PSALM: SPPC has P35 billion overdue payables

MANILA, Philippines — The Power Sector Assets and Liabilities Management Corp. (PSALM) said San Miguel Corp.’s South Premiere Power Corp. (SPPC) has P34 billion overdue payables to the state-run firm as of June 30, in relation to the1,200-megawatt (MW) Ilijan power plant in Batangas.

In a statement, PSALM said the amount is based on its computations of generation payments for the Ilijan plant that takes into consideration the prices in the Wholesale Electricity Spot Market (WESM).

PSALM said the computation 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 computations of generation payments were based on its power supply agreement with Meralco, of which it is not a party.

The state-run firm said while SPPC has already remitted to PSALM about P285.37 billion as of June 30, these remittances were insufficient because they were not based on the WESM prices.

“It is PSALM’s position that the payables of SPPC due to PSALM should be in accordance with the provisions of the IPPA-AA,” PSALM said.

“However, while the aforementioned case is still unresolved, should there be any rate increase, then SPPC’s remittances to PSALM should be recomputed and adjusted accordingly, consistent with SPPC’s own legal position that such remittances to PSALM should be based on the power rates in its power supply agreement with Meralco,” it said.

There is currently an ongoing litigation between PSALM and SPPC in the Regional Trial Court of Mandaluyong to determine, among others, the correct computation of the generation payments.