A Pasig court declared the P14-billion settlement agreement between Manila Electric Co. and National Power Corp. valid, moving the two companies closer to end their dispute over a 10-year supply contract.
Acting presiding judge Antonio Reyes of the Pasig City RTC Branch 71 issued a 13-page decision dated May 29, but said the decision was “independent of the pass-through provision” that would result in additional power charges to Meralco’s consumers.
The court referred the pass-through provision to the Energy Regulatory Board, which regulates electricity rates.
The P14-billion settlement agreement, if approved by the ERC, translates into an increase of P0.12 per kilowatt-hour in the electricity bill of Meralco consumers.
“The court did not rule on the pass-through provision under the settlement agreement as the same is reserved for the approval of the ERC where the case is currently pending,” the ruling said.
ERC executive director Francis Saturnino Juan said Meralco might still have to wait for the final decision of the Pasig City court because of a possible appeal.
“After that, [Meralco] can go back to ERC to resolve their petition to allow the recovery of the settlement amount,” Juan said.
The settlement agreement, which was concluded after the parties underwent mediation proceedings, resolved the dispute between Meralco and Napocor over their 10-year sale contract.
Meralco and Napocor signed a supply agreement entered on Nov. 21, 1994 covering 10 years from Jan. 1, 1995 to Dec. 31, 2004.
The deal obliged Napocor to supply and Meralco to purchase a specified minimum volume of electric power at rates approved by then Energy Regulatory Board.
Meralco was required to pay a minimum monthly charge, even if the actual volume of power it bought from Napocor fell below the minimum quantities.
Meralco from 2002 to 2004 drew less supply than the minimum stipulated by the contract. Meralco merely paid for the supply it actually received instead of the minimum monthly charge.
Napocor field a claim against Meralco to include contracted but undrawn energy starting in the billing month of January 2002.
Meralco objected and served a notice of termination of the contract, claiming that it suffered losses from the delay in the construction of Napocor’s transmission lines. The delay prevented Meralco from fully supplying electricity contracted with independent power producers. Meralco also cited unrealized revenues as Napocor directly supplied electricity to customers in violation of retailer’s franchise.
(Published in the Manila Standard Today newspaper on /2012/June/02) source
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