SMC Lodges Termination of PSAs With Meralco

SMC Global Power Holdings Corporation, the energy investment arm of Sam Miguel Corporation (SMC), has applied for a “notice of termination” for its two power supply agreements (PSAs) with Manila Electric Company (Meralco).

This approach by SMCGP comes after the Energy Regulatory Commission (ERC) has not acted on the -petitions for cost recoveries regarding fuel usage to generate electricity.

“South Premiere Power Corp. and San Miguel Energy Corp., administrators of the Ilijan and Sual plants, respectively, had already issued notices of termination to Meralco of their power supply agreements — citing unexpected and unprecedented ‘change in circumstance’ – including skyrocketing global fuel prices brought on by multiple factors including the war,”  says SMCGP.

SMCGP has gone on to say that the termination of the PSAs will take into effect beginning October 4, 2022  “if no relief is given”  or if ERC will not act in favor of the rate hike application.

ERC Chairperson Monalica C. Dimalanta has said that “with the work suspension given the typhoon, we are arranging for the holding of the hearing at the soonest possible time,” with the ERC chief stressing that ‘we also want to resolve this without delay and address similar issues brought to the Commission by electric cooperatives and stakeholders outside Metro Manila.”

SMCGP also says that “the temporary rate hike is meant to allow the Sual and Ilijan facilities to not only recover some P5 billion in losses; more importantly, it will ensure their fixed-rate PSAs are maintained over the longer term, and continue to mitigate the soaring cost of electricity for consumers.”

Source: Manila Bulletin