San Miguel’s South Premier Power Corp. (SPPC) has paid a total of $4.8 billion in fees to the Power Sector Assets and Liabilities Management Corp. (PSALM), as company president Ramon S. Ang said they continued to honor obligations contrary to the state firm’s allegations.
Ang said in a statement the amount was paid as of the end of October and covered various fees related to the operation of the 1,200-megawatt (MW) natural gas-fired power plant in Ilijan, Batangas.
“This is clear proof that we religiously pay PSALM and honor our contractual obligation under the Ilijan administration agreement,” Ang said, referring to a contract that took effect in 2010.
“PSALM is, in fact, net cash positive from their contract with us, having already gained P30 billion as of August 2017,” Ang said. By the end of August, the government had already paid a total of P238 billion (about $4.7 billion) in energy and capacity fees.
The San Miguel chief operating officer said there was no basis for PSALM to claim that SPPC still had underpayments, and that the state firm was losing money under the administration agreement.
Ang said that by the time the agreement with PSALM expires in 2022, San Miguel would have paid a total of P384 billion or about $7.68 billion for the 20-year-old power plant.
SPPC earlier filed a case against PSALM after the latter illegally terminated the contract “and treated it (SPPC) as an administrator in default.” San Miguel said there was “willful breach of contract” on the part of PSALM
PSALM said SPPC should have sold electricity in 2013 through the wholesale electricity spot market, and not Meralco, with which Ilijan’s output is contracted through a power supply agreement.