A Regional Trial Court (RTC) in Mandaluyong City has directed the state-run Power Sector Assets and Liabilities Management Corp. (PSALM) to return $60 million to South Premiere Power Corp. (SPPC).
The amount represents the performance bond for the 1,200-megawatt (MW) Ilijan power plant.
SPPC parent firm San Miguel Global Power Holdings Corp. disclosed to the Philippine Dealing & Exchange Corp. that it received the Mandaluyong RTC decision through its legal counsel, Poblador, Bautista and Reyes Law Offices, on Oct. 5, 2025.
The Mandaluyong RTC, Branch 212, rendered a decision on the complaint filed by SPPC on Sept. 8, 2015, and docketed as Civil Case No. MC 15-9629, entitled: “South Premiere Power Corp. v. Power Sector Assets and Liabilities Management Corporation” on June 13, 2025.
On Sept. 4, 2015, PSALM, despite ongoing discussions, unilaterally terminated SPPC’s administrator contract over the Ilijan natural gas plant because of the latter’s alleged failure to settle outstanding generation payments, and called on the performance bond.
The court said PSALM’s acts of terminating its agreement with San Miguel Corporation (SMC) relative to the administration of the Ilijan natural gas plant, drawing on the performance bond and issuing the cessation notice, “are unauthorized and without factual and legal basis.”
“Thus, PSALM is ordered to 1. return to SPPC, the amount of $60 million, the amount performance bond drawn on or forfeited by defendant, with interest on such amount at the rate of 6 percent per annum from Sept. 8, 2015, the date of judicial demand,” the court said.
It directed PSALM to comply with its agreement with SMC relative to the Ilijan IPPA, particularly by revising its billings to SPPC for generation payments for Manila Electric Co. (Meralco) nominations under the power supply contracts (PSCs) between National Power Corp. and Meralco to supply the Sunpower and Ecozone requirements by using the ERC-approved Sunpower and Ecozone rates in the said PSCs as basis for the price.
It further directed PSALM to remove the value-added tax for the Sunpower and Ecozone portions and revise its billings to SPPC by reducing the must-pay amounts during hours when the power station did not generate and deliver energy when under maintenance.
The Mandaluyong RTC also dismissed for lack of merit PSALM’s counterclaim for SPPC’s alleged underpayment of generation charges or outstanding obligations, which as of Aug. 31, 2024, already accrued in the amount of P38.178 billion.
SPPC trades the contracted capacity of the Ilijan natural gas plant in Batangas after posting the highest bid of $870 million in 2010. The dispute arose from the interpretations of certain provisions related to generation payments under the Ilijan IPPA agreement.
