MANILA, Philippines – The Power Sector Assets and Liabilities Management Corp. (PSALM) said South Premiere Power Corp. (SPPC) of San Miguel Corp. the 1,200 megawatt (MW) Ilijan power plant in Batangas.
In a statement, PSALM said the amount is based on its calculations of generation payments for the Ilijan plant which take into consideration wholesale electricity spot market (WESM) prices.
PSALM stated that the calculation based on WESM prices is in accordance with the provisions of the Independent Power Producer Administrator Administration Agreement (IPPA-AA) between PSALM and SPPC dated May 11, 2010.
According to PSALM, SPPC’s calculations regarding production payments were based on its electricity supply agreement with Meralco, of which it is not a party.
The state-owned company said that while SPPC had already paid PSALM about 285.37 billion pesos as of June 30, these payments were insufficient because they were not based on WESM prices.
“PSALM’s position is that SPPC’s debts owed to PSALM must comply with the provisions of the IPPA-AA,” PSALM said.
“However, although the above matter remains unresolved, in the event of a rate increase, SPPC’s payments to PSALM should be recalculated and adjusted accordingly, consistent with SPPC’s legal position that such payments to PSALM should be based on the electricity rates of its electricity supply agreement with Meralco,” he said.
There is currently ongoing litigation between PSALM and SPPC in the Mandaluyong Regional Magistrate’s Court to determine, among other things, the correct calculation of generation payments.