Court rules in favor of Meralco in dispute over power supply charges

THE Court of Appeals (CA) has ruled in favor of the Manila Electric Co. (Meralco) and its supplier MPower, overturning a decision by the Energy Regulatory Commission (ERC) that barred MPower from disconnecting the power supply of Atlanta Industries, Inc. over unpaid fuel cost recovery adjustments.

The CA Seventh Division said the ERC had no jurisdiction to resolve the pricing dispute between MPower and Atlanta Industries, as such matters are outside the scope of the ERC under the Electric Power Industry Reform Act.

“The ERC should have referred the matter to arbitration, as agreed upon by the parties in the Retail and Electricity Supply Agreement (RESA),” the 14-page decision penned by Associate Justice Ramon A. Cruz read.

“More importantly, because the ERC lacks jurisdiction to hear the dispute between MPower and Atlanta, the assailed Order was issued without jurisdiction and is therefore null and void,” the ruling publicized on Sept. 18 added.

The court ruled that the ERC had no legal basis to intervene in the pricing dispute that stemmed from the 2016 RESA, in which MPower agreed to supply electricity to Atlanta at a fixed price.

Meralco and MPower questioned ERC’s jurisdiction, arguing that pricing in the contestable market is beyond the agency’s power, to which the tribunal agreed.

In 2022, MPower introduced fuel cost recovery adjustments, citing increasing global fuel costs.

Atlanta rejected the additional charges, saying the fixed price should not be subject to adjustments, prompting it to file a petition before the ERC to challenge the imposition.

The ERC ruled in favor of Atlanta in March 2023, ordering MPower to stop issuing disconnection notices and refrain from cutting Atlanta’s power while the dispute was being resolved.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

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