Taguig court extends TRO vs Meralco contract auctions

CHEAPER ELECTRICITY Customers of Manila Electric Co. (Meralco) can expect to pay lower bills with the utility’s supply deal with South Premier Power Corp. —Niño Jesus Orbeta

MANILA, Philippines — A Taguig court extended the temporary restraining order (TRO) against Manila Electric Co.’s (Meralco) scheduled auction of contracts to supply 1,000 megawatts (MW) of additional power from 72 hours to 20 days.

Presiding Judge Antonio Olivete of the Taguig City Regional Trial Court (RTC) Branch 267, in a three-page order dated Aug. 2, extended the TRO enjoining Meralco from conducting its competitive bidding selection process (CSPs).

The TRO was issued after evaluating affidavits and sworn testimony provided by the petitioner, which is composed of operators of the Malampaya gas project.

READ: Lawyer hits TRO vs Meralco power supply bidding

The Pangilinan-led firm split the 1,000 MW CSP bids and had initially set bid submission deadlines for the 600 MW contract on Aug. 2 and the 400 MW contract on Sept. 3.

“While issues on jurisdiction of this Court and the personality of the plaintiffs in applying for the injunctive relief have been raised by defendant Meralco, and in view of the special appearance of several lawyers manifesting their intent to intervene in this case, the Court finds it proper to extend the 72-hour TRO to 20 days,” Olivete said.

Interveners, other issues

The additional time, he said, would be used to “thresh out these issues and provide time for the parties to fully articulate their positions thereon.”

“The extension given is without prejudice to the resolution of the merits of the Complaint, which shall be threshed out in a full-blown trial,” he added.

The TRO stemmed from a petition for injunction filed by members of the Malampaya consortium—Prime Energy, UC 38 LLC, Prime Oil and Gas Inc. and the Philippine National Oil Company-Exploration Corp.—to halt Meralco’s CSPs for 1,000 MW of new power supply.

The Malampaya consortium said the auction terms placed indigenous natural gas in an unfavorable position, contradicting existing laws.

It added that the bidding process was “flawed, skewed or supplier-driven and violative of existing laws, rules and regulations.”

The group also said the planned power deals could threaten the country’s energy security.

Higher rates

“The favor being accorded to imported LNG (liquefied natural gas) and coal would also discourage investors from exploring and developing other oil and gas fields in the Philippines, which is a very high-cost, high-risk activity. Eventually, the Philippines may have no indigenous gas sources to speak of,” the petitioners added.

“Lack of demand for Malampaya’s supply would necessarily lead to lack of revenue, ultimately hitting the government’s 60 percent share in revenues,” they said.

Meralco, however, argued that any delay in the process could result in higher electricity rates.

During the hearing on Friday, Prime Energy managing director and general manager Donabel Kuizon-Cruz testified before the court on the supposed disastrous impact of the CSPs on the exploration and development of indigenous natural gas.

Meralco waived its right to reply when the giant distribution utility “presented no evidence to overturn the finding” of the court in granting the earlier TRO.

The order stated that Meralco “presented no evidence to overturn the finding … to show that it will suffer any injury if the 72-hour TRO is not extended to 20 days.”

“The extension given is without prejudice to the resolution of the merits, of the Complaint, which shall be threshed out in a full-blown trial. Let further proceeding for the prayed Writ of Preliminary Injunction be set on Aug. 28, 2024, at two in the afternoon,” the court said.