate court suspends the implementation of the power supply agreement (PSA) between SMC and Meralco.

“The TRO is absurd and rash. It suspended the PSA between SMC and Meralco, which governs how SMC can supply Meralco with electricity and how much SMC can charge. Now that it is gone, how should Meralco act to procure electricity? How much can they charge consumers? How should Meralco react given that the PSA suspension is temporary? This is a desperate move from SMC, and with the CA’s approval, consumers have left to foot the bill for SMC’s business decisions to use volatile coal and gas in its power contracts,” said Gerry Arances, P4P Convenor.

Luke Espiritu, labor lawyer and President of the Bukluran ng Manggagawang Pilipino (BMP), a member organization of the P4P, said that the action taken by the CA should not have been in the form of a TRO.

“A TRO is supposed to preserve the status quo to protect the requesting party from an irreparable injury that will be inflicted upon it by another party. In this case, there is no such harm committed by another party upon SMC. In fact, the ERC simply ordered SMC to continue implementing the PSA, thus maintaining the status quo. Going by SMC’s convoluted logic, it is being harmed because of its own action – entering into a PSA in 2019 with Meralco. What SMC wants to happen, which was granted by the CA, is to undo a thing that SMC brought upon itself. It seeks to escape a contract but this cannot be allowed by the mere expedient of a TRO. At the very least, a hearing is required and unilateral action by the court cannot suffice,” said Espiritu.

P4P called out SMC for backing out of its responsibility to supply power at the cost it pledged to in its power contracts.

“SMC must be very desperate for it to stop at nothing to get out of its contract with Meralco. We hope that given their efforts to escape their obligations, SMC will be banned from participating in future PSAs. We also hope that despite this setback, any further development on this case will be positive for consumers,” said Arances.

Contact: Aryanne, 09295940057

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