THE president of diversified conglomerate San Miguel Corp. (SMC) has offered to pay in full the capacity charges for its 1,200-megawatt (MW) Ilijan power plant amounting to P22.68 billion, more than two years ahead of schedule.
In a statement, SMC President Ramon S. Ang said his offer was meant to help “cash-strapped” Power Sector Assets and Liabilities Management Corp. (PSALM) manage its liabilities.
“While we have an ongoing court case with PSALM regarding the computation of generation fees for the Ilijan plant, as a stakeholder in the power industry, and more importantly, a proactive partner of government in nation-building, we sincerely want to help PSALM raise funds for government,” he said.
Capacity charges represent capital payment to PSALM coming from SMC as administrator of Ilijan. They will be spread over the term of its contract.
SMC said Mr. Ang’s letter sent to PSALM clarified that his offer is separate from the alleged “overdue receivables” of its power arm South Premiere Power Corp. (SPPC), amounting to P23.9 billion. The amount is the subject of a court case pending since 2015 that stemmed from differences in computing power generation charges.
“While we have an ongoing court case with PSALM regarding the computation of generation fees for the Ilijan plant, as a stakeholder in the power industry, and more importantly, a proactive partner of government in nation-building, we sincerely want to help PSALM raise funds for government,” he said.
PSALM calculated generation charges based on the wholesome electricity spot market prices to maximize its earnings from the independent power producer agreement, while SPPC uses a fixed rate approved by the Energy Regulatory Commission. — VVS
