San Miguel questions ‘unpaid debts’ to government

Diversified conglomerate San Miguel Corp. (SMC) on Thursday questioned supposed unpaid debts of its power unit for the administration of the Ilijan power plant in Batangas.

In an emailed statement, SMC said its power unit has paid a total of P314.6 billion to the Power Sector Assets and Liabilities Management (PSALM) as of January 2020 in relation to the Ilijan power plant.

The statement was in response to reports citing PSALM and the Makabayan bloc, claiming that the company had unpaid debts to the government.

"For some reason, while our case with PSALM is still in court, this issue is being raised by parties that are devious enough to use and mispresent the Makabayan bloc to advance their ulterior motives," said SMC president Ramon Ang.

"It's for this reason that we are releasing the latest figures of our continuous and up-to-date payments to PSALM," he elaborated.

Broken down, SMC said the P314.6 billion in payments consists of P73.9 billion in fixed monthly payments, and P240.7 billion in generation charges.

This would leave a remaining balance of P77.6 billion, consisting of P23.6 billion in fixed monthly payments and P54 billion in generation charges.

To recall, SMC power unit South Premiere Power Corp. (SPPC) assumed administration of the Ilijan Power Plant, which sits on a 60-care site at Arenas Point, Barangay Ilijan in Batangas in June 2010.

Two years later, SPPC and PSALM began discussions in 2012 to come up with a proper computation for generation payments, as both parties had differences in their respective interpretations.

PSALM computed generation payments based on prevailing Wholesale Electricity Spot Market (WESM) prices from November to December 2013, when there was a temporary spike.

"We cannot just change the provisions of the contract for those two months, when there was an extraordinary spike in prices, and then revert to the original agreement after that. If we did that, PSALM would actually lose a lot more" said Ang.

"We have continued to pay them and they have earned so much from this agreement already. We’re just asking them to honor the contract," he added.

In 2015, PSALM unilaterally terminated SPPC's Administrator Contract, which then PSALM chairman and Finance Secretary Cesar Purisima said was not authorized by the PSALM Board. — RSJ, GMA News