situations exception prevails.
This is exactly the case of the Ramon Ang-led San Miguel Corporation (SMC) whose two power
generating subsidiaries negotiated for an upward adjustment in their selling rate of its electricity to giant
power distributor in Luzon, the Manila Electric Co. or MERALCO. The primary reason for the petition for
increase is that due to the serious disruption in the global economy brought about by the almost 3 years
of CoViD 19 pandemic, and the ongoing Russia-Ukraine war the conglomerate’s power firms are losing
billions of pesos, according to their claims in their submission to the Energy Regulatory Commission
(ERC).
As most Filipinos know the petition was rejected primarily on the ground that the Power Supply
Agreement (PSA) between the SMC power units and MERALCO is fixed in terms of its effectivity as well
as the provisions thereof. And probably it is in the agreement itself that the top lawyers of the company
failed to realize the weakness in the SMC position of the bargain. That is, that the legal luminaries might
not have considered certain global situations that should be factored as contingency for renegotiation. It
is largely possible that the same weak point in SMC’s position in the PSA that is found by the ERC as its
strongest bargaining chip that cannot be contested successfully even by all legal means.
Unfortunately Mr. Ang seemed to have been carried away by his frustration in being unable to have
what he wanted. Instead of adjusting accordingly his power firms’ position where they can possibly
figure out where the ERC has its own weakness Ang chose to destroy the personal reputation of the
Chair of the government regulatory body and in effect the collective action of the ERC which is the
rejection of his firms’ bid for a rate hike.
And he not just insinuated but openly questioned the objectivity and fairness of the ERC resolution by
intimating that it was bias and was influenced by the chair because she used to be a top legal official of a
competitor power corporation that is also generating and supplying electricity in the Luzon grid.
But even as the SMC top honcho immediately ran to the Court of Appeals for the issuance of a
Restraining Order preventing the ERC resolution from taking effect he also boldly announced that he
was cutting the supply of power from his generating plants to MERALCO. And he did just that at this
time when every so often the power situation in the whole of Luzon, especial;;y in the MERALCO service
areas has been declared under “Yellow Alert.”
Again, who is Mr. Ang threatening with his companies’ action? Not the power distributor of course.
MERALCO can always go to the Wholesale Electricity Spot Market or WESM even if the cost is higher.
After all, it can always pass on the added cost to the consumers. Meaning it is the consumers who will
suffer for the SMC firm’s “hostaging” tactic.
Now it would be a different story if MERALCO “conspires” with San Miguel. That is, that it will not
avail power from the WESM because it is costly and it is the people who will bear the brunt. So, the
power distribution firm resorts to rotating power interruptions every single day that the ERC decision on
the SMC’s want is not reconsidered to favor the latter.
That would be bedlam in Metro Manila and other peripheral areas served by MERALCO where a
good percentage of the country’s economic activities are done day in and day out. Production will be
seriously deterred; businesses will be forced to adjust operation and subsequently workers will end up
losing income opportunities. In short, it is the economy of the Metro Manila areas and eventually the
whole of the country that Ang sees as the most vulnerable that he can be used as his “softener” in the
ERC position.
Of course the SMC boss man will not confront the government directly because his diverse businesses
and industries are also subject to other regulatory bodies that may look into the operation of the
businesses concerned. Ang certainly knows the risks.
Now, will the ERC budge on its resolution, which if it does reflects the tentativeness of the entire
government and its leaders? Will government allow the economy to be hostage to businesses wanting
profit in everything they engage in even if the people’s welfare will have to be sacrificed?
Certainly we believe that business enterprises like the power generation firms of San Miguel
Corporation deserve what is due them if it has to survive. But to demand that the acquisition of these
profits be done with extreme haste at this time when the economy is on its knees by the same factors
cited by the petitioner is like kicking a man on the back while kneeling and seeking for a little more time
to catch his breath.
Somehow, Ang and his power units are too much in a hurry in joining the crucifixion process of the
Filipinos in that part of Luzon. Hopefully, they’ll not include Mindanao which is also partly supplied
power by a San Miguel power generating plant.
