Psalm vows power price stability

The Power Sector Assets and Liabilities Management (Psalm) Corp. has allayed fears that dropping a San Miguel Corp. (SMC) subsidiary as independent power producer administrator (Ippa) of the 1,200-megawatt Ilijan natural gas power plant will raise power prices.

“Almost all of the power output of the Ilijan plant is under a power supply agreement (PSA) between South Premiere Power Corp. (SPPC) and Manila Electric Co. (Meralco) at a rate approved by the Energy Regulatory Commission (ERC). With the Ilijan Ippa contract termination and consistent with its mandate to manage its remaining assets, Psalm is willing to supply Meralco’s requirements to ensure that power consumers are protected against price volatilities in the WESM (Wholesale Electricity Spot Market), subject to necessary approvals since Psalm is not a party to the PSA,” Psalm chief executive officer Lourdes S. Alzona said.

Reacting to Psalm’s statement, SMC Global Power Holdings Corp. (a unit of SMC that operates SPPC) said the state firm has effectively admitted that its interpretation of one of the provisions of the Ilijan Ippa contract is “erroneous.”

SMC Global Power said that according to Psalm’s own statement, the Ilijan power plant output is covered by a Meralco PSA approved by ERC, that the Ilijan power plant is a base load plant and that its output is better supplied to Meralco as a base load plant, and that power consumers should be protected against price volatilities in the WESM.