SMC Global set to appeal court ruling on power supply bidding

By Alena Mae S. Flores – May 23, 2019 at 8:50pm

SMC Global Power Holdings Corp. said Thursday its subsidiaries will appeal a Supreme Court ruling that ordered energy companies to undergo a competitive selection process on power supply agreements.

“The wholly-owned subsidiaries of the corporation which are parties to the aforementioned case, namely Mariveles Power Generation Corp. and Central Luzon Premiere Power Corp., will be filing a motion for reconsideration within the given reglementary period,” said SMC Global Power, the power unit of conglomerate San Miguel Corp.

Central Luzon Premiere plans to build a 600-megawatt coal-fired power generating facility in Pagbilao, Quezon set to be operational in 2021.

Manila Electric Co. signed a power supply agreement for the purchase up to 528 MW of the output of Central Luzon Premiere.

Meralco also signed a PSA with Mariveles Power, which is putting up a 600-MW coal-fired power generating facility in Mariveles, Bataan. Meralco agreed to purchase 528 MW from Mariveles Power.

The Supreme ruling is seen to affect Meralco’s PSAs and more than 95 other PSAs, including some that are already in effect.

All PSA applications submitted by the distribution utilities on or after June 30, 2015 were required to comply with the CSP in accordance with the 2015 circular of the Energy Department.

The Supreme Court also ordered that the power purchase cost after compliance with the CSP should be retroactive to the date of the effectivity of the PSA, but in no case earlier than June 30, 2015, for purposes of passing the purchase cost to the consumers.

The Energy Department asked power industry stakeholders to comply with the Supreme Court.

“We will tell them go CSP. If you don’t want to undertake the CSP, we will come out with a circular that we will do the CSP for you,” Energy assistant secretary Redentor Delola said earlier.
Delola said that aside from on-grid PSAs, the ruling also affected off-grid distribution utilities.

“It’s difficult for the off-grid because in their contract, that’s really the available supply where for on-grid, you can look for other power plants,” he said.