Philippine conglomerate gets Court favor over Ilijan dispute

Philippine conglomerate San Miguel Corp.—through its subsidiary SMC Global Power Holdings Corp.—won its case anew versus the Power Sector Assets and Liabilities Management Corp. (PSALM) over its four-year dispute on the 1,200-megawatt (MW) Ilijan power plant in Batangas province.

In a filing with the Philippine Dealing Exchange over the weekend, SMC Global said that the Court of Appeals’ (CA) fifth division, in a resolution dated August 23, 2019, dismissed PSALM’s petition for certiorari against SMC Global’s subsidiary South Premiere Power Corp. (SPPC).

CA said that PSALM failed to submit infirmities such as the names and addresses of the parties in the case as required under Section 3, Rule 46 of the Rules of Court, a copy of the petition to SPPC, and implead the RTC, among others.

“Upon perusal of the petition and its annexes, the Court rules to dismiss the petition,” the court said.

“Anent PSALM’s prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction, the court rules to deny the same,” it added.

SPPC bagged the Ilijan power plant’s independent power producer administration (IPPA) through a public bidding in April 2010, but PSALM terminated the IPPA in 2015 allegedly for the group’s non-payment of generation charges it computed using Wholesale Electricity Spot Market (WESM) rates instead of the approved rates by the Energy Regulatory Commission.

IPPAs are qualified private entities that manage the output from energy conversion and power purchase agreements that the National Power Corp. (NAPOCOR) entered into with independent power producers.

They are appointed through public auctions conducted by PSALM.

SPPC filed a complaint versus PSALM with the Mandaluyong Regional Trial Court due to willful breach of contract as a result of a flawed interpretation of certain provisions in relation to generation payments, under the administration agreement.

Prior to the CA’s dismissal, the Supreme Court earlier this year also went in favor with SPPC when PSALM challenged the CA’s decision to affirm the writ of preliminary injunction.

PSALM has said that the group has failed to settle some P19.75 billion in taxes, but SPPC said that as of end-April this year, it paid as much as P289.1 billion for Ilijan. This comprised of P222.4 billion in energy fees and P66.66 billion in capacity fees.

By the time the contract expires in 2022, SPPC would have paid a total of P390.6 billion in energy fees and P97.60 billion in capacity fees.

Apart from Ilijan, the San Miguel group also has the IPPA for the San Roque power plant.