Phinma Energy Corp. and Power Sector Assets and Liabilities Management Corp. have agreed to mutually terminate the administration agreement for the 40-megawatt strip of energy of the Unified Leyte Geothermal Power Plant.
“The termination allows the company to improve its supply costs while maintaining a diversified portfolio. The company has settled all its obligations with PSALM,” Phinma Energy disclosed to the Philippine Stock Exchange Friday.
The company said it would withdraw the case it filed earlier and drop further claims.
Phinma Energy filed a complaint and sought a temporary restraining order against state-run PSALM with the Makati City Regional Trial Court in September for terminating its agreement and forfeiting on the company’s performance bond because of alleged default.
The company filed the complaint against PSALM and its former President Emmanuel Ledesma Jr.
The case sought to restrain PSALM from terminating the administration agreement for the selection and appointment of independent power producer administrators for the strips of energy of the Unified Leyte Geothermal Power Plants located in Tongonan, Leyte on grounds of administrator’s default.
The move followed the recent decision of the Phinma Energy board that “authorized the filing of the case against PSALM” after the state agency moved to terminate the agreement and forfeit on the company’s performance bond.
Phinma Energy, formerly Trans-Asia Oil and Energy Development Corp., was declared one of the winning bidders for the right to administer 40 megawatts of “strips of energy” from the Unified Leyte power plants on November 7, 2013.
Shortly after winning the bid, however, super typhoon Yolanda struck Region 8 on November 8, 2013, resulting in extensive damage to the ULGPP. Phinma Energy cited that PSALM awarded the strips to the winning bidders after a one-year delay.
PSALM issued the notice of award to Phinma Energy as the IPPA for the 40 MW worth of strips of energy of the Unified Leyte plants in January 29, 2014.
“In several letters to PSALM, Phinma Energy formally sought the renegotiation of the agreement and proposed several measures for relief,” the company said.
It said representatives of PSALM and Phinma Energy met on several occasions, with the power firm expressing the difficulties suffered by the administrators under the agreement.