DOE looking to resolve PSALM-SMEC dispute

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THE Department of Energy (DOE) said it is looking to mediate in a dispute between San Miguel Energy Corp. (SMEC) and state-run Power Sector Assets and Liabilities Management Corp. (PSALM) to bring about a speedy resolution.

“We are planning to sit down with the DOF (Department of Finance) to resolve the issue since DOF is the chairman of the PSALM Board,” Energy Secretary Zenaida Monsada told reporters during the launch of the DOE’s energy resiliency campaign on Monday.

Monsada said they were just ironing out the schedule for the meeting, adding that the DOE’s concern is with PSALM because it is a government body.

“We wanted to know if PSALM committed some negligence or abuse its powers,” she added.


SMEC had filed before the Department of Justice (DOJ) a plunder complaint against
PSALM president and chief executive officer Lourdes Alzona. Also included in the complaint were Suguru Tsuzaki, president of Team Philippines Energy Corp. (TPEC); Koichi Tamura, executive vice president of Team Sual Corp. (TSC), and several John and Jane Does.

In a 20-page complaint-affidavit filed on October 21, SMEC general manager Elenita Go claimed that the respondents entered into an alleged anomalous deal in 2009 that supposedly resulted in government losses of P14 billion.

Go said the case involved the allegedly illegal grant of so-called “excess capacity” of the Sual Power Station to TPEC, which enabled it to receive around P17.3 billion at the expense of the government and SMEC.

In June 2009, PSALM entered into a memorandum of agreement (MOA) with TPEC and TSC, which served as the independent power producer (IPP) for the coal-fired Sual Power Station in Pangasinan.

The two power generating firms have described the case as “baseless and without any merit.”

TeaM Energy pointed out that its Sual Power Plant was designed and constructed to produce a net capacity of 1,200 megawatts (MW) and only 1,000 MW has been contracted to the National Power Corporation (NPC) under the Energy Conversion Agreement dated May 20, 1994.

TSC said it is being paid by NPC for the 1,000-MW contracted capacity only and that it owns the excess capacity of 200 MW.

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