DOE steps out in Psalm, San Miguel Global tiff

By Lenie Lectura – August 29, 2017

from Business Mirror

ENERGY Secretary Alfonso G. Cusi urged the Power Sector Assets and Liabilities Management Corp. (Psalm) and San Miguel Global Power Holdings Corp. to settle their differences over unpaid obligations for the generated capacity of the Ilijan power plant.

Cusi said there is no need for him to mediate as a contract exists between the two parties.

“[PSALM] should collect; that is the contract [and SMC] has to pay. If [SMC] want government to honor the contract then [SMC] also has to honor the contract on their end,” the energy chief said when sought for an update on the legal dispute.

San Miguel Global Power, through its unit South Premier Power Corp. (SPPC), earlier lodged a complaint against PSALM.

On September 8, 2015, SPPC was constrained to file a complaint before the Regional Trial Court in Mandaluyong City against the Psalm due to a willful breach of contract arising from what SPPC believes is a flawed interpretation of certain provisions related to its generation payments under the Ilijan independent power producer administrator agreement. PSALM’s unfounded interpretation has resulted in alleged shortfall in generation payments by SPPC.

The case also sought to stop Psalm from illegally terminating SPPC’s Ilijan IPPA and treating the latter as an administrator in default. On the same date, the court issued a 72-hour temporary restraining order against the Psalm.

On September 15, 2016, the court issued an order granting a preliminary injunction enjoining PSALM from proceeding with the termination of the Ilijan IPPA agreement with SPPC while the main case is pending.

SPPC also filed criminal complaints for estafa and violation of the Anti-Graft and Corrupt Practices Act against officers of Psalm in connection with the earlier termination of SPPC’s Ilijan IPPA.

Cusi said SMC could “easily” pay whatever amount it owes to Psalm.

The power firm said last year that it has already paid a total of P159.67 billion to Psalm as of April 2016.

“This is precisely the reason why we filed a case against PSALM last year—to seek justice from the court, clear the confusion and set the facts straight. We have been diligently paying PSALM what is due us. We do not owe PSALM a single centavo. SPPC has fully paid all its obligations under [IPPA] with the government,” San Miguel Global said.

PSALM earlier said SPPC owes the government P12.3 billion in unpaid power generation fees as of April last year. The amount includes a P7.8-billion disputed amount, which SPPC, administrator of the Ilijan natural-gas plant, opposed.