ERC to resolve dispute between SEMPHIL and Meralco unit

Samsung Electro-Mechanics Philippines Corp. (SEMPHIL) has asked the Energy Regulatory Commission to resolve its dispute with Manila Electric Company’s retail electricity business segment MPOWER.

SEMPHIL said the dispute arose from their Retail Electricity Supply Agreement (RESA).

It asked ERC for recovery of the fuel cost recovery adjustment (FCRA) collected by MPOWER, which it paid under protest.

SEMPHIL said the FCRA is unwarranted under the parties’ RESA.

Under the RES, MPOWER will supply SEMPHIL with electricity at a fixed rate of P3.18 per kilowatt-hour beginning May 26, 2019, to May 25, 2022.

SEMPHIL said MPOWER issued a notice of change in circumstance in April 2022, advising that it will implement recovery of “fuel adjustment cost” coming from its power generator suppliers for the period January to March 2O22 and for future billing periods.

MPOWER said this was due to external factors such as policy changes regarding coal in Indonesia and the side effects of the Russia-Ukraine War.

“The “change in circumstance” ground invoked by the respondent to effectively raise the price of electricity is not in its RESA with petitioner,” SEMPHIL said.
SEMPHIL said it was forced to pay “under protest” the FCRA to MPOWER, amounting to over P200 million.

SEMPHIL said discussions were held to settle the dispute, but due to the disparity in the figures that the parties were willing to accept as settlement, no agreement was reached.