Naga ruling to deprive Visayas grid of 300MW


SPC Power Corp. has expressed dismay over the Supreme Court’s decision to nullify its purchase of the Naga Power Plant Complex, saying this would mean the loss of an additional 300 megawatts (MW) for the Visayas grid.

“What’s even more frustrating is that prior to the release of the bidding documents for the Naga Power Plant Complex, the provision on the right to top was vetted by the Department of Justice, who found it to be legal and enforceable,” SPC Senior Vice President Alfredo Ballesteros said on Wednesday.

The high court has ruled that SPC, which took control of Naga complex in October last year, did not have the right to revise its offer to top Therma Power Visayas, Inc.’s bid, which was the highest submitted during a March auction.

The Power Sector Assets and Liabilities Management Corp. (PSALM) gave SPC first refusal rights based on a 2009 land lease agreement.

Ballesteros said PSALM considered the right to top a necessary sale condition, adding: “The bidding rules were very clear and transparent and it specifically mentioned the right to top of SPC Power Corporation.”

He said not one of the bidders objected and that all the interested bidders had accepted SPC’s right to top.

The high court ruling involved a case filed by Senator Sergio Osmena 3rd, who called the right to top condition as contrary to public policy.

“This third bidding itself was also open, public, competitive and transparent, and was won fairly by SPC by exercising its right to top. SPC paid a 5 percent premium or P54 milion more,” Ballesteros said.

TPVI submitted a P1.09-billion offer while SPC bid P859 million during the March auction. SPC subsequently adjusted its offer and paid PSALM P1.14 billion in May.

In voiding the sale, the Supreme Court’s Third Division said SPC— formerly known as Salcon Power Corp.—could not exercise first refusal rights under the land lease agreement due to “lack of valued interest or right to the object over which the right of first refusal is to be exercised.”

The court pointed out that the property subject of the right of first refusal was outside of the premises covered by the lease deal.

SPC, which will be appealing the court ruling, said businesses cannot develop properly if rules were changed in the middle of the game.

“Considering the investments that we already poured in after the award and turnover of the asset, if at all, a change in rules should only be prospective and not retroactive,” Ballesteros said.

The Naga Power Plant consisted of the 52.5-MW Cebu 1 and 56.8-MW Cebu 2 coal-fired thermal power plants, already demolished, and the 43.8-MW Cebu Diesel Power Plant 1.

Last month, SPC said it would be creating Cebu Naga Power Corp. to oversee the construction of two new 2×150-MW facility at the complex.


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  1. The mechanics of buying excess power from another power plants is something dubious, it is the psalm that determines, there maybe double claims and it is the consumer people that carries the burden. The other one claims that they bought electricity from the excees or to that generators it is to complex. There is no one from the consumer sectors or its representive that audit the same. The complexity brought high cost of electricity even if is not used or consumed the people has to bite the bullet and pay for the unneeded electricity. If they the power plants owner needs to raise profit they only resort to artificial shortage and presto increases in payment. SO VOTE FOR THE LIBERAL PARTY FOR ADDITIONAL HIGH COST OF ELECTRICITY