Power Sector Assets v. Sem-Calaca Power Corporation

Summary

PSALM and SCPC disputed the interpretation of Schedule W in their Asset Purchase Agreement regarding SCPC's electricity supply obligation to MERALCO. PSALM argued SCPC must supply unlimited 10.841% of MERALCO's requirements, while SCPC claimed a 169,000 kW cap existed. The ERC, Court of Appeals, and Supreme Court all ruled in favor of SCPC, finding Schedule W ambiguous and applying Civil Code contract interpretation principles. They harmonized the 10.841% figure with the 169,000 kW capacity limit, reasoning that both figures must be given effect and that requiring unlimited supply would be unreasonable given the plant's limited capacity. The decision establishes important precedent for contract interpretation in privatized power sector transactions and affirms regulatory agencies' jurisdiction over energy sector disputes.