THE Energy Regulatory Commission (ERC) is set to challenge the ruling of the Court of Appeals (CA) that voided its earlier decision to revoke the operating permits of Siqujor Island Power Corp. (Sipcor).
Premiere Island Power REIT Corporation (PREIT), a Villar-backed real estate investment trust whose primary sponsor and major lessee is Sipcor, received last Tuesday a decision from the Court of Appeals (CA), which granted Sipcor’s petition for review filed in September last year and reversed the ERC’s decision.
Sipcor,a power generation company operating diesel and bunker-fired power plants on Siquijor Island, will keep PREIT updated on the finality and execution of the decision, as well as the recovery of its operating authority. Once achieved, Sipcor intends to lift the suspension of the amended the April 2022 lease agreement.
‘Taking into consideration the Court of Appeals’ Decision in favor of Sipcor without prejudice to any action or remedies that may be pursued by the ERC, PREIT shall continue to evaluate internally and confer with Sipcor regarding the potential lifting of the suspension, subject to the formal restoration of its authority to operate.
‘The eventual lifting of such suspension, which remains contingent upon material developments on the matter, is expected to have a favorable effect on PREIT’s overall financial condition upon the resumption of revenue recognition arising from the lease,’ PREIT said in a disclosure.
ERC Chairperson Francis Saturnino Juan refused to comment on the merit of the case. However, the ERC, through the Office of the Solicitor General (OSG), will file a motion for reconsideration (MR).
‘I would not comment on the decision itself or the merits of our case. But please note, regardless of the final outcome of the case-we will file our MR through the OSG-the term of Sipcor’s provisional authority to operate had already expired. So, Sipcor cannot just resume operations without filing for its renewal,’ Juan said via Viber on Wednesday.
In August last year, the ERC revoked the provisional authority to operate and ordered a cease-and-desist for Sipcor’s generation facilities.
Citing major operational breaches, the ERC said Sipcor lacks operating certificates for several generator sets, failed to submit reportorial disclosures, and violated the power supply agreement. It was also cited for prolonged power outages caused by poor maintenance planning and delayed parts replacement, which led to extended shutdowns.
‘But why would it still operate if its power supply agreement with Prosielco [Province of Squijor Island Electric Cooperative Inc.] was already terminated and Prosielco had already conducted its CSP [competitive selection process] and contracted with a new power provider,?’ Juan commented.