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San Miguel asks PSALM to wait for court’s ruling

Diversified San Miguel Corp. on Monday urged the Finance Department and Power Sector Assets and Liabilities Management Corp. to give the country’s justice system a chance instead of hurling accusations in an ongoing case concerning the 1,200-megawatt Ilijan power plant.

“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,” SMC president and chief operating officer Ramon Ang said.

The Finance Department and PSALM issued statements that they were running after SMC over alleged unpaid debts to PSALM through SMC power arm South Premiere Power Corp., which administers the output of Ilijan plant.

The PSALM and SPPC dispute has been pending with the Mandaluyong regional trial court since 2015. San Miguel said SPPC filed a motion asking PSALM to fully disclose the facts to expedite the resolution.

It said that 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 both denied.

The local court indefinitely enjoined PSALM’s termination of the IPPA agreement in favor of SPPC while the case remained pending. Such injunction was upheld both 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,” Ang said. Alena Mae S. Flores

PSALM  said SMC owed the government P23.94 billion and that the power firm should bear the “financial consequences” of its bid.

The main dispute between PSALM and SPPC is due to differing interpretations in computing generation payments provided for under the IPPA agreement, not in the amounts stated in SMC’s bid, according to the company.

SMC said generation payments are based on actual generation data and the determinants of revenues derived from the capacity of the Ilijan power plant, both of which could not be reasonably determined and, thus, would not be information included in the bid when the IPPA for the plant was bidded out.

It said that as of Jan. 31, 2020, out of the P314.6 billion paid by SPPC to PSALM as the administrator of the Ilijan power plant, about P240.7 billion was considered as generation payments.

SMC said PSALM failed to explain its reasons for claiming an additional amount of P23.94 billion in generation payments and related charges from SPPC.

Ang said this dispute stemmed from PSALM’s erroneous use of Wholesale Electricity Spot Market prices in computing for generation payments beginning January 2013.

SPPC used the tariff rate approved by the Energy Regulatory Commission for the Ilijan power plant, when appropriate, as required under the IPPA agreement in computing generation payments to PSALM.

Topics: San Miguel Corp. , Power Sector Assets and Liabilities Management Corp. , Department of Finance , Ilijan power plant
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