Taguig RTC issues TRO on Meralco supply bid

MANILA – The Taguig Regional Trial Court (RTC) on Wednesday granted a restraining order sought by the operators of the Malampaya gas field consortium, including the state-owned Philippine National Oil Exploration Corp. (PNOC-EC), against Meralco from proceeding with its competitive bidding selection process (CSP) for two contracts totaling 1000 MW.

In a five-page Order promulgated on July 31, 2024, Executive Judge Byron San Pedro of Taguig City RTC Branch 15-FC, granted the plea of the members of the consortium operating the Malampaya gas field – Prime Energy, Prime Oil and Gas Inc, UC38 LLC, and the Philippine National Oil Exploration Corp (PNOC-EC) – for the immediate issuance of the 72-hour temporary restraining order (TRO).

"(A)cting on the basis of the allegations of the plaintiffs and on the strength of the evidence as presented in the complaint…the plaintiffs' application for a 72-hour Temporary Restraining Order is hereby granted, subject to posting of bond," the order stated.

"Upon posting a TRO bond which is hereby fixed in the amount of five million pesos (P5,000,000), let a Temporary Restraining Order effective for 72 hours be issued in favor of the plaintiffs-applicants enjoining the respondent Manila Electric Company from conducting its competitive bidding selection process (CSP), under its current Terms of Reference (TOR), including the receipt of bids, the award and the implementation of any award arising from (it)," the RTC said.

The RTC order puts a stop to Meralco's invitation to Bid Contract Capacity of 600 MW effective September 2025, whose bid submission deadline is scheduled on Friday Aug. 2, 2024, including all other that may be scheduled after, as well as its invitation to Bid Contract Capacity of 400 MW, also effective September 2025.

"Upon evaluation of the allegations contained in the verified complaint for injunction, it appears from the facts shown that great or irreparable injury would result to the plaintiffs-applicants before the writ of preliminary injunction could be heard. In other words, there exists extreme urgent necessity for the writ as to warrant the issuance of Temporary Restraining Order to prevent further damages to the plaintiffs' interests, the government and the environment," the Taguig court ruled.

In a 54-page complaint, members of the Malampaya consortium argued that the bid terms violate the preference given to indigenous natural gas under existing laws, and creates a direct threat to the country's energy security and energy sovereignty.

They said Meralco's bidding done through Competitive Selection Process (CSP) was "flawed, skewed or supplier-driven and grossly violative of existing laws, rules and regulations."

Under the Electric Power Industry Reform Act (EPIRA) and orders issued by the Department of Energy (DOE), preference is given to local natural gas in power generation.

The Meralco TOR for the scheduled bids "unduly disadvantages power suppliers which use ING (indigenous natural gas) as a fuel source," the petition said.

If the biddings push through, the petitioners said it "would put the country in a situation where a significant portion of our power supply is placed in the hands of imported coal and imported LNG (liquefied natural gas), the prices of both are notoriously unstable and extremely subject to external shocks in the market."

"The favor being accorded imported LNG 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 said.

"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 added.

Government revenue from Malampaya had already reached P374 billion as of 2023, with at least P26 billion earned in 2022 alone.

"To allow the Subject CSPs which are hard-wired and skewed to favor coal-fired power plants is to take a step backwards which is clearly a digression from the worldwide trend to go for cleaner sources of energy," the petitioners said. (PNA)