By Myrna M. Velasco
South Premier Power Corp. (SPPC), the San Miguel Energy Corporation subsidiaryfor the 1,200-megawatt Ilijan gas-fired power plant, claimed that it already paid $6.19 billion (P289.1 billion) as of end-April this year to state-run Power Sector Assets and Liabilities Management Corporation (PSALM) for its financial obligations as independent power producer administrator (IPPA) of the facility.
SPPC issued this statement to dispute the P19.5 billion claims recently reported by PSALM to Finance Secretary Carlos G. Dominguez III, the company’s board chairman. SPPC is the IPPA for the privatized Ilijan power facility.
SPPC President Ramon S. Ang lamented, “It is unfortunate that PSALM has to resort again to misinformation while the case is pending in Court.”
It has to be noted that an injunction was issued by a regional trial court following SPPC’s filing of a case claiming “willful breach of contract” by PSALM when it cut off Ilijan plant’s trading activities due to the differing interpretations of the parties-in-interest on how generation payments shall be calculated on the delivered capacity of the facility.
“While it is inappropriate for us to comment on the issue, we take this matter seriously and we cannot allow damaging statements like this to hurt our reputation and our stakeholders,” Ang stressed.
The build-operate-transfer (BOT) contract for the Ilijan plant will lapse in 2022; and by that time, the power facility should have already been set for turnover to the IPPA which is SPPC. Nevertheless, given the legal dispute on the payments set for the asset, it is not clear yet how the transfer of ownership will be enforced in the next three years.
SPPC, nevertheless, qualified that by the end of the Ilijan contract in 2022, the company’s aggregate payments to PSALM would already hover at P390.6 billion – comprising of P293.01 billion in energy fees; and P97.60 billion in capacity fees.
It pointed out that “the amount paid for capacity fees alone, which is equivalent to about $2 billion, is already enough to pay for the 20-year old power plant.”
The San Miguel energy firm has in fact highlighted that “a brand new plant with the same capacity could be built for so much less.”
SPPC further emphasized that it has been reimbursing PSALM “for fuel and variable operating and maintenance (VOM) costs in the form of energy fees.”
It qualified further that, “Given these, SPPC is paying PSALM more than what it is paying the IPP counterparty for the Ilijan plant,” adding that “PSALM is in fact net cash positive from its administration agreement with SPPC.”
According to the San Miguel firm, PSALM as of end-April this year, has already gained P34.75 billion from its IPPA deal for the Ilijan plant.