San Miguel unit’s payables to Psalm already ₧34.04B
THE Power Sector Assets and Liabilities Management Corp. (Psalm) claimed that South Premiere Power Corp. (SPPC), a power unit of San Miguel Corp. (SMC), has overdue payables amounting to P34.04 billion as of end-june this year.
In a statement issued late Tuesday, Psalm said the amount is based on its computation of generation payments for the 1200MW Ilijan Natural Gas Combined Cycle Power Plant (Ilijan Plant) that takes into consideration the prices in the Wholesale Electricity Spot Market (WESM).
SPPC has yet to comment as of press time.
To date, there is an ongoing litigation between Psalm and SPPC in the Regional Trial Court of Mandaluyong City to determine, among others, the correct computation of the generation payments.
It will be recalled that Psalm calculated generation charges based on the WESM prices to maximize its earnings from the IPPA (Independent Power Producer Administration), while SPPC uses a fixed rate based on approved by the Energy Regulatory Commission (ERC).
Psalm claimed that SPPC’S computations of generation payments were based on its power supply agreement with the Manila Electric Co. (Meralco), of which Psalm is not a party.
“It is Psalm’s position that the payables of SPPC due to Psalm should be in accordance with the provisions of the IPPA-AA. However, while the aforementioned case is still unresolved, should there be any rate increase, then SPPC’S remittances to Psalm should be recomputed and adjusted accordingly, consistent with SPPC’S own legal position that such remittances to Psalm should be based on the power rates in its power supply agreement with Meralco,” Psalm said.
The possible rate increase Psalm was referring to is SPPC’S motion with the ERC for temporary price adjustment of its 2019 power supply agreement with Meralco, mainly due to staggering increases in fuel prices.
SPPC had said that selling Ilijan’s reliable baseload capacity to the WESM would have exposed consumers to the erratic surges of prices in the market and put them in violation of their power supply contract.
While SPPC has already remitted to Psalm about P285.37 billion as of June 30 this year, “it is Psalm’s view that these remittances of SPPC were insufficient because they were not based on the WESM prices.”