SAN MIGUEL Corp. (SMC) told Power Sector Assets and Liabilities Management Corp. (PSALM) on Monday to stick to the facts and let the courts decide on the claim by the state-led agency that a unit of the conglomerate owes the government P23.94 billion.
“Let us not undermine the integrity of the court and return to basics. We choose to be on the side of law instead of presenting a good yet misleading story. Let us stick to the facts of the case and let the court decide,” said Ramon S. Ang, SMC president and chief operating officer, in a statement.
The company also urged the Department of Finance (DoF) and PSALM to “give the country’s justice system a chance instead of resorting to trial by media in the hope of gaining public approval in an ongoing case concerning the Ilijan power plant.”
SMC unit South Premiere Power Corp. (SPPC) administers the capacity of the 1,200-megawatts Ilijan gas-fired power plant in Batangas City.
Mr. Ang’s group was responding to a statement issued by the DoF on Sunday that PSALM would “vigorously” go after delinquent accounts in the energy sector and initiate collection cases versus independent power producer administrators (IPPAs) that have existing unpaid dues.
IPPAs are private entities that manage the output from the energy conversion and the power purchase agreements that National Power Corp. (Napocor) entered into with the independent power producers. They are appointed through public bidding conducted by PSALM, a corporation created by law to privatize the power generation assets of Napocor that were built during the crippling energy crisis in the 1990s.
SMC said the subject of contention has been pending with the Mandaluyong Regional Trial Court (RTC) since 2015. It said that to hasten the case’s resolution, SPPC filed a motion for production of documents by PSALM in order to have full disclosure of the facts.
But it said instead of proceeding with the discovery process by submitting the requested documents, PSALM filed a motion to hear other defenses unrelated to the merits of the case, which the RTC and the Court of Appeals have both denied.
It said the RTC had also indefinitely enjoined PSALM’s termination of the IPPA agreement in favor of SPPC while the case remains pending. It said the injunction had been upheld by the Court of Appeals and the Supreme Court.
“We are one with the DoF and PSALM in wanting to have closure to the case. However, premature closure by distorting the facts through the court of public opinion is only compromising the integrity of our justice system,” Mr. Ang said.
SMC said the main dispute between PSALM and SPPC arose from differing interpretations in computing generation payments provided for under the IPPA agreement, not in the amounts stated in SMC’s bid.
It said generation payments are based on actual generation data and the determinants of revenues derived from the capacity of the Ilijan power plant. It said both could not be reasonably determined and would not be information included in the bid when the IPPA for the plant was bidded out.
SMC said that as of Jan. 31 this year, out of the P314.6 billion paid by SPPC to PSALM as IPPA of the Ilijan plant, about P240.7 billion paid by SPPC is considered as generation payments.
It also said PSALM had failed to explain its reasons for claiming an additional amount of P23.94 billion in generation payments and related charges from SPPC.
Mr. Ang said the dispute stemmed from PSALM’s erroneous use of wholesale electricity spot market prices in computing for generation payments beginning January 2013 to date.
SMC said SPPC used the tariff rate approved by the Energy Regulatory Commission (ERC) for the Ilijan plant, when appropriate, as required under the IPPA agreement in computing generation payments to PSALM.
It said using the approved rate is also consistent with the baseload nature of the Ilijan plant and the fact that its capacity is contracted in full to bilateral customers primarily Manila Electric Co., which pays a tariff rate approved by the ERC.
SMC said SPPC has not received any billing statement from PSALM claiming the alleged unpaid amount of P23.94 billion.
“Interestingly, PSALM has released the figure to the media instead of informing affected party SPPC or SMC,” it said, adding that based on PSALM’s last billing statement to SPPC, it is claiming just P15.63 billion. — VVS