SMC pays $4.8 B obligations to PSALM
San Miguel Corp. (SMC) has settled $4.8 billion in various fees to fhe Power Sector Assets and Liabilities Management Corp. (PSALM) to cover its contractual obligations for the management and control of the Ilijan power plant.
“This is clear proof that we religiously pay PSALM and honor our contractual obligation under the Ilijan Administration Agreement,” SMC president and chief operating officer Ramon S. Ang said.
SMC owns SPPC, the administrator of the 1,200-megawatt (MW) Ilijan natural gas power plant in Batangas.
PSALM alleged that SMC does not pay its obligations.
“The records will show that we have paid more than enough, and we religiously abide by our contractual obligation as administrator of Ilijan. PSALM is in fact net cash positive from their contract with us having already gained P30 billion as of August 2017. How can they claim we still have underpayments and that they are losing money under the IPPA (independent power producer administration) agreement?” Ang said.
SPPC earlier filed a case against PSALM after the latter illegally terminated its IPPA and treated it as an administrator in default.
According to SPPC, PSALM’s willful breach of contract was the result of a flawed interpretation of certain provisions related to its generation payments under the IPPA agreement.