ERC reviews SMGP's P34B cost recovery request amid fuel surge

The Energy Regulatory Commission (ERC) is reviewing San Miguel Global Power Holdings Corp.'s (SMGP) request to recover P34 billion in costs from consumers due to a change in circumstances.

Chairperson Monalisa Dimalanta stated that SMGP has filed two motions, one for the period from March to May and another for June to December, seeking P5 billion each period and an additional P29 billion.

SMGP's subsidiaries South Premiere Power Corporation (SPPC) and San Miguel Energy Corporation (now Sual Power Incorporated) terminated their 1,000 megawatt, 10-year power supply agreements with Meralco after receiving a Supreme Court resolution on September 2, 2024.

The dispute stems from a 2022 joint petition between the two SMGP units and Meralco for a temporary rate adjustment due to unforeseen surge in fuel costs caused by Russia's invasion of Ukraine.

Dimalanta stressed that proper due process must be followed and that any increase in costs must have a basis under the power supply agreements before approval can be given, emphasizing the need for justified documentation.

The Power for People (P4P) Coalition urged Meralco to defend its customers from potential rate hikes proposed by SMGP, stating that such hikes would negate recent P19 billion refunds announced by Meralco.

Arances also called on Meralco to reconsider whether it should continue sourcing power from SMC if the company did incur significant losses.