SMC seeks P34-B relief from soured Meralco deal
The power entity of Ramon Ang-led San Miguel Corp. (SMC) is claiming P34 billion in regulatory relief from the Energy Regulatory Commission, citing unforeseen events that jacked up the cost of its power supply deal with distributor Manila Electric Co. (Meralco).
“They just filed. I’m not sure when they filed those motions but it’s still under evaluation,” ERC Chair and CEO Monalisa Dimalanta told reporters on the sidelines of the Philippine Energy Efficiency Alliance’s Energy Efficiency Day 2025 in Pasay.
San Miguel had filed two petitions to recover costs arising from the change in circumstances affecting its power supply agreement with Meralco, Dimalanta said.
“They want us to execute the Supreme Court, the Court of Appeals decision collecting P5 billion for that period of change in circumstance,” she said, referring to SMC’s first filing that covered the March to May 2022 billing period.
Cost recovery
The second motion involves a P29-billion recovery claim for costs incurred by SMC’s Sual Power and South Premiere Power Corp. (SPPC) in July 2022 and December 2022, respectively.
The relief sought means the ERC must authorize a temporary price hike for its power plants to recover part of their unexpected costs. If approved, power distributor Meralco will pass on the charges to consumers.
Although the cost of power supply agreements may increase depending on prevailing market conditions, Dimalanta said the ERC would evaluate the “reasonableness” of these petitions.
“But we need to evaluate the basis, the supporting documents,” she said.
Even if the regulatory relief for the first period had already been upheld by the courts, she noted, “I’m sure they do not expect us to just approve a blank check without supporting documents.”
It can be recalled that last September, the Supreme Court rejected with finality the ERC plea against the termination of the power supply deal between SMC and Meralco. Both parties lamented the substantial losses arising from the spike in fuel prices.
The ERC sought Supreme Court intervention in 2023 as the appellate court had ruled in favor of SPPC and Sual Power (formerly San Miguel Energy Corp.) and Meralco. But the ERC’s petition was junked.
San Miguel intended to end the supply deal with Manuel Pangilinan-led Meralco after the ERC had denied their rate hike petition.
In their petition, firms said they incurred P15 billion in losses and sought to recover about P5 billion.
