DOF, DOE to discuss Ilijan power contract

MANILA, Philippines - The Departments of Energy and Finance are looking to resolve the dispute between the power unit of San Miguel Corp. and state-run Power Sector Assets and Liabilities Management Corp. (PSALM) involving the 1,200-megawatt (MW) Ilijan combined-cycle power plant.

Both agencies are mulling to sit down and discuss the legal case filed by SMC Global Power Inc. against PSALM, Energy Secretary Zenaida Monsada said.

The case versus PSALM is a concern since it is a government-run entity.

“The Department of Finance (DOF) is asking to sit down with us since the chairman of PSALM Board is DOF,” she said.

Currently, both agencies are working around their schedules to set up a meeting for this issue.

Details have not yet been worked out but Monsada said this meeting could be between the Department of Energy (DOE) and DOF, or among the Cabinet economic cluster.

Last Sept. 4, PSALM terminated the independent power producer agreement (IPPA) agreement for the Ilijan plant with South Premiere Power Corp. (SPPC) for failure to pay the outstanding generation payments from Dec. 26, 2012 to April 25, 2015 amounting to P6.46 billion.

Following the termination of contract, SMC Global chairman Ramon Ang earlier said the company will sue PSALM for “intentional breach of contract.”

SMC Global filed for a temporary restraining order with the Mandaluyong Regional Trial Court (RTC) Branch 208, which issued a preliminary injunction in favor of the company after the TRO lapsed.

In April 2010, PSALM bid out Ilijan IPPA where San Miguel emerged as the highest bidder with a $870 million offer.