Power giants’ $3.3-B deal up for review anew
Photo from Philippine Competition Commission/WEBSITE
The Philippine Competition Commission’s (PCC) approval of a $3.3-billion deal between power giants will trigger a review of two energy supply deals, according to the chief of the industry regulator.
In a briefing on Monday, Energy Regulatory Commission chair and chief executive officer Monalisa Dimalanta said they would assess again the power supply agreements of Manila Electric Co. with Excellent Energy Resources Inc. (Eeri) and South Premiere Power Corp. once they receive official copies of the Philippine Competition Commission (PCC) decision.
Eeri and South Premiere are both subsidiaries of San Miguel Global Power Holdings (SMGP).
READ: PCC urged to probe possible rice cartel in PH
Last December, the PCC gave its green light to the transaction involving Meralco PowerGen Corp. (MGen), Aboitiz Power Corp., and SMGP.
Article continues after this advertisementUnder their agreement, MGen, the power generation arm of Meralco, and AboitizPower would jointly invest in SMGP’s 1,278-megawatt (MW) Ilijan gas-fired power plant and the new 1,320-MW facility, which is owned by Eeri.
Article continues after this advertisementThe three groups will then acquire nearly 100 percent of the liquefied natural gas (LNG) import and regasification terminal owned by Linseed Field Power Corp., a local unit of global infrastructure firm Atlantic, Gulf & Pacific Co.
“We’ll need to revisit our decision because we need to ensure that whoever the PCC has determined to be in control of — there are two sets of assets here — the two power plants and the terminal,” Dimalanta told reporters.
“So, whoever will end up controlling them, we will need to revisit on the power plant side compliance with our market share limitations,” she added, saying there were limitations in place under the Electric Power Industry Reform Act (Epira).
Under Epira, no firm or related organization can own, operate, or control more than 30 percent of the installed generation capacity of a grid and 25 percent of the national installed generation capacity.
The ERC official even stressed that the issue of ownership of the terminal was “very important” as the operator would take hold of the facility’s fuel.
Late last year, the commission cleared Meralco’s 1,200-MW power supply deal with Eeri.
However, this accompanied mounting conditions aimed to “mitigate the volatility of fuel and freight costs that are passed on to consumers.” Other conditions were also linked to the energy deal between the three power players.
