TeaM Sual Corp. (TSC) and TeaM (Philippines) Energy Corp. (TPEC) on Tuesday cried foul on plunder charges filed against them.
The charges are in connection with the alleged P14-billion loss in a 2009 contract with an independent power producer (IPP) for the Sual Power Plant in Pangasinan.
The two companies described the cases as “baseless and without any merit.”
“We are shocked and perplexed by the reported charges brought against our companies,” said TeaM Energy said in a statement.
For its part, the state-owned Power Sector Assets and Liabilities Management Corporation (PSALM) said it has neither received nor seen a copy of SMEC’s complaint.
“PSALM will make the necessary comment as soon as it receives a copy of the said complaint,” the agency said in a statement.
Meanwhile, TeaM Energy explained 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 Corp. (NPC) under the Energy Conversion Agreement dated May 20, 1994.
TSC is being paid by NPC for the 1,000 MW contracted capacity only and owns the 200 MW excess capacity, the company said.
“Contrary to the assertions of San Miguel Energy Corp. (SMEC), the 200 MW excess capacity already existed when the plant was built in 1999,” it added.
TSC and TPEC had various agreements with government regarding the excess capacity, the companies said. Such excess capacity has been sold to various customers for the past sixteen years, according to them.
“Obviously, this was the case even prior to the appointment of SMEC as independent power producer administrator (IPPA) in 2009,” said TPEC.
Team Energy maintained that the MOA is legal and above-board.
It pointed out that PSALM, TSC, and TPEC entered into the Memorandum of Agreement (MOA) in question on June 18,2009—prior to the appointment of SMEC as the IPPA of the 1,000 MW contracted capacity of NPC.
“This went through the regular approval process of the respective boards of NPC and PSALM—composed of the Secretaries of Finance, Energy, Budget and Management, Trade and Industry, NEDA, Interior and Local Government, Agriculture, Environment and Natural Resources and Justice,” it stressed.
The firm also denied the claim of SMEC that TPEC has priority over the dispatch of the 200 MW excess capacity, since dispatch of capacity is based on competitive bidding under the Wholesale Electricity Spot Market (WESM) rules.
“In fact, it is clear from the MOA that the contracted capacity of 1,000 MW has priority over the excess capacity of 200 MW; when due to the fault of TSC, the Sual Plant is unable to make available its full net capacity of 1,200 MW,” it said.
Even prior to the MOA, TPEC said it has been trading its 200 MW excess capacity in the WESM through PSALM.
Under the MOA, the excess capacity continues to be traded through PSALM or its appointed IPPA.
Since September 2009, being the appointed IPPA, TPEC said SMEC has been trading and collecting the proceeds of the sale of the energy firms’ excess capacity to the WESM.
“In fact, since October 2013, SMEC has not been remitting to TPEC a substantial portion of the proceeds of its sale of the excess capacity to WESM without basis and to TPEC’s detriment,” the company said.
TeaM Energy pointed out that it invested substantial capital in the country to build power plants to address the country’s development needs.
“Our track record will show that we have abided by and respected all the country’s laws and regulations and have operated with utmost integrity in all our business dealings and contracts,” it said.
TeaM Energy said the move by SMEC “will only result in a chilling effect to the inflow of foreign capital needed to sustain the continued development of the country.”
In a 20-page complaint, SMEC stated that PSALM president and chief executive officer Lourdes Alzona violated Section 3(e) of Republic Act 3019 or the Anti-Graft and Corrupt
It also included in the complaint Suguru Tsuzaki, president of Team Philippines Energy Corp. (TPEC), and Kochi Tamura, executive vice president of Team Sual Corp. (TSC).
San Miguel alleged that a June 2009 memorandum of agreement between PSALM, TPEC and TSC, which served as the independent power producer for the Sual Power Station, was disadvantageous to the government because it resulted in a loss of about P14 billion.