Utility giant Manila Electric Company (Meralco) clarified that it has yet to secure a ruling from the regional trial court (RTC) on its petition for declaratory relief in regard to its P14.3 billion settlement agreement with state-run National Power Corporation.

The company indicated that it just made filing last November 23, and that it has yet to get a ruling on its prayer toward declaration of validity of its settlement deal that was sealed with NPC in 2003.

In a disclosure to the Philippine Stock Exchange, Meralco stated that “it has not received” yet any RTC ruling on the case.

In the said filing, Meralco is seeking Court verdict that could possibly seal the agreement’s validity, following the decision of the Energy Regulatory Commission (ERC) also to suspend proceedings on the matter.

The dispute between the parties stemmed from the un-procured volume that had been indicated in the 10-year power supply agreement between NPC and Meralco. The deal already lapsed in 2004, but there are outstanding claims that the parties opted to resolve via a settlement agreement.

The original amount of the settlement with NPC was P27 billion, but after offsetting Meralco’s claims of P7 billion, this was trimmed down to P20 billion. When the additional supply procurement of Meralco from June 2003 to end-2004 was factored in, the final amount was reduced to P14.3 billion.
Meralco indicated in its filing that during the years 2002, 2003 and 2004, it procured supply from Meralco lower than the minimum quantities prescribed under their contract because of circumstances “beyond the reasonable control of the parties.”

From that, Meralco noted that it did not pay the minimum monthly charges but only paid for the actual energy it had taken from NPC.

Given that, the state-run power firm eventually served a claim-notice to Meralco enjoining the latter to make its payments based on contracted volume, even if the energy were not actually drawn.

Meralco objected to NPC’s claims, and this prompted it to serve a notice of termination of their 10-year supply deal. To resolve the conflict arising from both parties’ decisions, they had to bring the matter to negotiations leading to the signing of the settlement agreement later on.