SMC to collect deferred generation charges
The power entities under conglomerate San Miguel Corp. (SMC) will start collecting from power distributor Manila Electric Co. (Meralco) generation charges which have been put off for nine years due to consumers’ legal protest.
South Premiere Power Corp., San Miguel Energy Corp. and Masinloc Power Partners Co. Ltd., all wholly owned subsidiaries of SMC Global Power Holdings Corp. (SMCGP), “will be able to proceed with the collection of the deferred generation charges for November and December 2013 billing periods from Meralco under their respective power supply agreements,” said SMCGP in a disclosure to the Philippine Dealing and Exchange Corp.
The Supreme Court has “denied with finality” the motions for reconsideration filed by the National Association of Electricity Consumers for Reforms and the counsel for Bayan Muna representatives, as well as the motion for reconsideration lodged by the Office of the Solicitor General for the Energy Regulatory Commission (ERC).
This was in relation to the high court’s decision which affirmed the order issued by the Energy Regulatory Commission (ERC) to collect P22.64 billion in generation costs on a staggered basis. It allowed Meralco to implement a generation charge of P7.67 per kilowatt-hour in its December 2013 billing and another P1 per kWh for the February 2014 billing.
SMCGP also said the difference between the actual Wholesale Electricity Spot Market (WESM) price in Luzon and the regulated price set by the ERC for WESM sales and purchases made by its subsidiaries, San Miguel Electric Corp. and Strategic Power Development Corp. in these billing periods would have to be settled with the Independent Electricity Market Operator of the Philippines, the operator of WESM, the centralized venue for trading electricity.
It was referring to another SC ruling which declared the ERC decision dated March 3, 2014 as null and void. The ERC order had nullified the WESM prices in Luzon for the said billing periods as the ongoing ERC investigation on the matter at that time was not yet complete.
Stable position
Separately, SMC assured it is in a “stable position” amid the ERC’s denial of its petition for temporary relief from its fixed-rate supply deals with Meralco.
SMC president and CEO Ramon Ang said SMCGP would realize at least P8 to P10 billion in earnings before interest, taxes, depreciation and amortization (Ebitda) from its battery energy storage system (BESS) project by next year.
Its new Mariveles power plant is expected to come online, which will contribute an additional P5 billion to P6 billion in annual Ebitda.
Further, SMCGP will no longer make capital lease payments of about P14 billion annually under its independent power producer administration agreement (IPPA) for the Sual power plant effective October next year.
By this time, the full 1,000-megawatt BESS project can contribute P12 to P15 billion Ebitda yearly, Ang said.
As of last June, SMCGP no longer needed to pay P12 billion per annum in capital lease payments under its IPPA for the Ilijan power plant.
