San Miguel refutes PSALM claim

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San Miguel Global Power, through its South Premier Power Corp. (SPPC), on Thursday dismissed the claims made recently by the Power Sector Assets and Liabilities Management Corp. (PSALM) about its alleged unpaid obligations for the generated capacity of its Ilijan power plant, reiterating that it has already paid a total of P159.67 billion to PSALM as of April.

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“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. We do not owe PSALM a single centavo. SPPC has fully paid all its obligations under it Independent Power Producer Administration Agreement (IPPA) with government,” San Miguel Global said in a statement.

On Sept 8, 2015, SPPC was constrained to file a complaint before the Regional Trial Court of Mandaluyong against 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 IPPA agreement. PSALM’s unfounded interpretation has resulted in alleged shortfall in generation payments by SPPC, the company said.

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 TRO against PSALM. On September 15, 2015, 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 earlier cautioned that the illegal termination could lead to higher electricity prices, as PSALM reportedly plans to trade the output of Ilijan on the Wholesale Electricity Spot Market (WESM).

SPPC assured consumers that prices would remain stable as long as status quo is maintained.

San Miguel Global called on PSALM to refrain from issuing misleading statements related to the case. “Let’s wait for the court to decide and respect the status quo as the court has thus far ordered.”

SPPC 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.

Recently, PSALM said that the total unpaid obligations San Miguel Group had ballooned to over P12.3 billion.

The amount is the accumulated shortfalls in generation payments from June 2010 to April 2016, which includes undisputed obligations, PSALM said.

Meanwhile, the San Miguel Group’s outstanding generation payment covered by PSALM’s demand letter now amounts to P7.8 billion from P6 billion.

“This amount is the accumulated shortfall in San Miguel’s payment of its monthly obligations to date. P12.3 billion including the disputed amount of P4.6 billion,” the agency said.

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